Does Mr. Fawcett mean by compensation for risk, protection from it,
or reward for running it? Every business involves a certain quantity
of risk, which is properly covered by every prudent merchant, but
he does not expect to make a profit out of his risks, nor calculate
on a percentage on his insurance. If he prefer not to insure, does
Professor Fawcett mean that his customers ought to compensate him
for his anxiety; and that while the definition of the first part of
interest is extra payment for prudence, the definition of the second
part of interest is extra payment for imprudence? Or, does Professor
Fawcett mean, what is indeed often the fact, that interest for money
represents such reward for risk as people may get across the green
cloth at Homburg or Monaco? Because so far as what used to be business
is, in modern political economy, gambling, Professor Fawcett will
please to observe that what one gamester gains another loses. You
cannot get anything out of Nature, or from God, by gambling;--only
out of your neighbour: and to the quantity of interest of money thus
gained, you are mathematically to oppose a precisely equal disinterest
of somebody else's money.
These second and third reasons for interest then, assigned by Professor
Fawcett, have evidently nothing whatever to do with the question. What
I want to know is, why the Bank of England is paying me 1,200l. a
year. It certainly does not pay me for superintendence. And so far from
receiving my dividend as compensation for risk, I put my money into the
bank because I thought it exactly the safest place to put it in. But
nobody can be more anxious than I to find it proper that I should have
1,200l. a year. Finding two of Mr. Fawcett's reasons fail me utterly,
I cling with tenacity to the third, and hope the best from it.
The third, or first,--and now too sorrowfully the last--of the
Professor's reasons, is this, that my 1,200l. are given me as "the
reward of abstinence." It strikes me, upon this, that if I had not
my 15,000l. of Bank Stock I should be a good deal more abstinent
than I am, and that nobody would then talk of rewarding me for
it. It might be possible to find even cases of very prolonged and
painful abstinence, for which no reward has yet been adjudged by
less abstinent England. Abstinence may, indeed, have its reward,
nevertheless; but not by increase of what we abstain from, unless there
be a law of growth for it, unconnected with our abstinence. "You cannot
have your cake and eat it." Of course not; and if you don't eat it,
you have your cake; but not a cake and a half! Imagine the complex
trial of schoolboy minds, if the law of nature about cakes were,
that if you ate none of your cake to-day, you would have ever so
much bigger a cake to-morrow!--which is Mr. Fawcett's notion of the
law of nature about money; and, alas, many a man's beside,--it being
no law of nature whatever, but absolutely contrary to all her laws,
and not to be enacted by the whole force of united mankind.
Not a cake and a quarter to-morrow, dunce, however abstinent you
are--only the cake you have,--if the mice don't get at it in the night.
Interest, then, is not, it appears, payment for labour; it is not
reward for risk; it is not reward for abstinence.
What is it?
One of two things it is;--taxation, or usury. Of which in my next
letter. Meantime believe me
Faithfully yours,