80. The price of interest depends immediately on the
proportion of the demand of the borrowers, with the offer of the
lenders, and this proportion depends principally on the quantity
of personal property, accumulated by an excess of revenue and of
the annual produce to form capitals, whether these capitals exist
in money or in any other kind of effects having a value in
commerce.
The price of silver in circulation has no influence but with
respect to the quantity of this metal employed in common
circulation; hut the rate of interest is governed by the quantity
of property accumulated and laid by to form a capital. It is
indifferent whether this property is in metal or other effects,
provided these effects, are easily convertible into money. It is
far from being the case, that the mass of metal existing in a
state, is as large as the amount of the property lent on interest
in the course of a year; but all the capitals in furniture,
merchandize, tools, and cattle, supply the place of silver and
represent it. A paper signed by a man, who is known to be worth
100,000 livres, and who promises to pay 100 marks in a certain
time is worth that sum; the whole property of the man who has
signed this note is answerable for the payment of it, in whatever
the nature of these effects consists, provided they are in value
100,000 livres. It is not therefore the quantity of silver
existing as merchandize which causes the rate of interest to rise
or fall, or which brings more money in the market to be lent; it
is only the capitals existing in commerce, that is to say, the
actual value of personal property of every kind accumulated,
successively saved out of the revenues and profits to be employed
by the possessors to procure them new revenues and new profits.
It is these accumulated savings which are offered to the
borrowers, and the more there are of them, the lower the interest
of money will be, at least if the number of borrowers is not
augmented in proportion.