THE PROBLEM OF INTEREST 85

by the investment of the marginal amount saved, on the
vther by the resistance to be overcome to secure the saving
rather than the spending of that marginal amount, that is,
ts devotion to the supply of future rather than of present
needs.
The supply of capital available for fresh investments is
not, however, as has already been stated, confined to the
newly-made savings from current revenue, and, as a result,
the statement just made needs some correction. While the
actual additions to capital are limited to the new savings,
some part of what represents a wear-and-tear allowance on
existing capital may compete with new savings for employment
 in new ventures. The income received by a capitalist
from his capital is, from certain points of view, rightly
divided into what is needed to maintain his capital, that is
to replace materials used up and make good wear and tear
of machinery and the like, and into the amount remaining
after such maintenance is provided for. This last amount
alone can provide additions to the capital, but the capitalist
may elect not to replace materials or machinery which is
wearing out, and the funds which might have served this
purpose may go to increase the stream of fluid capital
seeking new investments. In corresponding fashion, the
replacement of materials or worn-out machinery is a use to
which funds may be applied which are not any part of the
income afforded from the employment of such materials and
machinery. The field of employment in which the rate of
interest is determined is thus wider than that with which
new savings proper are concerned. Capital not newly saved
but merely freshly disentangled from some previous concrete
smbodiment, takes a place alongside the newly-made savings
as a part of the supply whose marginal supply-price is the
rate of interest. On the other hand, the field of investment
for fluid capital is not limited to new enterprises and
axtensions of old enterprises, but comprises also the reformation
 of instruments which have exhausted their
services as capital in aiding in the formation of current
income. The demand for capital, of which the marginal
demand-price registers the rate of interest, is, in fact, wider