THE PROBLEM OF INTEREST 87

sentative of values, money. The borrower does not, in a
sense, want to borrow money, but he first acquires money
and then is free to exercise his choice as to the actual forms
which shall represent the capital he proposes to use. He
contracts to repay money and to pay in money for the hire
of what he has borrowed. The savings, of which a good
jeal has been said above, are savings of money, or rather of
rights to commodities the amount of which is estimated in
money, say, savings of general purchasing power. General
purchasing power is lent, is borrowed, is paid as the price of
the control transferred by lender to borrower. Before it can
be made productive, it must be transformed into such forms
as buildings, machinery, materials, etc, as a rule. That
could not be instantly done if stores of such goods were not
held ready, that is, the actual productivity of a certain
amount of purchasing power borrowed is dependent on the
prices at which instrumental goods can be purchased, and
consequently on the accuracy of the intelligent anticipation
of the forms which new capital is to take which has been
displayed by the producers of those forms. The test of that
accuracy is the correspondence of the marginal demandprices,
 offered by those who desire to acquire the instrumental
 goods for productive purposes, and the cost of producing
 those instrumental goods.
In the mercantile field there is use for a considerable
amount of capital in the form of purchasing power, to assist
in the exchange of goods. In the industrial field the
capital must be used in the form of instrumental goods in
srder to be made productive. The contrast thus suggested
is more in appearance than in reality, for the merchant only
makes his money productive by becoming the possessor of
goods, to which goods he imparts a further utility due to
changes of the goods in place or in time. Itis the changes
of value of the goods which afford the profit on his operations.
 His investments of the purchasing power (money),
which forms an important part of his capital, are thus such
as to convert it into instrumental goods as truly as are the
investments of the builder of an ironworks or a factory.
The differences lie in the nature of the changes which take