A STORY OF ROBINSON CRUSOE  - 18 -

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The real cause of interest lies in money itself. It is in the nature of money that a money-owner receives interest. Even when money gets stored, it doesn't lose its value. A merchant for instance thinks of buying goods. When a merchant buys goods, he has accumulated some money for that purpose. The money-owner can always make his trade-partner wait. But since the owner of goods has to accept a loss in the value of his goods, he is under pressure. The merchant who does not have to fear a loss in value of his money, can take advantage in a bargain from this superiority of money. The purchased goods are expected to earn a gain when sold. If a merchant borrows money from another money-owner in order to buy goods, his trade profits will be the remains after substracting the costs for borrowing (interest) the capital.

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