Note 199-4 — Chapter VI

The older political economists have, as a rule, ignored this law, and were wont to consider every payment of money to a foreign country as injurious. Thus, for instance, Culpeper, Tract against the high Rate of Usury, 1623, 1640, disapproves all loans made from foreign countries, because they draw more money in interest, and in repayment of the principal out of the nation, than they brought into it at first; and all the more, as the loan is generally procured, not in the precious metals, but in foreign goods, of which there is a superabundance in the home country. Similarly Child, Discourse of Trade, 1690, 79, who claims that the creditor was always fattened at the expense of the debtor. Hence v. Schröder, Fürst, Schatz- und Rentkammar, 141, advises that the capital borrowed in foreign countries should be confiscated. Compare, also, v. Justi, Staatswirthschaft, II, 461. And yet the very simplest calculation shows, that if a man borrows $1,000 at 5 per cent. and makes 10, he is doing a good business with the borrowed capital. This Locke, Considerations, 9, recognizes very clearly. Compare, also, J. B. Say, Traité, II, ch. 10, and Hermann, Staatsw. Unters., 365 seq.