Preface

vii viii PREFACE The solution 11ere offered is that the rate of interest de pends on the character of the income-stream, - its size, composition, probability, and above all, its distribution in time. It might be called a theory of prospective provi sion of inc·ome. As in The Nature of Oapital and Income, mathematics have here been relegated to appendices. These appendices are not, however, mere translations into mathematical language of the theory verbally expressed in the text. l\{athematics can properly claim no place in economic discussions except as they add something not expressible, or at allY rate only imperfectly expressible, in ordinary language. Parts of Chapters V and XIV with their appendices have appeared in somewhat different forms in Appreala tion and Interest. My thanks are due to tIle American Economic Association for permission to use portions of this monograph unaltered. Since it appeared a decade ago, the view expressed in it, to the effect that apprecia ...

tion of money should, and to some extent does, lower the rate of interest expressed in money, has gained con siderable currency, though it is still unfamiliar to most persons. It has been thought ,vise to present again the statistical evidence in its favor, and to bring the statis tics do\vn to date. In the preparation of this book I have received impor tant aid from nlany persons. For general criticism I am indebted to my wife, to my colleagues, Professors H. O. Emery and J. P. Norton, and to my friend Richard lVI. Hurd, President of the Mortgage-Bond Company of New York City. My thanks are also due to ~"inance Minister Ilohm-Bawerk for his kindness in reading and criticising the chapter devoted to his theory of interest; to Professor Clive Day for facts and references on the history of inter est rates; to Dr. Lester W. Zartman for a large part 0 ...

PRUACE ix the statistical computation and for many helpful criti. cisms; to two of my students, Mr. Harry G. Brown and Mr. J. H. Parmelee, for valuable aid in proof-reading, including many keen and fruitful suggestions; and to my. brother, Herbert W. Fis~er, for a most searching and valuable criticism of the mode of expression and exposition. IRVING FISHER. NEW HAVEN, July, 1907.