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Finance, in the way in which it will be applied in this brief article, means the machinery of money dealing. That is, the machinery by which money which you and I save is put together and given out to people who would like to borrow it.

Money therefore saved and loaned is capital. So finance is the machinery that handles capital, collects it from those who save it, lends it to those that want to make use of it and agree to pay a price for the loan of it. This cost is referred to as the interest rate, or profit.

The borrower offers this cost because he intends to be able, after paying it, to benefit himself out of what he's planning to make or grow or get with its help. If it is a Government, it wants to improve the country's success by its use.

Occasionally applicants want cash due to the fact they have been spending more than they have been getting, and attempt to tide over a difficulty by paying one set of loan providers with the help of another, instead of lowering their spending.

This avenue, if followed far enough, results in bankruptcy for the borrower and loss to the lender.

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If no price were offered for capital, none of us save it, or if we saved we didn't risk our money by lending it, but hide it in a hole, or lock it down in a storage room, and so there could be no new industry.

When it's misused, let's abuse it as heartily as we like, and take any possible measures to punish it. But let us recognize that capital, when well and fairly used, is far from becoming a sinister and suspicious weapon in the hands of people who have somehow managed to seize it.

It is in fact so necessary to all kinds of industry, that people who have amassed it, and placed it at the fingertips of industry, render a service to society without which society could not be kept alive.

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