We shall suppose that some one has occasion for L.100, which he finds
a friend obliging enough to lend him. On receiving it, he requests the
loan of other L.10; and being asked for what purpose, he answers, that
with that L.10 he will pay up the original L.100. This is a rather
startling proposal; but when he is asked how he is to manage this
practical paradox, he says: 'Oh, I shall put out the L.10 to interest,
and in the course of time it will increase until it pays off the
L.100.' The lender is perhaps a little staggered at first by the
audacious plausibility of the proposal, but it requires but a few
seconds to enable him to say: 'Why, yes, you may lend out the L.10 at
interest; but in the meantime, as you have borrowed it, interest runs
against you upon it; so what better are you?' The lender, so far from
concurring with the sanguine hopes about the fructification of the
L.10, will only regret his having intrusted the larger sum to a person
whose notions of money are so loose and preposterous.
Yet the proposal would only have carried into private pecuniary
matters the principle of the sinking-fund, so long deemed a blessing,
and a source of future prosperity to the country.
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