That there must be a limit to the accumulation of capital is
obvious. The downward course of the rate of interest,
notwithstanding that many new employments have been made possible
for capital, indicates how large is the increase of surplus value.
This decline of the interest rate is in accord with Bohm-Bawerk's
law of "diminishing returns." That is, when capital, like anything
else, has become over-plentiful, less lucrative use can only be
found for the excess. This excess, not being able to earn so much
as when capital was less plentiful, competes for safe investments
and forces down the interest rate on all capital. Mr. Charles A.
Conant has well described the keenness of the scramble for safe
investments, even at the prevailing low rates of interest. At the
close of the war with Turkey, the Greek loan, guaranteed by Great
Britain, France, and Russia, was floated with striking ease.
Regardless of the small return, the amount offered at Paris,
(41,000,000 francs), was subscribed for twenty-three times over.
Great Britain, France, Germany, Holland, and the Scandinavian
States, of recent years, have all engaged in converting their
securities from 5 per cents to 4 per cents, from 4.5 per cents to
3.5 per cents, and the 3.5 per cents into 3 per cents.
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