We have learned already that labor and land, when assisted by capital, produce more than when working alone. The best evidence of this fact is the tremendous volume of modern production compared with what we might expect to be produced if all capital were removed or if it had never existed. No one doubts that the sudden disappearance of capital from the face of the earth would in a short time result in the starvation of half of the human race. The borrower, then, since he knows from experience and observation that he can afford to pay a premium for the use of capital, is willing, if necessary, to bid up to the point of his expected gain. The wide variety of business enterprises combine with the different expectations of enterprisers, to make these independent bids cover a wide range which we may illustrate as follows:

Fig. 11.

Borrower A is willing if necessary to go to AK (12 per cent); B, to BL (8 per cent); C, to CM (5 per cent); and D, to DN (4 per cent). It should be noticed that the borrowers' curve is a demand curve.