A man comes to you and says: “Lend me this piece of capital which you possess” (for instance, a ship, and stores of food with which to feed the sailors during the voyage of the ship). “Using this piece of capital to transport the surplus goods from this country over the sea and to bring back foreign goods which we need here I shall make a profit so large that I can exchange it for at least one hundred tons of wheat. The voyage there and back will take a year.” You naturally answer: “It is all very well for you to make a profit of one hundred tons of wheat in one year by the use of _my_ ship and of _my_ stores of food for sailors who work the ship, but what about me? I grant you ought to have part of this profit for yourself, as you are taking all the trouble. But I ought to have _some_, because the ship and stores of food are mine; and unless I lent them to you (since you have none of your own) you would not be able to make that profit by trading of which you speak. Let us go half shares. You shall have fifty tons of wheat and I will take fifty, out of the total profit of one hundred tons.” The man who proposed to borrow your ship agrees. The bargain is struck, and when the year is over you make a fifty tons profit of wheat on your capital. That is _the earning of interest on a productive loan_. There is nothing morally wrong about that transaction at all. It does no one any harm. It does not weaken the State or society, or even hurt any individual. There is a sheer gain due to wise exchange (which is equivalent to production); everybody is benefited--you that own the capital, the man who uses it, and all society, which benefits by the foreign exchange. Supposing your ship and stores of food were worth a hundred tons of wheat, then your profit of fifty tons of wheat is a profit of fifty per cent., which is very high indeed. But you have a perfect right to it: your capital has produced a real increase of wealth to that extent. If your capital be worth ten times as much, then your profit is only five per cent. instead of fifty. But your moral right to the fifty per cent. is just as great as your moral right to the five per cent. No one can blame you, and you are doing no harm. Now supposing that, instead of coming to ask you for the loan of your ship, the man came and asked you for the loan of a sum of money which you happened to have by you and which would be sufficient to buy and stock the ship. It is clear that the transaction remains exactly the same. The loan is _productive_. He makes a true profit, that is, there is a real increase of wealth for the community, and you and he have a right to take your shares out of it--you because you are the owner of the capital, and he because he took the trouble of organising and overlooking the expedition. These are examples of profit on a _productive_ loan.