SAVING AND BORROWING II 1. Abstinence of the conservative kind. II 2. Cumulative abstinence.
Saving without and with the use of money. 6. Classes of borrowers.
§ 1. Abstinence of the conservative kind. Abstinence is the name of that faculty of mind which enables present desires to be subordinated to future desires. Abstinence (the faculty) expresses itself in particular acts known as abstaining, or as saving. Conservative abstinence is that which keeps men from using up or invading their present stock of goods, and cumulative abstinence is that which im pels them to add to that stock. There is no sharp dividing line, no abrupt break, between these two, yet on the whole they differ. Conservative abstinence is a quality of mind analogous to the inertia and momentum of physical matter, and makes men resist stubbornly a reduction of property, of income, and of an accustomed social position, even when there is little or no disposition to increase or advance them. It is this which makes nearly all men think that using up any part of their principal (when they have sold property or have collected loans) is a very different thing from regularly using up their free income. A large part of accumulation results from the operation of conservative abstinence. Through insurance for one's family, purchase of annuities, laying up "for a rainy day" or for old age, etc., guided by the con servative quality of mind, men seek to maintain (rather than 285 to increase) the standard of themselves or their families.
§ 2. Cumulative abstinence. Adding to wealth at the cost of a present lowering of long-accustomed standards of living is a rare occurrence; but in a large number of cases where there is no deliberate purpose to go beyond conserva tive abstinence, the uncertainties of life, insensible changes in the habitual standard of possession, desire to leave children a larger patrimony, etc., tend to the heaping up of wealth for
heirs. It is much easier to accept a higher than a lower standard of living. Consequently, deliberate cumulative ab stinence is most likely to appear at favorable times in the lives of men of rising fortunes, who, while maintaining or even increasing their scale of expenditure, are able to add to their riches. ( Accumulation comes to be to some men the one game they can enjoy. I recently met an old man who gener ously was bent on becoming richer so that, as he said, his at tractive young wife might get a second husband as good as her first one. ) Many successful business men evidently are accumulating not because of a desire to enjoy more material income them selves, excepting in so far as that is necessary to present suc cess or is the evidence that they are succeeding in the present. Business has in it always something of the character of a game, and the game can not be won unless at one place and another the resources of the business are steadily enlarged. The older inexpensive equipment must be replaced by newer and more costly, the stock must be increased and the build ings enlarged, if the business is to maintain its place among competitors and outstrip them. The cumulative abstinence in such cases seems to be but an outgrowth and result, under favoring conditions, of an original conservative motive.
Abstinence of either kind is the guardian of the individ ual's future against his present desires. Upon the conserva tive faculty depend the preservation, repair, replacement, and economic use of our environment ; upon the cumulative faculty depend largely its growth and betterment. As the capital values in a community are many times as great as the savings in a single year, and as a large part of the savings result from conservative motives, it is evident that the pres sure and resistance of conservative abstinence against present desires must be steadily many times as great as that exerted by cumulative abstinence.