Page:Indian Journal of Economics Volume 2.djvu/607

ECONOMIC DEVELOPMENT 589 other words we must understand the conditions supply of capital in the local money.markets. Nature of Money Market of money for follows'- side, that first. It one class and the next on either side. For our present purpose the study of the supply supply of that offers. putting security first,- others wanting a speculative investment with probable high yield. Each class of borrowers and lenders who are seeking to borrow and lend upon similar conditions forms $ separate market; and the rate of interest for each class of security may vary separately.. from ?hst of other classes in accordance with the conditions of demand foi and in that market. who are on the kets for different classes of securities are to a large extent interdependent. If the demand in one class-- say, industrial preference shares, increases with an expansion of trade, some offers are diverted, say from the railway debentures is the classes of will be sufficient investment lenders, may be taken to divide all lenders of purposes into five classes, as market, lessening the supply There are always numerous lenders margin of indifference as between of capital for investment with the conditions class attached to the demand and supply Yet, as everyone knows, these separate mar- The money market in any financial centre is not ih reality one market, but from the theoretical point of view a number of interdependent markets. Some borrowers want money for short terms, others for long terms: some offer good security, others compara- tively poor security but a high rate of interest. On the side of the lenders there is equal diversity as to the terms on .which owners of capital are willing to -lend--some for short, some for long periods: some