The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1869-09-18
A New Monetary System,
By EDWARD KELLOGG.
CHAPTER iii.

CHAPTER iii.
SECTION XVI.
The LGW Of Interest on Money an Accumu.
lattice, not Producing POWer.
Money loaned is universally Spoken Of as
bearing interest; but this 10 mistaken idea.
1t is the borrowers obligation, and not the
lenders money, that bears interest. It is
generally believed that borrowe.s have the
use Of money for the time that they hire it,
just as tenant has the use Of q farm for
the time that he rents it.. This also 10 q
mistaken idea, for the farm is disable in the
tenants hands. but money 10 not disable in
the borrowers hands. " man borrow
$4,000, and give to the lender his note
payable IN one year, with seven per cent. in
terest, at the end of the year be will owe
70 the lender the principle and 500 interest.
Now what does he have to use during the
year out Of which he 10 to gain she interest ?
1t certainly cannot be the $4,000; Tor il
be Keep the money in his own pocket, there
can be no increase in quantity. and at the
end OF the year, he will not have enough BY
800 to pay the debt. But the borrowers
obligation in the lenders pocket has in
creased the debt 500. The $40, 900 must
enable the borrower to have something else
to use for the year, or certainly be would
not borrow the money, and agree to pay the
interest. As soon as be has the money ia bis
possession, be either pays a debt previously
contracted, or buys land, or some kind OF
goods, wares or merchandise With il. IL be
buys land be has the use Of it for the year
by paying $500 rent. II be is a manufac-
turer, and has been disappointed in the sale
OF bis goods, and owes $40, 200 that has be-
come due, he pays the debt, and this enables
him to keep $4,000 worth of his goods for
the year. 1t gives him q years time to sell
these goods, and turn them into money t.
pay the debt. Thus the so-called interest
on money is the rent that he pays for the use
OF the money. The money and the interest
Are both representatives Of value. The
value is in the goods, or land, and the la
Dor that makes them productive. The money
is always dead, and strictly speaking, peo-
pie never pay fraction Of interest for ite
use. The practical effect of The per centage
called interest, IS simply to determine tie
per centage rent Of property.
A tree bears fruit, because the fruit grows
out from the vitality of the tree. But money
is authorised and organized BY human laws,
and human laws do not organise or create
vitality, therefore money il of necessity a
daad power, and has NO vital energy to pro-
duce other money. Money loaned accumu-
lates by interest, but the money produces
no interest. All the money IN this nation
will be kept over from to-day until to-mor-
row, and will bear no interest to those who
keep it it will gain nothing by interest for
bin who keeps it a week, month, year, OF
any other longer or shorter time, All the
money in the county is barren Of interest 10
The hands Of somebody to-day, and will be
barren in the hands Of somebody TO- morrow,
IL may change owners a hundred times, buI
it is always q dead power 10 the hands Of
somebody. Borrowers, whether for longer
or shorter period, always paws out tue money
as soon as possible they do dot keep It,
The money ls not disable as property, it il
not susceptible of being improved by labor
nor Is it competent in itself to supply any
want of man, or to make any Improvement.
Is is dead in their hands, and they at once
part with it, for something that is usable,
such as materials that can be improved, OF
houses that will shelter themselves and their
families, or lands upon wGich they can raise
crops, Or goods, wares and merchandise
which they can use, or cen exchange for q
profit.
A. we have said, the FER centage interest
that borrowers agree to pay for the use Of
money, simply determines what per cvntage
rent they shall pay for the actual use Of d
certain amount Of property for a given
period. Borrowers use the property, NOS the
money and from the property they mus
produce or gain the means to gay the 10.
terest. II F. be farmer, and borrow from
A. 81 900 at seven per cent, F. must rails,
one hundred and forty bushels Of corn, anC
sell at fifty cents a busbel to pay the yearly
interest Of seventy dollars. Is is then tbt
productiveness Of F.'s farm coupled with
F.'s labor, that produces The money to pay
the interest The thousand dollars lent b.
A. to F. do not produce anything: but The
money, by q legal, arbitrary power, tsket
one hundred and forty bushels Of corn from
F., and apprOpriates them to A.'s use. II
A.'s thousand dollars possessed vital instead
of legal power, and could hire land, buy the
seed, plant, cultivate, gather, shell and sell
the corn, it would then actually produce for
A. what the money now legely compels F
to produce for bin. But rs no human Law
can make the dollar a naturally productive
thing, il is impossible to gain wealth By
finance, unless the labor Of others produces
what is gained by the 6nanciers.
Money, then, earns for its owner by an &C
cumulative power; by power to gather
things already produced, and not by q ma
tural power OF growth, like that contained in
the germ Of wheat or grain. Where this
power to accumulate by interest is made
greater and more rapid than the natural
power OF production by labor, this law Of in.
terest becomes a most powerful engine Of
evil. 1t gathers into the hands of few
capitalists the productions Of labor, and
often deprives the producers Of the neces-
Saries of life.
All nations consider money to be wealth,
because it possesses this power to accumu-
late; but whether made Of gold or Of paper,
it really contains a very small amount OF ac-
tual wealth. The laws make money a legal
equivalent for all property, and give it the
power to accumulate by interest They
make $l00, OC0,. loaned at six per cent. in
terest, earn for the owner $1,000 q year,
without labor on his part, while the labor of
twenty men for three hundred in the year at
a dollar day, will earn no greater sum. The
AhuVE VI bWCuhy mNnf AVh q JNui1 "VNiu HuA .
a visible improvement on a farm but the
interest makes no visible improvement on
the money loaned.
Nothing has prevented, nor now prevents,
the full employ ment, and adequate compen
sation Of labor, but the monopoly of money,
and unjust rates of interest. All nations
and all political parties profess TO ,legislats
for The prod uCtion Of industry, but in reality
they have from time immemOrisl leglslated
tosuppOrt exOrbitant intensst on money. And
since the interest on money governs the rent
or use Of all property, legislation, BY fixing
high rates of interest, has always support
ed and increased capital, and depressed Ia
Dor. This enormous per centage interest
ON money has reversed the true order of
nature for the increase Of the earth Is the
natural reward of labor, but the too great
income power gives the reward to those
VINO neither plant nor water, and often