The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1869-09-11
| New M onetary System,
BIZ EDWARD KELLOGG.

- ~" @% ~A~~~
BIT EDWARD KELLOGG.
CHAPTER III.
fHE RATES or INTEREST THE GOVERNING POWER
or DISTRIBUTION 70 LABOR AND CAPITAL.
SECTION XIV.
Voluntary Agreement no test Of just rate
Of Interest.
The lava do and ought to restrict some
contracts and give freedom 10 others.
should apply to transactions
upon O wrong basis, and those made upon
q right one should be entirely free. Agree
ments founded upon just basis would ma
turally be mutually beneficial to the parties
contracting them, but no agreements founded
upon q wrong one can ever do equal justice.
Lotteries and various kinds Of gambling
are rightly prohibited BY Law, although the
buving and selling o. lottery tickets, and
betting on games Of cards, are voluntary
transactions. IL mere voluntary agree
ment makes contracts Just, why do the
laws annul those made 10 gambling, while
thew enforce the fulhlment Of other less
voluntary agreements? A man without
property must become q pauper unless be
agree to work for others, or have the pro-
perty Of others to work upon. He is not as
free in his contracts rs the gambler, in whose
case there is no such necessity for the lat
ter must have money or property to stake,
or Others will not bet with him. The only
reason for making gambling contracts void
n a - ans n n
losers for what is gained BY winners. II,
then, wealth 10 the product OF labor, and IL
passes into the bands Of a few capitalists by
agree meots less voluntary than betting and
buying lottery tickets, Is not the former even
more contrary 80 justice than the latter !!
Wrongs Of this kind to the laboring classes
are surely rs greatly to be deprecated as
those to gamblers; and as no mutual agree
ments will ever make gambling just, so no
mutual agreements founded ON a wrong
money standard can ever be fair and equal.
If R. be batter, and 7. shoemaker, the
products of their labor must be exchanged,
in order 20 supply both their families with
hats and shoes. If Y. hold the medium BY
which this exchange must be effected, and BY
it's power and use can obtain without labor
more hats and shoes from r. and I. than
thew can get tog. Their retain as the reward
Of their labor, X. evidently holds an unjust
power over them and their products. X and
T. are not only obliged to exchange their
bats and shoes with each other, but are also
Obliged to exchange them for every neces-
cary Of life, and even for the materials out
Of which the hats and shoes are manufactur-
ed. They cannot make these exchanges
without an agreement with x for the uee Of
the legal medium. Neither the shoemaker
NOR the halter can refrain from the use OF
money M . man from gambling; and, under
the operation OF the present monetary sYs'
ten, BY using 10 they are certain to lese the
greater share of their surplus Eats and
shoes. They do not even stand the same
chance for winning by their labor that the
gambler does BY gambling, for the dice may
turn In his favor, but a rapidly accumulat-
ng power will never turn in favor Of pro-
daeers. When money shall be rightly insti-
tuted, and just rate per cent interest main
tanned, agreements among r. T. and X.
viii naturally award TO each his equitable
shsre VI products; but until this medium Of
exchange 10 rectI6ed, the legal rights OF pro-
perry must continue at variance with actual
iustice. The income pow er will absorb what
the producing power earns, and no volun-
sary aKr~ements according to demand and
snpply, can prevent this result for the
sufsrinx is caused by injustice 10 the laws,
NOS BY faults In the agreements.
Pebble opinion appears to lean toward less
legal restraint upon trade. This would be
we'll, IL the foundation Of trade were made
just. Bot 6rst 70 TX upon an unjust money
basis, and then to make laws enforcing the
fulflment OF voluntary agreements made
upon it, 10 first to establish an evil, and
then trust to n competition in doing the evil
90 produce q good. II makes the grossest
legal, and gives it the greatest
freedom. But fnancers assert the laws
caunot be enacted which will regulate the
rate per cent. inter est, and thus keep money
NJ q uniform value; AID that tbs rate
rec cent, Ike the market value OF commo-
dities, can only be regulated by supply ard
demand. Under this law OF supply and de-
mand, agreements according to the neces-
sity of the borrower and the avarics of the
lender, are considered tests Of q Just rate Of
interest, and must regulate the standard by
which all values are determined. Under
this system, directors and the favored few
borrow money from banks at FIVE si3, or
seAen per cent. per annUm, and lend lt at
three four or five per cent. month and if
mutual agreement makes justice, all these
rates are equally just although one class
pays fr0m six to ten times more than
The other, AMI the favored class gains the
BY mere exchange of paper,
without in any way bene6ting the sufferers
A broker borr0ws money from bank at the
rate OF elk per cent. per annum, and lends it
On the same day to a merchant who is \" cor
aered" at enc per cent. day-just sixty
times NJ much-and according to this great
aw OF supply and demand, as it is often
called, each party pays exactly the right and
Dust rate per cent. interest. The broker de-
mands the money from the bank, and the
bank supplies him at the rate Of SIX per cent.
per annum: but the merchant demands the
money from the broker, and the broker sup
plies hing ut the rate of 3b5 per cent
per AMMAN. IL q man fall into water anC
demand help to get out, the person who sup
plies assistance has a perfect right, acrord-
my to this law OF supply and demand, 10
lake oil the property man may OVID; for
EhO bot . miser would not give all bic
Eealth 70 save his life Ia EurOpe, labor
'se, by voluntary agreement, work for tet
" Fifteen cents q day, and are often thank
~s ~ BOb WOh4 ~ bucSc IAbC6 W save bDom-
selves and their children fIOm starvation. II
mere freedom Of agreement, or supply anu
iemand, constitute the justice Of contracts,
Independently Of their basis, these prices
must be standard whereby to estimate the
rue value OF labor, which, therefore would
iePend on the Price the capitalist would pay
or it, and not oO its utility.
This wrong basis of contracts also causes
competition among laborers themselves
to their necessities the tendency
Il which, under present systems, is to re-
luce the price Of labor to the mere subsis
ance of the iaborer. But the reverse 81
his 10 true OF competition in lending money
Whenever strife occurs in the money mar
'et, and one bank begins to run upon an
'ther, and capitalists strive for the highest
ute per cent. for the use Of their money, the
endency is at once to increase tne rates Of
interest. The greater the strife the higher
be interest rises, until the whole business