The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1870-02-12
A N5w Monet Try system,
CHAPTER IV.-SEcrIoN V.
d. EnUARJ KELL-GG


Tie lL.,ag maent of the Banks and the
Efeces Of their Operations upon the
Ifro1ierity Of Trade and Productive
had'ts!y.
CONTINUED.
The fslowing illustration will show the
bearingsI Of these speculatiOns in money
upon thu welfare of the producing classes.
/ II. is Il healthy broker, and bank director.
His income, as also the income Of the bank,
depends Iupon the interest in money. lie is
worth St0O, 900, $40 900 Of which are in
bank std TX. lie uses $50, 900 as a broker
in buying mercantile paper Suppose him
to be abb to effect a change in the rate Of
interest, IRON six per cent per annum, to
two per lent. a month, and the interest on
his $50 200 will be increased from 81 800,
to $4,000, making clear gain of $l4,-
400 st the bank in which he is director,
and at oshcr banks be obtains discount for
l $50, 00Q at six per cent interest per an
mum on bhort paper, aud pledge Of bis bank
stock. I9aning this at two per cent a month,
be makks a clear gain of $14, 400 more,
making with the former, in one year, clear
gain Of SIS, 800 over the six per cent. in-
terest. by the rise Of interest from six per
cent. pei annum TO two per cent month,
/ II. incH3ases his income from $4,000 to
I S34, SOC. This increase is paid to him by
merchsTtts for money to meet their engage
ments, $nd, consequently, their debts are in
creased sthis sum. If interest had remained
al six pr cent, the broker would not have
borrowed Of the banks, for there would have
been nd inducement to borrow money which
/ he coulIl not reloaa at higher rate of in
tercst The money would, therefore, have
been ljlned by the banks directly to the
merchalts at six per cent. per annum, and
the mel. hants would have saved S2S,8O0,
which hey paid to the broker.
Whel the banks curtail their discounts,
nnmerohs contracts depending on their loans
must LID over unpaid. Those who are de-
sirous yf meeting their engagements will
suffer themselves to be defrauded in the
rate of interest, rather than have their paper
protested for in a large city, if their paper
lies ovq-, their credit is gone, and their busi-
ness n ined. They are compelled to pay
these lxorbitant rates Of interest, however
sensible they may be of the injustice. Good
aud cys are not set before them to choose
betwedl but two evils are placed before
them, snd they must choose one or the other.
If thel wish to do right, they will choose the
one which they think will do the least injury
TO themselves and their neighbors but to
one on the other Of the evils, to usurous in
tcrest ior to bankruptcy, they are compelled
to submit
Sudi are, however, by no means all tn e
evil CO lsequences Of speculations in money.
Money! is the standard Of value, BY which
the prtducts of the soil, all merchandise, and
the LABOR of the people are estimated. The
incomts from labor and products diminish
in prohoi ton to the increase of the income
from honey The change Of the rate Of in
tcrest sompels the producers to labor four
times more to clear 800, than before the
rise q interest. Each sum Of 500 con.
tainedsin the s2S,SOO gained by the broker
will purchase as many products Of labor, as
the SlOO gained by the four-fold toll Of the
producers; and yet the broker has done
nothing to aid production or distribution.
but his retarded both. City merchants sell
goods to country merchants, and country
merchants sell them to farmers and me
chanic,, from whom they must collect the
moneS But the diminished price of pro-
ducts puts it out Of the power Of the me
chanica and farmers to pay, and thus the
merchants are bankrupted. Meanwhile
brokelI, and capitalists, who are neither en-
gagged lin productive labor, nor in the dis
tributii 10 OF products, grow rich on the spOils.
They ire reverenced for their wealth, while
mechanics, farmers and merchants, who have
becoute correspondingly poor, are despised
for thSr poverty, and blamed for being un-
able 4 fulfil their engagements.
Thi nature Of money is not understood
by tbf public, nor By the farmers, mechanics,
and tse great masses ofthe laboring classes ;
for if hey did understand it, they certainly
nevertwOuld submit to its overwhelming and
oppressive power The newspapers in the
City Of New York devote several columns
daily 70 giving the state Of the money market
the Prices Of various stocks, and their fuc-
tuatidns from day to day, according to the
state ,Of the money market. Now If money
we're properly instituted and regulated, there
would never be such thing as a money
markl,t There would be a market for the
predictions of labor and these would
dOubs less vary more or less in their markes
valuG or price, but there would be no varia-
ton q the market value Of money. 1t is at
unret sonsble for people to gain great wealth
by fluctuations in the market value Of money
as it sgould be for them to gain great wealth
BY fluctuations in the length Of the yard.
MOny is as much a standard of value as
the Ylrd is Of length and deviations in the
MARKET value Of money are as much fraud
uponsthe public as deyiatiOns in the length.
weight and size Of other measures No
matter how long this gross wrong has been
Practsed upon all nations, it is no less an
evil !, and it has shown itself to be such BY
the q naturalization of wealth in every nation,
and &c poverty Of the people whose labor
has produced the wealth.
ltIis now quite generally admitted that
money is only representative Of value and
we Presume many of the writer's of the
mon1y articles in our daily papers would ac-
know edge that its value is only representa-
tive.l Yet in the next breath they will tell
you, khat the country is rich in all the pro
duet pms Of labor, but what the people need
is capital to get their products to market !;
that The manufacturers have plenty Of goods,
but 4nere is a great want of capital to buy
thens and therefore there is no market for
the aoods-just as if the money was the nc
tual capital, and the labor and the prOduc-
tons. Of labor, merely represented the value
Of tht money The reason why money thus
aDDohro 70 ho tha raoI oon;fal - kl,o% al