The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1873-12-27
From the Northwestern Review.
Our Nationaa Finances and Currency
The Impsrfections Of the Present Sys-
tenn and the True American None
tary System.
CONTINUED.

CONTINUED.
| EFFECTS ON OUR SHIPPING INTERESTS.
| To make this more clear, let MS take the
case Of our shipping interests, and suppose
d compsny Of twelve Englishmen to pro-
pose to an equal number of Americans to
establish daily line of steamers between
New York and Liverpool, and that it would
require twenty-four vessels, costing, on the
Clyde, $500, 600 each. As matters now
stand, the American part Of the company
/ would not feel disposed to enter into the
! arrangement without first procuring from
our Government subsidy in some shape.
If they should happen to belong to the
free-trsde school, they would ask for, and
be content with, the removal Of tie duties
on all materials entering into the construc-
tiOn Of ships and ship stores. On the other
hand, if they should belong to the protec-
tion school, they would ask for a subsidy
to indemnify them against the higher
wages paid to labor in the construction and
operation of their vessels. Now suppose
Congress should say to these gentlemen,
whether they were Of the school of free
trade or protection, we are 80 interested in
having our merchant marine restored to
the high seas, that We will not only COM
ply with your request, but we will guaran-
tee that you will have twelve vessels Of the
same capacity, and in all respects equal to
those of your English partners, at the same
cost, and that your seamens wages, re-
pairs, insurance, ETC., shall be the same as
theirs, but you must employ American
capital in the enterprise. This would, of
course, be perfectly satisfactory, for with
us the question Of the rate Of interest or
cost of capital is never raised in connec-
ton with enterprises Of this kind. The
advocates of protection never complain Of
nor ask to be indemnifed against the high
er rates of interest paid for the use of cap
ital, but only against the higher wages |
paid to labor here than in Europe and |
the advocates Of free trade assume that |
our manufacturers can pay ten or twelve, |
and even twenty per cent, for capital, and |
compete successfully with foreign produc- |
tions manufactured with capital at three |
to four per cent. The political economists
Of both these schools look upon the cost |
of capital as matter Of secondary impor
tance.
Nov, We will suppose the arrangemeIt to
be consummated, and the company to make |
a net profit Of seven per cent. per annum
over and above seamens' wages, repairs,
and all other expenses, and aft
er providing a sufficient sinking fund to
the line in like good repair 1t all
times. This would doubtlessly be satisfac
tory to the English partners, for it is about
double the average rate of interest in that
country, and it ought to be equally salts
factory to the American members Of the
company for it is quite double the average
rate of increase in our national wealth.
And let us farther suppose that the Eng
lish parties borrow their capital at four per
D,nt. per anDum, and that the American
parties agree to pay ten per cent. for
theirs. This is just about the difference
in the rate Of interest ON capital in the two
countries.
The result would be as follows: