The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1875-06-02
Borrowing Money.


The Adrertiser of the 22d of May has a
column pertaining to loans, in which it points
out how the money can be obtained and-how
spent. 1t favors borrowing abroad, on the
supposition that because other nations readily
make loans abroad, therefore we can. Here is
just where we are liable to make a financial
mistake-placing ourselves in bondage to for
/ eign capitalists Our views on this subject
have been freely expressed, in the discussions
which took place last year. If we obtain our
money abroad, every dollar of interest due on
it must be sent abroad, and the Incidental cost
of exchange and foreign agency, will swell the
rate to more than what it may cost to obtain it
here. Eventually, the principal must be sent
away also.
The sum that we need to borrow annually
for public works, improvements, roads, har-
bors, &C., IS not a large one, from two hun
dred thousand to five hundred thousand dollars
at the outside. This amount can, with proper
effort, be obtained here by paying whatever
rate Of interest money is worth, probably not
over ten per cent. per annum and under the
most favorable terms no foreign loan can be
made at less cost to the country. The adj
vantages of a home loan are quite apparent,
as whatever it may cost in the way of interest
and charges will be expended here, and when
the principal is paid, the amount actually
borrowed, and not a premium of twenty or
twenty-five per cent. on that amount, is pay
able to the bondholders The original sum,
as wep as the interest paid on it, remain in
the country to enrich our own people. This is
the secret of the financial solidity of England
and France, and of the loyalty of their people,
who are bound together as with bands of gold
and silver.
No nation which contracts loans abroad is
truly independent. The United States, during
the late civil war, sent to Europe where she
contracted the bulk of the present debt, under
very disadvantageous circumstances, and has
for ten years been paying dearly for it. The
constant drain of one hundred millions of gold
to pay the interest on the public debt due in
Europe, added to other European demands for
American gold, has kept the premium on it
from ten to twenty-five per cent. While the
debts of England, France and Germany are so
many Strengthening bonds, those of the United
States, Spain and Turkey, mostly owned
abroad, are the sources of national burdens,
axes and poverty. While the rate of taxes in
England and France do not exceed 81 to each
person of the entire population, that of the
United States is over $40 These are stub
'orn facts, from which we should learn
essen in political economy. A national debt
wned at home may serve to bind together the
ation, but this cannot be claimed for one due
broad.
But some may say, we have not the capital
n the Kingdom to supply a loan of five hun
red thousand or even one hundred thousand :
year. No one may assert this without the
roof to support it. The money wanted by |
Government is not for boarding, but to be '
aid out for labor, materials, &C., and would
emain in the public treasury no longer than
necessary to count and pay out. And when i
aid out it would very soon return in the shape i
new loans. Thus one hundred thousand G
ollars kept circulating might supply loans in l
ne course of year for five times that amount.
Ices any one suppose that if the bank engaged :
provide for Government $780, 900, at 10 per +,
emit interest, as it might require it during the "
ext year, there would be any difficulty in 81
'taining that amount? And if $3.50, 900, n
by not double that sum, by using proper !, a
forts to attract capital from abroad ? We =.
mly believe that all the money required by :
during the next ten years can be :
ised on loans at home, and if SO, it is not a. ~
'litic to go abroad for it.