Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1875-12-15
HorroMing Money.


haust their friends by borrowing, and then
their acquaintance, and then any strangers
whose confidence they can secure or whose
compassion they can defraud. There are
scores of corporations that are great servi-
tors Of public interests, and therefore have
q strong claim ON the consideration of the
public, that are large borrowers whenever
and wherever they can find capitalists dis
posed to lend They Justify their borrowing
on the ground Of the public advantage.
though we do not see how public welfare is
subserved 10y their refusal to restore their
borrowed funds.
The second class of borrowers consists
Of individuals, corporations. towns, states
aud governments, who borrow ON The oXpcc-
tation or security Of future returns. profits,
advantages, emolument-, which will enable
them to return the borrowed capital prnci-
pal aud interest Sometimes, but rarely, their
expectations Of future profits or develop
mcnt are fallacious and they are unable
30 meet their engagements. This cunsti-
tutr, by far the largest class of borrowers.
The first class is small, and soon comes to
the end Of borrowing. This class is large,
and the business Of the country is for the
most part carried on 10y them. Students,
who mortgage their future earnings 10 obtain
means for their education, belong to it.
Merchants, whose capital is not equal TO
their present wants, belong to it, Men of all
sorts, whose means are not sufficient to build
aud furnish the houses which they nom
inaly own, belong it. Brokers and spec
ulative operators Of all kinds belong to it.
Churches and religious societies, whose
ambition outruns their purses, belong TO it.
Railroad and other corporations whose CON
structiun accounts. dividends aud current
expenses occasionally exceed their net earn
ngs belong to it. All the savings banks in
the country belong to it. for they are actu-
ally, though not technically, the borrowers
of the money Of their depositors. Banks be
/ long To it to the amount of their outstanding
notes aud liabilities All the creditors Of
banks and trust funds belong to il. School
districts, villages. towns and cities belong
to it, whenever their current expenses OK
coed the rate of taxation, or whenever their
liabilities are in excess Of any rate of taxa
ton they may dare to impose. The states
and the general governments, and all munc-
| ipal and other corporations, belong to it, to
| the amount of the bonds they have issued
/ 1t would Ice an instructive study in political
economy to learn the amount AMI the kind
of borrowing that keeps all the wheels Of our
civil commercial, business and social affairs
moving. \ tabulated statement Of borrow
ers, the reason for borrowing. the amount Of
actual assets behind all liabilities the char
acter and time Of loans, and the real lenders,
would be the best book that Il fuancicr or a
political economist could study It would
be- an inside view of the condition Of bust
ness that now can only be conjectured.
This statement as to the classes of borrow
eis will give us hint as to the state of our
financial affairs. In the first place, the ma
tional government is a borrower to the ex-
tent Of over two thousand millions of dollars.
The entire banking capital of the country
may be placed in the hands of the borrower.
The amount of deposits in trust companies
savings Institutions, may also be charged to
the borrowing class. All municipal indebt-
edness belongs to the same category, and all
railroad bonds and floating debts Then all
individual obligations to individuals are to
be added to this amount, The total sum of
borrowed capital, or money, must be not less
than five thousand millions 1t probably is
twice this sum. The annual interest is not
less than four hundred millions. The inter
est of large part Of this borrowed money
is paid to the capitalists of other countries
But the larger part is paid to our own citi-
zens, and the capitalists of this country
The interest which is paid out of the coun-
try, is so much taken from the financial re-
sources and ability of the country. II i,
like interest paid by one man to another
from whom he gets no employment or Other
advantage The interest which is paid in
the country keeps the business of the coun.
try active and prosperous The borrower is
stimulated TO productive industry, and the
capitalist receives the pay Tor the use of hi,
money. Thus the great debt which is car
red 10y the state, the municipal and other
corporations, and by individuals, is a con
slant spur to development to work. to pro
duction, and a constant means Of the in
crease OF capital and its distribution.
or course, borrowing ON the credit of fu
ture development and resources, is dangerou,
business. The borrower is servant to the
lender Interest accumulates against Him
night and day, whether he is in sickness OF
in health, while at work or at play The
business may be so good, and the efficiency
of the borrower may be so great that very
soon his debt becomes his capital, and hi,
angmenting capital becomes, in turn, the
debt of Others. But now and then the ex
pected accretion is not realized The bor-
rover has made mistake, aud the lender
swoops down and takes all his good, aud ef.
fleets aud leaves him to begin again Some
times the borrower plucks up courage and
enters again into business, on new
credit, but usually he loses heart and goes
down step by step into poverty and obscur-
ity. Hence borrowing in trade or business
is risky. Ii often is the foundation of for.