The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1875-07-03
The Scientific Rate of Interest.

reduced to a scientific certainty. In this
system, not vet fully discovered perhaps,
there is one point, at least, which has been
SO clearly set forth 10y different writers
and it seems 70 me 50 selfevident that
hazard nothing IN stating that we have Oh
tanned complete solution of this part Of
the problem.
| wish to give few extracts from differ
ent writers to show that there Is all identity
Of thought on tins subject Of interest %,
MONEY. which has only to be seen in order
that all honest persons shall come to a
unanimous agreement upon this most i'm
portant point.
In the first place let me call attention to
the most remarkable words of Edward
Kellogg. In his celebrated work, New
Monetary Systems, page l7S, he says
III Now. as labor ia any useful occupation
should De Justly compensated. So also the
necessary labor 70 furnish and issue the
money OF a nation should be fairly remu-
uerated ana the per centage interest on
the money furnished and loaned by an in
stItutIon established by the government for
that purpose, should be equivalent to pay
for the material and labor employed IN PRO
ducing and loaning it.
Thus the borrowers Of the money would
pay the cost Of the production and issue,
and this would form the rate per cent. in
terest 10 be charged by any subsequent
owners ~ the money, when they should
loan IL.
Money thus organized would always pay
for its own support, without AID from the
Government.
~ foot note the editor says The too
modes q estimating the just rate Of interest
W. forth IN this chapter, 40 not differ ia
their results but the author considered
the latter w hich Is taken from hls more re
cent writings the final criterion and spoke
II It repeatedly, during the last winter Of
his life, as a point 70 which ne attached
great Importance.
Well he might attach great importance
"a tins discovery which. when 1t shall
have become generally known Viii effect
a revolution IA business and iu society
Sow wish to ask. Is it Just 90 the
memory W Edward Kellogg to put -
much stress upon his earlier thoughts and
methods, and totally ignore his latest and
inuSt important discovery Let the disci-
pies ana enthusiastic admirers Of Mr.
kellogg answer.
MI Albert Brisbane j. the next witness
He presents the point in this wise 1T
lthe government must loan the currency
direct w the industrial and commercial IN
tereSts II the country. 1t must loan it at
,,.t ut ISSUING and management, not at
fictitious rates 81 interest
Now cali the atten.io Of all thinking
men ta one Of the most remarkable and
excellent presentations of this subject
which have come within my knowledge
! consider ID concise anj complete
statement VT NhAt scientific banking will
and must be. u substance, when We get
It ID ~ Am extract from a pamphlet
written by Mr. Charles Moran / am in-
formed tina. Mr. Moran Is a New York
banker
tie says, " Ii Is solely to act as guar
autve fund against the losses it may sus-
tam from its debtors, that a bank ever
needs any capital Of its own for bank
Iug j. mott Il generally supposed, the
luamng 81 money II any kind, nor Of
capital. but the exchange of its own well
known credits for less widely known but,
supposed equally well secured individual
credits
' When tins shall be fully understood
by the community and by legislators,
banks NI.. Ivy relieved from all govern
mental restriction and control and then
the rate I'D interest for money and bank
credits viii soon be reduced 10 the lowest
possible minimum, j. e., to the cost Of eX-
changing credits, Plus, a moderate per
yrutage u cover the risk and labor of
transactIug the business Of the bank
Bank psnics viii then become imPOssI-
bic as loans Of money, OF rather eK-
changes Of credits, will then BE readily
obtained, at any moment, by every one
who can offer sufficient security for the
returns of the money as credits rlthin
mOderat9. fixed, period q tiRe, at much
lower rates than loans Of product We capt
Adl- SUI - Adhhg bilt Aidllu. rCbollt5s
warehouses. machinery, tools and nipple
ments etc The remuneration for the
loans Of the latter must ever bear the same
relation to the amount they can be made to
produce within the year, whilst the rate
~ loans ot money and credits will be con
trolled by the cost and RISK attending lthe
business N L'oIusg, and not at all by the
productions Of real capital
In a recently published book Of "Frag-
ments, written by Col VIM. b. Greene Of
Boston, this idea is so fully developed that
| would refer the reader to the book for a
complete and exhaustive presentation Of
this great and newly discovered truth.
l will quote few sentences as follows
The paper money of the bank is good,
because 1t takes none but good notes from
its customers, and the notes Of the custom
srs fully garantes the notes NJ the bank
All profits, therefore, Of bank 81 issue
belong rightfully to the customers of the
bank, and ought to be divided back to
them for the customers furnish the CAPT
tai when they make over their notes to
the bank, and they then pay the officers
salaries. and the other proper expenses Of
the bank. III the discount they give when
their notes transmitted into current money.
The customers themselves are the only
stockholders that the bank has any call
10 nave.
" A commercial bank that issues paper
nO"eS ought "a, uch be a mere clearing
house tor legitimate business. paper run
mng TO maturity
Now, can 1t be possible that these stu
dents have all Numbered at this point Is
i not more reasonable to suppose that the
present system, based upon the barbarous
past, stands 70 represent ignorance, cupid
lty and stupidity
In conclusion, let me say that the man
who oorrows money of bank on a mort
gage, furnishes the credit himself and