New-York tribune., 1879-08-28
THE A B G OF FINANCE.
HOW TO MAKE CAPITAL SCARCE.

nOtCS WOuid take part OF us Ndlue iIeui tNFI1 uo
lar of capital that has been saved and loaned, or
lies ready to be loaned. Workmen and farmers at
the East need nothing else so much as greater ac-
tivity and confidence Of capital to start the wheels
that are sti. They have savings, and creditors
aud capitalists themselves, though macy do not
know it. Yet some of them are found urging re-
lief for the debtor class" and talking Of " the
tyranny of capital" man might "a well com
plain Of the tyranny of his cows because they VIII
not give milk if they are not fed Industry cannot
thrive unless capital is kept busy and capital can
not be made to work unless it has fair returns and
a far degree of safety.
Capital Is the aggregate of the savings of eight
millions of workers. Not one of those eight mil
lions wiz lend his small savnrs unless he thinks
the sum viii be fairly repaid. Each one will hold
that his savings bank insurance company has
robbed him if it so lends his money that be cannot
get it back. Whoever holds his money would wrong
him by lending il where dollars worth 100 cents
each might shrink before payment to dollars worth
80 cents each. That is why every Outcry formore
money, and cheap money, stops some lending. But
all this capital in full uses needed to make trade
aud industry prosper There is never too much in
this country where all Is busy. and if part lies idle
through fear, some of the mills or mines or shops
must be idle also. SO every outcry for more
money" tends to stop trade and industry just as
drought at the distant of stream may stop
the wheels that are turned by its waters.
The West and South take pains to make it felt
that the man who has money to lend can get but
scant favor there. Laws are passed as in Indiana,
to hinder the collection Of debts; sometimes by
officials and sometimes by mobs the creditor IS
deprived of Justice; payment Of debts is refused by
many counties and towns, and even by States. But
above ALL there is constant clamor for cheap
Il a. I.,,1 l1.vu
and bankers as if they were public enemies. No
other thing has done as much TO check loans OF
capital at the West aud South. for men who have
money in charge feel that it is not safe to put it
where the temper toward lenders is so hostile.
Every vote for cheap money, every vote against
banks and bOndhoders. makes this fear
stronger and causes careful men to hold back more
OF the capital which the West and South need so
much. Nor is this strange. The workman, who
has contrved to save. by years of thrift and toll.
few hundred dollars to keep his dear ones from
want if he should sicken or die would not wish TO
lend his money to those who feel that 50-cont dol
lars ought to be provided for paying debts. What
the workman thinks, the prudent banker OF capital
ist who has charge of the savings of many work
men is also apt to think. When the tracks Of wild
beasts arc seen about the place man thinks twice
before he turns his cattle out of the barn.
In the Bank of England fifty millions of money
lie idle that could well be spared Loans have
been made in London at One-quarter OF per cent
interest year. Yet this country wants more money,
and the average interest received on all loans last
year, by four of the largest NewEngland com
panies, was over per cont. Vast sums Of money
can be brought to this country, for any safe use,
and Mt low rates, if we Will but put end to the
cry of cheap money for debtors. Foreign holders
want to lend but not to lend dollars and get back
halves Many acts of bad faith, by States, cOun-
ties cities and corporations, have helped to cause
distrust as to loans i'll this country, but there
is no lack of confidence in tho good falth
of many wcll-knOwn firms and men. or In
the vast resources and rapid growth OF
the United States. The one thing that checks
free and large movement OF foreign capital TO this
country, to be used in opening mines. start
ing mills clearing farms, hiring workmen and
Fastening prosperity, is the doubt whether the dol
Var which car here be legally collected years hence
will be as good as the dollar loaned now. Specie
RESUMPTION has come. but there is large and
noisy party ut work to stop the redemption OF
notes, and to bring back cheap dollars for paying
debts. Farmer Jones has plenty of grain and
wouId be glad to lend his neighbor wheat for
sowing but wants first to be that the bushels
returned will not be half chah.
Rates of interest can bo reduced in this country
only bv more saving of capital at home and more
lending from abroad. But before men save or lend,
they want safety The same mill or farm that can
now pay per cent interest on 50, 600 borrowed cap
itaI could better pay per cent on $4,000, for the
Use of larger means would enable il 10 yield more.
Tins if more capital could be saved and loaned, so
that rates of interest might be reduced more could
be safely borrowed and used with profit In thou
sands of cases. But there is only one way to en-
couraQe men to lend, and only one way to stimulate
greater saving of capital. First of all, it must be
made sure that good dollars shall be paid for good
dollars loaned No laws can force down the rate Of
interest. because no laws can compel men to lond
or induce men to save. Confidence is the only fer
tilizer that will bring large yield of capital.
Some fanatics complain because any interest
whatever is charged for the use of money. But
what n man has earned is his own. He can spend it
IF he chooses and save nothing Or, like the saw
ages he can work only enough to supply his needs.
II he works more, and denies himself the pleasures
in which all his earnings might be consumed, civil
lzed society is glad to make it worth his while. In
the form of interest on what he saves society pays
him not to eat or drink all that he earns, but to
keen part for his old age part for his family, and
part for the building up of larger industry here
after 1t can well afford TO pay all the cost of in
dncing men to save for if they did not, civiliza-
tiop and progress would be impossible Millions of
workers earn good wages and go to pleasant homes
this day. who could not have been employed or paid
at all had not other workers before them saved
mart of their earnings Interest, which prompts
and helps men to save is the very foundation stone
mon which the grandest temples of industry are
reared But foundation and structure would 90 to
min together If they rested on the quicksand of
cheap money for debtors.
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