Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1879-07-09
Hard Times and the Decline In Prices

SECOND ARTICLE.
In our article on this subject last week we
reached the conclusion that the cause of the
present as well as of past business crises is
the vast increase of debt under our legal
credit system and the consequent necessity
for periodical settlements, by which the hold
ers of money have so great an advantage over
the rest of the community that the rich con-
tinually grow richer and the poor grow poorer.
The way in which legalized credit sys-
tenn works to defeat the principle of equality
upon which our republican government is
founded, and to build up powerful priv
ileged class in spite of the adjustment of
the laws of primogeniture, entail and mort
main, is worthy of much more study than
ever seems to have been given to it by
statesmen, or by writers upon social science
and political economy. 1t may appear very
presumptuous for farmer to undertake to
grapple with the subject, yet no men are
more interested in it than the farmers. The
tendency of wealth to aggregate itself in few
hands has not yet manifested itself to a
great degree in America in connection with
landed property, because we have so much
unoccuped land, and comparatively SO small
a population. Yet it is only a question of
time, and in the older states of not very long
time, when this law of the aggregation of
wealth under legalized credit system will
begin manifestly to act in that direction, as
in all the older nations it has already done.
1t is said by some writers that the evil
cures itself, because wealth thus aggregated
is continually flowing back into the hands of
the people by the extravaganza of the rich.
But we consider the extravaganza Of the rich
to be an aggravation of the evil, since it not
only is pernicious example in the COM
munity and sets up false standard of re-
spectability, but it also diverts industry from
the production of real wealth to the pro-
duction of useless articles of mere fancy and
injurious luxury. A vast amount of the
labor of the world is now engaged in such
worse than unproductive activity for the
supply of artificial wants, generated by a
superfluous wealth which, if more widely
distributed, would stimulate only healthy
production. Costly residences, furniture,
ornamental grounds clothing, personal adorn.
ments, luxuries of the table and of recrea-
ton, can only be INDUCED in by the few at
the expense of necessary shelter, clothing,
food and other reasonable comforts among
the many. The wine-drunkenness of the
rich arising from the lack of something to
do, too often causes the rum.drunkenness Of
the many from want and despair; and so
the candle of national prosperity is burned
at both ends.
To suggest the adjustment of so wide
extended and almost unquestioned a system
as that of legalized credit is to risk the i'm
putation of folly from the unthinking, who
hold that what is generally agreed to must
be right. But this is an age of free thought
in which every institution, not only of state
but of religion, must be ready at any time
to be brought to the bar of criticism, ant
submit to the conclusions of right reason
If what is said here be sound, it may fail o
hearing at this time by being in advance
of the popular thought. Yet it is none thu
less a duty for the writer, having access u
the public ear, to offer his thoughts on 81
important matter for public consideration
The first opposing thought that will aris
will be that credit is the life of business
and that to abolish credit is to fatally fette
the progress of the nation. But it is no
proposed to abolish credit. What is pre-
posed is to give credit sound and safe basi:
and thus to prevent its pernicious periodica
expansions, and the consequent destructiv
contractions. Credit is not destroyed c
abolished by withdrawing from it the SAINT
ton and protection of law. Law is now bu
asecondary protection to credit. Its primar
basis is character; and the number of cred
transactions of nation would suffer il
fnitely greater curtailment by the disal
pearance of personal integrity among its pc
pie than by withdrawal of the sanctio
and support accorded to them by law Vel
few persons will trust another with money
property who has no character for honest
however rich he may be reputed to be; viii
credit is widely given to men of small mea
who are known or believed to value the
good name as far above rubies." It
abolition of legalized credit might curti
the business transactions of the former
the limits OF his ability to pay cash, but
would have no such affect upon those of t
latfa Tho action biu fnrtnnac
business would be only beneficial, since t
sole change likely to occur would be
greater interest on the part of his credtt
in the wisdom of his investments I
credit would be large in proportion to
honesty and his skill and prudence in bu
ness. 1t would have no other limit. A
thus the business of the country would
into the hands of our best aud ablest m
The dishonest and incapable would be ru
out-the first absolutely, and the second
proportion as they failed to be or beco
wise and honest.
AS to the effect upon farmers, let us
how many hundreds are there in Verm
to-day who wish they never could HI
bought any land on credit ? And in the
ton how many thousands more
abolition of legalized credit would be
greatest of boons TO the young farmers
the country. There would be only two W
in which they could then come into
ownership of land. The first would be
cash purchase. This would result in
multiplication of small, and necessarily ,
titled, farms. Under such system
agriculture would vastly improve, and
production of abundant and cheap food
clothing-material would have powerful
ton in the development of our other
dustries. 1t would tend to rapidly make
nation what it must eventually becom,
hive of industry, and the center of the {
merce of the world.
The other way in which the farmer w
get hold Of land would be by pertnershi
Joint ownership. Mortgages being illeg
large landowner could only sell in that
to the farmer of moderate means. A
worth two thousand dollars would buy s
one-third or one-fourth interest in I
with the purpose of buying the whole b.