Idaho County free press. [volume] (Grangeville, Idaho Territory) 1886-current, 1894-03-30

in Producing Panics, Psuperism and !
Chronic bankruptcy.
The following are extracts from an
Article by j. W. Bennett, in the Arena
for March, entitled "The Cause Of Finan
cial Panics":
An odd proposition, but one capable Of
mathematical demonstration, IL that the
very foundation principle Of our industrial
system leads % to recognize obligations
which we can never pay. A simple,
specified statement OF what they are COM
pels US to admit that they are too large to
meet. The present wealth Of the United
States may be placed in round numbers,
at seventy-two billions Of dollars. That
fully eighty yer cent OF this sum
pays interest may be verified by any
person who cares to give the subject
thought. Something like eighty per cent
of the country 10 in the hands
OF 250,000 persons or about one
ACKNOWLEDGEMENTS OF the whole
population. This excludes the wealth Of
well-to-do farmers and merchants, and 1t
goes without saying that nine.tenths OF
The wealth held BY the immensely rich is
interest bearing. The wealth in the
hands OF farmers and merchants Is pay
ing interest on all that lie not used for the
, personal wants Of themselves and their
, families; and even many Of the home
steads Of the country are paying interest.
At least one half Of such wealth is inter.
, est bearing An examination OF the
/ mortgage lists OF the several states will
. bear this statement.
. We are, then, paying fixed charges on
a about $55, 600, 900 OF the country's wealth.
0 The net rate will average five per cent. |;
D and taking into consideration commits.
Il sions and other charges, six per cent. ia
Q low estimate Of the gross rate. The
!. interest on $55 ZOO. 900 at six per cent. Ia
+ 50, 300 ,OO0, 900 per year.
y To get the average interest charges Of
l. the last decade, We must take the aver
n ake OF interest paying capital, which lie
d about $50, OOO, 0O0, 900. We have, then, an
% average yearly interest OF 5000 DOC, 0OC
70 a sum which more than absorbs the
entire yearly increase Of wealth in the
United States. During the last decade
the wealth Of this country has increased
n about 49,, OOO, 900. During the same pc.
10 riod the interest charges were $50, 900,
" OOO, 900. Adding but the single item o.
q interest on personal business obligations
N to the standing debt of the people, the
lie assets of the countrys citizens will, II
It tile short period Of ten years, fall $S 600,
OF The principal falls due in that time
to and the business of the country, il fixet
ne in the same hands, would bankrupt II
ne that time. The tendency OF the countr,
nd is to drift into the hands Of large prop
n erty holders, who are almost exclusivel
ly creditors. The mightier the fortune tn
Nv more interest 1t draws, and the more eX
he empt it is from the danger Of speculs
as ton. Fortunes 20 on piling up unde
nm the laws Of interest and land rents; an
after all checks and counter tendencie
are allowed for the country has a panic
becomes bankrupt-every twenty year
n, The fact 10 that whenever the creditG
no. class demands Its money there Ia
hi panic; for there is not cash enough
,;s the country to supply the demand, an
va all property must be turned over to me
nd liabilities. During times Of confiden'
NV busness is kept moving by shifting
N liabilities; but in times of doubt and u
wo certainty, from whatever cause broug
i'm about, the business Of the country fin
inc il impossible to meet its obligations OIL
,se is obliged to 90 into bankruptcy
the The piling up OF debts always ends
, in collapse 1t is nonsense to cay that wa
iad of confidence is the cause.
left But interest and rent charges are I
,ar. the only liabilities Of the business OF
country. The government must be 81
ported; the national debt and the int
yet thereon must be met debts (sta
municipal and schooD must be provit
IL for The interest on the public debt
'i.e the United States amounts to SAC, 4lO, I
, ou annually.
on, The interest on municipal, scho
nse county and township debts in the Uni
States is $50, $50 900 per year. The
ise' penses OF the United States, exclusive
,eu, interest and the paying off Of the stal
aoH ing indebtedness, are now about $3s
'sue 600, 900 yearly, and the cost Of sta
,sm county and municipal government
s en $45O, 600. 900 year. At the very low
zee lee' estimate, 1897 900 900 must be char
1 ou yearly to government in the Uni
non States, not including payment OF
principal OF the public debt. This, r
resenting money spent outside OF regu
business, amounts to IS $40, 900 600 l
last decade. Adding to the former sum -
land excess OF interest on private obligati
and over the increase Of wealth-and We h
we're SIG, 97O, 100000 az the sum which
ork, assets OF the citizens OF the United ST.
ay q fall behind their indebtedness every
ouse years.
hite In view OF such figures as these,
lin not difficult to see why We nave peri
hey of business depression every ten "
to and terrible financial panics every TIVE
Ex- vears. The tendency. under such
ltiict ditions, is to have all the wealth wi
alton is not used to feed, clothe and shelter
Q as race pass into the hands Of the me
lender. 1t is therefore plain that VI
our present financial system the
ness Of the country cannot meet its
Q not legations. 1t is also plain that tho c
but itor class must go on absorbing more
from more of the wealth Of the country I
'erial finally the more wealthy-those who
the not obligated to take any chances
l the have the lions share Of this wo
useo goods.
piece We see nothing adequate to accoun
teen this condition Of affairs except the
nicer ment OF rents. These fully accoun
ging, it.
'sical In a nutshell, borrowing on int
lister and paying land rents are the caus
drink all our financial difficulties.
And we say again, as We have
many times before, there is no hop
the producing, laboring people
Fla, through direct and simple taxation
killed led on land values exclusively, regar
lnded of improvements, and the repeal
are laws providing for the collection OF d
using In this direction a remedy is to be fe
70 OF and In no other.
sum-