Alma record. (Alma, Mich.) 1878-1928, 1895-08-23

| lloI classes can, III the long run, pIoHt
at the expense of the debtor classes.
The great imitation or credit money is
directly due to the appreciation of gold.
The creditor classes, tempted by the
prospects of immediate gain, have coax
eel and complied great nations INTO dis
carding silver rs money, thus incrcas-
ing the demand for gold. With the in
creased demand for gold its value in
creased, and with this increase the bur
den of all debts was arbitrarily increas.
ed. The purchasing power of the gold
in which interest aud principal must be
paid was increased, and this increased
purchasing power was the creditors
unearned gain. Such is the great and
seemingly irresistible temptation that
/ has induced the creditor classes 10 adj
vocate the approaching gold standard.
Losing all sight Of future possible, if
not unavoidable. ruin and losses, in
their Sordid rush for present gain, they
are blindly pursuing policy that must
ultimately end in their own destruction.
From the appreciation of gold the cred
itor classes may reap great and none
tary gain, but in the end they must
surely suffer the penalty Of their blind
sellishness.
TIE first effect of the appreciation Of
gold and the consequent fall in prices
is 10 check the demand for money, a1d
as a result interest falls. The fall in
prices checks borrowing of those inter
ested in productive enterprises, for the
incentive To the farmer to improve his
buildings and secure new tools, the
the manufacturer TO increase the capa-
city of his plant, and of enterprising
men 10 increase the railroad and other
trans ortation facilities of the country
i, DESTROYED. The farmer, munufac-
turer and railroad no longer want to
borrow money save to renew an old
mortgage falling due, and the fall in
prices having placed them at the mercy
of the money-lenders, renewals are
only made at ruinous rates of interest.
But demand for money 10 start new m
dustries and enlarge old ones falls off,
if 1t does not cease, for no one wishes
TO borrow save when it is possible for
him to invest the money borrowed prof
itably, so that when invested il will
not only earn enough To pay the inter-
est, but yield profit to the borrower,
and when prices are falling this is inn
possible.
As a result of falling prices, although
it is practically impossible for the
debtor to borrow, money accumulates
in the financial centers and can be
readily borrowed upon such govern
ment and municipal bonds as are based
upon the unlimited taX-levying power
of the community or on bonds of first
class railroads whose transportation
charges are practically tax upon the
entire tributary population. Compet-
ton among capitalists for such invest
ments becomes keener and kecner and
interest rates rule unprecedentedly low.
Low rates of interest are thus not
caused by abundance of money. but by
an insufficient supply which causes a
fall in prices, congeSted industries. and
a lack Of demand for money. The
readiness with which our municipal
bonds are taken at low rates Of interest
instead of showing improved credit and
giving US cause for congratulations.
should be looked upon melancholy evil
dence of the Frustrated condition to
which industry and trade have been
reduced.
So the very fall in prices which the
creditor classes look upon with selfish
pleasure results in stopping the fields
for profitable investment and forcing
the creditor classes to take lower rates
for their money. 1t is, indeed, not inn
possible that the creditor classes lose
as much from this and the insolvency
of their debtors caused by falling prices
as they gain by falling prices as they
gain by the appreciation in the value
of debts due them by solvent debtors.
True it is. that debtors and producers
are ruined before the creditor feels any
loss, and that the creditor can profit by
falling prices while the producer can
not avoid losses. but the creditor can
inves, his money much more proiitably
and reap greater returns when prices
are rising and the country is prosper
Gus than when prices are falling and
industry checked.
1t is, indeed, true that money grows