The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1896-07-30
CREDIT AND coNFIDENcE.

We are frequently told by the goldltes
that to restore silver to the rlace It occu-
pied prior to 1873 will destroy confidence
and paralyze industry. They say that
the reason why capitalists now hesitate
60 loan their money is the fear of being
paid back in depreciated dollar.
Want Of confidence is loudly pro-
claimed as the source Of all our ills, but
want of confidence Is the effect, not the
cause, of industrial stagnation. Conf
dence is based on credit and credit on the
ability of debtors to promptly pay their
debts. When the retail trader cannot
dispose OF, for cash and at fair prices, the
goods he buys from the wholesaler on
credit, and as q consequence Is obliged
to ask for renewal Of the note given in
payment for such goods when due, then
his credit is impaired and the confidence
Of the wholesaler in the ability of the
retailer to promptly meet his indebted
ness is destroyed. II the wholesaler
cannot get his money from the retailer,
he cannot pay the manufacturer, and as
consequence his credit is impaired and
the confidence born of prompt payment
Of Indebtedness Is destroyed.
Thus want of confidence is born OF the
inability o. debtors to promptly take up
their indebtedness when due, and the In
ability of debtors to meet their indebted.
ness is born of their inability to realize
on their property. Hence credit and con-
fldence is based primarily on property.
When property Is rising in value, then
the debtor can readily find buyer for
and readily realize on his property and
consequently promptly meet his indebted
ness But when property is depreciating
then credit is impaired and confidence
destroyed, for the ability Of the debtor to
pay is dependent upon his ability to
realize on his property, and while prop
Oioy 10 uophoOiooihB ~ 10 uhSolohDlo saNe
at sacrifice, for the would-be buyer
hesitates saying to himself: "Tomor.
row can buy cheaper"
But 1t is not only inability to sell, but
inability to collect promptly for goods
sold, that impairs the ability OF debtors
to promptly pay their debts. and hence
undermines credit and destroys conf.
dence. 1t Is therefore in falling prices
that we find the source of the want OF
confidence Of which we hear so much
The restoration of confidence, we are told
Is all that is needed to bring renewed
prosperity, but how is confidence to be
restored while prices are falling, while the
value of property, the basis of credit IL
derreciating, and while the ability of the
debtor to meet his indebtedness Is being
impaired by the shrinkage of his assets!
just as the creditor sees the property OF
his debtor on which he relies for payment
depreciatlng in value, he must lose conf
dence, for the property is the security fol
the prompt and full payment of the debt
Confidence will return when The ruinou.
fall In prices due TO the appreciation Of
| gold, is checked and when industry bC
comes profitable, not before; for conf
dence is dependent solely on the ability Of
the debtors to pay their debts, and this
ability Is dependent entirely upon the
value of goods on which credits are grant
ed to purchasers, and which are In effect
the security for the payment of the in
debtedness and the basis of credit and
confidence. AS we have said want o.
confidence is loudly proclaimed as thu
seat of all our sufferings; but loss o.
confidence is caused by the depreciation
of property, and cannot return whilt
prices are falling
When we restore bimetallism, thu
checking the disastrous fall of prices, ther
the credit of producers, now impaired
through the depreciation of their property
will be restored, and then confidence will
return; but 1t is foolish to expect re
turn Of confidence in the face of falling
prices and of the constant depreciation o.
things that go to pay debts.
1