The herald., 1896-08-09
Observation-Disclosures
!: BORROWING and PAYING
sAAAAAAAAAAAAASAsAAAAAA&&S

A few days ago the Journal called at
tention to a statement of the city audi
tor of Cleveland, Ohio, that the free
silver agitation had cost that city $4,000
in the sale of S276,0 900 worth of refunding
bonds, and added: "Other cities and
municipalities are likely to have similar
experiences until the movement is end
ed" The returns are beginning to come
in. A dispatch in the Journal of Satur-
day stated that the treasurer of Clay
county, Indiana, was unable to sell SOL
900 of county bonds, issued for the con-
Struction of gravel roads, because they
were not made payable in gold. To the
same effect is the following from Holden,
Mo-:
"A short time since the town voted a
bonded Indebtedness of S12. 900 to estab-
lish system of electric lights. The pa
pers were made out, and, as the town
was absolutely free from debt and its
business men for the most part wealthy.
1t was thought that they would soon
have good light plant, but all efforts
to float the bonds failed. The brokers
absolutely refused to touch them unless
made payable in gold. A public meeting
was held to discuss the ma tier, and after
consulting legal authorities the city de-
cided to wait until after the presidential
election before placing the bonds upon
the market"
The storm is gathering. and the trouble
has begun sooner than the Journal an
ticipated. 1t is probable that no more
municipal bonds of any kind can be ne
gotiated this summer, unless they are
made payable in gold Thus the public
works and the public interests intended
to be promoted by loans will have to
su1er on account of a movement that
AIMS at the partial repudiation of all
debts, public and private.
Tnls is one of the obvious effects of
the proposition to open the mints to the
free and unlimited coinage of silver 1t
might have been predicted with abso-
lute certainty. All money now Is as
good as gold because of the govern
mrents pledge to maintain the parity
between all OF its moneys. because its
ability to do so is a S yet not a matter of
doubt, and because everybody knows
that the present administration will use
every means in its power to maintain
the parity Any one who borrows mon
ey now borrows gold, or money as good
as gold or that can be converted into
gold, or that has the purchasing power
OF gold. He must, therefore. expect to
pay back money as good as that he bor-
rowed. The man from whom he borrows
money Will see to that. OF that he may
be certain. Nobody now need expect to
borrow money on a years time or lQny-
er without expressly agreeing to pay
gold. What is more, he ought not to
want to. Nor will he be harmed in
ihiLu, bouy OI tSldle, especially Ill eS-
tate IL he does sign gold note for mon
ey borrowed now. He borrows money
as good as gold and that has the pur-
chasing power of gold. With it he buys
or builds something. If by the opening
of the mints to the free coinage of silver,
the dollar of the future becomes, as COM
pared to the dollar of today, as so cents
is to 81, the house he had built WITH say
1000 gold dollars will become worth 1000
of the silver dollars, for which he could
buy 1000 gold dollars. There is not the
slightest danger of harm to either cred
itor or debtor in lending or borrowing
money for business purposes now on
gold notes. Whatever is bought now
with gold will go up in the cheaper dol
lars just as much as the dollars decline
in value. so that the difference in value
between the thing purchased and the
price paid for it in gold will be as great
with the cheaper as with the dearer
dollars.
OF course it would be a slick thing for
n man to borrow now and pay the loan
off in the future with money of only half
the purchasing power of the money bor
rowed. But that sort of thing nobody
need expect to be able to do. surely in
| vain the net is spread in the sight of any
bird And men with money to lend are
| as wise as any birds. They cannot be
| caught in that way, and ought not to be
| caught. Men who lend money have a
| right to expect to get back money as
| good as they lend, as good not better,
| and men who borrow ought to pay back
| and ought to want to pay back money
| as good as what they borrowed.
Whatever effects, good or evil, may
| flow from the cheapening of the dollar,
| one of them will not be this thing of en-
| abling people who borrow money now
| to repay next year or the year after
that in cheaper dollars. This should be
clearly understood.
Once upon silver basis business can
and will proceed in a regular and orderly
fashion. Mr.. Bryan contends that the
price of silver bullion and the price of all
the great necessities of life in the lines
of food, clothing and household goods
the things men buy to use-have pre-
served a remarkable parity Gold NAV
or may not have gone up in value in
the past twenty years. Possibly 1t has
stood still or even declined But what
ever the facts in regard to gold may be
he holds it true that the exchange value
of gold for commodities has been steadi-
ly increasing during the past twenty
years, while silver bullion in it's decline
has merely kept pace with the decline
in the average price of all other things.
Ihere IS nothing revolutionary, says Mr.
Bryan, in money standard that keeps
step with commodities. There is some
thing wrong with money standard he
ei99Si -, thdt increases III value, so 1ar IS
It's exchange power for commodities
goes, while it is loaned out. for it takes
from the debtor more of the things he
produces and out of the sale of which
he makes his living to pay the debt than
it did when he borrowed it. and gives
to the creditor money that will buy more
commodities when the loan is repaid
than he could buy with what he loaned.
indianapolis Journal.
Vanderbilts coIispse Not Surprise
Friends of Cornelius Vanderbilt
would not have been surprised at any