The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-01-15

world has resulted in the creation and use
TO such an enormous proportion of this credit
money as against coin money, may we not
wen ask what gives to this credit money its
value? It's value is confidence in the expecta-
ton that it will be paid as stated on its face,
and that it is secured by property, real or
personal, to guarantee such payment. Its
legal value is expressed in the terms CT coin
money, which is the legal standard authorized
by law. Now. if confidence is so powerful
factor in giving value to credit money the
destruction of confidence SO far tends to take
away It's value, and any change or attempted
change to lessen the value of the legal stan
dard can have no other effect than to so far
lessen or destroy that money through which is
transacted more than ninety per cent OF all
the business of this country. The payment
Oh snort leans or credits is usually guaranteed
by the pledge or hypothecaton security
Tor such payment Of the merchandise CT other
commercial commodity covered by the trans
action On the other hand longtime loans
or credits are generally made upon the pledge
of real property. For many years in this
country real estate mortgages have been
favorite investment for large loans, and III
most states the legislatures have by law en-
coufaSed the investment in these securities.
or savings bank deposits, trust funds and
estates of minors in the hands of administra-
tors. etc. longtime loans secured by real
estate mortgage have as a rule commanded
lower rates of interest than the shorter com
lnerclal loans In the past five six years
this condition has rapidly changed, until now
real estate loans are avoided by investment
companies. Al the present time. every SOL
vent commercial, manufacturing. mining or
other large business enterprise in the whole
country can borrow q full! supply Of money
necessary to carry on It's business. no matter
how large, at lower rates of interest than was
ever before known in the history Of this coun-
try during the present century. Formerly it
prises to secure their cheap money
from the East. At present the
Western banks are full of surplus
money which they are willing to loan
n1IFFf of prta e sNI
less than were current five years ago. A few
years ago all, or nearly all, of the money
10 build railways and other enterprises call
ing for the use Of unusually large amounts
or money was supplied mainly from the
financial centers of Europe and as late as
1880 there was hardly an American railway
or less extent held by foreign investors. For
the past seven years these securities have
been more and more rapidly returned to this
country and bought by the large life insur-
ance companies and other American inves-
tors, until now but a comparatively small
proportion is held abroad. This helps our
amounts heretofore paid in interest and divi-
bends on securities held abroad. Notwth-
standing this country has been able TO buy
back these enormous amounts of railway and
other securities, we find that at the open
ing of the present year the principal finan-
cial cities in the United States are the
cheapest money markets in the world and
they are today loaning in Europe in the
neghborhood of $500, 900, coo at an average
rate which probably does not exceed per
cent per annum. With all this ayaiIahIe
money. why is 1t that American real estate
and fertile farms, well improved which here
toiore nave for years been considered the
best security for long time loans, are now
almost entirely avoided? I find but one
answer to this question: The destruction Of
confidence and with it OF credit so far as it
anects farm lands and real estate; and this
destruction has been brought about by agita-
ton among the people, looking to the change
of the legal standard of money and by laws
making 1t more difficult to recover money
loaned. The effect Of this is much farther
reaching than would at first appear. All the
labor, both skilled and unsklled employed
in the mines, in the forests. in the mills
ana IN the production of building material
of every description. we'll as that of those
engaged in the building up Of cities, has been
to a great extent reduced to enforced idle
ness, for the reason that nobody wanted to
invest in real property or to improve real
property already held; and I believe that
the enormous shrinkage in all this real prop
erty throughout the entire country will con-
tinue until the legal standard of money is
settled that the holders of money will no
longer prefer to accept per cent per annum
from the hands Of foreigners rather than
that they will receive in return 40 80
cents the dollar or be compelled to take
property upon which the taxes will be equal
to the revenue. This is not pleasant pic
ture nor have l any pleasure in drawing 1t.
However, l believe the time has come when
it is the duty of every citizen who loves his
country to raise his voice with no uncertain
sound. and let it be clearly understood, that
we can have no progress and no general
restoration of the value of real property
throughout the nation so long as this real
property is not an available basis for credit
money, with which 95 per cent OF all the
business OF the country is transacted No
man can call himself a friend Of his country
or OF his countrymen who will deliberately
strike a blow at what constitutes so large a
proportion Of the money necessary to tran
sact the general business of all the people.