Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1898-08-11
OUR SPLENDID CREDIT.
Some Significant Facts Brought Cd
Light by the SO-CalIed
Popular Loan.

q xsar-a mere bagateIle to a nation 50
rich as this republic Is All this money is
offered to the government five times over.
The people offer practically all OF it in
small subscriptions of $500 or less. Banks
oner IL on any terms that the government
may make, and one New York bank mas
offered TO take ii and distribute il among
the people without any fee or reward Of
any kind There never was a more splen-
Old national credit than this And when
We ask why, the answer is ready At the
end of the civil war the nation owed nearly
SS,oco.Oo0.og and had terribly dep reciated
currency Il has since enormously re-
ouced taxation, and yet IL has made its
currency sound and has SO rapidly paid
It's obiIsa.IU--s IEaI its bonded debt on
NoVeL->cr I. 1881, oH.y SS47, 365, ST. Once
IN ali InOse years was IneFe thought OF
increasing the LOnded Indebtedness with
out a war necessity, yet even with that
increase Of 40 during Cleyelan5s
time, the interest bearing Ceot OF the coun-
try has been ecuced 10 oHe-Ihird Of what
IL was II is the man who pays his debts
that enjoys abundant credit 81 Is precise
- the same with the nations l. W GRID
The foregoing sounds well and
tickles the vanity of the thoughtless,
but it will not stand a careful analysis.
The fact that the people are almost
breaking heir necks in mad scramble
TO secure government bonds at three
per cent. is very far from being cir
cumstance of congratulation- 1t
proves conclusiVely one OF two
things: Either general business must
be extremely bad. affording poor op-
portunities for the profitable invest
ment of money, or there must be some
peculiar or emotional advantages il
a government bond as an Investment
No man will loan 10 the government at
three per cent. if he can DO better and
feel perfectly safe Persons who are
timid-who are afraid TO assume any
risks whatever in business, may con-
tent themselves with what they con-
slider sure thing at three per cent.
Now and then we find 4 person whose
fear of losing is such that he will not
invest his money at all. but will simply
hide il away. These, however. are ex-
ceptional cases When there is grand
rush to secure investments al rates so
low. it should lead people to pause and
inquire into the reason of it, \ gen
orally low rate Of interest does not in
dictate either general prosperity, or an
abundance OF money On the contrary.
il shows that business is dull. that de-
mand for money is slack. it cannot be
profitably invested in productive en-
terprises. and consequently has be-
come superabundant in certain places
In short. that money is plentiful in the
hands of the lenders. but scarce every
where else. This is one of the simplest
principles in monetary science, and ii
is yet the most difficult for anyone TO
comprehend PROFESSIONALLY the
credit of the government is good
Why should il not be? The gov
eminent is backed up and con-
trolls the entire wealth of the ma
zion. 4 government bond is Is safe as
anything in human affairs can be- But
that is not the only reason for the low
rate. nor is il the chief one. The fact
stated by the World that since the
civil war two-thirds of our bonded debt
has beer paid il Tot the reason why The
government can borrow money at
three per cent. The English govern
ment can do the same and even bet
ter. although II makes 10 pretense of
paving 'ne principal of its debt. In
vestors in bonds do not want the gov
eminent to pay them. and the fact is
well understood that bonds which have
n long time to run IRE worth more
than the same class of bonds which
are payable sooner 4 20-year bond is
worth more than a teE-year bond AT
the present time four per cent. United
States bonds maturing in 1928 are
worth about 125. while tie same sort of
bonds coming due IN 1907 are only
worth III. There are two reasons why
the government can so easily float its
three per cent bonds. neither OF which
is touched upon or referred TO by the
World. First. under the gold stand
ard, which the World so strongly ia
vors. three per cent IS just about the
same TO the bondho,Ger as six per
cent was IS years ago. before the an
cieut standard of value was tempered
with. That is to say, il will buy about
twice as much on an average of the
necessaries oflife. For:he same reason
tne people who produce these nEcessa-
ries and have &c sell them for half price
find il as difficult TOW to pay three per
cent. interest as they formerly did six
per cent Nay. more, for in many
cases the fall Of prices has entirely
destroyed their profits and left them
unable to pay anything. The second
IS that. besides being exempt from
taxes. the bonds can be used as 1 basis
for the issuance of bank notes. which
notes can also be loaned and bring
the lender anywhere from six to
twelve per cent interest This talk
about poor people" all rushing for
bonds is bosh. Those who are attempt
ing TO justify the bond issue by point
ing 10 the large number of small bids
of $500 or less assume that every per-
son who takes a small bond is neces-
sariIy a person of small means. That
is absurd. There is nothing TO prevent
a man worth $1,000. 900 from buying a
$500 bond. There is nothing to prevent
him from getting numS Gus friends TO
buy bonds for him. That a very con-
siderable number OF the small bids re-
Gently made have been put IN by
wealthy men can admit CT no reason
able doubt. As stated IN another ar
IicIe. il is certain that no matter who [
buys them in The first instance the
banks Will ultimately own nearly all
of them. Every person not Geusely !
ignorant must know that il is not the
poor people who are constantly de-
handing bond issues. Who ever heard
of an agricultural convention or
abor organization asking for an issue
of bonds bearing interest? 1t Is the
great bankers and finaEciers who have
especial interests TO subserve. with a
few special pleaders and now and then /
a small fry" chap who thinks shat it
L I, - ~