The daily Gate City and constitution-Democrat. (Keokuk, Iowa) 1916-1922, 1917-06-20

| the form of fixed capital, and, until
| changed into liquid capital cannot
| be used by the government. All the
government can get as the savings
of its people-what is known as new
capital. Let us examine this thought
little further.
The wealth with which you are sur
rounded in this section is largely in
the form of farm properly. although
you are familiar also with railroads
and other fixed property. That
wealth cannot be used by the United
States directly, but the net product
of it can be used. You will observe
that 1 said the net product of it.
Let me explain this. \ farmer takes
his liquid capital, in money, Cor Dor
rows someone else's liquid capital to
do so) and buys seed, fodder, labor,
ETC., to plant and raise crop. The
amount he has left over, after paying
for seed, labor, feed, living expenses
and the like, is new property which
did not exist before; ana this he can
use in buying government bonds, or
paying taxes to the government to
help prosecute the war.
From this you will observe, that
the smaller his expenses, and the
more efficient his production, tie
greater will be the net amount of
new capital he can produce. Tbs
first Of these conditions means thrift.
the second means more intensive Gull
tivation. In other words, this war
must be financed from the savings
OIL the American people. 1t cannot
be financed from their wealth, but
from the productiveness of their
wealth. From this you will see that
thrift and intensive cultivation are
decidedly patriotic duties during tue
war.
Having reached this point there
are several further ideas that natur-
ally follow in sequence.
l. The first is that labor is in
just the same position to create capt.
tai for the war as is capital itself.
Every dollar earned, but not con-
sumed, by the man who works for
salary or wages, can be turned over
in quick and liquid form to the coun-
try in fighting the WARRIOR all CAPT |
tai, initially, is the unconsumed pro- |
duct of labor or previously existing |
capital. Added to this thought should ,
be kept in mind what | said before, |
about the great strength of the ma |
ton financially residing in the COM
lara lively small Contributions OF
of people rather than in the |
big contributions that the compare /
lively few very wealthy persons can
make.
Investment of Capital.
2. The second thought is this. All
the stupendous wealth Of this nation
amounting to $25O,O00,0 0,000.00) is
the accumulation of decades of sur
plus produce over expenditures, by
millions of working persons, work
ing with billions of already existing
capital. Now, therefore, every dol
ar of surplus wealth production dur
ing the course of the war that Is in
vested in fixed capital, is dollar
hat the nation cannot make use OF.
The moral of this is, that during
the war the capital invested. in any
thing but government bonds, must
be kept down to a minimum.
In case you think this is drawing
| long bow, and that the argument !
5 theoretical and fanciful let me
,all your attention to some figures
prepared by the London Economist, /
showing the application Of new CAPT
al in Great Britain during the years /
914, 1915 and 1916. In the first of ,
hese years, peace existed until about I
August first, during the last two t
vears the war was on. In 1914, the 8
otal new capital invested was 9512,- !
22,6O0, or, roughly, about $780, ]
100000. OF this $3.50, 506,700, or {
6 percent was applied to loans of '
he British colonial or foreign gov f
and the balance, to the {
'arious things in which people are &
n the habit of investing, such as
mines. factories and the 7
ike. I
In 1915 and 1916 the percent of [
otaI new capital available, which T
vas applied to government bonds, 1
-as respectively SO percent and 9S.2 I
ercent. This wonderful mobiliza-
on Of capital was not accomplished I
aphazard, by each patriot with L
honey rushing down to London to
NY government bonds, but was done
y the deliberate, considered and u
action Of the govern II
lent 1 have brought out this mat {
II to show how necessary it is for II
government to conserve the capital u
Of its people during a war.