New-York tribune., 1922-02-05


tiated prices? They comprise every
ono who has savings bank account.
every one who has "stocking." every
one who has a deposit account in
commercial bank, every one who has
mortgage investment, everyone who has
government, state, municipal, rail
road or industrial bond or a preferred
, stock of every kind and every one who
has life insurance policy. These are
the real "money lenders" whose
"money' is lent for them by banks and
barkcrs. whose money" is deprecated
by currency imitation. and whose prop
crty is in effect stolen from them by
this process.
Currency Initiation
Who gets the stolen property? Who
is benefited by currency imitation?
Germany furnishes the answer. There
the entire middle class has been ruined.
Workmcn are worse off than before
the war. Farmers are no better off, for
the higher prices they get for
their produce will buy them no more
Of the things they need than in pre-
war days and their "savings" have been
wiped out by the fall in currency
value. A small class Of spectators
have benefited. Debtors have also
been able to defraud their creditors By
paying in deprecated money Is this a
desirable thing? If so, would it not be
better to cancel all debts by law and
avoid the other troubles? 1t certainly
would be more honest.
"What is the effect of boarding
money? To reduce its volume. Bank
ers hoard money for the same reasons
that monopolies restrict production
to be able to secure greater profits on
their stock in trade"
False Reasoning
More falsehood could not be packed
into less space. The only source of profit
to "banks" is interest on the money
they lend. When their reserves are
highest - presumably "hoards' means
reserves~interest rates are lowest;
when reserves are lowest interest rates
are highest. From a proft-making view
point the more loans bank can make
and the less cash it holds in reserve
the better. The one thing a bank does
| it makes no profit on the money" it
hoards-only on the money" it sets
to work.
"What is the effect Of this course on
industry? 1t places business and pro-
duction on a credit basis, so compel-
ing the producer to finance his busi-
ness with borrowed money and the
consumer to supply his needs in the
same way. This adds to the taxes of
each for the privilege Of existence"
In the first place this course" is
not this course; it does not exist
In the second place the "credit
basis"-by which presumably the en-
tire process Of commercial banking is
meant-is in effect merely the account
ing Of the industrial and commercial
processes by which the commodities
used by the community are manufac
tured, transported. distributed and
consumed. A manufacturer borrows to
buy raw material for his mills; the
jobbbcr who buys his product borrOws
to buy from the manufacturer, who
then repays this loan; the retailer bor-
rows to buy from the jobber, who then
repays his loan; the ultimate consumer
buys from the retailer on a monthly
"charge account" and when he re-
ceives his pay at the end Of the month
he pays his account and the retailer
pays off his loan.
Interest Not AT
Under what system (outside mad
house, should a manufacturer be able
to get raw material for which he can
not pay cash on the nail, a jobber get
products for which he cannot pay cash
on the nail and a retailer get goods
for which he cannot pay cash on the
nail-save on such system as this
The interest he pays is not tax y
it is a proper price for the use of
some one else's property, out of which
use he makes a profit.
"To borrow money one must give
adequate security. What is adequate
security? The security for all loans
rests on land and labor in the last
analysis"
Bosh! adequate security" Except
for security collateral and mortgage
loans) is essentially personal. A mans
credit is measured by the estimation
of his ability and intention to pay.
Whose estimation? That Of the per-
son whose money he seeks to borrow.
That is the person who makes the "last
analysis" and rightly so-especially
when he is lending some one elses
money for which he is trustee.
Is it contended that every man should
be the sole judge of his own credit
That he has a right to use other peo-
ple's money when and as much as he
pleases? If so, why not say so?
"Could that security be utilized in
J the solution of the Money Problem
One school of economists says it could.