Year: 1879

XI.


HOW To MAKE CAPITAL SCARCE.


1t is both strange and sad to see the very
men making war on capital who most need it's
aid. The West and South cry for "more
money" What they really need is more
capital, but new issue of notes would take
part of its value from every dollar of capital
that has been saved and loaned. Workmem
and farmers at the East need nothing else sos
much as greater activity and confidence Of.
capital to start the wheels that are STILL They
have savings, and are creditors and capitalists
themselves, though many do not know it.
Yet some of them are found urging "relief for
the debtor class" and talking of 'the tyranny
of capital" A man might as we'll complain of
the tyranny of his COWS, because they will not
give milk if they are not fed. Industry can
not thrive unless. capital is kept busy, and
capital cannot be made to work unless it has
fair returns and fair degree of safety.


Capital is the aggregate of the savings OF
eight millions of workers. Not one of those
eight millions will lend his small savings un-
less he thinks the sum viii be fairly repaid
Each one will hold that his savings bank or in
surance company has robbed him if it so lends
his money that he cannot getit back. Whoev-
er holds his money would wrong him by lend
ing it where dollars worth 100 cents each might
shrink before payment to dollars worth 30
cents each. That is why every outcry for more
money, and cheap money, stops some lending.
But all this capital in full use is needed TO
make trade prosper. There is never too much
in this country, where all is busy, and if part
lies idle through fear, some of the mills, or
mines or shops must be idle also SO every out
cry for "more money" tends to stop trade and
ind ustry, just as drought at the distant sources
OF stream may stop the wheels that are turned
by its waters


The West and South take pains to make it
felt that the man who has money to lend can
get but scant favor there. Laws are passed, as
in Indiana to hinder the collection of debts;
sometimes by officials and sometimes by mobs
the creditor is deprived of justice; payment of
debts is refused by many counties and towns,
and even by States. But above all, there is o
constant clamor for cheap money, and a rail-
ing at creditors and bondholders and bankers
as If they were public enemies. No other thing
has done as much to check loans of capital at
the West and South, for men who have money
i'll charge feel it is not safe to put it where the
temper toward lenders is so hostile. Every
vote for cheap money, every vote against
banks and bondholders, makes this fear strong



of the capital which the West and South need
so much. Nor is this strange. The workman
who has contrived to save by years Of thrift
and toll a few hundred dollars to keep his
dear ones from want if he should sicken or
die, would not wish to lend his money to those
who feel that 50-cent dollars ought to be pro-
vided for paying debts What the workman
thinks, the prudent banker or capitalist who
has charge of the savings Of many workmen, is
also apt to think. When the tracks of wild
Al.
twice before he turns his cattle out of the barn.


In the Bank of England fifty millions of
money lie idle that could well be spared. Loans
have been made in London at one-quarter of l
per cent. interest year. Yet this country
wants more money, and the average interest
received on all loans last year, by four of the
largest New England companies, was over 8
per cent. Vast sums OF money can be brought
to this country, for any safe use and at low
rates, if we will but put an end to the cry of
cheap money for debtors Foreign holders
want to lend, but not to lend dollars and get
back halves. Many acts of bad faith, by States,
counties, cities and corporations, have helped
to cause distrust as to loans in this country,
but there is no lack of confidence in the good
faith OF many well-known firms and men, or
in the vast resources and rapid growth of the
United States. The one thing that checks a
Tree and large movement of foreign capital to
this country, to be used in opening mines,
starting mills, clearing farms, hiring workmen





the dollar which can here be legally collected
years hence will be as good as the dollar loaned
now. Specie resumption has come, but there
is large and noisy party at work to stop the
redemption of notes, and to bring back cheap
dollars for paying debts. Farmer Jones has
plenty of grain, and would be glad to lend his
neighbor wheat for sowing, but wants first to
be sure that the bushels returned will not be
half chaff.


Rates of interest can be reduced in this coun-
fry only nv gaVinO Of c1uita1 n hnnna and
more lending from abroad. But before men
save or lend. they want safety. The same mill
or farm that can now pay per cent interest
on 5000 borrowed capital could better pay 4
per cent. on $4,000, for the use of larger
means would enable it to yield more. Thus,
if more capital could be saved and loaned, so
that rates Of interest might be reduced, more
could be safely borrowed and used with profit
in thousands of cases. But there is only one
way to encourage men to lend, and only one
way to stimulate greater saving of capital.
First of all, it must be made sure that good
dollars shall be paid for good dollars loaned
No laws can force down the rate of interest,
because no laws can compel men to lend
or induce men to save. Confidence is the only
fertilizer that will bring large yield of capi-
tal


Some fanatics complain because any interest
whatever is charged for the use of money.
But what man has earned is his own. He
can spend it if he chooses, and save nothing.
Or, like the savages, he can work only enough
to supply his needs. If he works more, and
denies himself the pleasures in which all his
earnings might be consumed, civilized society
is glad to make it worth his while. In the
form of interest on what he saves, society pays
him not to eat or drink all that he earns but to
keep part for his old age, part for his family,
and part for the building up of larger indus
try hereafter. 1t can well afford to pay all the
cost of inducing men to save, for, if they did
not, civilization and progress would be i'm
possible. Millions of workers earn good wages
and go to pleasant homes this day, who could
not have been employed or paid at all had not
other workers before them saved part of their
earnings. Interest, which prompts and helps
men to save, is the very foundation stone upon
reared But foundation and structure would
go to ruin if they rested on the quicksand of
nl lnan for loltarc