Year: 1872




An exchange pleads with the eapi


talists 10 be more liberal in their poll
ey toward young and struggling busi


ness men, and then asks the question


Is it not better for the rich man t.
loan money at 6 per cent, and have
the city grow and flourish, than tC
exact u per cent. and have it withel
and wane? We wonder how many
men of fortune ever think of the mat
ter in this way? And yet it is, after
all, the soundest calculation that 8
capitalist can make. For the general
prosperity of a community affects
every person in it owning either fixed
or floating capital. And as prosperity
is enhanced by an easy money mar
ket and low rates of interest, and is
retarded by a stringent money mar
ket and high rates of interest, ii
stands to reason that if the capitalists
generally agree in their policy OF
squeezing as much money as possible
out of borrowers in the way of inter-
est, the rest of the people who are not
capitalists will retaliate in some way
that will tell upon the money lender.


Is it not clear? The man who is
compelled to submit to an exorbitant
shave must either become insolvent
or realize higher profit on what he
deals in. If he fails the loss comes at
once upon the money lender, and
this is quite a common case all over
the country, and will continue to he
so as long as the rates of discount are
unhealthy and abnormal. These rates
are not such as the people generally
can afford to pay, and consequently
some one is certain to fail. Yet the
diseOunter invariably ignores this fact
and goes on shaving as before. If, on
the other hand, the borrower does
not fail, he must save himself by real
izing higher profit on the articles
he deals in. In New York and Chi
eago, where the rates of discount are
always exorbitant, prices of all kinds
are very high. Real estate in both
cities brings rates and figures that
seem preposterous aud the expense of
living is enormous. 1t cannot be 9TH
erwise while capital costs so much.


Let US suppose a real estate owner
has a store on business street occu-
pied by an old, prosperous and relia-
bic tenant at a moderate rent. Incl
ted by greed he raises the rent one.
third, which is quite common case.
The tenant refuses to pay it, and
having the means at command buys
another property and fits up store
of his own. The owner of the old
store has his place empty for time
during which he loses the rent, and
then he leases it to a new tenant who
does not succeed and either fails OF
moves off. Now we maintain that
the low rent of the first tenant is a
better return than the precariou
chances of the succeeding one. Many
landlords govern themselves by this
principle. And the case with regard
to money is the same. The man who
makes up his mind to invest his
money in such a way as to risk no
losses is sure to accumulate and grow
rich. Moreover, if we revert to the
test from which we started, ii is bet
ter for capital to foster the general
of community, by len
ding at moderate rates ofinterest, than
to screw every dollar out of a needy
borrower that can be eXaeted. Sup
pose two private discounters TO pur-
sue opposite lines of policy. One
takes every possible advantage of the
needy borrower, while the other, when
be finds business man in trouble,
who deserves better fate, examines
into his affairs closely, ascertains the
weak point, advances the required
capital at a moderate rate, and secure
a permaLsnt and profitable customer,
who sends all his friends to the same
banker. Which of these men is the
shrewdest ? Which will grow richest?
is the truest exponent of the
Uses Of capital and the advantages of
banking? Which is best for a COM
nunity?