Year: 1872

ne lOllOWl0S article from the Phlla-
phia North american, contains some
excellent suggetions on the subject of
loaning money, which we commend to
many of our capitalists:


"a paper published at Bangor, Maine,
pleads with the capitalists of that place
to be more liberal in their policy toward
the young and struggling business men of
the town, and then asks this question:
ais 1t not better for the rich man to loan
money at six per cent. and have the city
grow and flourish, than to exact twelve
per cent. and have it wither and wane ?"
We wonder how many men of fortune in
Philadelphia ever think of the matter in
this way? And yet it is, after all, the
soundest calculation that capitalist can
make. For the general prosprity of
community affects every person in its own
ing either fixed or floating capital And
as prosperity is enhanced By an easy mon.
ey market and low rates of interest, aud
Is retarded by stringent money market
and high rates OF interest, it stands to rea-
son that if the capitalists generally agree
IN their policy of squeezing as much mon
cy as possible out Of borrowers in the way
of interest, the rest of the people who are
not capitalists will retaliate In some way
that will tell upon the money lender.


'Is not this clear? The man who is
compelled to submit to an exorbitant shave
must either become insolvent or realize a
higher profit on what he deals in. If he
fails, the loss comes at once upon the
money lender, and this is quite common
case all over the country, and will contin-
ue to be so 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 discouutcr in
variably ignores this fact and goes on
shaving as before If, on the other hand
the borrower does not fail, he must save
himself by realizing higher profit on the
articles he deals in. In New York and
Chicago, 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 prepos
ferrous, and the expense Of living is enor-
nous. 1t cannot be otherwise while cap.
ital costs so much.


'Let us suppose real estate owner has
a store on business street occupied by an
old, prosperous, and reliable tenant, at a
moderate rent. Incted By greed he aais-
es the rent one third, which is quite a
common case. The tenant refuses TO pay
it, and having the means at command
buys another property and fills up store
OF his own. The owner of the old store
has his place empty for a time during
which he loses the rent, and then be leas.
es it to new tenant who does not succeed
and either fails or moves off. Now we
main tain that the low rent of the first ten
ant is a better return than the precarious
chances of the succeeding one Many
landlords govern themselves by this prin-
ciplo. And the case with regard to mon
ey 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 accumu-
late and grow rich. Moreover, if We re-
vert to the text from which we started it
is better for the capital to foster the gen
eral prosperity of a community, By lend
ing a moderate rates of interest, than to
screw every dollar out of needy bor-
rover that can be exacted. Suppose two
private dlscounters to pursue opposite
lines of policy. One takes every possible
advantage of the needy borrowers, while
the other, when he fluids a business man
in trouble, who deserves a better fate,
examines into his affairs closely, ascer-
tains The weak point, advances the re.
qnired capital at moderate rate, and
secures permanent and profitable custo
mer, who sends all his friends to the same
banker. Which of these men is the
shrewdcst? Which will grow richest
Which is the truest exponent of the uses
of capital and the advantages of banking !?
Which is best for a community 2"