Bad debt

“ It destroys the happiness of his household.
Even those who are in the regular receipt of large incomes, feel crippled, often for years, by the incubus of debt. Weighed down by this, what can a man do to save—to economise with a view to the future of his wife and children? A man in debt is disabled from insuring his life, from insuring his house and goods, from putting money in the bank, from buying a house or a freehold. All his surplus gains must go towards the payment of his debt. ”

“ Debt, indeed, had been creeping on them with slow but sure feet during the last five years. Who can see his children hungry, and not take bread if it be offered? Who can see his wife lying in sharpest want, and not seek a remedy if there be a remedy within reach? So debt had come upon them, and rude men pressed for small sums of money—for sums small to the world, but impossibly large to them. ”

“ Now, was there ever, since men emerged from a state of utter barbarism, an age in which there were no debts? Is not a debt, while the solvency of the debtor is undoubted, always reckoned as part of the wealth of the creditor? Yet is it tangible and real wealth? Does it cease to be wealth, because there is the security of a written acknowledgment for it? And what else is paper currency? ”

“ Precious friends of the people those are who, under pretense of protecting the debtor against the creditor, rob the laborers of hundreds of millions of their hard-earned savings and despoil even those who have suffered for their country.
But is not a large portion of the middle class, small business men and farmers, in debt, and would they not be relieved by an expansion and depreciation of the currency? No doubt there are many of that class burdened with liabilities, although the number of mortgaged farms is much smaller than generally supposed. ”

“ If a state is poor, and people owe more money than can be procured, a legislature may perhaps go so far as to suspend the collection of debts; or to ordain that a certain part only of the debts shall be recoverable immediately, and the payment of the remainder suspended. This may ease the debtors; but can be justified in extreme cases only, when the people are generally and greatly involved.
[pg 042] A people should not generally be in debt: The consumers of goods should not get credit. Heavy and numerous debts are great evils to a state. ”

“ So debts may be necessary to those who have fallen into decay or have been unfortunate, but they should find no place in the normally healthy financial conditions of an individual or incorporation or nation.
Debts make no man the richer. A man is no richer when he has secured a loan, than he was before. Paying debts makes no man poorer. He but relieves himself of the property of another.
Paying a national debt destroys no wealth. ”

“ A penultimate Disadvantage of Credit may be noted in the facility which it offers for contracting great national Debts. There are certain aspects, under which a Nation may be properly regarded as a moral person, and as such person may pledge the public faith for the present and the future, becoming a debtor to its own people or to foreigners, and thus a public debt may be made a sort of mortgage on the national property and income. ”

“ They arise chiefly, perhaps, because of different local circumstances affecting local industrial conditions, or the conditions of influential classes. Many, especially in the southern and western states, feeling the pressure of the industrial depression through which we have just passed, finding themselves deeply in debt and finding it difficult to pay their debts, and having been told the undeniable fact that money has appreciated in value since their debts were formed (i. e., a dollar will buy more goods now than then) , feel a sense of wrong and injury. ”

“ CANCELED DEBTS. Debt is one of the most disturbing and harassing factors in human experience. It sows nettles in the pillow of poverty, and even the merchant, farmer and banker pursue a weary existence when they are compelled to live under the shadow of overhanging indebtedness. ”

“ This vast mental indebtedness has every variety that pecuniary debt has,—every variety of merit. The capitalist of either kind is as hungry to lend as the consumer to borrow; and the transaction no more indicates intellectual turpitude in the borrower than the simple fact of debt involves bankruptcy. On the contrary, in far the greater number of cases the transaction is honorable to both. Can we not help ourselves as discreetly by the force of two in literature? ”

“ Thanks to your mysterious master, dearth will follow on disaster,
Ills will follow fast and faster, trade will wholly leave your shore;
And the people, so impoverish’d, will your taxes pay no more.
Debt will haunt you more and more!
“Now your revenue is sinking—it’s no use the matter blinking,
Every day, you know, Sir Stafford, your big deficit grows more,
And you have to borrow, borrow (three more millions, eh, to-morrow?)
You have now a floating debt that’s ten times what it was of yore;
Think upon the splendid Budget Gladstone left in ’Seventy-four,
And your muddle now deplore!” ”

“ The funded debt was not heard of; it seemed to have floated off, nobody knew whither. But the public debt, now augmented to over seven million dollars, hung like a black cloud of evil portent over the country. ”

“ Think what you do when you run in debt: you give to another power over your liberty. If you can not pay at the time, you will be ashamed to see your creditor; you will be in fear when you speak to him; you will make poor, pitiful, sneaking excuses, and by degrees come to lose your veracity, and sink into base, downright lying; for 'the second vice is lying, the first is running in debt,' as Poor Richard says; and again, 'Lying rides upon debt's back.'
"This doctrine, my friends, is reason and wisdom; but industry, and frugality, and prudence may all be blasted without the blessing of Heaven. ”

“ A man, for example, owning property to the value of $5,000, contracts a debt of $5,000. By the reduction of one-half of the currency of the country, his property in effect becomes reduced to the value of $2,500. But his debt undergoes no corresponding reduction.... But if the effect of this hard money policy upon the debtor class be injurious, it is still more disastrous, if possible, on the laboring classes.... Of all the subjects of national policy, not one ought to be touched with so much delicacy as that of the wages—in 354other words, the bread—of the poor man. ”

“ And the larger the aggregate indebtedness in proportion to the volume of money available for debt paying purposes, the larger must be the deficiency to be met out of their savings, or what should have been their net income from the exercise of their producing power. ”

“ All such persons are freed, by a depreciation of the currency, from a portion of the burthen of their debts or other engagements: in other words, part of the property of their creditors is gratuitously transferred to them. On a superficial view it maybe imagined that this is an advantage to industry; since the productive classes are great borrowers, and generally owe larger debts to the unproductive (if we include among the latter all persons not actually in business) than the unproductive classes owe to them; especially if the national debt be included. ”

“ The Debt of this country, which at the beginning of this century was sixteen millions and a half and tormented our forefathers with fears of bankruptcy, had risen at the end of it, in the heroic madness of conquest and national pride, to the sum of three hundred and eighty millions, without a doubt of our perfect competency to sustain the burden. ”

“ The mortgages, bonds, and most of the coupons you still hold, and, in many cases, you also have a deed to the property; but neither the one nor the other is of any practical present value. The mortgagor is dead, moved away, bankrupt, or working at daily labor—when he can get work—for his daily bread. Therefore the debt is worthless, and the property is but little better. The very best of it—costly business blocks in the heart of the cities—is unremunerative. No intelligent poor man would, or could, take a brick block as a gift and keep the taxes and interest paid. ”

“ But you seem not only to have bought too much of it, but have paid too dear for what you bought, else how was it possible to run so much in debt when at this very time the yearly income of what is mortgaged to those usurers would discharge Hocus's bills, and give you your bellyfull of law for all your life, without running one sixpence in debt? You have been bred up to business ”

“ If the currency be greatly diminished, as beyond all example it has been, how is this debt to be extinguished? Property, the resource on which the debtor relied for his payment, will decline in value, and it may happen that a man, who honestly contracted debt, on the faith of property which had a value at the time fully adequate to warrant the debt, will find himself stripped of all his property, and his debt remain unextinguished. ”

“ There is an intensely ludicrous notion in the public mind respecting the abolishment of debt by denying it. When a debt is denied, the lender loses instead of the borrower, that is all; the loss is precisely, accurately, everlastingly the same. ”

“ We should earnestly endeavor to avoid debt.—Debt means slavery. It is loss of independence. It is misery. "He" (says a Spanish proverb) "that complains of sound sleep, let him borrow the debtor's pillow." Every shilling that we spend beyond our income means an addition to a burden that may crush us to the ground. "Pay as you go," is a good rule. "Keep a regular account of what you spend," is another. "Before you buy anything, think whether you can afford it," is a third. But whatever rule we follow in regard to our expenditure, let us see that it does not exceed our income. ”

“ The disputes which exist respecting the real nature of money arise more from the disputants examining its functions on different sides, than from any real dissent in their opinions. All money, properly so called, is an acknowledgment of debt; but as such, it may either be considered to represent the labour and property of the creditor, or the idleness and penury of the debtor. ”

“ He can let his balance pile up if he is able, or he can keep it low."
"Suppose he goes into debt?" suggested the Very Young Man.
"In the case of obvious, verified necessity, the government will allow him a limited credit. Persistent—shall I say willful—debt is a crime."
"I thought at first," said the Big Business Man, "that everybody in this nation was on the same financial footing—that there was no premium put upon skill or industriousness. ”

“ When you come to consider that issue you must view the claim for reparations as you would any ordinary debt. You must make up your mind whether you wish to ruin the debtor or to recover the cash. If there are no sufficient realisable assets, [Pg 142] then, if you want your money, you must keep your debtor alive. If you want beef from your cow you must forgo the milk. If your object is to destroy your debtor, you press for payment of more than he can be reasonably expected to pay, and then seize his house, his lands, and his chattels, whether they can be disposed of or not. ”

“ The creation of public debts is pernicious in practice, productive of more harm than good. What right have I to create debts for my grandson or granddaughter? I have no right even to presume that I will have a grandson, certainly none that he will be able to meet his own debts in addition to those I entail upon him. The character of the people called upon to settle the debt of Virginia, contracted in 1860, before or immediately after, differed radically from the character of the people who were called upon to tax themselves to cancel that debt. ”

“ Poverty is hard, but debt is horrible; a man might as well have a smoky house and a scolding wife, which are said to be the two worst evils of our life.—Spurgeon.
The first step in debt is like the first step in falsehood, almost involving the necessity of proceeding in the same course, debt following debt as lie follows lie. Haydon, the painter, dated his decline from the day on which he first borrowed money.—Samuel Smiles. ”

“ The debt of the borrower loads his heart, cramps his hands, and dulls his labour. The gain of the lender hardens his heart, fouls his brain, and puts every means of mischief into his otherwise clumsy and artless hands. ”

“ They have had the benefit of that Company's means; they have been brought from the old country to this place by that aid; and when they get here, some appear to feel indifferent with regard to paying their indebtedness. All know that this is not right, for that should be the first debt they should pay. They should not wait until they get rich before they pay, especially when these debts can be paid in labour, stock, grain, cast and wrought iron, or any and every description of available property at command in this country. ”

“ Debt, like every other habit that runs counter to the common good, brings with it its own punishment, because society protects itself by making unpleasant the ways of such as inconvenience their neighbours. It is true that some are born with a special talent and capacity for debt—they live on it, and live merrily withal, but most debtors feel the weight of their chains, and suffer greater pangs than those which they inflict on any defrauded creditor. ”

“ We must, however, in most things take the world as we find it, and in spite of my hatred of all debts, and of my belief that debt never paid off in the long run ruins the debtor, whether individual or state, it has to be admitted that good of many kinds came out of evil in this instance. Debt, by the intermediary of the banker, begat credit ”