Finance

“ The conclusion was inevitable, that there have been no acknowledged or even known, fundamental principles of finance operating in any of the many systems of the many nations, and that the so-called money of the world is not now, nor ever was, money, in the scientific sense of that term. ”

“ Do you know economics and finance, money, banking, credits, corporations, and business in their broad relations to the people, the American Government, and natural law, and the relation each holds to the other, or is your knowledge confined to the skimming and smattering such as any alert and bright stock speculator would naturally pick up in years of experience as a broker and manipulator? ”

“ In finance the most striking effect in America has, on the first view of it, certainly been good. It has enabled the Government to obtain and to keep a vast surplus of revenue over expenditure. Even before the civil war it did this—from 1837 to 1857. ”

“ Imagine yourself by nature versed in the arts of finance, capable of playing with sums of money in the forms of stocks, certificates, bonds, and cash, as the ordinary man plays with checkers or chess. ”

“ There never plays upon their imagination the least glimpse of the wonderful complexity of the mechanism of finance nor of the amazingly intricate organization of buying and selling. Who can blame them—they have never been told. I have kept a meeting of workmen keenly interested for an hour, after the conclusion of some official business, in a simple explanation of the functions played by finance in industry, and of the various kinds of financial operations entailed in the marketing of the product of their particular factory. ”

“ The rules of private finance, it such there be, have not yet been formulated, and it is indeed only in recent years that economic writers have sought to coördinate the rules and principles of public finance into a science of finance. ”

“ As soon as the meaning of the laws under which business was to be conducted had come to be reasonably defined, as soon as it became apparent that the latitude tacitly permitted during the pioneer period must end, finance fell into line with the new spirit and has kept in line. ”

“ It will be seen that all questions of finance and commerce are intimately connected, while those of labor and capital grow out of the conditions they make possible and inevitable. To properly understand the relations of capital and labor, and to harmonize them, demands a correct comprehension of the basic principles of economy which relate to finance and commerce. ”

“ International Finance The new Britannica has been called “the most comprehensive of all surveys of past and present civilization,” and its treatment of finance and commerce possesses a breadth and sweep directly due to the international character of the book. The American financier knows that under existing conditions he must take into account the laws and usages of foreign countries in regard to banking, currency, taxation, stock exchange transactions, corporations and all the other methods and appliances used in dealing with money and credit. ”

“ It is through the expenditure of public money that the State works in all of its activities, and it is the first duty of the science of finance to determine their nature and scope. Finance accepts public expenditures as a fact. ”

“ I started with the policy of buying and selling for cash, keeping a large fund of cash always on hand, taking full advantage of all discounts, and collecting interest on bank balances. I regard a bank principally as a place in which it is safe and convenient to keep money. The minutes we spend on a competitor's business we lose on our own. The minutes we spend in becoming expert in finance we lose in production. The place to finance a manufacturing business is the shop, and not the bank. ”

“ After the general principles of government are properly formulated in Constitutions and vitality given them by laws, a correct, a scientific financial system stands next in importance. If a country have a true system of government, and do not have a true system of finance, it can never attain to any permanent prosperity. Literally speaking, finance is a part of government ”

“ But unless a plan of finance is of the nature of a commercial undertaking, it cannot give government more than it takes away, either from individuals, or from government itself, under some other form. ”

“ Finance and financiers have had no mean share in creating organizations and institutions in this country which are models of efficiency and which men from all quarters of the globe come here to study and to admire. ”

“ FINANCE.—We demand a national currency, safe, sound, and flexible, issued by the general government only, a full legal tender for all debts, public and private, and that without the use of banking corporations, a just, equitable, and efficient means of distribution direct to the people, at a tax not to exceed 2 per cent. ”

“ Nearly half a century has elapsed since this essay was written; finance has made great progress, particularly in the United States, where, under peculiar circumstances, a succession of violent convulsions ended in building up a completely new system of currency and banking ”

“ It should insist that our finance and currency concern not alone the large traders, merchants and bankers of our land, but that they are intimately and every day related to the well-being of our people in all conditions of life, and that, therefore, if any adjustments are necessary they should be made in such manner as shall certainly [32] maintain the soundness of our people’s earnings and the security of their savings. ”

“ When banks lend on collateral security of corporation stocks to the buyers of those stocks, they are, in effect, financing the corporation itself. [483] Industries differ widely in the extent to which they depend on the money market for their finances. The difference depends often less on the nature of the industry than on the type of the industrial organization. An individual farmer cannot get the bulk of his credit that way! ”

“ Such an arrangement of course favours extravagant credits, high prices, speculation, and crises, just as it did in the United States. It is rapidly giving way to a more complex organisation, in which the farmer has funds of his own, does his short-term borrowing at a bank, and pays cash for his purchases.
Without attempting to comment on intermediate grades of organisation we may consider briefly the manner in which trade and finance are conducted in the north coast countries. ”

“ Prices first rise in the particular enterprise, production augments, the movement spreads to other lines of business, and the new enterprises are financed by loans from the banks or trust companies, or by the sale of securities on a capitalization proportionate to the anticipated earnings. In times of buoyancy we are continually capitalizing anticipated earnings and future hopes, and we do this through the utilization of credit on a large scale. ”

“ The world of finance is a mysterious world in which, incredible as the fact may appear, evaporation precedes liquidation. ”

“ It has already been shown that capital, saved by thrifty folk, is essential to industry as society is at present built and worked; and the financiers are the people who see to the management of these savings, their collection into the great reservoir of the money market, and their placing at the disposal of industry. ”

“ Under this system all the various revenue officials and tax assessors and gatherers would be dispensed with, and a vast system of economy inaugurated, which, in a few years, would transpose us from a borrowing to a loaning nation, making us the financial example for all the world. ”

“ Next, my Remedy will benefit that great middle class whose savings go to make up the billions in the savings-banks, national banks, trust and insurance companies, which are used by the "System" to secure for themselves a hundred, a thousand, and ten thousand per cent. interest on their capital, while the owners of these billions must be content with two and a half to four per cent. per annum ”

“ A clearer perception of the conditions under which the effective attainment of revenue is possible is another outcome of financial development. Security, and in particular the absence of arbitrary impositions, combined with convenient modes of collection, have come to be recognized as indispensable auxiliaries in financial administration which further aims at the selection of really productive forms of charge. ”

“ Into the rigging and launching of almost every big financial operation in the United States during the last twenty years, double-dealing, sharp practice, and jobbery have entered; and, what is more, the men interested have participated in and profited thereby. ”

“ The word finance is a slavish word, unknown in the city-state. ”

“ The financial organization is the medium by which the various parts of the industrial and commercial organism are held in harmony. It is by the financial organization that capital is collected and distributed, that the friction of exchanges is reduced to a minimum, and that time is economized, through credit, between production and consumption. The financial system furnishes three indicators—prices, the rate of discount, and the foreign exchanges—through which we may read the operation of economic forces now that their magnitude makes it impossible to inspect them directly. ”

“ Thirteenthly, The Law that is in use among them for transference of Bills for Debts from one man to another: This is of extra-ordinary advantage to them in their Commerce; by means whereof, the can turn their Stocks twice or thrice in Trade, for once that we can in England; for that having sold our Foreign Goods here, we cannot buy again to advantage, till we are possest of our Money; which it may be we shall be six, nine, or twelve Months in recovering: And if what we sell be considerable, it is a good man's work all the Year to be following Vintners, and Shopkeepers for Money. ”

“ The advantages of the Bank may consist in this: in the profits of the contracts made with Government, which should bear interest to be annually paid in specie; in the loan of money at interest, say six per cent.; in purchasing lives by annuities, as practised in England, etc. The benefit resulting to the Company, is evident from the consideration, that they may employ, in circulation, a great deal more money than they have specie in Stock, on the credit of the real property which they will have in other use. ”

“ Suddenly, agriculture raised her drooping head, for commerce beckoned her to prosperity. Your people began to pay their debts and to become rich. Public credit was restored; the Treasury began to fill readily. Sources of revenue were explored, certain of continually increasing, equally certain of being never exhausted, except by folly and madness. Indeed, sir, so perfect was the financial machinery that it admitted of no improvement. ”

“ The economic financial incubuses you have created now control your lives, from the day of your conception, until long after your death. With your money they directly control your most essential industries; and indirectly hold ownership through their loans, and mortgages, of your business, your homes, farms, stock, lands. ”

“ With the third method a permanent increase is secured in the capital funds available for use in the business. Financial policy, governed by the needs of the business and its markets, will always dictate the method to be used for extinguishing or contracting a debt. ”

“ A thousand men contribute to the production of $1,000,000 of wealth, all of which is gobbled up in a few weeks or months by the scheming of a single “financier.” The board of directors of a railroad, a mining company or a manufacturing company, may issue to themselves certificates of watered stock for which [98] they pay not a cent, and which represent wealth having no existence, but which they are in a position to compel the public to make good. ”

“ Money travels rapidly from hand to hand, from one pocketbook to another, from bank to bank, to borrower or drawer, in constant circulation.
"Has any one of your economists calculated how many times an active one-dollar multiplies itself in a year from the time it is first issued from the Treasury? How much does it earn in interest, compound interest, commissions, bonuses, dividends, and profit gain from constantly being shifted from person to person, bank to bank, and loan to loan? ”

“ The net output thus obtained is obviously for each industry the only fund from which first, wages, salaries, interest on capital, rent, royalties and profits are, or can be, paid, and secondly, taxes, rates, depreciation, advertisement and sales expenses. ”

“ The design of the new law is to supply just enough money or credit, when and where business needs it, to create for our commerce, as has been said, foundations so even, so broadly laid, and so deeply planted that they can not be shaken. ”

“ The high price of public stocks and indeed of all species of stocks, the reduction of the public debt, the unimpaired credit of the general government, and the large amount of existing bank-stock in the United States leave no doubt of the practicability of obtaining the necessary loans on reasonable terms. ”

“ It is not less difficult to pronounce how far the effect of any given quantity of money, as capital, or in other words, as a medium for circulating the industry and property of a nation, may be increased by the very circumstance of the additional motion which is given to it by new objects of employment. ”

“ Many economic questions are treated fully in such articles as Banking, Federal Reserve Banking System, Federal Farm Loan Board, Excess Profits Duty, Income Tax, City Government, Interstate Commerce, Conservation Policy, Insurance, Cost of Living, Food Supply, Rationing, Marketing, Price Control, Profiteering, Profit-Sharing, Savings Movement, ETC. For industrial development see also the articles Shipping, Railways, Telegraph, Telephone, and Electricity Supply, as well as those on important industries such as Coal, Copper, Cotton and Cotton Industry, Dyeing, Petroleum, Iron and Steel. ”