Financial burden

“ 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 inability of the debtor class to meet their obligations increases the risk of business investments, and the accumulation of money in the hands of the financial class depriving the channels of commerce of the needed medium of exchange, a stagnation of business will ensue, which readily accounts for the accumulation of all kinds of products in the hands of the producers and for the consequent dearth of employment. ”

“ 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. ”

“ If sixty thousand millions be taken as the public and private debts of the world, the annual interest at 5 per cent. would require the sum of three thousand millions, and to pay it would require the labor of ten millions of men working 300 days in each year at one dollar per day. The burden of the principal of the debt is made to rest more lightly upon the country when prices are high and money is cheap. It requires less labor and property to pay at high, and more at low, prices. ”

“ These derangements of business would seem to be of interest primarily to the bankers and brokers or to the large borrowers—to the capitalist class. The counterpart of the picture is to be found in the effect of the crisis upon the man [Pg 630] of small means and upon the poor. Inability to borrow may mean considerable inconvenience or even financial ruin for the man of large affairs but it does not usually mean actual suffering. ”

“ The burden of the National Debt, for example, would have been doubled, for, to pay every pound’s worth of interest to the fundholder, the public would have had to realise what represented two pounds’ worth of wealth when the interest was first fixed. ”

“ This is the pivot of the argument, A. might have so much more money to spend, and that expenditure might benefit so many men; but what use would that be to the community, if at the same time B. received so much less, and by stopping his expenditure threw a proportionate number of men out of employ. The nation would not be benefited ”

“ As used in economics, the term, however, implies a sudden change of business conditions for the worse, a collapse of prosperity. What precedes has not the appearance of disease, but rather that of exuberant health. Crises in economics may be distinguished as industrial, speculative, and financial, according as one or another influence seems to be more potent, but all are essentially financial. The change that occurs always is connected in some way with the use of money and credit. ”

“ 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. ”

“ When the object in view is worth the sacrifice of such an amount of the expenditure that furnishes the daily enjoyments of the people, the only well-grounded economical objection against taking the necessary funds directly from capital, consists of the inconveniences attending the process of raising a revenue by taxation, to pay the interest of a debt. ”

“ Debts place the whole burden on producers of the future. They [191] relieve those who hold the wealth now, but are a draft upon those who make the wealth that is to be.
An individual incurring debt places a mortgage upon his productions; by a pledge of future production he relieves himself of the strain of the present.
A family incurs debt; a part of the members of the house are strong and capable of productive labor, and a part are not; the whole burden of the payment comes upon the productive members of the home. ”

“ It was their task to solidify a conglomerate mass of interest-bearing burden, to operate the property with the greatest efficiency possible, in order that it might support the burdens laid upon it and yet other burdens to come as the land waxed rich,—all burdens being ultimately passed to the broad back of the Public, where burdens seem naturally to belong. ”

“ Under a disastrous financial system our income had been reduced to three thousand ducats; yet I could not comprehend how we were in such straits as she had described. When people were unable to maintain a decent state in the capital, they could live at ease in the country at one-third of the same cost. Houses ought to be let, and not sold. Still my father had the power to make any contract he thought right ”

“ I have since been occasionally reminded of this scene, by those calm, sunny seasons in the commercial world, which are known by the name of "times of unexampled prosperity." They are the sure weather-breeders of traffic. Every now and then the world is visited by one of these delusive seasons, when "the credit system," as it is called, expands to full luxuriance, everybody trusts everybody; a bad debt is a thing unheard of; the broad way to certain and sudden wealth lies plain and open; and men are tempted to dash forward boldly, from the facility of borrowing. ”

“ As the direct result of this kind of financial legerdemain, which converted the debt-paying medium of the country into an interest-bearing debt, the wages of labor and the prices of products steadily declined, business enterprises were wound up in bankruptcy at the rate of more than one thousand per month and millions of workmen were forced into idleness and thronged the highways in all parts of the country, demoralized, degraded and becoming a sure menace to civilization. ”

“ So, our inflationists pretend to have discovered the art of honestly discharging debt without paying them, and of enabling you to acquire wealth without producing more than you consume, or earning more than you spend. ”

“ Do the ratepayers ever think that the seven millions of annual poor rate would in one single year place every recipient of Poor Law relief, old and young, man, woman and child, on the shores of America?—would pay all expenses, and leave them one or two pounds their pockets to begin the world with? ”

“ At the worst, too, the nation would not dock me of more than half my income, so I should still be as well off as before my investment, and in the meantime I shall be drawing a double income until the catastrophe arrives. A nation doesn't become bankrupt more than once in a century, so I shall have plenty of time to amass a little capital out of my savings. ”

“ 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. ”

“ What are called financial crises are merely an extension of this critical condition to the larger business community. Financial panics which sometimes follow upon financial crises are a precipitate of this critical condition. ”

“ Quite so, count, but money is dear just now, and it does not seem right that yours should remain uuproductive. A financial crisis threatens to extend over the whole country. The position is not an easy one in the interior. ”

“ I've practically no capital to enlarge the business, and I don't care to mortgage what I have and pay a high rate of interest when, just at the critical moment, we might have a commercial crisis and I would then lose everything. ”

“ So the leaven of the law works its way through all society. The payments cannot be made out of these reduced means, the loss of the credit follows the loss of the money; the means of exchange, employment, and consumption are destroyed, and the world looks with amazement on the consummation of your work—the wealthiest nation in the world withering up under the blight of a universal insolvency; an abundance of all things beyond compute, and a misery and want beyond relief. ”

“ Whether we regard the distressed condition of our labourers at home, or look to the disturbed state of affairs abroad, the importance of closely and earnestly considering what may be the wisest course to take, in order to improve our finances, must be equally apparent. ”

“ 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. ”

“ You took that old sideboard for a debt—yes, a debt at eighteen per cent interest. You don't pay a cent of taxes. You sing psalms and bag your trousers with kneeling on the platforms at prayer meetings and then loan out the church's money to yourself on worthless securities. You're too mean to keep a cat, for the cost of her milk. ”

“ Under the operation of the present system, by which prices are constantly falling and money is constantly increasing in value, the surplus earnings of the people are flowing in a steady stream into the vaults of money-lending institutions, and into the pockets of creditors. ”

“ Great men, I say, are delivered from this burden, because they are always furnished to supply the expense of their out-of-the-way offspring by making little assignments upon the Bank of Lyons or the Town House of Paris, and settling those sums to be received for the maintenance of such expense as they see cause. ”

“ If the whole or any part of that income be saved, so much new capital is generated,—the infallible operation of which is to lower the value of money, and consequently to conduce towards the improvement of public credit. ”

“ He found that his regular income of forty-five pounds a year, secured to him by his friends and patrons, was quite insufficient, with his new wants and desires, to cover his expenditure, and the profits derived from his books being fluctuating and altogether inconsiderable, he experienced the worst pangs of poverty in the terrible knowledge of being constantly in debt. ”

“ In the former case, the wealth of individuals insensibly increases, and income keeps ahead of expenditure. But in the latter instance, debts have been contracted, engagements made, and habits of expense established, in reference to the existing state of wealth and of its representative. When these come to be greatly reduced, individuals find their debts still existing, their engagements unexecuted, and their habits inveterate. ”

“ While this state of things lasts, it is not a question as to how much the producer is increasing in wealth, but how long will he be able to pay his taxes and keep his family from starving? If he is in debt, he is without hope of paying. ”

“ Without considerable financial resources such enlargement has hitherto been absolutely impracticable, and even where practicable has rarely been carried into effect without a long period of makeshift, discomfort, and disorganisation, for which the enlargement itself affords only a temporary remedy. ”

“ Above all, I deprecate a starving system, which has already produced great distress, lowered our funds, augments the necessary amount of the loan, increases its interest, and which has thrown a gloom over our affairs, and spread an universal terror in the market. ”

“ Thus, they are always, so to speak, comforting themselves for the enforced payment of the insurance of hard work and poor fare in this life by the assurance of paid-up capital with interest, in the next! Poor, hard-worked mothers of the slums! ”

“ For economic bankruptcy or breakdown, like physical bankruptcy or breakdown, is generally the result of faulty organization in the system of income and expenditure. Physically a person breaks down because he has been spending more energy than he [Pg 49] can recoup by rest, food, and recreation. Economically he breaks down because his scale of expenses exceeds his regular income. ”

“ An additional cost to individuals is in the extra risk of carrying such wealth, as shown in express charges and special insurance, and still greater expense for safe keeping, and a considerable use of time in counting. ”

“ Secondly, because one of the risks, or expenses, of industrial operations is the risk or expense of what are commonly called bad debts, and every saving which can be effected in this liability is a diminution of cost of production; by dispensing with an item of outlay which in no way conduces to the desired end, and which must be paid for either by the consumer of the commodity, or from the general profits of capital, according as the burthen is peculiar or general. ”

“ By not confining his expense within his income, he encroaches upon his capital. Like him who perverts the revenues of some pious foundation to profane purposes, he pays the wages of idleness with those funds which the frugality of his forefathers had, as it were, consecrated to the maintenance of industry. ”

“ But this can only be done when the money to support the whole twenty-four hours is in sight, either in wages, or salary, or invested securities. More money than this—that is the surplusage that men lock up in their tin boxes, is a curse. ”

“ Such are the exigencies of life, we may as well concede that a vast majority at some time or other find it necessary to owe more than they can readily pay. Emergencies arise which force us into expenses that require credit, and if we have so ordered our lives that when the pinch comes we have no credit established the fact that we pay out our last dollar and go hungry to bed does not bring us much sympathy. ”