Financial hardship

“ In financial crises the thing men want is money; that which everybody must receive in payment of debt or forever thereafter forego all claim of interest thereon. What men want in such seasons of panic and distress is that which will pay a note in a bank, will meet the exactions of government, will avert the sacrifice of homestead, warehouse or other property by sheriff’s or marshal’s sale ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ 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. ”

“ So grave were the financial disturbances that several of the States were swept from their honest moorings by the cheap money craze, and irresponsible banks were created almost without limit or restraint, all of which brought speedy and fearful disaster to the people. ”

“ 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. ”

“ But I mean the disappointed speculators, who, instead of following the path of frugal and steady industry, tried quickly to get rich on their wits, by getting up large financial operations on a small capital of their own or on borrowed money, and who finding themselves baffled by an unfavorable turn of things, and involved in heavy liabilities, now want “the people's money” to help them out of the lurch and to pay their bills. ”

“ From one point of view ... every economic crisis is a financial crisis. For since values are expressed in terms of money, and since the modern business superstructure is erected on the basis of credit, every economic revulsion expresses itself through the medium of a change in prices; and since the bank is the center of credit operations, every crisis inevitably involves a revolution in the conditions of credit. ”

“ And yet there remains with us to-day in full strength and activity, as an incident of that tremendous struggle, a feature of its financial necessities not only unsuited to our present circumstances, but manifestly a disturbing menace to business security and an ever-present agent of monetary distress. ”

“ Risky bets were made with other people’s money. Some folks made a lot of money taking advantage of consumers. It was wrong. And this irresponsible behavior on the part of some contributed to the worst financial crisis since the Great Depression. ”

“ This, the greatest economic catastrophe that the modern human structure has known, immeasurably more calamitous than any other that ever occurred, was borne by the financial system of the United States almost without a tremor. ”

“ Broadly the community has cooperated to meet the needs of honest distress, and to take such emergency measures as would sustain confidence in our financial system and would cushion the violence of liquidation in industry and commerce, thus giving time for orderly readjustment of costs, inventories, and credits without panic and widespread bankruptcy. ”

“ In the case, however, in which the plans are excessive, extravagant, and ill-devised, and where the capital is carelessly and recklessly managed, the only consequence must be a wide sweep of financial disaster. Then, if the bankrupts are voters, and the institutions of civil government are those of a democratic republic, a general indebtedness comes to appear like the worst of political and social diseases. ”

“ There are several sadly bloody spots in the financial history of our race. It could probably be shown, however, if one cared to take time to show it, that it is easy to get vexed about mismanagement of the finances without knowing how they might be better managed. ”

“ Outside those who are actually engaged in a financial panic—such as brokers, bankers, merchants and manufacturers, who have loans to pay or receive, or acceptances falling due, and who are therefore too busy and too sorely beset to moralize on it or look at it objectively, as the philosophers say—there is a large body of persons who are not immediately affected by it, such as professional men, owners of secure investments, persons in receipt of well-assured salaries, ministers, newspaper writers, speculative economists, financiers, and farmers, to whom it is a source of secret enjoyment. ”

“ So far as material conditions are concerned, I must admit that the money crisis weighs heavily upon us. The most disagreeable feature of the present state of affairs is the dreadful scarcity of money. It is impossible to convert anything into cash ”

“ See what we will do for you."
"Yes, it's free trade," bawled one newspaper.
"It's nefarious England," snarled another.
"It's the greed of Wall Street, the crime against silver, the burden of the mortgage," vociferated a third.
"It's 'hard times,'" the meek sighed, and furbished up last year's clothes, and cut the butcher's bill.
"Yes, it's 'hard times,' a time of psychological depression and distrust," softly said the rich man. "A good time to invest my savings profitably. Real estate is low; bonds and mortgages are as cheap as dirt. ”

“ I was now too proud to work as a mere journeyman, and I commenced business for myself; but I began without capital, and a gourd of sorrow hung over me, while I stood upon sand. I had some credit; but, as my bills became payable, I ever found I had put off, till the very day they became due, the means of liquidating them; then had I to run and borrow five pounds from one, and five shillings from another, urged by despair, from a hundred quarters. My creditors grew clamorous; my wife upbraided me; I flew to the bottle—to the bottle! ”

“ 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. ”

“ 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. ”

“ 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. ”

“ Such fall of prices has destroyed the profits of legitimate industry, injuring the producer for the benefit of the non-producer, increasing the burden of the debtor, swelling the gains of the creditor, paralyzing the productive energies of the American people, relegating to idleness vast numbers of willing workers, sending the shadows of despair into the home of the honest toiler, filling the land with tramps and paupers, and building up colossal fortunes at the money centres. ”

“ On every hand we see people living on credit, putting off pay-day to the last, making, in the end, some desperate effort—generally by borrowing—to scrape the money together, and then struggling on again with the canker of care eating at their hearts; but their exertions are vain; they land at last in the inevitable goal of bankruptcy. If they would only be content to make the push in the beginning, instead of the end, they would save themselves all this misery. The great secret of being solvent and well-to-do and comfortable is to get ahead of your expenses. ”

“ I would relieve the distress by the application of appropriate remedies to notorious diseases—a bankrupt act to bankrupt banks—taxation to bank issues—restoration of the land revenue to its proper destination—the imposition of economy upon this taxing, borrowing, squandering, gold-hating, paper-loving administration; and by restoring, as soon as possible, the reign of democracy, economy, and hard money.
The distress! still the distress. Distress, still the staple of all the whig speeches made here, and of all the cabinet reports which come down to us. Distress is the staple of the whole. ”

“ 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. ”

“ 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. ”

“ Business was scared and slowing down and, therefore, using less and less of its working capital. The false ease of increasing loanable funds in the custody of the banks lulled many into a specious confidence. ”

“ 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. ”

“ There is distress because there is not money enough in circulation, say these peddlers of silver. It is a well understood fact that every sound bank in the country has idle money in its vaults looking for investment.
Money is precisely like the laborer - it, too, is on the lookout for work. Show money where it can make interest, and it will come out of those vaults as quick as the hungry laborer will answer the knock at his door.
Whatever distress the laborer is suffering, however, be sure that the millionaire owner of that idle money feels it not. ”

“ 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. ”

“ At this juncture any accident to our venture might affect the whole American business fabric, and no one realized the danger of the situation better than Mr. Rogers and myself. During the anxious days that were passing we canvassed the dire possibilities that the situation contained, just as children tell each other ghost stories when left alone in the darkness of the night. The great catastrophes of finance, we remembered, had all been born of the unexpected—of unforeseen contingencies—far beyond the range of human foresight. ”

“ Each demands immediate payment, and shakes his head when we suggest that he call again next week. We realize that our moral cash in hand is not sufficient for the crisis. If all our obligations must be met at once, there will be a panic in which most of our securities will be sacrificed. ”

“ Business establishments, manufactories, mercantile houses, unable to get the money for meeting their obligations, will by the hundreds succumb to their embarrassments and tumble down like a row of bricks. Others will cautiously restrict their operations to the narrowest possible limit, and wage-earners by the thousands will lose their employment and be turned into the street.
No class of society will be spared the destructive consequences. Every frightened creditor, pressed by his own creditors, and apprehensive of a growing loss by every day's delay, will eagerly pounce upon his debtors. ”

“ Borrowing for expansion is one thing; borrowing to make up for mismanagement and waste is quite another. You do not want money for the latter--for the reason that money cannot do the job. Waste is corrected by economy; mismanagement is corrected by brains. Neither of these correctives has anything to do with money. Indeed, money under certain circumstances is their enemy. And many a business man thanks his stars for the pinch which showed him that his best capital was in his own brains and not in bank loans. ”