Financial independence

“ But the interest on loans, public and private was only a small fraction of the burden of usury imposed upon the wealth producing masses. All the large industrial, financial and commercial enterprises of the country were on a debt-creating basis. Stock companies owned the railroads of the country; the streetcars, waterworks, gasworks and electric light and power plants of the cities; all the great manufacturing, mining and commercial enterprises ”

“ For thirty years past it has been the uniform policy of the British Government, directed by the pressure of the money power, and the influence of realised capital, to augment the value of realised wealth, by enhancing its price and cheapening everything else. ”

“ The measure, being approved by the National Government, had the desired effect of freeing to a great degree the financial world from its parasites of industrial malefactors, and to some extent established again the stability and integrity of honorable financiers, in the meanwhile safeguarding foolish persons from being fleeced out of their savings. ”

“ The condition of the national finances, produced by unwise laws, was set forth clearly in this message, as follows: "With natural resources unlimited in variety and productive strength, and with a people whose activity and enterprise seek only a fair opportunity to achieve national success and greatness, our progress should not be checked by a false financial policy and a heedless disregard of sound monetary laws, nor should the timidity and fear which they engender stand in the way of our prosperity. ”

“ The entire case may be presented by the statement that the day of sensible and sound financial methods will not dawn upon us until our Government abandons the banking business and the accumulation of funds and confines its monetary operations to the receipt of the money contributed by the people for its support and to the expenditure of such money for the people's benefit. ”

“ The growth of the nation, therefore, and all our activities are in the hands of a few men, who, even if their actions be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who, necessarily, by every reason of their own limitations, chill and check and destroy genuine economic freedom. ”

“ So this financial reform refocuses the financial sector on what’s really important: getting capital to entrepreneurs who want to grow their businesses, and financing to millions of families who want to buy a house or send their kids to college. ”

“ 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. ”

“ First, Is it not self-evident, that any financiering operation, which reduces from 5 to 4, the interest of a national debt, deprives as well the lender of the fifth part of his comforts, as if the nation had loaded herself with ten millions more, to be paid annually? ”

“ Still more wonderful is this discovery; better than costless; it is said to enrich a nation, by enriching a paper interest. Oh happiness unlocked for! No longer remains then a motive for that mass of patronage and taxation, by which nations are enslaved. This beautiful system of banking enriches stockholders by dividends and the people by bank notes. Patronage is received and returned with mutual civility and profit. And avarice is at length converted into a blessing for industry. ”

“ It is asked, whether the borrowing class, may not forbear to borrow, and whether this power of forbearance, is not an evidence, that the profit or income collected by banking, proceeds from the voluntary act of individuals. Should bread and water be placed in abundance, before a hungry and thirsty multitude, could their eating and drinking be fairly said to be merely voluntary? Currency is the medium for exchanging necessaries. If gold and silver, the universal medium, are legislated out of sight, all human wants unite to compel men to receive the tax collecting substitute. ”

“ All money should be issued by the General Government only, and without the intervention of any private citizen, corporation, or banking institution. It should be based upon the wealth, stability, and integrity of the nation. ”

“ Mankind has been taught that in the essence of things fiscal your question of currency is as intricate and involved as was the labyrinth of Minos. And then, to add ill-doing to ill-teaching, our own crazy-patch system of finance has been in every one of its patches cut and basted and stitched with an interest of politics or of private gain to guide the shears and needle of what money-tailor was at work. ”

“ Every citizen, whether a stockholder of the banks or not, would have a direct and incalculable interest in their success and prosperity. They, the people, would have this interest, not merely as holding the notes of the banks, which would become our currency, but because the banks would hold the stock of the Government, would have loaned it in this way the money to suppress the rebellion, and thus have saved us from a redundant and depreciated currency, from inevitable bankruptcy and repudiation, and have prevented the overthrow of the Union. ”

“ Two such economies will be of infinite value to the people, whose riches will be proportionally increased. In the development of wealth, next to making money is saving money.
Bearing these things in mind, Financial Reconstruction is relieved of its difficulties. It only remains to find the proper machinery or process. And here we encounter the propositions of the Secretary of the Treasury in his Annual Report, [209] which are threefold:—
1. To refund twelve hundred millions of six per cent. Five-Twenty bonds in four and a half per cent. ”

“ Running through the above statement of the independent doctrine of finance, we see that three ideas are most prominent. First, a desire that the government supersede avaricious man and blind nature in the creation and distribution of money, in order that money may be a stable purchasing power. Second, a determination that money shall no longer be a commodity to be bought, and sold, and manipulated, a leech upon labor in the hands of a few, but a convenience of trade, accessible to the many at first cost. ”

“ There are in the savings-banks of many manufacturing centers in our country amounts which if capitalized would place the workingmen of those towns in industrial independence; moneys which, in some instances, are actually furnishing the borrowed capital for their own employers. ”

“ It is hard to say whether, as society is now constituted and power distributed in this country, the fundholder has most to fear from years of general suffering or from periods of transient prosperity. Is the nation flourishing, are exports increasing, taxes well paid, a surplus revenue beginning to appear, and a huge store of useless and costly bullion accumulated in the bank? ”

“ As these fall principally on the rich, it is a general desire to make them contribute the whole money we want, if possible. And we have a hope that they will furnish enough for the expenses of government and the interest of our whole public debt, foreign and domestic. ”

“ Thus far then, Sir, we are agreed, that the only method of reducing the present high price of Provisions, is by reducing the national debt, and the only method of reducing the national debt, is by reducing the expences of government, or (as you emphatically express it) by narrowing those channels, through which the riches of the public have flowed in such torrents into the pockets of private men. ”

“ Spend less money than you earn, and you will every day grow richer. Never run in debt, and lawyers will become farmers. Never make paper money, and you will not cheat your citizens, nor have it to redeem. Above all, pay your public debts, for independence and the confederation require it. ”

“ It was to be beyond the control of Government, and this fund with its accumulations was to be applied, as circumstances permitted, to the reduction of the debt. The principle is obviously sound as far as it goes, that is to say, what a nation saves it can clearly apply to the purpose of reducing its liabilities, but there the matter ends; there is and can be no peculiar and mysterious power in a sinking fund. ”

“ Therefore, for the sake of public enterprise in its manifold forms, for the sake of that prosperity which depends on human industry, for the sake of manufactures, for the sake of commerce, and especially for the sake of railroads, by which all these are quickened, we must do what we can to reduce the general rate of interest, which is now such a curb on enterprise; and here we must begin with our own bonds. ”

“ That a good many “people” do entertain a certain traditional fondness for the greenbacks, or do dislike banks, or do fear contraction, or do disapprove of the retirement of the government paper money on the ground that it would mean the substitution of an interest-bearing for a non-interest-bearing debt, is unquestionably true. ”

“ The increasing public debt, the great augmentation in the volume of the currency, with its necessary concomitant of extravagant prices for all articles of consumption, the want of revenue from a taxation adequate to support the public credit, all unite in admonishing us that energetic and wise legislation alone can prevent serious embarrassment in our monetary affairs. ”

“ 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 high politics of money-making consist in forcing the States of Europe to issue loans at twenty or at ten per cent, in making that twenty or ten per cent by the use of public funds, in squeezing industry on a vast scale by buying up raw material, in throwing a rope to the first founder of a business just to keep him above water till his drowned-out enterprise is safely landed—in short, in all the great battles for money-getting. ”

“ The preceding account will, I fancy, help to shew what is practicable, taking things as they are, in borrowing money for public uses. It proves, that the nation loses greatly by the low price of all capitals bearing a higher interest than 3 per cent. ”

“ As a merchant, he was familiar with the resources of the country; as a Member of Congress, he was familiar with the wants of Government. His resources were taxes and loans; his obligations, an old debt and a daily expenditure. Opposed as he was to the irresponsible currency which had brought the country to the brink of ruin, he was a believer in banks and bills resting on a secure basis. ”

“ Now this vast increase of wealth in the hands of the already wealthy owners of stocks and bonds and accumulated money, by laws increasing the power of their accumulated capital, at the expense of the debtors and laborers, is reacting with terrible force against those who did it. ”

“ Has there been any want of contracts, of loans, of monopolies of corn, of good understanding between the rich and the powerful to assist one another, and to fleece the poor? Have the poor prospered? Have the rich declined? What then have they to complain of? What ground is there for the apprehension, that wealth is secretly changing hands, and that the whole property of the country will shortly be absorbed in the poor’s fund? Do not the poor create their own fund? ”

“ And thus, by force of political necessity, but doubtless in large part naïvely, it developed into the more sweeping theory that wages, welfare, and prosperity called for a larger supply of money independently of the effect on debts. ”

“ All the familiar arguments against cutting into the incomes of the very rich—that the whole people ultimately would pay the bill, that higher levies in the upper brackets would drive an increasing amount of wealth into tax-exempt securities, that the Government should not take money needed in industry—were heard. ”

“ Suppose the security of the national bank notes were their own capital instead of the bonds, who would not prefer to trust the faith of the United States, rather than that of any individual in these times of Credit Mobilers, Tweed and whiskey rings? Then, again, why should individuals furnish the circulating medium of the people, when the people can furnish it themselves and save the expense? $1,000,000,000 is as small an amount of currency of all kinds as will transact the business of the country properly. ”

“ Under the system of sales, matured as it has been by experience, and adapted to the exigencies of the times, the lands will continue as they have become, an abundant source of revenue; and when the pledge of them to the public creditor shall have been redeemed by the entire discharge of the national debt, the swelling tide of wealth with which they replenish the common Treasury may be made to reflow in unfailing streams of improvement from the Atlantic to the Pacific Ocean. ”

“ The whole amount of our national riches—the capital of this and of every other country—has been formed by the same slow but certain process of individual savings, and the accumulations of savings, stimulating new industry, and yielding new accumulations. ”

“ But though a funded debt is not, in the first instance, an absolute increase of capital or an augmentation of real wealth, yet by serving as a new power in the operations of industry it has, within certain bounds, a tendency to increase the real wealth of a community, in like manner as money borrowed by a thrifty farmer, to be laid out in the improvement of his farm, may in the end add to his stock of real riches. ”