Financier

“ 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. ”

“ Then, too, the subtle process by which the man satisfies himself that he can afford to buy. Talk of Wall Street and financiering! No subtle manager or broker ever saw through a maze of financial embarrassments half so quick as a poor book-buyer sees his way clear to pay for what he must have. ”

“ 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. ”

“ 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. ”

“ I, says debt stock, encourage industry, by taking way your money; and I, says bank stock, by pouring money into your pockets. When, by theory or experience, has it ever been said, that either the redundancy of money, or the loss of earnings, was an encouragement to industry? If the calculation of a false opinion, that industry enjoys her own earnings, is the best mode to which all orders, titled or stock, can resort for her encouragement, it is evident that the mode would be improved, by making the opinion true. Fulfilment would be a stronger excitement to industry, than disappointed hope. ”

“ Again, if I were a lawyer, a doctor, farmer, bricklayer, engineer, musician, or painter, my services would be wealth because I can sell them or exchange them for money. Again, there is still another kind of wealth that may be described by the single word "rights," such as mortgages, bonds, stocks, bank notes, checks, drafts, bills of exchange, copyrights, patents, good will of a business, etc., all these various things are also wealth because they can be exchanged for money. They can all be bought and sold. ”

“ In a money economy those who have cash use it to pay their bills or settle their accounts.
Those who buy on credit pay interest to money lenders. The money lenders, later the bankers, make their profits by helping others to spend beyond their own means. ”

“ 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? ”

“ 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 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. ”

“ 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. ”

“ And so it goes in every business but finance—finance, the most important of all, the business into which is merged all other businesses, the business of taking and preserving the results of all other businesses, of all other human endeavor. ”

“ Capital being the property of all, injury to it is shared by all and made up by all. The bank is the universal government credit-account, the ledger in which every individual's earnings and spendings ate balanced. ”

“ 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. ”

“ To the credit of the account he pays in such sums as he may not have occasion to use, and interest is charged or credited upon the daily balance, as the case may be. From the facility which these Cash Credits give to all the small transactions of the country, and from the opportunities which they afford to persons who begin business with little or no capital but their character to employ profitably the minutest products of their industry, it cannot be doubted that the most important advantages are derived to the whole community. ”

“ 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 distribution of provisions, money, and merchandise in just proportions, according to times and places, is the true secret of finance and the source of wealth, provided those who administer it have foresight enough to suffer a present apparent loss, in order really to obtain immense profits in the future. ”

“ The proper business of finance, I take it, ought to be to consider of the means to improve the revenue, and introducing economy into the expenditures; to recommend general systems of finance, without having any thing to do with the actual administration of them, because, if he engages in the executive business, we shall be deprived of his talents in more important concerns. ”

“ Is it for the best financial interest of the company to borrow on short or long time, to create a floating or a funded debt, etc.—these points require consideration and can, of course, be answered only in the light of the conditions prevailing in each case as to the status of the working capital requirements. ”

“ 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! ”

“ 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. ”

“ Seasonal calls on an inelastic money supply for actual cash to move crops and pay agricultural wages may make a real difference in the value of money; scarcity of money of the right denominations for retail trade may give an agio to such money, [550] but the money and credit used by specula [Pg 523] tors, bill brokers, dealers in foreign exchange, investment bankers, etc., increases, rather than decreases, the funds available for ordinary industry and commerce. ”

“ 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. ”

“ Under the head of investment of Capital will be considered stock of every description, all Implements of Husbandry, and other Articles which may be applicable to the purposes of pn>ductive industry, or which may be necessary for the establishment of the Settler on the Land where he is to be located. The amount of any Half-pay or Pension which the applicant may receive from Government, and which he may be prepared to invest as before mentioned, will also be considered as so much Capital. ”

“ With ten, or twenty millions! My system is similar to that of the State: the higher the debt of a country, the higher stands her credit; therefore, what is credit?—wealth! This is elementary, not counting that it involves a high question of moral philosophy. But I shall explain my financial and philosophical ideas on a more favorable occasion. Go to Mariette, and report to me later. As for me, I have promised to take my little shop-girl out on a new saddle-horse which, by the way, cost me an outrageous price. ”

“ In the course of my task I shall describe such parts of the general financial structure as will place my readers, especially those unfamiliar with its more complicated conditions, in a mental state to comprehend the methods by which the savings they think are safely guarded in the banks, trust and insurance companies, are so manipulated by the votaries of frenzied finance as to be in constant jeopardy. ”

“ I think that bankers, brokers, and other business men who are interested in the general problems of money, trade, speculation and credit, will find the book of use. Naturally, however, it is my hope that the special student of money and banking, and the special student of economic theory will find the book of interest. ”

“ And further, I apprehend that their confidence of being helped out in the event of ill-fortune, will mainly depend on their opinion of their own individual credit, with, perhaps, some consideration, not of the quantity of the currency, but of the general state of the loan market. They are aware that, in case of a commercial crisis, they shall have difficulty in obtaining advances. ”

“ Interest is determined by the amount of capital seeking investment in loans, relative to the demand, and in a time of relative contraction of the volume of money, and consequent falling prices, will, as a rule, be low, since there is less inducement for men to borrow capital to engage in business, and more men wishing to lend. ”

“ That’s important. The fact is, financial firms play an essential role in our economy. They provide capital and credit to families purchasing homes, students attending college, businesses looking to start up or expand. ”

“ He must be a constant student of financial conditions; and must expand or contract his loans as the sea of finance is placid or stormy. His responsibility is great. He must lend, but he must lend judiciously, millions of other people's money. He can not allow feelings of personal friendship to warp his judgment. He must be thoroughly familiar with the laws concerning the making and the collection of notes. ”

“ The moneyed capital thus employed is invested for that purpose in securities by way of loan, discount, or otherwise, which are from time to time, according to the rules of the business, reduced again to money and reinvested. ”

“ So employed, it yields, like any other capital, wages of labour and profits of stock. The profit is shared between the banker, who receives interest, and a succession of borrowers, mostly for short periods, who after paying the interest, gain a profit in addition, or a convenience equivalent to profit. ”

“ The factor, if he be a man of money, and answers their bills, fails not to make them pay for advancing; or sells the goods to loss to answer the bills, which is making them pay dear for the loan; or refuses their bills, and so baulks both their business and their credit. ”

“ The usual course of development is this: among an advancing people, the number of money transactions increases at first; later, when education has become general, and the people have grown habituated to the giving and receiving of credit, the circulation of money is accelerated, and an increase of the substitutes for money effected. ”

“ Fifth: Credit from a commercial point of view, when granted to create consumable commodities, the necessaries of life, is filling its proper function.
Sixth: Credit granted to facilitate the sale, transfer and distribution of consumable commodities, the necessaries of life, is filling its proper function from a commercial point of view.
Seventh: Credit extended in the form of acceptances of checks, drafts or bills of exchange, growing out of the actual production and distribution of the necessaries of life, is filling its proper function from a commercial point of view. ”

“ A trader with a capital of twelve hundred pounds will carry on operations, by means of bills and credit, on a scale of four, eight, or twelve thousand pounds. Thus he draws from capital which he does not possess, usurious interest, out of all proportion with the capital he actually owns. ”

“ The lender might himself use the money to gratify his own desires. It is his money; he may use it, as he pleases, for his own gratification. Or he may himself employ it productively, and, at the end of the period, receive back his principal with the customary rate of profit. ”