Moneylender

“ I have tried for money everywhere in desperation; put myself in a money-lender's hands, mostly in Don Gennaro Parascandolo's, and they have eaten me up to the bone.'
'Did you borrow money from Agnesina's godfather?' Luisella exclaimed sadly, hiding her face in her hands.
'In money matters no relationship counts; money hardens all hearts. These debts are my shame and torment. A tradesman who takes money at eight per cent. a month is thought to be ruined, and they are right. Money-lending is dishonest both in the borrower and lender. ”

“ The fact is, I don't mind tellin' you I've a deal on, an' I've undertaken t' put up this money in cash—to-night."
The banker ruminated for a few minutes. Experience had told him that with a certain class of men money in bills was more valuable than money in a cheque or draft. The very bulk of the currency seemed to impress them. He had seen an old-timer refuse a twelve-hundred-dollar marked cheque for his property, and yet surrender greedily at the sight of a thousand one-dollar bills piled on a table before him. ”

“ In common business, the trader can add to the cost price of the goods he sells a large mercantile profit, say 10 to 15 per cent.; but the banker has to be content with the interest of money, which in England is not so much as 5 per cent. upon the average. The business of a banker therefore cannot bear so many bad debts as that of a merchant, and he must be much more cautious to whom he gives credit. Real money is a commodity much more coveted than common goods: for one deceit which is attempted on a manufacturer or a merchant, twenty and more are attempted on a banker. ”

“ The money-lenders at Baden would have spared you—served you perhaps; but now, after you have once been in prison, they'll despise you. A money-lender is, like society, like the masses, down on his knees before the man who is strong enough to trick him, and pitiless to the lambs. ”

“ In my room at Bruton Street I had almost five hundred pounds in cash, as well as jewels for which I had last night paid £9,800. I possessed, moreover, a credit balance at my bank of exactly one hundred and forty-two pounds. I considered therefore that it would be absurd for me to continue playing the lackey to my master for a beggarly eight pounds per month, when a sufficient capital was ready to my hands, with which, and one or two smiles of the fickle goddess, I could make myself a millionaire. ”

“ And what a burden his camel carried—flour-mill, saw-mill, ash- factory, farms, a general store, lime-kilns, agency for lightning-rods and insurance, cattle-dealing, the project for the new cheese-factory, and money-lending!
Money-lending? It seemed strange that Jean Jacques should be able to lend money, since he himself had to borrow, and mortgage also, from time to time. When things began to go really wrong with him financially, he mortgaged his farms, his flour-mill, and saw-mill, and then lent money on other mortgages. ”

“ The capitalist who lends out money must take that contingency into consideration. He has to run what I have already called the gambling risk. Now, suppose the Senator from Indiana had $100,000 to lend out. If he were asked to lend it out, say on three months, he would have to consider whether at the time when the loan will be returned to him his $100,000 will be worth as much as it was when he lent it out. The currency being inflated and depreciation being the consequence, he will ask himself whether the paper dollar, which is, say, at 10 per cent. discount to-day, will not be at 16 per cent. ”

“ A merchant brings his notes or debts, that are payable some time in the future, to the banker for sale, and the banker buys them for credits in the form of deposits, or debts payable instantly, which have precisely the same effect in commerce as so much gold. He reaps exactly the same profit by creating a credit in favor of his depositor as if he gave him the actual cash. The checks drawn against these credits so created by the banker circulate commodities in trade precisely in the same way that bank notes do which circulate commodities precisely in the same way that gold coin does. ”

“ The friend completes his work, puts away his books, and figures up the amount needed. The borrower has a small balance to his credit, and he gives a note for the difference. Then the teller opens the safe, brings out a roll of bills, and begins to count out the amount. The safe door is left open, and the visitor sees within the piles of bank-notes and the rouleaux of gold. A fortune in cash is within his grasp with only a human life standing in his way ”

“ Practically every form of investment in which a man is capable of indulging involves the lending and borrowing of money, the interest exacted being the profit which the lender receives for the use of his capital. The existence of the professional lender, as apart from the ordinary facilities for borrowing money on good security, is obviously due to the fact that it is not every borrower who is in a position to give good security for a loan. ”

“ A working man enters into a banking house with his month’s earnings nicely tied up in the corner of his handkerchief: a blandly smiling clerk, with well pared nails and laundried linen, receives it and notes the amount in the depositor’s account book;—the workingman departs. Then the proprietor enters, gives a portion of the money to his clerk and puts the remainder carefully away—in his pocket. In another apartment, the projectors of a railway company offer a graceful financier one-half of their beautifully printed stock certificates, on condition that he floats the other half. ”

“ Then for another year I was a money-broker, selling currency, silver, and revenue stamps. When that petered out I was ready for anything. A friend had loaned money to a printer and seemed about to lose it. In 1867 I became bookkeeper and assistant in this printing office to rescue the loan, and finally succeeded. I liked the business and had the hardihood to buy a small interest, borrowing the necessary money from a bank at one per cent a month. I knew absolutely nothing of the art and little of business. ”

“ When you want to employ your money for a short period, do you not frequently take bills of long date, and advance upon them?—But that is not a re-discount on our part. Very often brokers in borrowing money send in bills of long date, and afterwards we call in that loan; but that is no more a re-discount than lending money upon consols and calling in that money again. It is not an advance of ours; we do not seek it; they come to us and borrow our money, and give us a security; when we want our money we call for that money, and return their security. ”

“ This compensation is fixed by the competition of the market. The rate of interest is no further lowered by this operation, than inasmuch as it brings together the lender and the borrower in a safe and expeditious manner. The lender incurs less risk, and a larger proportion, therefore, of the holders of capital are willing to be lenders.
When a banker, in addition to his other functions, is also an issuer of paper money, he gains an advantage similar to that which the London bankers derive from their deposits. ”

“ But even though someone might be keeping a weather eye on my survival, I had to face up to my own money problems. It is madness to go into business without a bankroll under the mattress. I thought I could see my way to making it on the Avenue, but where was the cash outlay coming from for fixtures, additional stock, everything? Not even my reformed accountant could prepare a financial statement that would qualify me for additional bank loans. ”

“ There is also another species of money-lender, not inaptly termed the Female Banker. These accommodate Barrow-women and others, who sell fruit, vegetables, &c. in the public streets, with five shillings a day (the usual diurnal stock in such cases;) for the use of which for twelve hours they obtain the moderate premium of sixpence when the money is returned in the evening, receiving at this rate about seven pounds ten shillings per year for every five pounds they can so employ. ”

“ When paper currency is supplied, as in our own country, by bankers and banking companies, the amount is almost wholly turned into productive capital: for the issuers, being at all times liable to be called upon to refund the value, are under the strongest inducements not to squander it, and the only cases in which it is not forthcoming are cases of fraud or mismanagement. A banker's profession being that of a money-lender, his issue of notes is a simple extension of his ordinary occupation. ”

“ She had a dream-book, gotten up especially for policy buyers, and consulted it as regularly as a merchant does his price-current or a broker the sales of stock. Every day she bet on some “row” or series of “rows,” rarely venturing less than five dollars, and sometimes, when she felt more than usually confident, laying down a twenty-dollar bill, for the “hit” when made gave from fifty to two hundred dollars for each dollar put down, varying according to the nature of the combinations. So the more faith a policy buyer had in his “row,” the larger the venture he would feel inclined to make. ”

“ Well, these banks were not only called mounts of piety, but were known also as Lombards, [2] from the name of the original bankers or money-lenders. Now you see how it is pawnbrokers bear the sign of the goldsmiths.
You who know so well where to place your money, both for interest and security, when you have any to spare, can scarcely understand the trouble and annoyance which our merchants and wealthy people experienced at having no place of security wherein they could deposit their money. ”

“ The principal mode in which money is raised by traders is by "bills of exchange"; the estimated certainty of their paying those bills on the day they fall due is the measure of their credit; and those who estimate that liability best, the only persons indeed who ^can estimate it exceedingly well, are the bill brokers. And these dealers, taking advantage of their peculiar knowledge, borrow immense sums from bankers and others; they generally deposit the bills as a security; and they generally give their own guarantee of the goodness of the bill ”

“ Every good banker finds out, that many of his customers wish always to leave a balance in his hands; that while some of them are constantly drawing cheques on him for cash, others of them are as constantly depositing with him in cash; and that consequently he can properly and safely use a large part of the money he has purchased with his credit to purchase other credits with. ”

“ The most important business men have to get loans. Heads of trusts and—every one. People go to their banks to get loans, and they’re not ashamed of it. Well, this is exactly the same thing. I simply walk in, repay the loan, take the watch, and go. Exactly like paying a note at the bank.”
Was it, though? Exactly like a bank—this queer, dark little shop, with barred windows—and the man behind the counter was exactly like the cashier her father used to bring home to dinner. She handed the ticket across the counter, with the money; but the man pushed the money back to her. ”

“ There is a great difference, however, between the lending by an ordinary individual, who has more than he knows what to do with, and the business of lending as practised by a banker. The difference is this, that an ordinary individual lends his own money, while a banker lends that of somebody else. ”

“ If you had no cash to spare, that did not matter. Your credit was good, and your note, as an acknowledgment of the purchase, and a formulary of trade [Pg 31] all that was wanted. To give a note of ten thousand dollars, to-day, for a piece of property that there was a fair chance of selling, in a fortnight, for twenty thousand, was, certainly, a temptation. Of course you had to sell, if you did sell, as you bought, for paper, not for cash. But that was nothing. Every body was getting rich, and, therefore, everybody was safe. ”

“ If you would get rich, don't deal in bill books. Credit is the "Tempter in a new shape." Buy goods on trust, and you will purchase a thousand articles that cash would never have dreamed of. A shilling in the hand looks larger than ten shillings seen through the perspective of a three months' bill. Cash is practical, while credit takes horribly to taste and romance. Let cash buy a dinner, and you will have a beef-steak flanked with onions. ”

“ A legitimate, useful, profitable use of money is to accommodate strangers who come with money that will not circulate in the country. The exchanger gives them current money; they pay a consideration for the convenience; and out of this comes the legitimate profit to be divided between lender and borrower. The rule which applies to one fruitful use of money will apply to a thousand, and, between wise lending and honest borrowing, swamp and forest become field and garden, and mountains wave with corn. ”

“ Would you like to make a little money?
Moles. [Brightening visibly.] Indeed and I would, sir. I've got two thousand three hundred and sixteen dollars in my savings bank, and I've heard of how these Wall Street magnums made fortunes out of less'n that.
Steven. I'll double it for you! You get it for me, Moles, and I'll make it into five or six thousand for you, sure!
Moles. Thank you, sir!
Steven. [Writes in note book.] I'll put in an order to buy for you the first thing in the morning; and you have your money down at my office by ten o'clock, can you?
Moles. ”

“ Soon after the widow had an offer for her house and furniture, so she went to redeem the lease held in security by the money-lender. The poor woman, who had signed the papers presented to her, either without reading them or without thoroughly understanding them, then learned for the first time that “£5 per cent.” did not mean £5 a year for the loan of a hundred pounds. The money-lender’s advertisement did not say “£5 per cent. per annum.” He lent his money at £5 per cent. per month, or £60 for a year for £100, besides various fees and charges. ”