SAN-DRO 
 
 A DISCUSSION OF INTEREST 
 
 BY 
 
 FRED'K R. BURCH 
 
 II 
 
 OLIVER HULBACK 
 
 627 New York Block, Seattle, Washington 
 1915 
 
 oo-^ooo 
 
SAN-DRO 
 
 A DISCUSSION OF INTEREST 
 
 BY 
 
 FRED'K R. BURCH 
 
 Neither a borrower nor a lender be." 
 
 — Hamlet. 
 
 OLIVER HULBACK 
 
 627 New York Block, Seattle, Washington 
 
 1915 
 

 *?¥ 
 
 COPYRIGHTED 1915 
 By 
 Frederick R. Burch 
 Seattle, Wash. 
 
 0, >« 
 
 APR -5 1915 
 ©CU397414 
 
®n ttyaat mljn aprk juattrr tbia bank 
 ta parupatlg opatratro. 
 
 — ®I|p Author. 
 
CONTENTS 
 
 CHAPTER I. 
 The Origin of Money-Primitive Business-Money as a Medium of Exchange- 
 Money Abnsed-Method of Abuse Must be Disclosed. 
 
 CHAPTER II. 
 Definition o. Money-Cannot fie Botfi a Commodity and Medium of 
 Exchange. 
 
 CHAPTER III. 
 Value-Intrinsic-Market-Speculative-Money Value Given by Law-Cannot 
 Create nor Measure Value-Dog Should Wag Tail-Money Hoarded for 
 Profit— Money Produced by Government— Legal Tender. 
 
 CHAPTER IV. 
 Money as a Profit Producer-Buttressed Behind Commodities-Claims Profit- 
 Affects Consumer— A Reservoir Without Outlet. 
 
 CHAPTER V. 
 Money The Method of Its Perversion-Interest Hoarding-Blood of Com. 
 merce-lnterest a Tribute-Water Must Be Distilled-Interest Tables- 
 Sell Estate in New York-interest on Debts of Nation-Failures- 
 Financier Averted Panic. 
 
 CHAPTER VI. 
 
 The Abuse of Money Explained-As a Profit ^^ZTe^ZTZl 
 Different Results-Loss not Recognized by Lender-Money PI a) ^ 
 Deck-Loss of Invested Dollars-The Money Lender-ms Position 
 The Borrower-His Position-Duty Passed to Consumer. 
 
 CHAPTER VII. 
 The Fallacy of Interest-Quotations from Bible-History-De Q uinc >-- Fore ; 
 gomg a Fallacy-Wall Street Money-Remove Interest-Mules and Money 
 ^Business on Sane Basis-Rent-Profit After Interest-No Competition- 
 Individual Effort— Ten Men on Island. 
 
 CHAPTER VIII. 
 Banks and Banking System-Faro Bank-Banks to Get Interest-Wall^ street 
 -Two Classes-Bank Reserve-Amount Legally Loaned-Seattle Banks 
 National Banks. 
 
 CHAPTER IX. 
 Result of interest System-Feudal System-Ignorance and Fear _of M any- 
 Cupidity and Duplicity of Few-Third Organization-Questions Pro- 
 pounded by Banks-Banking-The Serfs Relation Thereto. 
 
CHAPTER X. 
 Condition of Labor — Money Does not Produce — Invested Dollars — Loaned 
 Dollars — Wages Borrowed Money — Interest not Paid by Borrower — Rail- 
 roads — Money Stored Labor — Stored Labor Paid for Never Bought — Pocket 
 Knife. 
 
 CHAPTER XI. 
 Usury — An Act Either a Crime or Not a Crime — Usury Law, Frauds — Bankers 
 No Way Hampered — Golden Egg — Object of Law — Small Borrower on 
 Short Loan. 
 
 CHAPTER XII. 
 Modern Financing — A Prospect Discovered — Can Borrow Only — Mortgage 
 Foreclosed — Property Taken — Same in All Business — Square Deal — Trusts 
 Created by Banks — Suicide to Vote Bonds — A Hideous Monster — Money 
 Evidence of Credit — "Foregoing" a Fallacy. 
 
 CHAPTER XIII. 
 Wealth and Capital — Wealth and Poverty — Mysterious Force — Complex Ex- 
 change — Abuse of Money — Definitions of Wealth — Definitions of Capital — 
 Money not Wealth — Cannot Be Capital — Gold and Silver not Wealth — 
 Pebbles Are as Much So. 
 
 CHAPTER XIV. 
 System in Action — Fundamental Principles — Consumer Must Pay Interest — 
 Bonds Never Retired — Labor for Money Lender — Laborer Must Borrow 
 Money to Pay Interest on Borrowed Debt — Competition Defeated — De- 
 positor in Bank Pays Interest on Deposit — Railway, Tobacco, Steel Money 
 — A Vampire — Hatchet. 
 
 CHAPTER XV. 
 The Money Question — Refractory Malady — Over Production — Money Appre- 
 hended — Greenbacks — Free Silver — Symptoms — Treatment — Inflation — 
 Contraction — Malady Keeps Breaking Out — Results — Milk and Squeeze — 
 Confidence Game — Two Scales — Fishes — Stock Exchange. 
 
 CHAPTER XVI. 
 Recapitulation and Remedy — Borrowing for Profit — Illustration — Verdict — 
 Remedy — Prohibit Private Parties from Exacting Interest — All Banking 
 and Money Lending To Be Done by Government — No Change in Business — 
 No Confusion — Lincoln's Foresight. 
 
X 
 
 PREFACE 
 
 HAVE for some time been deeply impressed with the idea that the 
 abuse of money had a much closer connection with the cause of 
 poverty and misery in the world than was generally understood. The 
 wonderful earning power of an article, which, in itself, is useless to mankind, 
 was a mystery to me. 
 
 During all this time I was fully occupied with the cares of my profession 
 and the opportunity never presented itself wherein I could find time to 
 reflect and reach a conclusion on the subject satisfactory to myself. 
 
 It was not until the year 1914, which I spent on an extended hunting 
 trip in the Talkeetna Mountains, Alaska, that my ideas began to assume 
 relative proportions and I began to perceive the true and the false use of 
 money. From that remote distance, and in the quiet and impressive solitude 
 of the mountains, the perspective of life and the true relations and duties 
 of man to man are presented in a clearer and grander view. 
 
 It there occurred to me that people did not struggle for gold, in this 
 world, but for the things which gold will buy. Accepting this as a logical 
 fact, I could not understand why a man who had gold enough to buy all 
 he and his family could use in a thousand years, if they lived that long, 
 should still be striving for more. That man was either striving for some 
 other than the legitimate use of gold i. e., to exchange it for wealth, or 
 else he was demented. I had to dismiss the hypothesis of a mind diseased, 
 for were that true, his friends would have taken him to an asylum. The 
 only other alternative is that he was striving for gold for other than legitimate 
 use; that is, an abuse thereof. The summit of his desires was emblazoned 
 with the magic word, POWER. 
 
 This power is gained with gold, gold is gained with interest; more 
 interest, more gold; more gold, more power; more power, more interest. 
 
 The greater the power to exact, the higher the interest rate exacted, and 
 the greater the amount of gold, exactly. 
 
 The people's money is thus offered up as a sacrifice to the false god of 
 power, and they themselves, compelled by law to follow it, find themselves 
 dangling "twixt the devil and the deep blue sea." It gives them a feeling 
 of "great unrest." 
 
 In the following pages I have attempted to explain how money is thus 
 abused. I lay no claim to having exhausted the subject. If this modest 
 attempt will actuate a more competent mind to investigation, it is all that is 
 
 , . , , THE AUTHOR. 
 
 asked by 
 
SAN-DRO 
 
 A DISCUSSION OF INTEREST 
 
 CHAPTER I. 
 THE ORIGIN OF MONEY. 
 
 While living in a primitive condition human beings have no need of 
 money. All commerce may be carried on in the same primitive way in which 
 they live. It is natural and convenient to barter among themselves with 
 the actual commodities at hand. Thus, one will have a fish and another will 
 have a rabbit. It transpires that they are each fond of fish and rabbit and 
 desire to have a little of each, rather than all one or the other. As a result 
 they agree to exchange one-half a fish for one-half a rabbit and vice versa. 
 Having done this, a transaction has been consummated in the world of com- 
 merce as full and complete as any which has ever heretofore or will ever 
 hereafter be effected. The purchase of a battleship by one nation from another 
 is no more a complete transaction than this. 
 
 This primitive method of carrying on commerce by the exchange of 
 actual commodities can remain in its simplest form only so long as each 
 member of society is an actual producer and simple and modest in his de- 
 sires. Complex conditions, concerted action along special lines of endeavor, 
 larger and more elaborate transactions in the world of commerce, multitud- 
 inous desires engendered by advancing civilization, all tend to make it im- 
 possible to carry on trade in this simple form; hence all nations have been 
 called upon to invent and adopt means for simplifying commercial trans- 
 actions. 
 
 Evidently one very simple, very natural and very complete method 
 presented itself, for all nations perceived it and all nations have adopted 
 it — Money. 
 
 By the use of this medium complex transactions are simplified. Suppose 
 the man with one fish had a thousand fish, and the man with one rabbit 
 had five hundred rabbits, and a third party had venison for exchange; and 
 further suppose that the man with fish could not use rabbit, but wanted 
 \enison, and that the man with rabbits could not use venison but wanted 
 fish. This being the condition, it is evident that the man with rabbits could 
 not get his supply of fish unless he first trade for venison. This is the 
 beginning of that complex condition which grows more and more intricate 
 till it becomes impossible to carry on commerce. 
 
 Money, then, is chosen as the medium to assist in these transactions as 
 the natural, logical and complete solution of the problem. 
 
 This is the normal, complete, the one and only use of money. No 
 other conditions called it into being and no conditions whatsoever have 
 enlarged or detracted from its usefulness, nor in any way changed it from 
 the simple meaning of its definition, "A medium of exchange." Yet by 
 
10 
 
 means strange and devious, money has become diverted from its natural 
 and only use. 
 
 By a senseless course of reasoning, which has been permitted to control 
 the minds of men, money has become an instrument of torture, the gyves 
 ii nd fetters of the struggling masses, the supporting column of a system of 
 slavery more universal and eminently more refined and genteel than ever 
 did or ever will again obtain. A system which is leading the world 
 directly to the brink of repudiation and war. 
 
 This result has been averted in the past solely on account of the vast 
 ungarnered wealth of the world, assisted by the production of the metals, 
 gold and silver, in sufficient quantities to, in a measure, satisfy the rapacious 
 appetite of the monster. But when these sources of supply cease to respond 
 and the monster turns its greedy eyes and poisonous fangs upon the people 
 and begins to mercilessly devour their heart's blood, the conditions of which 
 I speak will then be no mere theory, as most people are now prone to be- 
 lieve, but will become living, burning facts, and the world will awaken to a 
 realization of their hideousness, just as it has awakened from other silly 
 and unjust practices, which a benign aristocracy and hoary antiquity have 
 conspired to foist upon society, by the grace of a short-sighted, penny wise 
 and pound foolish public. 
 
 The abuses of the past, present and future all depend upon some method 
 devised to compel the many to pay an unjust and unearned tribute to the few, 
 aDd getting the method legalized. 
 
 The triumph of modern surgery is that the most difficult operation may 
 be rendered painless. The patient when he "comes to" is fully aware of 
 the fact that some important part of his physical structure is missing, but 
 he does not know who did it nor how it was done. He realizes it was 
 necessary and rests content. 
 
 So it is in the industrial world today. When the patient "comes too" at 
 the end of each month, he is fully aware of the fact that the major part of 
 the fruits of his labor has been amputated and is missing. He does 
 not know who did it nor how it was done. But in this case he cannot rest 
 content for he has a vivid conviction that the operation was unnecessary. It 
 is this conviction which gives rise to that mysterious "spirit of unrest" which 
 pervades the masses. 
 
 The world is seeking in divers directions for these surgeons, so stealthy 
 and deft. They must be discovered, their methods exposed, and their "in- 
 dustry" rendered unprofitable. This is the one great problem of the day. 
 
11 
 
 CHAPTER II. 
 THE DEFINITIONS OF MONEY. 
 
 The definitions of money adopted by all modern political economists are: 
 
 First. Money is a medium of exchange. 
 
 Second. Money is the circulating medium. 
 
 Third. Money is the measure of value. 
 
 The first definition is the most nearly correct. It is, however, misleading 
 as it would imply money to be an essential medium of exchange. This we 
 have seen is not true in a simple transaction. 
 
 The second definition is meaningless. 
 
 The third definition is radically wrong, and acquiescence in its meaning 
 is one of the causes of the erroneous conceptions of money, its uses and 
 abuses. 
 
 The proper definition is: Money is an essential factor in the economical 
 consummation of a complex exchange. 
 
 To perceive the error of the third definition one must have a correct 
 conception of value, which will be treated hereafter. 
 
 My object in setting forth the above definitions is as much to note the 
 sins of omission as commission. None of the above definitions, either 
 oirectly or by implication, describes money as a commodity, an article of 
 commerce to be bought and sold on the market as a profit producer. 
 
 None of the polictical economists, whose work it has been my pleasure 
 to peruse, have in any way intimated that such a definition would be correct. 
 Most of them are content with the simple phraseology that "Money is the 
 medium of exchange." Webster defines it as "a medium of commerce." 
 
 The strange part of this is, that all the thinkers along these lines, not- 
 withstanding their failure to define money as a profit producing commodity, 
 promptly proceed to treat it as such and endeavor as a matter of course 
 to apply to it all the laws relative thereto, and leave the reader to conclude 
 that it is actually on a par with all other commodities. 
 
 Webster defines a commodity as "including everything movable that is 
 bought and sold — goods, wares, merchandise, produce of land and manu- 
 factories, etc." 
 
 The definition of money, amplified, means the substance chosen for a 
 medium to facilitate the interchanging of the above commodities. 
 
 If that medium should become one of the commodities, it must, as a 
 matter of necessity, lose its identity as a medium of exchange. The as- 
 sumption of such diametrically opposed characteristics is absolutely un- 
 tenable, and when we further consider that money is by law made legal 
 tender, which Webster defines as "that which the law authorizes to be 
 tendered in payment of debts," it is all the more ridiculous to contemplate 
 it as a commodity. 
 
12 
 
 CHAPTER III. 
 VALUE. 
 
 A commodity has: 
 
 First. An intrinsic or real value. 
 
 Second. A market or profit producing value. 
 
 Third. A speculative value. 
 
 These differing values may be marshaled as past, present, and future 
 values. We will consider them in their order. 
 
 A commodity has intrinsic or real value exactly in proportion to its 
 service to mankind. 
 
 The essential demands of humanity are nourishment, shelter, raiment, and 
 adornment. There are also numerous other demands more or less essential. 
 The real value of any commodity then lies fairly within its ability to administer 
 to some one or more of the above mentioned demands. 
 
 The measure of this real value is the cost of production. 
 
 The market value of the same commodity will be controlled by the law 
 of supply and demand. 
 
 The measure of this value is the keenness of the demand. 
 
 Speculative value is what its name implies. 
 
 The measure of this value will be the same as the other two according 
 to where it falls when put to use by mankind. 
 
 To illustrate these differing values I take the two commodities, wheat 
 and diamonds. Wheat has a very high intrinsic value, as it is essential to 
 meet the demand of mankind for nourishment. The measure of that value 
 is the cost of production. Under normal conditions the supply equals the 
 demand, so that the market value rarely goes much above the real value. 
 Diamonds have a real value as they meet a demand of mankind for adorn- 
 ment, and the measure of that value is the cost of production. However, 
 as the supply does not equal the demand, the market value soars far above 
 the real value. 
 
 Thus far we have seen that money has no connection with value nor the 
 treasure thereof. On the contrary, the commodity is the measure of the 
 {i mount of money required to make an exchange for some other commodity. 
 
 Money is the medium which by law is made a compensating balance 
 for the different values of commodities. It can in no way affect the value 
 of an article, neither can it measure that value. Money is not called into 
 the transaction until the value has been measured as above explained, and 
 then only as a means of facilitating exchange by balancing the differing 
 values. An instrument of mere convenience. 
 
 Gold and silver left to the same standards as other commodities would 
 have the same proportionate values. The degree of their usefulness to 
 humanity in places where adapted would be the factor determining their 
 real value and the law of supply and demand would control their market 
 \alue. 
 
 However, inasmuch as gold and silver have been adopted as money by 
 law, that very fact removes them from the realm of other commodities and 
 pives them an arbitrary value which they would not otherwise possess. This 
 arbitrary value is not a real value, nor a market value, nor a speculative 
 
IS 
 
 value. In short, it is no value at all, as that term is recognized in political 
 economy. Gold and silver are assigned, by law, to perform a certain 
 function; iron, paper, cloth or almost any substance would perform the same 
 function, but gold and silver have been chosen as they are best adapted to the 
 purpose. 
 
 The fiat of the government that money shall be legal tender, results 
 necessarily in some fixed ratio between the amount of money in circulation 
 and the commodities of exchange. Left to natural laws, they will adjust 
 themselves as unerringly as water will seek its own level. The money of 
 the world will always maintain the same proportion to any given commodity 
 which that commodity holds to all other commodities. The amount of money 
 expressed in the proportion is just adequate to compensate the value of that 
 commodity. 
 
 We are still unable to detect any connection between money and the 
 value of any commodity, neither do we perceive that money can in any way 
 be the measure of that value. 
 
 It is but a simple factor of exchange. It is useless while lying idle. It 
 is valuable only for what it will be taken in lieu of. 
 
 Left to a logical conclusion, the world would not be at fever heat to turn 
 commodities into cash, but, to the contrary, it would be equally as anxious 
 to change its valueless lieu, money, into commodities, as they are the only 
 producers of profit. This being true, the active workers, laborers or thinkers, 
 would be the possessors of true value, wealth, and their wares would be ever 
 in demand. Money having no real value would pass freely to true com- 
 modities and the world would be immeasurably blessed thereby. 
 
 Neither gold, silver nor paper have any great value as a commodity. 
 They neither clothe, shelter nor nourish mankind. The metals have some little 
 use in the trades and arts, but the values engendered from these quarters 
 ^. ould be no more than values relative to other values of other commodities 
 in proportion to their respective uses to mankind. Nothing would or could 
 carry this value beyond its true position as dictated by the rule of their 
 usefulness. 
 
 Paper money has not even this showing of value. Left in the market 
 £.s a simple commodity, owing to its uselessness, it never would nor could 
 have any real value. 
 
 However, by law, the foregoing moneys have been decreed the balance 
 in exchange. A mere incident of commerce. Not a commodity but a creature 
 of commodities, a servling. The commodity is the master, the money nothing 
 but a factor, subservient and responsive. 
 
 To perceive that money, of whatever nature, maintains its position by 
 fiat of the law only, it is but necessary to observe that the metals, with 
 some real value, are exactly on a par with paper, which has no real value, 
 when both are used as money. 
 
 Money being held in lieu of commodities, while thus hoarded, is value- 
 less. The natural and logical thing to do will be to exchange this unpro- 
 ductive lieu substance for some commodity, the usefulness of which will 
 create a demand which leads on to profit. 
 
 This simple condition is easy of understanding, automatic in action, and 
 satisfactory in results. 
 
u 
 
 Money, in its proper sphere, can never fix, nor in any way affect, the 
 value or a commodity. Under natural conditions the dog always wags the 
 tail. This seems to be nature's law and the average human being is able 
 to otse)ve it f,nd commend it. He is so sure this is correct that he 
 would indignantly tcout any other hypothesis. Yet, in the commercial world, 
 he will complacently stand by and see the very life shaken out of the dog 
 by the tail, and will as indignantly scout any assertion that there is something 
 wrong. 
 
 When value dictates to money, the dog is performing his proper function, 
 but when money in any way dictates to value, something is wrong and the 
 tail is wagging the dog. 
 
 If commodities and money were left in their proper spheres, i. e., the 
 commodity, the real value and the producer of profit, and the money a 
 mere lieu or factor of exchange with no real value and nonprofit producing; 
 it does not require a very profound deduction to conclude that the com- 
 modity would be the thing of interest and the money a mere auxiliary 
 thereof. Money would be seeking investment, there would be no incentive 
 to hoard and withdraw from use. 
 
 Anyone with labor, or with a commodity as the result of his application, 
 could find a ready market therefor. Money held in lieu, being profitless, 
 vould readily find channels through which to flow in quest of profit producing 
 commodities. 
 
 That this natural and logical condition does not exist is patent. That 
 the dollar is king and master is evident to all. That money has acquired an 
 unnatural value is apparent. Money has become the master, commodities 
 servlings. To accomplish this, money must have met commodities in an open 
 l^eld, with no favors and come off victor. It must have indeed become the 
 commodity, the profit producer, and the commodity a mere incident, or, at 
 best, a. very poor second. 
 
 This is exactly what has occurred: Money has been permitted to enter 
 a perverted channel and become a profit producer, something entirely foreign 
 to its original and only use. 
 
 •This new use, or abuse, of money brings its natural results. It is now 
 to the interest of the profit seeker to hoard money, take it out of circulation, 
 and bend his energies to the accumulation of cash, and to despise the pro- 
 duction of useful commodities. The man who wins cash at a gaming table 
 seemingly has done more for humanity than the man who raises wheat. 
 The gambler has the master money, and the honest producer has the creature 
 wheat. 
 
 Money held in lieu of any commodity cannot rise above that commodity, 
 lr I sell one hundred bushels of wheat, a profit producing commodity, for 
 cne hundred dollars of non-profit producing money, I will naturally hasten 
 to reinvest my money in some other profit producing commodity, or to 
 employ labor in some profit producing enterprise. 
 
 There would be no incentive to hoard money as its only sphere of use- 
 lulness is to assist in economically transacting business, changing one 
 commodity for another. If this condition were permitted to exist, commodities 
 and labor would always be in demand. Money would be constantly seeking 
 to exchange itself for these articles. 
 
15 
 
 However, this is not the case. The exact contrary exists. Money is in 
 ■constant demand and labor and commodities are the suppliants at its gates. 
 
 As no effect can exist without a cause, there must be some cause for 
 this wonderful effect. What is the cause which places the valueless sub- 
 stance money in command of the most essential commodities of life. Evi- 
 dently it is because money, by an absurd custom, has been permitted to 
 enter the realms of profit producing commodities. To be the victor in that 
 held it must be the producer of the greatest profit. 
 
 This is easily accomplished as money is not produced by the people 
 but by the government. Thus we have commodities produced by the peuple 
 <.nd held in check by competition and other causes, in direct competition as 
 profit producers with money, the product of the government, hence monopo- 
 listic, and with naught but a fiat value upon which to base its ability to 
 create profit. 
 
 The magic wand which has most to do with this abortive condition is 
 the fact that money is permitted to bear interest, i. e., reproduce itself without 
 the application of labor, and this anomaly is made possible by the law 
 -which makes money legal tender. The man with hoarded money 
 can subsist indefinitely without your commodity, no matter what it may be. 
 1' you deal in flour, he can eat rice. If you deal in both flour and rice, 
 he can eat oatmeal, and so on. But not so with his commodity. The law 
 has made it the legal tender and as such there is no substitute. We must 
 get his article and none other and get it quickly and at his price Our bills 
 must all be met promptly with cash. True commodities have absolutely 
 r;o chance. 
 
16 
 
 CHAPTER IV. 
 MONEY AS A PROFIT PRODUCER. 
 
 We have seen that an article has real value just in proportion to its 
 usefulness to mankind. 
 
 Wheat is one of the most indispensable of articles and one of the most 
 useful. As long as the supply equals or exceeds the demand, the cost of 
 production will be the measure of its value. When the demand exceeds the 
 supply, the cost of production is out-distanced and a new factor enters the 
 race, i. e., the keenness of the demand. The keener the demand the higher 
 and higher mounts this new or market value. The higher it ascends the 
 scale of this new or market value, the higher rank it takes in comparison 
 with other commodities and the greater amount of money will be required to 
 make an even balance with any other commodity, so that all commodities may 
 float on an even keel upon the sea of commerce, as it were. 
 
 This added amount of money, or ballast, required by other articles to 
 counterbalance the rising market value of the first, is what is known as profit. 
 
 Profit is the coveted goal of the entire commercial world, and the com- 
 modity which will yield the greatest profit is the one zealously and jealously 
 embraced. This enviable position fluctuates from one commodity to another 
 hence anyone of them may be in demand today and a begging tomorrow, which 
 condition is governed entirely by the law of supply and demand. 
 
 All true commodities are produced by the people and are directly subject 
 to the vicissitudes of the seasons, frosts, droughts, floods, and other causes 
 such as fires, strikes and a multitude of constant perils. Money is a daily 
 producer and free, or as nearly free from danger as human ingenuity can 
 devise. 
 
 All true commodities stand as breastworks between borrowed money and 
 loss. This is accomplished by the custom of insisting upon a safe margin 
 of security on each and every loan. This gives borrowed money a glaring 
 and unjust advantage when considered as a simple commodity. 
 
 What, then, is the subtle cause that permits this phenomenon to occur? 
 Why does a useless article, i. e., an article with little or no real value, 
 dominate all other commodities? It must be that it, in some strange way, 
 has become the greatest profit producer. A creature of economical commerce, 
 a mere incident in the exchange of commodities has become greater than 
 its principal. What has heretofore been the object, is now the incident, 
 and what has heretofore been the incident has now become the object. 
 
 An article of no real value competes with articles of the utmost value 
 in the field of profit and maintains its position as victor by the absurd custom 
 which prevails of making the articles of real value stand all losses, when 
 losses are in order, and allowing them to participate in the profits to a relative 
 degree only, when profits are in order. A strange and unjust result of warped 
 reasoning on the part of the borrowers and pleasant platitudes on the part 
 cf the lenders. 
 
 Any commodity which is assured of profit at a fixed time and at a fixed 
 ratio is indeed fortunately circumstanced. Good fortune is not yet content, 
 but provides that, should the tide turn against said commodity, it is safely 
 buttressed behind all other classes of commodities to the extent of the 
 
17 
 
 margin of security, thereby placing those other commodities in the forefront 
 of the continual strife against loss, to be first sacrificed should the tide be 
 too strong. This, then, is the enviable position occupied by money. 
 
 Thus we have the unnatural condition of money, which is not a com- 
 modity, having lost that dignity when it was adopted as the medium of 
 exchange, competing with all other commodities for profit. This abortive 
 condition is not sufficient. As though in fear for this malignant interloper 
 'bat it may not hold its own, the unjust and unreasonable custom has become 
 legalized by which this foreigner in the realms of profit is permitted to 
 hide itself behind all other commodities when danger of loss threatens, and 
 come to the front, urbane yet insolent, to claim the lion's share when profits 
 are in sight. 
 
 Such a mean, contemptible condition cannot long survive when once the 
 world is thoroughly awakened to its iniquity. 
 
 Were this injustice left to affect the original borrower alone, the masses 
 would not have such great cause for complaint, but when we consider that 
 the brunt of the evil effect is passed along to the struggling masses who da 
 not and cannot borrow money, it is easily seen how unjust the system is. 
 
 A slave is one who is compelled to give the profits of his labor to another. 
 By the present perverted use of money the same definition applies with 
 equal force to all citizens of the world who are not in the money-lending 
 class, and even they are victims of the same system only that their losses 
 are more than balanced by their profits. 
 
 If common thievery were legalized there would be different degrees of 
 ability and opportunity to steal. Some would lose more than they could 
 steal, others could steal more than they would lose. The latter class would 
 be looked upon as being eminently successful in business. Taking the entire 
 transaction, to them, the game is profitable. But would that fact cause such 
 a condition to be desired? 
 
 Money, fortified against loss and constantly attracting other money unto 
 itself, is like a malignant cancer, incurable and constantly growing, a continu- 
 ing drain upon and sapping of essential vitality till death is the inevitable end. 
 
 A reservoir with no outlet, not even natural evaporation, with in- 
 numerable streams feeding it, will, in time, become a dangerous flood. Water 
 once gone by in one of those streams never comes back to replenish the 
 source, and, in time, they cease to flow, and then what a demand will arise for 
 the water impounded! 
 
18 
 
 CHAPTER V. 
 MONEY— THE METHOD OF ITS PERVERSION. 
 
 Money is perverted from its original, natural and only use by virtue of the 
 iact that it is permitted to enter the field of profit producing. This crime is 
 accomplished by the simple custom of demanding interest. 
 
 Demanding and getting interest on money results in hoarding the same. 
 Hoarding money takes it out of circulation. Taking it out of circulation 
 produces a scarcity. This, by the natural law of supply and demand, creates 
 a market value. The greater the scarcity, the keener the demand and the 
 higher the market value or profit will ascend, (the profit in this case being 
 i;i the form of interest). This in turn accelerates the hoarding process and 
 so on ad infinitum. 
 
 Money is the blood of commerce, flowing naturally through the veins and 
 arteries when commerce is normal. When commerce is abnormal and con- 
 gestion occurs at any place, money should and would flow to that place and 
 restore equilibrium, just as the blood does in a living body. Should there 
 be a demand for a certain commodity in one locality, and a surplus of the 
 same commodity in another, money will pass readily to the surplus, supply 
 the demand and thus provide an equilibrium. 
 
 It is the water of commerce, constantly carried back to the source to 
 flow down the mountain sides, across the plains and meadows, administering to 
 the wants of animal and vegetable life, causing all to rejoice and revel in 
 health and happiness. 
 
 Could anyone think that things were as they should be if the blood, 
 as it coursed through the veins to the heart, was not permitted to return 
 through the arteries to perform its natural function unless it pay tribute to 
 some insolent Shylock who stood by the gates of the heart. 
 
 How long would the dews and rains from Heaven, and the rivers and 
 rivulets of the world, give life to this fair land if the sun should fail to 
 evaporate the full amount of that vital fluid to be wafted back to the source, 
 but to the contrary should levy tribute and give back a diminishing supply 
 each day. Eevastation as swift and sure as night follows day would be the 
 inevitable result. 
 
 Gold and silver when first produced at the mine in the mountains are 
 akin to water; they flow freely o'er the land, they are taken at their trading 
 value and move easily for the purpose for which they are intended. Out 
 they rush through natural channels like water, slaking the thirst of all animal 
 and vegetable life. All are welcome to come and partake of the bountiful 
 gift of God. Onward they flow dispensing joy and satisfaction on their 
 paths till the water is finally discharged into the sea, the money to a bank, 
 vhen their characters are immediately changed. The water becomes con- 
 taminated with the salt sea and will no longer invigorate the land, the money 
 becomes contaminated with the blight of interest and no longer invigorates 
 commerce. 
 
 The water must be distilled by the sun before it is again fit to purify 
 the earth, money must be distilled by labor before it can again enrich the 
 fields of commerce. The sun distills and gives back freely to the land every 
 
19 
 
 drop of water; labor can distill but a percentage of the money deposited in 
 a bank. The remainder is left in the hands of those who have no right 
 thereto, the bankers and money lenders, to be used as an instrument of 
 torture while exacting the fruits of labor from a suffering and struggling 
 humanity. 
 
 The rapidity of interest accumulation is realized by a very few. A 
 reproduction of some of this phenomenon will be interesting and instructive: 
 
 Money at 4% simple interest doubles in twenty-five years. 
 
 Money at 4% compounded yearly doubles in 17.6 years. 
 
 Money at 5% simple interest doubles in 20 years. 
 
 Money at 5% compounded yearly doubles in 14.2 years. 
 
 Money at 8% simple interest doubles in 12.5 years. 
 
 Money at 8% compounded yearly doubles in 9 years. 
 
 Money at 10% simple interest doubles in 10 years. 
 
 Money at 10% compounded yearly doubles in 7.2 years. 
 
 Money at 12% simple interest doubles in 8.3 years. 
 
 Money at 12% compounded yearly doubles in 6.1 years. 
 
 Compared with the profits in some lines of speculation for a short while, 
 these gains seem small, but when we consider that they are sure and will 
 continue forever and are constantly augmenting the earning capacity of money 
 and correspondingly decreasing the amount in circulation in the hands of the 
 honest investor, one may readily see the enormity of results eventually. 
 
 As a further illustration of the rapid accumulation of money in interest, 
 and as proof that interest assimilates all the profits of commerce I invite you to 
 the following comparison: 
 
 The City of New York was taken from the Dutch in the year 1664. From 
 that date to the present, 1914, is just two hundred and fifty years. In this 
 short space of time New York has grown from a hamlet to the largest city 
 in the world. It is safe to conclude that real estate values in that city 
 have increased as rapidly as any in the world. We must admit that ad- 
 vancing values in urban realty is one of the most potent producers and 
 rapid accumulators of lucrative profit. New York realty is the foundation of 
 one of the largest fortunes of the age. 
 
 We will assume that in the year 1664 the most favorable lot in said city 
 was of the value of $1,000.00, and further assume that on the same date 
 $1,000.00 was loaned at 8% interest compounded yearly. At that rate the 
 r^oney would double every nine years. In ninety-nine years the money will 
 have an earning capacity of $1,024,000.00. The lot would not be of that value. 
 If, however, some optimistic party should think me wrong, I invite him to' 
 follow me to the present day. The money in the year 1914 will have a principal 
 or earning capacity of $134,217,728,000.00. The lot does not reach this figure, 
 li is reported that the greatest price ever paid for New York realty was 
 $3,000,000.00 for one lot. 
 
 We will view this problem from another angle. It is reasonable to con- 
 clude that the market, or earning value, of real estate in any city increases 
 just in proportion as the population increases. For the purpose of this 
 comparison we will assume that the lot and the money are of equal value 
 now in the year 1914. The population of New York City today is 5.583,871 
 and it has been two hundred and fifty years acquiring this. In order to 
 keep pace with the money New York must, in the next nine years acquire 
 
20 
 
 as much population as it did in the past two hundred and fifty years, or 
 a population of 11,167,742. The money at that time will have reached the 
 enormous figures of $268,435,456,000.00. That it is a phyiscal impossibility 
 tor a city to double its population every nine years goes without saying. 
 
 The population of the world today is 1,623,300,000. Assuming the popu- 
 lation of New York City today to be 4,194,304, and that it could double that 
 figure every nine years, we find that in eight-one years it will have a popu- 
 lation of 2,147,483,648, or 524,1 83, 64S more than the present population of 
 the world. This is an overplus of China's present population of 400,000,000 
 plus 124,000,000 more for good measure, the last amount alone being greater 
 than the present population of the United States. 
 
 These figures are astonishing and convincing that money, plain, inani- 
 mate money, a thing which neither nourishes, clothes or shelters mankind, 
 tsnd, further, is not even the means of producing any of the necessary com- 
 modities of life, has a wonderful earning power. 
 
 I do not need to draw my illustration from any of the older cities of 
 the world. New York is amply old to show the gross inequality of necessary 
 commodities and money. 
 
 That we may understand the mysterious disappearance of the fruits of 
 the world's labor, I submit the following figures: 
 Interest and other annual charges on the indebtedness 
 
 of nations for the year 1911 $1,731,517,1 .00 
 
 Coinage of the nations for the year 1911 520,299,841.00 
 
 Balance $1,211,217,159.00 
 
 We are liable to conclude that the production of the metals, gold and 
 silver, is sufficient to keep the volume of money abreast of the ever-increasing 
 wealth of the world, but the above figures will not justify that conclusion. 
 Whatever deficiency there is in the production of these metals leaves a fund 
 which must be directly supplied from the fruits of labor. 
 
 It will be noted that the above figures relate to public indebtedness only 
 and do not include the fabulous sums paid as interest through all trustified 
 industrials, railroads, steamships, merchants and even the farmers who 
 produce our foodstuffs. 
 
 The failures in the United States for the year 1911 amounted, in round 
 numbers, to one hundred eighty-six and one-half millions of dollars. The in- 
 terest on public debts, nation, states, cities, counties and minor civil divisions 
 in the United States, figured at 4'A , in the same year, was, in round numbers, 
 one hundred six and one-half millions of dollars. This one hundred six and 
 one-half millions of dollars was collected from the people, by officials paid by 
 the people, and the sum turned over to the financial pirates and brigands, 
 figuratively speaking, to hoard away for their own special benefit to be used 
 os additional means for levying tribute on the people. 
 
 The money thus taken out of circulation is the direct cause of a vast 
 majority of the failures. 
 
 A failure is an abnormal occurrence in the world of commerce. A system 
 of credits prevails, fostered by the scarcity of money occasioned by the "in- 
 dustry" of the money-lending fraternity. A time will come when a certain 
 debt must be paid. It may be a very insignificant debt, not 1% of a man's 
 ability to discharge, provided money circulates freely. He has ample other 
 
21 
 
 commodities to meet the debt, but they are not by law a legal tender, so 
 money he must have. This money, this legal tender, is all hoarded for 
 purposes not its natural use. It is hoarded for gain. The merchant cannot 
 get it and, if crowded, will be forced to the wall as it is called, i. e., forced 
 to sacrifice his other commodities to the golden calf — money, an idolatrous 
 and sacrilegious act which should rouse all fair and just minds to rebellion. 
 
 He may have one hundred bushels of wheat, one hundred bushels of 
 oats, and one hundred bushels of potatoes, each worth $1.00 per bushel. The 
 creditor demands his money, the merchant offers him his wheat, he declines; 
 the merchant adds his oats, he can again decline. As the merchant cannot 
 fcrce him to take these commodities, as they are not legal tender, for debt, 
 be is forced to get money, as that is the only legal tender. To do this he 
 must sacrifice probably all his wheat to get this cash to pay, and the only 
 v.'ay he can get it is to borrow. If he does not do this he is declared a 
 bankrupt and down he goes with a crash. 
 
 All the losses engendered must be sustained by the legitimate com- 
 modities in his hands, while that base interloper in the realms of profit 
 production emerges from the wreck thoroughly protected plus the unholy 
 interest which it demands to be used in turn (in its legitimate capacity) 
 to exchange for the woefully depreciated commodity it itself has wrecked, 
 thus feeding upon the carcass of a murdered business, murdered in cold 
 blood by this glutton. 
 
 And all the world stands by and regales itself with those pleasant plati- 
 tudes of "fair play," "unfortunate investments," "bad market," "bad manage- 
 ment," "over-confidence " "over-production," etc., to a degree of drivelling 
 idiocy. 
 
 It is accepted as true that a short while ago a certain interest gathering 
 financier of New York came to the front and averted a panic. If this be 
 true, it seems reasonable to suppose that the same all powerful genius could 
 precipitate a panic. But be that as it may, what a dangerous power it is in 
 one man's hand to be able to avert a panic. Let us not be silly. Let us 
 conclude that a power sufficiently great to avert a panic is more than 
 sufficient to start one to order. 
 
 And this power is generated by the simple means of interest. 
 
22 
 
 CHAPTER VI. 
 THE ABUSE OF MONEY EXPLAINED. 
 
 We have seen that the only use for which money was called into being 
 was for the purpose of assisting in economically transacting business. It 
 is an incident of commerce only, secondary and subservient to the various 
 commodities, in the economical exchange of which it is but an humble servant. 
 
 If there were but one commodity in the world, there would be no trade, 
 no commerce, no exchange of commodities. This is self evident. In every 
 exchange there must be at least two commodities involved. One must be 
 exchanged for the other. 
 
 Each commodity is launched upon the sea of commerce for the express 
 purpose of finding a market, and the hope of a rising market. The surface 
 of this sea is swept by the winds of supply and demand. I am interested in 
 producing and marketing wheat, you have the same interest in oats. Our 
 vessels at the start, are laden with one thousand bushels each and of equal 
 value, bushel for bushel, say one dollar. Under these circumstances we 
 could easily exchange our cargoes without the use of money. However, your 
 vessel is directly in the path of a stiff breeze of shortage in supply and a 
 consequent great demand, and your cargo goes scudding to a market of two 
 dollars a bushel. My cargo feels no breeze from the same quarter and comes 
 into a normal market with the price still at one dollar. 
 
 It is obvious that we can no longer make an even exchange I must 
 have two cargoes of wheat to exchange for your oats. Here is a natural 
 phenomenon which is constantly occurring in the business world, it is in fact 
 the "grand motif" of business, for it is this hope of the demand exceeding 
 the supply and a consequent rise over other commodities, known as profit, 
 which actuates all business. 
 
 I cannot get another cargo of wheat, hence I must add to my cargo that 
 article, which all have agreed to be the lieu of commodities, money. 
 
 I must add to my cargo one thousand dollars in money and then a parity 
 again exists. This one thousand dollars is your profit. If the exchange is 
 made it is easy to see that I hope to, and, if the demand stiffens, will make a 
 profit on my deal. 
 
 Transactions of a like nature are so plentiful that it is a waste of time 
 to endeavor to enumerate them. In all, however, money is but the balance» 
 the added weight, as it were, to maintain an even scale on the fluctuating 
 values. The blood of commerce carrying its red corpuscles, gold, and its 
 white corpuscles, silver, throughout the body of commerce. This being the 
 function of money, it could never properly become a commodity. 
 
 It is, however, permitted to become a profit producing commodity, which 
 abortive practice we will now consider. 
 
 As long as money is left to its legitimate use, it flows readily, constantly 
 seeking investment in labor or some profit producing commodity. Anyone 
 actively engaged in commerce, being fortunate in selecting commodities of 
 the greatest profit production, will in time feel that he has done enough 
 business for one life and elect to quit business and spend his declining days 
 in ease and recreation. He considers he has money enough to exchange for 
 
2a 
 
 the necessaries of life as long as he lives. If things were left to thus nor- 
 mally continue, in time all his hoard would find its way back into the chan- 
 nels of trade. Under the present system this natural result is not permitted 
 to occur, but to the contrary the money is deflected and applied to the 
 abortive use of profit producing. 
 
 Some other person engaged in active commerce conceives the idea that 
 if he could get some more money to buy more commodities he could make a 
 profit sufficient to pay something for the use of that money. This looks 
 very plausible and it has become the settled opinion of mankind that it is> 
 perfectly correct. 
 
 The party from whom he borrows, has the money and is not compelled 
 to let him have any of it except on his own terms. These are, ample security 
 that the money will be returned with interest. This seems plausible also 
 and it has become the settled opinion of mankind that it is correct. But in 
 each instance it is this deceptive plausibility which sustains this great 
 fraud upon honest industry. 
 
 Every lender presupposes a borrower. Of these there are two classes — 
 those who borrow as a matter of necessity and those who borrow with a view 
 of making profit. 
 
 Those who fall within the first distinction we need not consider, as that 
 class will disappear when money is restored to freedom. They will no 
 longer be driven to the extremity of borrowing, as money will be seeking 
 their labor. 
 
 It is the second class with which we have to deal. One who borrows for 
 gain does so with the avowed purpose of making the ultimate consumer of 
 his goods bear the burden of his act. He conceives a method by which he 
 can reap a greater legitimate profit from his consumers and at the same 
 time make these consumers pay for the means by which he accomplishes 
 his purpose. 
 
 He barters away the fruits of his consumers' future labor that he may 
 make a greater profit out of the past labor of the same consumer. The 
 money lender who is particeps criminis in this transaction, and who is. 
 "slated" to divide the spoils, does nothing but "sit tight," for so sure is the 
 borrower that he will be able to accomplish his purpose that he has hypothe- 
 cated the fruits of his own labor to the money lender as a margin of safety. 
 He is willing to jeapordize his own substance to assure the money lender in 
 his unjust exactions from his consumers, that he may garner greater profits 
 from their labor. 
 
 The question is asked, what difference could it make to the consumer 
 whether the merchant used his own money and pocketed all the profits or 
 borrowed the money and divided the profit with the money lender? 
 
 That it makes all the difference in the world, we shall soon see. 
 
 I take it as an accepted fact that the world advances only just so fast 
 as the population increases and human ingenuity grapples with and subdues 
 (bstacles to progress. This then fixes a limit on the world's surplus or 
 profit. This point is fixed and inexorable, and is the same the world over. 
 
 As an essential corollary to the foregoing, if the market price of any 
 commodity rises above this point at one place, it will fall below it in another, 
 cr if it takes a universal rise at one time, it will take a universal and corres- 
 
24 
 
 ponding fall at another. In short, commerce is made up of a heterogenous 
 conglomeration of profit and loss. 
 
 This point, above which prices cannot remain for any sustained period, 
 U a protection to the consumer which he has every right to enjoy, but it is 
 denied him under the present system. 
 
 The money lender refuses to recognize the law of profit and loss. He 
 constantly plays the game from the other side of the table. "Profit" is his 
 shibboleth and the word "loss" does not appear in his lexicon. 
 
 To make any enterprise in the field of commerce profitable is no light 
 undertaking. Only by years of judicious application is this accomplished. 
 Disaster overtakes by far the greater portion. 
 
 As we now understand the laws of commerce we will consider the differ- 
 ence it makes to the consumer whether the merchant is doing business on 
 his own or borrowed money. We will first consider him doing business on 
 his own money. 
 
 If with his own money he embarks on a venture and it proves profitable. 
 Iip will be the gainer and the consumer will be the loser, the gain to one 
 and the loss to the other will be equal. On the other hand, if the venture 
 ip a loss, the consumer will be the gainer and the merchant will be the 
 loser. The merchant will have nothing but his loss to reckon with. The 
 cards have all been played above the table and the game has been con- 
 ducted according to the rule laid down by the aforementioned fixed point. It 
 has been a pure game of profit and loss. 
 
 We will now consider him doing business on borrowed money. If the 
 enterprise is profitable, both he and the money lender will be the gainers, 
 and the consumer will be the loser. On the other hand, if the venture is a 
 loss, the consumer will be the gainer but the loss does not fall where ir 
 automatically should, that is on the merchant and the money lender alike. It 
 all falls on the merchant, and as odd as it may seem, the money lender makes 
 hit- profit just the same. 
 
 The entire market loss plus the profit, interest, pledged to the money 
 lender, falls primarily upon the merchant, but he is not the only one affected. 
 RememLer that the consumer has a far deeper interest in commodities as 
 s whole than the merchant. His interest is centered in the commodities 
 directly in his hands, and which are to be sacrificed in this transaction, 
 while the consumer is interested in all the commodities in the hands of all 
 the merchants. 
 
 For the time being forget the terms "money lender,'* "merchant," and 
 '"consumer," and fix your mind upon the two entities, "money" and "com- 
 nodities." 
 
 It will be clear to you that the game commenced as a friendly contest. 
 with commodities and markets for the cards, all of which were on top of the 
 table, and the rules to govern, but at the finish we find the game to be 
 changed to Money vs. Commodities, with money playing a cold deck cunningly 
 slipped from under the table. 
 
 In other words, money is slated to win in the finals, no matter who wins 
 or loses in the matches. 
 
 This is the onesided game which amounts to a continuous performance 
 which is being played between money and commodities and which is one of 
 the most potent causes of that much-debated question of the high cost of 
 
living, which, in turn, produces that mysterious unrest which abideth with 
 the people. 
 
 As proof that the guaranteed profits to money are sufficient to assimilate 
 all the world's natural increase, I refer you to the comparison of New York 
 real estate and money, elsewhere in this volume. 
 
 In reckoning the losses to commodities in the foregoing game, a peculiar 
 condition unfolds. We will assume that the merchant and the money lender 
 have equal amounts of money in the enterprise, the merchant to pay s-: 
 interest. If the enterprise shows a profit of 4' < the merchant makes nothing. 
 All must go to the borrowed money, and he is out all his time and energy. 
 if the profits are S f ., he is even on his money, but is out his time and energy. 
 
 Selling goods on the market is akin to gaining greater speed on a steam 
 vessel. It takes twice as much power to propel a vessel eighteen miles an 
 hour as it does fourteen. The higher one forces the price the more difficult 
 
 mes the operation. It is with great difficulty that the price can be forced 
 above 8 c / t profit in a legitimate market. 
 
 Should the goods sell at cost, the merchant is out 895 on his investment. 
 Should they sell at 4'/, loss the merchant is out 12%, and at 8<# loss he is 
 out 24' , on his investment, and all his time and talent. This gives loaned 
 dollars a marked advantage over dollars legitimately invested. 
 
 The position of the money lender, as defined by himself, is as follows: 
 I have money enough to last me as long as I live. By that time all my 
 money will have found its way back into the channels of trade. However, if I 
 loan my money to my neighbor, I can be assured that it will be returned 
 and with it will come as much, and more, profit than I could make if I 
 handled it myself. Besides, if I handle it myself, I will have to stand all 
 losses occasioned by faulty judgment and bad luck, but if I loan it out I will 
 be sure of my returns and my neighbor will have to stand the losses. In 
 the meantime I can live a life of as indolent ease as I could provided I did 
 not loan it out. snd further, my children can continue to live the same 
 indolent life and will never be called upon to take their places in the world 
 as honest producers. This nice little arrangement of interest will keep 
 other- toiling for their benefit. Never again will my money enter the chan- 
 nels of trade on a fair basis with money invested, there will be a "holy unto 
 thou" character attached thereto. 
 
 In time my heirs, by the most reckless extravagance, cannot dissipate 
 the accumulations, and the honest toilers of the world will forever be their 
 slaves. 
 
 We will assume that the great struggle between money, erroneously 
 called capital, and true capital, erroneously referred to as labor, were sim- 
 mered down to a simple transaction between two individuals, one with 
 the wealth, the capital of brain and brawn, the other with a bag of erold. 
 
 The first is actively engaged in producing something to gladden the 
 heart of man; the other is stolidly seated on his bag of money awaiting the 
 day when the first shall feel the effect of the scarcity of "the medium of 
 exchange," the "legal tender," and must come to him to get it. Thus by 
 the stroke of a pen he can take from the real producer of wealth all his 
 earnings, make him his slave and keep him as such, and do it with such 
 an air of patronizing condenscension that it will fully impress the borrower 
 with his superior station in life and surpassing kindness for permitting him 
 
26 
 
 to still exist. In other words, deliberately robs him and teaches him to 
 like it. 
 
 A young man, full of brawn and a fine and active brain, will find himself, 
 owing to the present system, at a loss to acquire some needed "legal tender" 
 with which to discharge his obligations. He applies to the only source where 
 he can get it, to the man who has it all hoarded and out of circulation, 
 a waiting this very moment. He will say: "I am a young man, strong and 
 active, and I apply to you to exchange some of your hoard of legal tender for 
 some of my capital — labor." 
 
 The money lender responds: "If I employ you, and agree to pay you 
 wages, i. e.. agree to give you some of my legal tender for your commodity, 
 labor, I will be exchanging a certain profit producer, money, for a very 
 uncertain profit producer, labor. My money will pass from me forever, and 
 in its place I accept a commodity which enters into direct competition with 
 all other commodities of its kind, one of the very commodities which now 
 stands as a bulwark between my money and loss. It would not be good 
 business; my profits would be too uncertain and my danger of loss would 
 not te properly safeguarded. I must decline to let you work for any of that 
 article which the law says you must have to discharge your obligations. 
 However, if you will hypothecate all the accumulations of your past life 
 to me and agree to give me all your future earnings, as proof that you like 
 this arrangements, I will loan you the required amount of that article which 
 the government intends shall pass freely in the exchange of commodities." 
 
 "But," expostulates the victim, "if I do that, I will become your slave 
 forever, as I can never pay you back the principal, and in a short while 
 you will foreclose and take from me, according to law, all which I have." 
 
 "But me no buts," soothingly retorts the money lender, "If you do not 
 borrow from me sufficient of that article which the law says is legal tender,, 
 ic comply with the demands of your creditor, that selfsame law will declare 
 you a bankrupt, and you will of a certainty lose all you have. If you borrow 
 of me, and agree to become my slave, you have one chance in ten thousand, 
 during the succeeding years of your life, of having the wheel of fortune so 
 turn that you will be mercifully delivered from this bondage." 
 
 "I cannot see how you, a creature in the form of a man, which the Good 
 Book says is fashioned in the image of God, can be so unjust," observes the 
 victim. 
 
 "Tut, tut," replies the money lender, suavely, "you forget that I am fore- 
 going for a time the use of this money." 
 
 "Well, if you have any use for the money, how does it happen that you 
 have any to spare to loan?" asks the victim. "I have people owing me who 
 are in the same condition that I am. If they could get money and pay me, 
 I could discharge my obligations. Go ahead and use your money for the pur- 
 poses for which it was intended. Employ labor, purchase some legitimate 
 commodity and it will do me just as much good and will have the added 
 blessing that I will not become your slave." 
 
 "Exactly," smiles the money lender, "but I have a better use for my 
 money. I am going to loan it, either to the man who owes you, or to the 
 man who owes him. I am not particular who first becomes my slave. Sooner 
 or later I will have you all. As I am an eminent financier, lauded and 
 emulated, I do not stoop to note a little thing like that. Think quickly and 
 
27 
 
 act with decision, my boy; it is the secret of success in business. You must 
 choose now, and choose quickly, between certain bankruptcy and a period 
 of years of bondage. One tenders you nothing but the shame and disgrace 
 of failure, with its taunts of bad management, incompetency, and the mis- 
 guided sympathy of erstwhile friends; the other, secrecy, the staving off 
 of the fatal day, and the hope that some day you may have the good luck to 
 be released from servitude and again be a freeman." 
 
 The young man grasps the situation. With a sinking heart, he bows his 
 head and meekly receives the yoke. 
 
 I have not overdrawn this picture one whit. It is the actual condition 
 ir the business world today. 
 
 Nor is this the worst. If the transaction could be confined to the actual 
 borrower and lender, there would be hope that this nefarious traffic in human 
 misery would be brought to a sudden and ignominous end. But it is not. 
 Our own great government, our own fair state, our own beautiful city and 
 county are industriously borrowing for us and pledging our labor to this 
 coterie of pillaging bond buyers. Every railroad, every steamship company,, 
 every industry, a vast majority of the very farmers who produce our food- 
 stuffs are borrowing for us and passing the burden along to their patrons and 
 customers as an indirect tax to be bled and torn from their hearts. And all 
 based upon the same peculiar logic. 
 
21 
 
 CHAPTER VII. 
 THE FALLACY OF INTEREST. 
 
 The custom of securing money against loss and guaranteeing it a. profit, 
 vas in olden times denounced as illegal and immoral. 
 
 The evils of the system were felt by the Jews in Old Testament days. 
 
 "And there was a great cry of the people, and of their wives * * * 
 we have mortgaged our lands, vineyards, and houses, that we might buy 
 corn, because of the dearth * * * * we have borrowed money for the 
 king's tribute * * * * Yet now our flesh is as the flesh of our brethren, 
 our children as their children; and, lo, we bring into bondage our sons and 
 our daughters to be servants, and some of our daughters are brought into 
 bondage already; neither is it in our power to redeem them; for other 
 men have our lands and vineyards. * * * * Then I rebuked the nobles 
 and rulers, and saith unto them, Ye exact usury, every one of his brother 
 * * * \y e have redeemed our brethren, the Jews, which were sold 
 
 unto the heathen; and will ye even sell your brethren? or shall they be sold 
 unto us? Then held they their peace, and found nothing to answer. I said, 
 it is not good that ye do: ought ye not to walk in the fear of our God? * * * 
 I pray you leave off this usury * * * * Then said they, we will restore 
 them, and will require nothing of them." — Nehemiah 5:1-12. 
 
 In those days interest in any form was termed usury. 
 
 "He who hath given forth upon usury, and hath taken increase * * * 
 he shall surely die; his blood shall be upon him." — Ezekiel 18:13. 
 
 Aristotle condemns interest as vicious, holding that money is "naturally 
 L'Lrren," and that to make it "breed money" is preposterous and a perversion 
 of the end of its institution which, he declared, was to serve as a "medium 
 of exchange" and not for purposes of increase. 
 
 The Christian Church and laymen early condemned the custom, and 
 held any interest to be usury and against good morals. The secular law 
 followed and the taking of interest was forbidden in England from the reign 
 of King Albert in the ninth century to the time of Henry VIII. At that time, 
 1545, interest at 109r was permitted. During the reign of his successor. 
 Edward VI, interest was again prohibited, A. D. 1552. This was the status of 
 the question till the reign of Anne, 1713, when interest was again legalized 
 and the rate fixed at 3%, and it was not till the year 1854, during" the reign 
 of Victoria, that all restrictions were taken off and the institution recognized 
 ac a factor.* 
 
 "Tlie first gold and silver cuius were brought from Asia to Hellas as an article 
 of col merce. Gradually they came into use as money. After the State had cmn- 
 mencec! to coin its own money, for a Ions? time there existed only a small amount 
 money in the land, and this was chiefly in the hands of the men of busi- 
 ness ano" merchants. As soon as money ceased to be an article of trade like other 
 articles coming on the market, when even the poorer classes could not exist wifh- 
 — the laws of debl prevailing in the interest of the proprietors, —money, like 
 a poisonous plant, absorbed and consumed the strength of the land." — Curtius's 
 History of Greece. 
 
 "Although the monarchy had been abolished, the people of Rome i>y no means 
 enjoyed the blessings of a fie.- government. All political power was in the hands 
 latricians, and plebeians were kept in a condition of great social degrada- 
 tion. Obliged to borrow money of their rich neighbors, they were charged enor- 
 mous rates of interest, and when unable to pay were Jelivered by the cruel laws 
 mercv of their creditors, who depriA ed them of their lands, and reduced then 
 mdition of serfs or slaves."" — Anderson's New General History. 
 
29 
 
 To-day the custom has become so venerable, that it is accepted by the 
 world as a thing of justice and right. Philosophers in political economy look 
 upon the custom as founded in sound principle and seem to recognize it as 
 an essential factor in the civilized world. They attempt to analyze the cause 
 and effect of high and low interest, but never once seem able to detect the 
 false foundation upon which the institution is builded. 
 
 It was probably a manifestation of like shortcomings which animated 
 Thomas DeQuincy to publish his somewhat uncomplimentary opinion of this 
 class of scientists and their works. "I saw that these were generally the very 
 dregs and rinsings of the human intellect; and that any man of sound head 
 and practiced in wielding logic with scholastic adroitness might take up the 
 whole academy of modern economists and throttle them between heaven and 
 earth with his finger and thumb or bray their fungus heads to powder with 
 ;i lady's fan." 
 
 The prime cause assigned for the necessity and justice of loaning money 
 ai'd collecting interest thereon is, that the money lender is foregoing the use 
 of the money for the time specified in the loan, and hence should be recom- 
 pensed therefor. 
 
 This idea that the money lender is foregoing the use of the money is a 
 fallacy, the failure in the understanding of which has permitted and still 
 permits this gigantic trick to be played upon honest industry. 
 
 Let us again refer to the man, hereinbefore mentioned, who had acquired 
 sufficient of the legal tender that he resolves to cease business strife and 
 spend his remaining days in ease and recreation. His money is all nicely 
 stowed away in a safe deposit box and he is at home, with the full determina- 
 tion that he will never use a dollar of it in any enterprise again. 
 
 His expectancy of life is, say, twenty years. If, then, he loans his neigh- 
 bor one-fourth of his money for a period of three years, and at the end of 
 that time the money is returned, then can it be said that the money lender 
 has "foregone" any use of the money? Or suppose he has his money deposited 
 ill a checking account at a bank. As far as he is concerned he has "foregone" 
 the use of the money to the bank, for which he receives nothing. The banker 
 aoes not "forego" the use of the money, for it is not his to use, in the first 
 place; and second, the only use granted him by the owner is to loan it. That 
 brings us to the central thought. 
 
 The only "use" a money lender has for money is to hoard and loan it, 
 and the only "foregoing" he suffers is that if he loans it to one he must 
 "forego" loaning it to another. If he accepts one as his slave, he must "forego" 
 the pleasure of having the other garnering his cotton. The money lender 
 never intends to invest one dollar in legitimate enterprises, he never fore- 
 goes" the use of money in that way. 
 
 Wall street money, and by that I mean what is known as bank mony, is 
 held sacredly for the one purpose of drawing interest unto itself. A banker 
 found investing any of this sacred hoard in any legitimate enterprise, i. e., any 
 enterprise where the money must stand its just share of the loss, if such there 
 be, will be shunned by his brethren in the fraternity, as a thing unclean. He 
 is a heretic and a traitorous backslider, for has he not violated all the sacred 
 canons of the interest-gathering creed? This cardinal precept, of never invest- 
 ing hoarded money in any legitimate enterprise, is more jealously guarded 
 than any maxim or tenet of the most dogmatic of faiths. 
 
30 
 
 Is it not true that, should these non-conformists become too plentiful, the 
 whole structure would crumble and fall? If too much of this hoarded money 
 should find its way into the channels of trade in its proper, just, and fair way, 
 i. e., with the full and honest assumption of its share of the losses, when 
 losses are in order, the time would soon arrive when no one would need to 
 borrow, as the cause thereof, to-wit, the scarcity of money, caused by hoarding, 
 would be a thing of the past. 
 
 The world would be immeasureably benefited if the whole "industry" of 
 "foregoing" were uprooted. To accomplish this it will only be necessary to 
 render the enterprise unprofitable. By removing the incentive to hoard (in- 
 terest) and by refusing money "safe conduct" against loss, it will be returned 
 to the channels of legitimate trade, and the golden calf will become a mutitude 
 of fatted calves, and all we poor prodigals will be invited to the feast, whereat 
 we will receive our just share. We ask no more. 
 
 By compelling this select coterie of much lauded financiers to enter the 
 fields of commerce on a fair and just basis, they will become industrious and 
 desirable citizens. Otherwise there is no hope for them. 
 
 It is strange and incomprehensible that a man can be so small, mean, and 
 contemptible that he should wish to loll in sodden indolence at the expense 
 of the sweat and misery of his fellow-man, and, like the late lamented J. P. 
 Morgan, profess to his God that he was "doing unto others as he would they 
 should do unto him." Such hypocrisy is too detestable for tolerance; and all 
 the poor, shortsighted beings who laud such actions and seek to emulate the 
 actors are but victims of their own selfish cupidity, and deserve the gyves and 
 fetters with which they soon are bound. 
 
 It is difficult to save an unreasonable being, but I know that the great 
 body of humanity, when once the silly injustice of our present financial sys- 
 tem is called to their minds, will rise and battle nobly for its complete and 
 lasting overthrow, a "consummation devoutly to be wished." 
 
 No nation ever felt the need of buying bullion and coining money to the 
 end that some of its citizens may hoard the same to their own use, as an 
 instrument to exact tribute from the great mass of the people. No nation ever 
 thought of as a fact, nor foresaw the necessity, of the mass of the people 
 having to pay tribute to an aggregation of private citizens for the use of that 
 article which it intended should flow freely as the medium of exchanging 
 commodities. 
 
 We here witness the distressing phenomenon of an article, bought by the 
 government and distributed to the people, for a specific purpose and for the 
 gi od of all, being hoarded by the money lenders and converted into a profit- 
 producing commodity. This strange accomplishment is made possible by the 
 fact that this metamorphosed "commodity" still retains its function of "legal 
 tGnder." This fact is bound to produce a demand or market. This demand 
 grows keener and keener, finally distressing. Business cannot be carried on 
 without this legal tender. The result is the gross injustice of the honest toiler 
 being compelled to sacrifice the fruits of his labor to the money lender for the 
 use of that which the government intended should be the prize of conquest. 
 
 That it is wrong to pervert money from its original and only use to that 
 cf a profit-producing commodity may be more readily understood by a simple 
 illustration involving the same principle. It will also illumine the un-get-at- 
 able-ness of this universal medium. 
 
31 
 
 Let us presume that the government has an army stationed at St. Louis, 
 Mo. This army represents the people of the United States, and the officers 
 thereof the money lending contingency. The Indians of Western Montana 
 •declare war and it becomes necessary to mobilize this army to quell the dis- 
 turbance. 
 
 The supplies of the army must be transported. The moving of these 
 supplies is tantamount to the moving of commodities in commerce. That 
 these supplies may be economically moved, the government buys one thousand 
 mules and delivers them to the army for that specific purpose. In order that 
 these mules may be identified as government mules and to provide against 
 counterfeiting, they are branded upon one side "E pluribus unum," and upon 
 the other "In God we trust." To make this transaction complete, the govern- 
 ment will by law proclaim that these mules, and these mules only, shall per- 
 form that function. Making them a sort of "legal tender," as it were. 
 
 The officers of the army, by virtue of their position, like unto the money 
 lenders by virtue of their acquired position, have charge of the mules, are 
 masters of the herd (hoard). By an absurd custom, the origin of which seems 
 •veiled in mystery, but which the government fosters and the people applaud, 
 it is permissible, yes, sanctioned by solemn law, for these officers to turn the 
 mules into a profit-producing commodity for their own private gain. They see 
 eo necessity for using these mules freely for the moving of those supplies 
 unless they have their interest protected. 
 
 Some "Captain of Industry" is building a railroad out West, and sees his 
 way clear to borrow these mules and pay for their use, as he knows he can 
 pass the burden along to his patrons in due time. The officers of the army 
 perceive the beauty of this arrangement and promptly proceed to loan the 
 mules to the said captain at an agreed percentage. Thus far this plan has 
 been productive of exceeding pleasure. The Westerners will get their railroad, 
 the "Captain of Industry" will be in a position to make them "pay the freight," 
 ynd the officers will get their principal and interest, and are correspondingly 
 tejoiced. The government stands by with a smile of benign approval, ready 
 at any and all times to borrow these same mules. The people, the army, are 
 supposed to look on, mystified by these masterful transactions in high finance, 
 and give thanks to these gentry, the officers, the money lenders, for their 
 gracious condescension in permitting these manifold blessings to fall alike 
 I'pon the just and the unjust. But they, poor souls, are equivocal. The whole 
 transaction is to them "as deep and dark as can be woven of the warp and 
 voof of mystery and death." 
 
 The only tangible fact which they as a whole can grasp and assimilate is, 
 tiiat they are still confronted with the task of moving those supplies, and that 
 they have no mules to do it with. They experience a feeling of "great unrest." 
 
 There is no alternative. If they should elect to transport the supplies on 
 their backs and toil along the hot and dusty roads till they had reached their 
 goal, i. e., carry on commerce in the primitive way, they are met by the fiat, 
 of the law, which asseverates that these mules and these mules only are "legal 
 tender." They are, therefore, compelled to apply to the officers for assistance 
 in the matter. This assistance, if granted at all, is upon the officers' own 
 terms, and just so long as selfishness and avarice dominate the business world 
 those terms will be the limit of what "the traffic will bear." 
 
32 
 
 This is an exact portrayal of the conditions in the business world, and 
 • his means the lives and happiness of the multitudes. It means the difference 
 between a freeman and a slave. It has all to do with whether you can or can- 
 not enjoy the fruits of your own labor. 
 
 That the commerce of civilized life must be carried forward, just as tne 
 supplies of the army, is patent. To be carried forward in a primitive way is 
 impossible in each instance. Means Of economically accomplishing these ends 
 must be devised. This has been done. In one instance mules and in the other 
 money That these mediums are to be used freely for the purposes tor which 
 tbey were created seems beyond doubt. Yet what a difference results. 
 
 'if the officers of the army were to brazenly appropriate the mules to their 
 own use, an investigation would be next in order. Upon conviction, dismissa 
 from the service as one unfit to wear the uniform, disgrace and imprisonment 
 
 would rapidly follow. 
 
 Should money hoarders appropriate the money to their own use, con- 
 gratulations are in order, and when one has hoarded sufficient that he may be 
 ciassed as one of our ■'great financiers" we advance him in the service as one 
 vorthv of our confidence and esteem, we envy his greatness and send him to 
 the U S Senate to make" laws to protect our interests. 
 
 A useful and desirable citizen is one who has the manhood to bravely 
 enter life's battle, and cheerfully assume his just proportion of its burdens 
 He should suffer and rejoice alike with his fellow-man. Should the tide of 
 fortune turn against him, he should manfully bear his loss and not seek to shift 
 
 it to his neighbor. . .. 
 
 Business should be conducted on as sane a basis as a prize fight, and 
 anvone convicted of a "foul" should promptly be ruled out. This would elim- 
 inate loaned money from the commercial "squared circle," as it is persistently 
 'fouling" commodities by constantly "striking below the belt. 
 
 Interest must not be confounded with rent. They are of essentially 
 different characters. Interest contemplates the return of the principal intact, 
 and an assured profit thereon. Rent contemplates the return of the principal 
 b>ss depreciation, and with no assurance of profit nor against loss. Interest 
 has no excuse whatever for its existence. Rent is a just contribution to the 
 labor which erected the building, due from the labor performed in the build- 
 ing. Each class of labor being essential to the other, they constitute an 
 homogeneous whole intended to do good for mankind. 
 
 By giving loand money this unique advantage over commodities, it soon 
 becomes dominant, and all profits are sought to be gauged by the rate of 
 interest which may be exacted. 
 
 In figuring this problem all business is assumed to be conducted on the 
 basis of borrowed money. If any certain enterprise is actually conducted on 
 borrowed money, the interest thereon is carried on the books as a fixed charge, 
 i. e., a necessary expense incident to the business, and must be deducted from 
 tbe gross receipts before any profit will appear. 
 
 •Tis clear then, that this enterprise must make a profit over and above 
 the interest on the money value of the investment. This interest is a direct 
 profit to the money lender and a loss to the consumer, but it is not permitted 
 ^o so appear There must be another profit to the enterprise and another loss 
 to the consumer. This double profit results in increased prices, winch all goes 
 to swell the already "high cost of living." 
 
33 
 
 The more business is compelled to subsist upon borrowed money the firmer 
 becomes this custom of double profits. 
 
 Tn enterprise conducted on borrowed money is thus removed from com- 
 rotitfon as it must get this double profit to exist. This being the standard, 
 ; y ^rprise conducted upon its own money can and does figure the problem 
 in the same way. The interest on the money value of its investment is not 
 gu ed as a profit. It is merely that much of the fruits of labor winch does 
 Z happen to get into the hands of the money lenders. The real profits of 
 ihft concern must be over and above. 
 
 MoneT shorn of its halo, and left to bear its own just losses will soon 
 be removed as a disturbing element in the affairs of men, and commodities will 
 so-just themselves with a fair profit to all. 
 
 Men do not enjoy equal ability nor opportunity to amass profits in the 
 commercial world. Each one, however, is entitled to the full benefit of his 
 "nd opporunities. The fruits of his industry are his, to enjoy ^ 
 manner he sees fit. I am a firm believer in individualism, in all things except 
 Those which are in their nature monopolistic. This very fact takes them out 
 of the realm of individualism and places them by right under public ownership. 
 It is the knowledge that individual effort will be rewarded that actuates indus- 
 try Each individual must assume the responsibility of his own welfare. He 
 cannot depend upon others; they have troubles of their own. 
 
 Tn the conduct of our affairs, in the present day, these facts are ostensib y 
 recognized, and are theoretically permitted to govern, but when submitted to 
 a practical demonstration they are absolutely ignored. 
 
 If human activities were confined to a contest between man and man, each 
 would enjoy all he could produce. But under the present system the stronger 
 Lnds his money forth to renew the struggle with the weaker, and thus 
 succeeds in taking away "that which he hath." 
 
 Assume that ten men, with all their inequalities, are on an island and 
 have one thousand dollars equally distributed among them. They enter trade 
 and the strongest will outstrip the others in accumulation. He is simplj 
 enjoying his superior abilities and opportunities. A ratio will be attained and 
 each will enjoy the fruits of his own labor to the extent of his ability to pro- 
 
 ^^The strong man, by his superior ability, has by this time obtained control 
 of the money. He now interjects this factor into the race, and by virtue of the 
 fact that it is legal tender, and that the others by law must have it, he sends 
 " forth to exact from his less fortunate fellows that portion of the products 
 of their labor which should abide with them. He does not permit them to 
 keep that which they already have. In short, robs them, and, under the present 
 svstem, does it legally. 
 
34 
 
 CHAPTER VIII. 
 BANKS AND THE BANKING SYSTEM. 
 
 The business world holds the same relation to the banks and money 
 lenders that the players on the outside of the table do to the faro bank. 
 The "bank" has the "medium of exchange" all hoarded. It consists of little 
 •celluloid chips or discs. The players borrow these "chips" by depositing 
 money as security. Thus equipped they begin to strive for profit by taking 
 chances on the "fall of the play." They win and lose, apparently from the 
 bank, but actually from each other. The bank loses nothing, but, to the 
 ■contrary, is the only winner, the percentage on the game, the interest. 
 
 Gambling is so detestable, and its existence so useless, that legislatures, 
 in their outraged majesty, arise and pass laws completely stamping the 
 practice out. 
 
 The practice of loaning money by banks is just as undesirable and use- 
 less. Yet, under our present system, it is a highly respectable occupation. 
 
 Money, as decreed by the various governments, consists of small gold 
 and silver discs and paper. Being the medium of exchange, it acquires a 
 peculiar value, based upon the ratio of the amount in circulation to the various 
 profit producing commodities. These "coins" and "bills," as they are called, 
 in the very nature of things, are very easy to be lost or stolen, and when 
 once gone they are hard to identify. It is impracticable for each citizen 
 to provide a thief or burglar-proof vault simply for his own use. Some one 
 will construct a vault sufficiently large to accommodate a great number and 
 they deposit their money therein. This constitutes a bank. 
 
 Naturally the depositors do not feel that it would be fair for the banker 
 to take care of their vaulables for nothing, and hence arises the tacit under- 
 standing that the banker shall have the privilege of loaning the money, and 
 whatsoever it shall profit in interest will be his. This arrangement is emi- 
 nently satisfactory to the banker. 
 
 It is an odd coincidence that the burglar and thief are the firm founda- 
 tion upon which all banks are builded. By leave of the activities of these 
 outlaws the banker comes into control of all the money in the community. 
 
 With this ccntrol he is in a position to inaugurate a system so like unto 
 the faro game just described. The banker has control of the chips, the people's 
 chips. He passes them out to the people again with the compact that they 
 will be returned at a stated time, plus the interest. The people receive the 
 chips, loaned money, and enter with zest into the grand game of profit and 
 loss. What one wins the others lose. But not the bank. The more some 
 win the more others will lose. But not the bank. Every winning makes a 
 losing a certainty, and of which the banker wots not. Scarcity of money 
 aggravates the trouble and higher and higher mounts the rate of interest, 
 and more and more is the money hoarded. Sooner or later the people's 
 money on deposit has accomplished a most astonishing feat. It has won 
 iiself away from the people and nestles snugly in the coffers of the banker. 
 
 For all this the people have received naught in return, unless perchance 
 a pleasant smile and the pleasure of being addressed by their correct names. 
 
 And all this time many a fair ship sailing the sea of commerce is wrecked 
 upon the rocks of a scarcity of legal tender. 
 
DO 
 
 Wall Street is the place where this system is worked on a wholesale 
 plan and each bank, throughout the country, is an active assistant. 
 
 Imagine a business, the full productive capital of which is furnished by 
 the people, operated in behalf of private individuals, and directly against 
 the interests of those who furnish it. In time the bankers have won from 
 the people all they had and this without the slightest risk and without one tap 
 of productive labor. 
 
 A system so absurd, so evidently unjust, so at variance with common 
 sense, maintains its unrighteous position by virtue of the ignorance of the 
 masses alone. I cannot attribute it to anything else for I do not believe 
 mankind so stupid as to permit it, once the result of the system is unveiled. 
 The banking system divides the world into two classes. The depositors, 
 the constant borrowers of their own money, and the banks, the constant 
 lenders of something they do not possess, and at the price of an enormous 
 tribute As we have seen this gain is greater by far than the gain of the 
 roost favored commodity. A gain great enough to absorb the profits of the 
 depositors in the aggregate. 
 
 If a bank should be limited by law to loaning 85% of its deposits it 
 could start with $100,000.00 and make loans of $566,666.66 and still comply with 
 the law and in the end have $100,000.00 in the bank. This is a mathematical 
 computation which any one can make. At 8% per annum, compounded 
 quarterly, the interest on this sum is $46,711.55, or 46.7% on the money on 
 
 deposit. . „ 
 
 I herewith submit some actual figures. They are instructive. On 
 September 12th, 1914, the statement on official call of all the Seattle banks 
 
 Sh0WS: T $63,845,319.78 
 
 Loans T „„„ nn 
 
 Cash in banks 28,310,965.62 
 
 Excess of loans $35,534,354.16 
 
 It is evident that the banks are having the same money draw interest 
 from several different sources at the same time, a thing which, under our 
 laws, is perfectly permissible. This is a good thing for the banks, but dis- 
 astrous to the people. 
 
 The interest on these loans at %% compounded quarterly is: 
 
 Interest for one year $ 5,262,907.60 
 
 Cash in banks 28,310,965.16 
 
 Excess of cash $23,048,057.56 
 
 This computation discloses the fact that in one year the bankers will 
 have become the owners of nearly one-fifth of the cash on deposit in then- 
 tanks. And this huge sum is paid by the people for the simple privilege ot 
 using their own money. Can you beat it? 
 
 The statistics of the United States National banks to July 1st, 1913, show: 
 
 Loans and disocunts $6,162,034,484,00 
 
 Cash on hand 969.101.931.00 
 
 Excess of loans $5,192,932,553.00 
 
 The interest on these loans at Wc simple interest for one year is 
 ?246,481,379.S6. This is at the rate of practically 25% on the cash in banks. 
 
36 
 
 Do not be misguided in the belief that there was any more cash at any time 
 in this transaction. The cash remains in the banks all the time. 
 
 All this would make an ordinary mortal feel as Our Saviour must have 
 felt when he overthrew the tables of the money changers in the temple, 
 "And said unto them. It is written, My house shall be called the house of 
 prayer; but ye have made it a den of thieves." 
 
 The banker being thus in control of all the money in the community 
 is in a position to compel true commodities to guarantee the return of the 
 principal intact, together with the unconscionable interest charge. 
 
37 
 
 CHAPTER IX. 
 THE RESULT OF THE INTEREST SYSTEM. 
 
 As we look back over the pages of history, and contemplate the many 
 advances humanity has made toward intellectual and industrial freedom, we 
 are liable to congratulate ourselves far beyond what the facts warrant. Some 
 most deplorable systems have seemingly been eradicated. But they have 
 been conquered in name only. The underlying principles of those same systems 
 exist today, and are at the bottom of abuses, even more detestable and 
 refined, which yet obtain the sanction of law and public approval. Permit 
 ine to illustrate: 
 
 We need go no further back in the annals of time than the 11th century, 
 when William, Duke of Normandy, established the feudal system in England. 
 This system regulated the social and political relations, including the rights 
 of landed property throughout the kingdom. A feudal proprietor was one 
 who held his lands from another, on condition of certain services which 
 he, as a vassal, was bound to perform for the other, as his suzerain, or 
 superior. This peculiar relation was established for the purpose of obtaining 
 and preserving military strength. With the exception of the duty of military 
 service to their superiors, the vassals of a king practically were invested 
 with sovereign power within their own dominions, having vassals in various 
 degrees beneath them; and living in their fortified castles, often by means 
 of pillage, while the peasantry were bound as serfs, or slaves, to the soil. 
 
 As we scan the pages which recount the doings of this system, and con- 
 template the hopeless condition of these serfs, we will unconsciously hail 
 ourselves as thrice blessed that we, of the present day, have passed beyond 
 such injustice. But have we? Let us make a comparison. 
 
 We must first stage the play as it was acted in feudal days. 
 
 Dramatis Personae — The king, dukes and landlords, vassals of the king, 
 knights and ladies, bishops, cardinals, and priests, tithe gatherers, the mob; 
 a serf, one of the mob. 
 
 The properties consist of cultivated fields, hunting parks, small huts, 
 the homes of the people; castles and elaborate grounds, the homes of the 
 nobility; horses and trappings; a plentiful supply of coats of mail, swords 
 and lances all polished to yield as much splendor as possible, cathedrals, 
 churches, and all necessary paraphernalia to perform mystifying ceremony. 
 
 Act I. 
 Scene I. — A room in one of the huts. 
 
 Enter Serf. 'Tis strange that the Great God of Hosts, the infinite ruler 
 of this incomprehensible universe, the Great Father of us all, should ordain 
 that some of His children should monopolize this earth, and the bountiful 
 blessings thereof, and live lives apart from toil, while the masses of his chil- 
 dren are permitted to exist on earth, only at sufferance of the others, and at 
 the price of heavy tribute. 
 
 Why do the former revel in plenty and rule the world, while the latter 
 toil unceasingly, suffer every privation, and live a life berefit of hope? Are 
 we not all human beings, having the same form, the same desires? Are we 
 not born free and equal in His sight? Are we not a part of this grand plan, 
 
38 
 
 a part of nature's laws, brought to this world to beautify the same, and enjoy 
 the bountiful blessings thereof, that we may truthfully give thanks to Al- 
 mighty God and have "peace on earth and good will toward men?" 
 
 That this might be, God must intend that every child born into the 
 world should be assured of the means of existence. These means, the basic 
 producers of all elements of life and happiness, are land, water, air and 
 sunshine. Forsooth, then, these must indeed be the assured heritage of all, 
 to their fullest capacity to enjoy. Labor, with the assistance of these elements, 
 will provoke the world to smilingly respond and happiness and contentment 
 be throughout the land. 
 
 The sunshine is universal, and all may bask in its life-giving rays. The 
 air is wafted from the four corners of the earth and we have but to breath 
 its invigorating oxygen and feel its munificent effect. The water falls from 
 heaven and vegetable and animal life partake thereof and are refreshed. 
 The land, that chemical laboratory, which so mysteriously assimilates the 
 sunshine, the air, and the water, and gives back the manifold blessings and 
 beauties of the world, is here in abundance, but none of it is for me nor my 
 kin. That I may derive a bare existence therefrom, I must pa\ heavy 
 tribute, the fruits of my labor, to someone else whom by law is declared to 
 be the owner thereof. 
 
 This is so at variance with God's will and evident intention that to 
 thus hold land, by law, away from the people, hence contrary to His will, 
 and to yet profess Christianity, is indeed hypocrisy. That I should be com- 
 pelled to pay tribute to my brother in order to enjoy that which God has 
 so freely given, is unjust, and such a system can be upheld only by fraud 
 upon my rights. 
 
 Yet this is the law, and as the law is just, alike to the rich and the 
 poor, the great and the small, I, of course, can get a piece of land upon 
 which to build a home and rear my children, and thus escape this tyrannical 
 tribute to those who revel in luxury at the expense of my labor. 
 
 I do not want any more land than I can use and improve. I do not wish 
 to enslave my neighbor by levying tribute upon his labor, by the false pre- 
 tense that I can ever become owner of any more than my share of that 
 which God has given to all. To desire any more of God's land than I can 
 use and improve, by my own labor, is selfish, and any one who indulges his 
 selfishness goes directly contrary to the teachings of my church. 
 
 No longer will I be the subject of this, the greatest and the meanest in- 
 justice of all, the living upon the labor of others. I will go and seek a piece 
 of land and become really and truly free. What a beautiful thing the law is. 
 T must admit that, in some instances, our laws seem unjust, but we must 
 not forget that humanity is weak and that our laws necessarily partake of 
 their infirmities; but how glorious to know that our laws, just or unjust, 
 bear equally upon all, and thus if it is legal for the lord of the manor to 
 own land, I am assured of the same great boon. I go in quest of land, a home, 
 and freedom. —Exit. 
 
 Scene II. — A room in the castle. 
 
 Enter the Lord of the Manor, Knights and Ladies, a Priest, two Tithe 
 Gatherers, Servants, etc. 
 
 L. of M. — All hail the King, the central figure of our great system. 
 
39 
 
 All — All hail the King. Long live the King. We drink to the good graces 
 of the Lord of the Manor. 
 
 L. of M. — Well done, ye creatures of the system. In me you see' the" 
 reflection of your own great favors. 
 
 A Knight — Aye, aye, My Lord; full well we see in his Gracious Majesty, 
 and yourself, the outward bulwarks of defense against the gross and unreason- 
 able babblings of our inferiors, the people. 
 
 L. of M.— Thou speakest well, Sir Knight. Our righteous system must 
 be preserved. Yet, methinks, great discontent is abroad in the land. The - 
 insolent hordes but yesterday made manifest their growing sentiment th&t- 
 things were not as they should be. Their grumblings went so far as to voice" 
 a desire to own some of the land, God's gift to us, His chosen few. 
 
 A Knight — Alas! Alack! That creatures in human form, and endowed 
 with brains, 'tis to be hoped, slightly superior to the dogs in our kennels, 
 should make such dastards of their faculties. Presumptuous curs, curb them 
 we must. 
 
 L. of M. — The thought is easy of conception, and fluent in rehearsal, but 
 beset with difficulties in the execution. 
 
 A Knight — Explain. Are your executions not the envy of all nobility? 
 Who has executed more culprits, and with such refinements of torture, as 
 you, my Lord. 
 
 L. of M. — Therein lies the secret. Human ingenuity is exhausted. Prisons, 
 thumbscrews, starvation, and all forms of torture have lost their power of 
 conviction, and have become but feeble lights to their warped visions. 
 "Familiarity hath bred contempt." Tortures of this world have become 
 confounded and the people cannot discriminate between torture when living 
 by the system and torture when administered for dereliction thereto. A 
 Greater Power than we must be invoked. May God help us from this wrath 
 to come. 
 
 A Lady — But we are taught that God is good and merciful — 
 
 A Knight— Silence, woman. Thou speakest by the book only, but without 
 understanding. Knowest thou not that things in this world are not what 
 they are but what they seem to be? Facts not accepted as facts are impotent,, 
 while mere vaporings, if accepted as facts, become living truths. 
 
 L. of M. — Your reasoning is astute. That God is good, just, and merciful 
 has long since been accepted as a fact by all. That God is pleased with the 
 present condition of affairs on earth, and that He will lend His power to 
 perpetuate them, seems open to conjecture. But if this matter could be 
 boldly asserted and plausibly maintained as a fact, it will become a fact, and 
 then we will have the tortures of hell added to our list and with telling 
 effect, for this torture is for eternity and there is no escaping it, either in this 
 word or the next. 
 
 A Lady — Then once damned, eternally damned, and a spirit eternally 
 damned may become reckless as no further punishment can be visited. 
 
 L. of M. — You speak with a wisdom peculiar to your sex. 'Tis true, 'tis 
 true. To avert this we must hold in reserve, absolution. The priest, the 
 mentor of God on earth, must have power to stay the tortures of hell, else it 
 were not efficacious. 
 
 A Knight — How can we resolve the uncertain attitude of our God into 
 fact, and how shall we impress that fact that it may be received? 
 
40 
 
 Priest — This is the proud prerogative of the church, for is it not the 
 duty of the church to teach contentment and happiness that truly peace on 
 earth shall prevail. 
 
 All — The church, the church! All hail the church! 
 
 L. of M. — Have the tithes been rigorously collected and properly dis- 
 tributed? 
 
 A Tithe Gatherer — Collected to the last penny, my Lord. The King, 
 yourself, and all the friends of our most noble system have received their 
 just due. The church, that it may more fully and convincingly teach the 
 truth, has been most reverently and plentifully endowed. 
 
 L. of M. — 'Tis well. Matters having been so beautifully and justly arranged, 
 and our fair empire now launched upon an era of good feeling, we part, 
 good friends, to meet tomorrow in friendly prowess upon the tourney grounds. 
 
 — Exuent all except the Priest. 
 
 Priest — By the divine grace of our Holy Father, our dear church will 
 row enlighten our sweet children that they may fully understand His word. 
 The divine right of kings to rule, we hold sacred. Else we would have no 
 kings. The rights of the nobility, the owners of the land, are sacred unto 
 God. Else we would have no nobility. The church, in furtherance of His 
 will, swears eternal fealty to this plan, and more, is not this same nobility 
 the direct patrons and benefactors of the church? That these truths are not 
 understood and accepted by the people passeth understanding. Alas! They 
 are a stubborn race, always harping upon personal rights, religious, industrial, 
 and political freedom. God, in His wisdom, has granted all these. The 
 personal rights of the people are unrestricted as long as they go not contrary 
 to the will of their superiors. They further have perfect freedom to worship 
 exactly in the way dictated by their holy mother, the church. None says 
 them nay to labor freely in field and vineyard as long as they promptly 
 deliver the tithes. Their rights to obey the king and nobility have never 
 been infringed. Such ungrateful beings must be brought to an appreciation 
 of His goodness. 
 
 Physical torture is impotent to rouse reverence, for the master, mind, 
 stands sentinel upon the ramparts of reason, and defies physical suffering; 
 but mental suffering, attuned to fear, so weakens the sentinel that the ram- 
 parts may be stormed, and the grace of God will enter. 
 
 That there should be no misunderstanding between the holy mother 
 and her children, the children must withhold no secret from her. That their 
 secrets will be fully confided the tortures of hell must be in mind, and the 
 power of absolution held sacred. God's children must and will be saved 
 by virtue of the confessional and the power of absolution vested in the 
 church. — Exit. 
 
 Scene III. — Same as scene one. 
 
 Enter Serf — I have traveled far and wide in quest of land. I have 
 wandered till I sank exhausted by the roadside. Everywhere I turn I find 
 the land appropriated by the nobility, and there is none left for me nor my 
 kin. Of what effect is a law which grants equal rights to all when the 
 foundation of those rights, as to some, are nonexistent. Clearly the defect 
 is not in the law but in the construction and application thereof. The injustice, 
 then, lies in that ill-assorted aggregation called judges, commissioned by 
 the King as guardians of the law. Our political fabric is unsound. Laws 
 
41 
 
 passed by appointees of the King, plausible on their face, to placate the 
 people, and construed by appointees of the King in a manner to best suit his 
 convenience. I rebel gainst such hypocritical tyranny and hereby swear 
 eternal warfare against such a despicable system. 
 
 Enter L. of M. — Hey day! What now, Siree? A storm o'ershadows your 
 countenance. What's abroad? 
 
 Serf — Profound injustice, sir. 
 
 L. of M. — The proud prerogative of we gentle folks is to redress wrong 
 and exact sweet justice to those less fortunate than we. Unbosom yourself 
 and command my gallantry. 
 
 Serf — Then turn your sword against yourself, for it is you and the King 
 who personify this grievous wrong. 
 
 L. of M.— You suffer of a diseased mind. Know you not the King can do 
 no wrong? 
 
 Serf — Thus I have been taught, but I scout such nonsense and defy the 
 teachers thereof. That the King can, and has, done wrong appears in this, 
 he has presumed to take the people's land and give it unto you that you 
 may levy tribute upon the people. 
 
 L. of M. — A divine right, forsooth. 
 
 Serf — Divine by persuasion only. Think you it is justice, divine or 
 secular, to choose favorites and make them the tyrants of the many? The 
 land, our just heritage, must be restored or peace on earth is but a dream. 
 
 L. of M. — Your reason has become dethroned. You have become a 
 brute and your unreasonable demands must be repelled with brute force. 
 I have an army of one hundred thousand men to protect my rights. Your 
 only recourse is to raise and equip an army of like proportions and do 
 battle. 
 
 Serf — The terms are impossible of fulfillment. Justice o'erpowered with 
 brute force must struggle in secret; 'tis our only hope, and, in time, truth 
 will prevail. — Exit Serf. 
 
 L. of M. — Justice struggle in secret? Great events these words portend. 
 In this we must fight fire with fire. 
 
 Enter Priest. L. of M. — Thrice welcome, Father. A poor misguided 
 soul plots in secret to acquire some fancied right. That no harm may come 
 to him in his delusions, his secret acts and thoughts must be disclosed. 
 
 Priest — His soul will be saved. Wot you not the confessional? 
 
 L. of M. — Sublime! The confessional. — Exuent all. 
 
 Scene IV.. — Interior of Church. 
 
 Enter Priest. I come to do God's bidding. Poor souls, sinking 'neath 
 tneir load of woe, may come to me, freely confess and seek absolution. 
 
 Enter Serf. Serf — Holy Father, I come to thee with a mind sore dis- 
 tracted with a multitude of perplexities. Under great provocation I have 
 been guilty of sin. The conviction that a great injustice has and is being 
 done me and mine gave rise to thoughts treasonable to my master. 
 
 Priest — Great is the sin, child. What were these evil thoughts? 
 
 Serf — Thoughts of resentment that I should be born to labor unremittingly, 
 and that the products of my labor should, by law, go to swell the already 
 distempered hoards of those who idle. 
 
 Priest — Be not distraught, my child. Know you not this is God's will? 
 Some are born to rule and others born to serve. All should be content with 
 
42 
 
 the lot God hath ordained. Resentment of others is tantamount to dissatis- 
 faction with your own condition, and this displeases your God. God's dis- 
 pleasure means damnation and damnation means hell and all its tortures. 
 
 Serf — Holy father, pray for me. 
 
 Priest — You may now disclose the names of any and all parties, if such, 
 there be, who are implicated in these treasonable thoughts, that they may 
 be saved from the wrath of God. 
 
 Serf — 1 hasten, oh, Father, to give you a full and detailed list. 
 
 Priest — This honest confession and full disclosure is good for your soul- 
 I will intercede with Almighty God, in your behalf, and may He have mercy 
 en your soul. 
 
 Serf — My reason would indeed teach me traitorous lessons. Were I to 
 listen to her seductive tones, 1 still would think myself wronged. But God 
 knows best, and may His will be done. God have mercy on my soul. We are 
 born to suffer wrongs in this world that we may gather treasures in the world 
 to come. — Exit Serf. 
 
 Priest — This list of traitors, so easy of acquirement, must indeed be 
 correct, for was it not given in the greatest fear which human mind can 
 compass, a fear produced by that triumvirate of fear dispensers, God, man, and 
 the devil? Of the gravest importance is this intelligence to my Lord, the Duke. 
 
 — Exit Priest. 
 
 The things that happened to that Serf, and all his friends, are not difficult 
 to divine. 
 
 The foregoing results were the direct outcome of those times. The 
 secular aristocracy had unjustly appropriated the land, and held possession 
 thereof by armed force. This was the means which, in those days, presented 
 itself for compelling the many to pay tribute to the few. Dissatisfaction on 
 the part of the many was sure to follow. This dissatisfaction would cul- 
 minate in open rebellion, if permitted to go unchecked. A means of keeping 
 advised of the thoughts and actions of the many, their resources and lia- 
 bilities, were necessary, and for this purpose the church was peculiarly 
 adapted. It served the two-fold purpose of teaching humility, contentment, 
 and that it was God's will that things should be as they were. The hopes 
 and plans of the many became the common property of the sacred and 
 secular few, by means of the confessional. It was at confession that the 
 many told their secrets, believing in their hearts that they were already 
 damned for their sins, and this was the only hope held out to them for 
 absolution. 
 
 The entire system was builded upon the ignorance and fear of the many 
 and the cupidity and duplicity of the few. 
 
 The minds of the many were distracted by the fear of what would 
 befall them in the world to come. They were taught, and firmly believed, 
 that to conserve their happiness in the next world they must be content to 
 sacrifice all their rights in this. 
 
 In the last few centuries, the people have learned to discount this doctrine. 
 It could not be made to serve the purpose it once did. People became not 
 so much alarmed about what would befall them in the next world but what 
 would become of them in this. 
 
 To meet this exigency it behooved the few to devise a new means of 
 encompassing this same end. 
 
43 
 
 As to the many, hell has been rescued from the realms of mystery and 
 become a permanent fixture right here on earth. 
 
 The world in those days was not "commercialized." The system was 
 founded upon the union of church and state, and the perversion of each fronv 
 its true sphere was the result of this unhealthy alliance. 
 
 At the present day all this has changed. A divorcement of church and 
 siate leaves each to do good in the sphere naturally intended. Unfettered 
 by the pressure of any of the mercenary few in either of these organizations, 
 these organizations as organizations are now permitted to pursue their mani- 
 fest destiny. 
 
 But what has become of the "mercenary few," those still committed to 
 the unalterable conviction that the many must pay tribute to the few. The 
 answer is easy. 
 
 They have combined into a third organization known as "bankers" or 
 "financiers." The avowed purpose of this organization is to acquire, control and 
 loan to their own use the nation's money. The members are solemnly 
 pledged to never invest one dollar legitimately, but make someone guarantee 
 a profit and stand all losses, and to hamper commerce incessantly by period- 
 ically hoarding the money, thus creating a. scarcity of "legal tender," which in 
 turn inflates the rate of interest. 
 
 The money, some of which is theoretically the people's, but which is in 
 reality all the bankers, and absolutely under their domination and control, 
 is perodically "refused" at the bank, and thereby a scarcity is created at 
 the most inopportune times. This causes the grim visage of the torture of 
 cur earthly hell to appear within the horoscope of the man of business, and 
 naught but the banker can grant him absolution. The price of this absolution 
 is the meeting of the interest rate demanded and a complete disclosure of 
 all your own private affairs and those of your friends with whom you have 
 business relations. 
 
 I herewith print a copy of the inquisition employed by the banks should 
 f-ome unfortunate individual be called upon to seek absolution from the 
 iniquitous sin of being unable to get a few dollars, "legal tender," and this 
 because they are all hoarded by these same inquisitors: 
 
 Name Location 
 
 Business Residence Address 
 
 To the Bank. 
 
 The undersigned, for the purpose of procuring credit from time to time 
 from you for the negotiable paper of the undersigned, or otherwise, furnishes 
 you with the following statement and information which fully and truly sets- 
 
 forth the financial condition of the undersigned on the day of 
 
 191...., which you may rely upon as continuing to be full 
 
 and accurate unless notice of change is given you. The undersigned agrees 
 t« notify you promptly of any change that materially reduces the pecuniary 
 responsibility of the undersigned. 
 
 In consideration of the granting of such credit, the undersigned agrees 
 that if the undersigned stops payment, fails or becomes insolvent, or com- 
 mits an act of bankruptcy, or if any of the representations made herein prove 
 to be untrue, or if the undersigned fails to notify you of any material change 
 as before agreed, then, and in any such case, all obligations of the under- 
 
44 
 
 signed held by you shall, at your option, immediately become due and 
 payable without demand or notice, and the same may be charged against the 
 balance of any deposit account of the undersigned with you, the undersigned 
 hereby giving a continuing lien upon such balance of any deposit account from 
 time to time existing to secure all obligations of the undersigned held by 
 you whether as borrower, endorser, guarantor, or in any other manner. 
 Further, that the exercise of or omission to exercise such option in any 
 instance shall not waive or affect any other or subsequent right to exercise 
 the same. 
 
 Assets. Liabilities. 
 
 Cash on hand Bills payable for merchandise 
 
 Cash in bank Bills payable (to banks) 
 
 Bills receivable, good, due List banks and amounts ....$ 
 
 from customers $ Total $ 
 
 Less bills receivable Other bills payable 
 
 discounted and sold Open accounts (not due) 
 
 Balance of bills receivable, all Open accounts (past due) 
 
 good, on hand Mortgages or liens on real estate 
 
 Accounts receivable, good Dates of maturity, amount 
 
 Merchandise, finished, cost and rate of interest 
 
 Merchandise, unfinished, cost Liens or other incumbrances on 
 
 Raw material merchandise or other assets 
 
 Machinery and fixtures aside from real estate 
 
 Real estate (list on other side). Goods held on consignment 
 
 Personal property Money deposited with us 
 
 Other assets and of what composed. Labor and salaries account 
 
 Total assets $ Chattel mortgages 
 
 Other liabilities and of what 
 
 composed 
 
 Net worth $ Total liabilities $ 
 
 Contingent liabilities: 
 
 Upon accommodation endorsement $ For guarantees $ 
 
 Upon endorsed bills receivable outstanding $ For bonds $ 
 
 Are any of the assets or liabilities pledged as or secured by collaterals? 
 The foregoing statements and those on the reverse side of this sheet are 
 correct. 
 
 (Over) Sign here 
 
 List of real estate: 
 
 Began business Investment in business 
 
 When was last inventory taken? Regular times for inventory 
 
 Is this statement based on actual inventory? 
 
 Amount charged off for bad debts last fiscal year $ 
 
 Amount recovered during same period $ * 
 
 Are any suits pending against you? 
 
 If so, give style of case and in what court 
 
 Insurance carried on merchandise $ On above real estate $ 
 
 On plant $ Credit insurance carried $ 
 
 Do you exchange paper with or endorse for anybody? 
 
45 
 
 Percentage of gross profits on total sales for past year? 
 
 Percentage of expense of conducting business? 
 
 Are you a partner in any firm? 
 
 Give names of banks where your accounts are kept 
 
 Resident of Seattle years. Former home ZZZZZZZ.ZZ 
 
 Life insurance carried $ Beneficiary? 
 
 What portion of real estate has been acquired through bad debts? 
 
 Amount of sales in past years $ In preceding years $.... 
 
 Gross profit on same, 19 , $ 19 > 3 
 
 Average terms of sale? 
 
 At what time of the year are your liabilities the heaviest? 
 At what time of the year are your liabilities the lightest? 
 
 This association of bankers, or financiers, is as beautifully and scientific- 
 ally organized as greed and selfishness can dictate. Its Vatican, we will 
 assume, is somewhere in the Old World, mayhap London, with the Lord 
 Rothschild on the pontifical throne, (and he a Jew— what irony of fate') 
 The affairs of the association in the United States are in the hands of Mgr' 
 J. P. Morgan, whose cathedral, or house of worship, is on Wall Street New 
 "Vork. 
 
 Every city throughout the United States has its subsidiary cathedral and 
 bouses of worship, and every town and hamlet which supports a sufficient 
 congregation has its church, its little bank. Each of these houses of worship 
 is m the hands of its "correspondent," and these correspondents are in turn 
 in the hands of their "correspondent," and so on to final convergence Mor- 
 gan's cathedral in Wall Street, New York. 
 
 This High Priest of Finance can push an electric button in Wall Street 
 and instantly every banker or financier throughout the land, if he be in "good 
 standing," will feel the thrill of the contact. 
 
 With the world thus organized, we again introduce Our Hero, the Serf. 
 
 He finds his existence one of unrequited toil, hopeless labor for his 
 oaily bread. He turns to the land as a means of escaping this thralldom 
 Wherever he turns he finds the land appropriated and held from him not by 
 the dangerous method of an army of men, but by that eminently more scien- 
 tific plan of an army of dollars. These dollars are backed by the law and 
 the law is enforced by an army, of which he himself is theoretically a mem- 
 ber, and the cost of maintenance of which he actually assists in paying He 
 is thus compelled to become a factor of that physical force which stands be- 
 tween himself and his rights, just as it was nine hundred years ago 
 
 In this respect, then, he has not advanced. 
 
 He resolves upon the only expedient to extricate himself. He plunges 
 Into business, that he may acquire an army of dollars sufficient to go forth 
 and do battle for the land. This is as hopeless a task as the one which con- 
 fronted him m his former pilgrimage on earth, as the sequel will show 
 
 He had carefully considered the field of labor, and it was its evident hope- 
 lessness which first caused him to turn to the land. 
 
 Taking his small means, he boldly enters business, that arena of fierce 
 competition, to do battle against fearful odds. He soon learns that the 
 scarcity of money, and the profound stagnation of what is in circulation has 
 
46 
 
 engendered a system of credits. He must conform to this system in order 
 to compete. This soon depletes his little treasury and before he is aware, 
 he has committed the cardinal sin of becoming short of that medium, which 
 the law ordains legal tender. 
 
 Hell, with all its tortures, which we have seen has become transplanted 
 here on earth, now stares him in the face. Ruin, utter ruin and disgrace, the 
 welfare of his family, the pitying glances of his friends, all rise before him 
 like a hideous nightmare. He feels the more advanced pangs of hell's tor- 
 ments. His friends would gladly help him in his extremity, but they are all 
 111 the same fix, seeking, not granting, absolution. 
 
 In this crisis, there is but one house of refuge open to receive him, his 
 little church, or rather bank, around the corner, with his father confessor, 
 the manager thereof, waiting to grant absolution, that is, if he sees fit. 
 
 Penitently he approaches, truthfully -he confesses as per the inquisition 
 above displayed, and humbly he begs for a remission of his sins, the price 
 thereof to suit the banker's pleasure. 
 
 He thus discloses, to the very ones plotting his ruin, the innermost 
 secrets of his ability to maintain independence, and has incidentally be- 
 trayed all the friends, with whom he has business dealings.* He is now at 
 the full mercy of the banks. There is nothing else to do but to watch the 
 banker's thumbs. Thumbs up means let him live; thumbs down means let 
 him die, commercially speaking. 
 
 Thus the bank has become our universal house of worship, the shrine 
 01 the Almighty Dollar our altar, and the manager of the bank our father 
 confessor. Under the present system of permitting money to become a profit- 
 producing commodity, there is no escaping a membership in the faith. The 
 more subservient we are to its dogmas, the better it is for an individual tem- 
 porarily, and worse, infinitely worse, for all as a whole. 
 
 Deflection from the faith brings excommunication, a refusal of the rights 
 of sanctuary, and the offender's business remains are denied interment in 
 consecrated ground. 
 
 These conditions throw him into the ranks of labor, where he is so 
 manipulated by the very force which crushed him, that naught but his daily 
 bread shall be his. the profits of his labor being systematically assimilated 
 by the bank, by virtue of the money loaned his employer, as will be seen 
 late.'. 
 
 Truly, then, our friend, the serf, has not progressed any in this respect 
 in the last nine hundred years. The same old scheme remains to plague 
 him, changed in form only. The new form is eminently more scientific and 
 satisfactory to the few and equally as certain and disastrous to the many. 
 It maintains its position by virtue of the erroneous notion that it is right 
 and just. 
 
 *That these secrets are of vital importance, note the following provisions of 
 the recent Federal Reserve Act: "No examiner, public or private, shall disclose the 
 names of borrowers or the collateral for loans of a member bank to other than the 
 proper officers of such bank without first having obtained the express permission in 
 writing from the Comptroller of the Currency, or from the board of directors 01 
 such bank, except when ordered to do so by a court of competent jurisdiction, or by 
 direction of the Congress of the United States, or of either House thereof, or any 
 committee of Congress or of either House duly authorized. Any person violating 
 any provision of this section shall be punished by a fine of not exceeding $5000 or by 
 imprisonment not exceeding one year, or both." 
 
4? 
 
 CHAPTER X. 
 THE CONDITION OF LABOR. 
 
 The fact is evident that all wealth is created by the application of labor 
 to the land and its products. This labor is performed by men. Money does 
 rot and cannot labor. It seems silly for me to say that if anyone thinks it can 
 I would adivse him to take a bag of money out to a field and wait till it 
 produces a meal of victuals for him. He will come away "a sadder and a 
 wiser man." 
 
 We are told that labor saving machinery assists labor and produces more 
 with less actual manual labor, and hence is entitled to its share of the 
 profit. This is undoubtedly true, assuming that we have the correct con- 
 ception what its share of the profit means. We are further told that, in- 
 f.s much as labor saving machinery is capital, and can be exchanged for 
 money, then money is capital; and as they are both capital, then money 
 must be labor saving machinery, and entitled to share in the profits. I will 
 be silly again and advise anyone who really believes this to take a bag of 
 money and with it plow his field, cut his wheat, or weave a bolt of cloth. His 
 mind will become disabused. 
 
 Therefore, no man can become entitled in the profits of labor saving 
 machinery till he has fully and completely severed his connection with his 
 money and accepted the labor saving machinery in return. By so doing he 
 -will be honestly entitled to the profits and honestly entitled to the losses. 
 
 It is begging the question to say that he can loan money to another for 
 the purpose of purchasing labor saving machinery, and by so doing become 
 entitled to profit, unless he is bound to share in the losses also, to a cor- 
 responding degree. 
 
 This is the difference in legitimately invested dollars and loaned dollars. 
 
 As long as the machinery is operating at a profit, loaned dollars assume 
 the characteristics of legitimately invested dollars, i. e., dollars which have 
 been exchanged for the machinery. But as soon as loss appears, they 
 suddenly lose this character and become just plain dollars, and yet, as such, 
 keep right on earning profit. A thing which we have just seen does not 
 lie within their power. 
 
 Stated another way: A borrows five hundred dollars from B and 
 puts another five hundred dollars with it and buys some labor saving 
 machine. The machine is not operated. A makes no profit with his in- 
 vested dollars, but B's loaned dollars keep right on earning. 'Tis clear 
 then that they do not partake of the nature of the real profit producing 
 commodity, the machine, for in that case they would gain no profit. They 
 are not of the nature of invested dollars, else they would suffer loss. They 
 are dollars, just plain every-day dollars, which by a peculiar vagary of the 
 mind, are supposed to be, and as far as the owner thereof is concerned, are 
 weaving cloth and hoeing corn. This we have seen is impossible. 
 
 Yet the cloth and the corn are delivered to the owner of the dollars. 
 As we all know that the cloth and the corn must have been produced by 
 labor, 'tis clear that somewhere, some sturdy sons of toil were industriously 
 
48 
 
 hoeing the corn and manipulating the loom to fill this hiatus and did not 
 
 know it. . . ■ . 
 
 •Tis evident, then, that this dishonest profit on money, known as interest, 
 
 falls directly upon labor. 
 
 It is no argument to say that the loss all falls on A. He was only one 
 of the plaintiffs in the celebrated case of Profit Producing Commodities vs. 
 Money, and the plaintiffs, having lost in this particular action, are all liable 
 for the judgment and costs, and are bound to contribute. 
 
 Labor is industriously hoeing and weaving and sending the products ot 
 labor to fill the rapacious maw of this monster and wondering what is be- 
 coming of it Ignorant of this, they blame their employers, and fail to recog- 
 nize the fact that these same employers are standing so close to the dragon 
 that they can feel his hot breath while devouring his latest victim. 
 
 It is reasoned, when a laborer receives his pay Saturday night, that the 
 contents of the envelope is his to do with as he wishes. We will assume 
 that his employer borrowed this identical money. If at 8tf it must, it tne 
 interest is payable yearly, be returned in nine years twofold. The employer 
 cannot do this unless he can make sufficient profit from the products of 
 the labor just paid for. It is plain, then, that the burden of meeting this 
 demand is passed along to be borne by labor. It would thus appear that 
 the money in the pay envelope is not the property of the laborer. It was 
 only borrowed from the bank and hence still belongs to the bank. It cannot, 
 in the very nature of things, belong to them both at one and the same time. 
 It came to the laborer impressed with the same demands that it had while 
 in the hands of the employer, i. e., that this same money, or an equal 
 amount, plus as much again must be furnished by labor in the above period 
 to meet this demand. This "vicarious atonement" is accomplished in the 
 most plausible of manners. The laborers of the world comprise the great 
 majority of that nebulous sect known as the "ultimate consumer.' As an 
 ultimate consumer the laborer must give back the principal and interest, 
 borrowed by his employer for the articles which he himself produced. Tis 
 plain that the real borrowers of the world are the laborers. Their employes 
 merely act as their agents. 
 
 The interest on government bonds, railroad bonds, steel bonds, and all 
 sorts and styles of bonds, and all borrowed money whatsoever, is not paid 
 by the borrower. If the borrower did not know that this burden would be 
 shifted to the people he would not be a borrower. He knows that he can 
 use the products of labor to compel that same labor to pay all demands. 
 
 We will contemplate a projected railroad to cost any price, say fifty 
 millions of dollars. A company is formed and sufficient stock sold to the 
 public to constitute a sufficient margin of security for bonds. Surveys are 
 made and work upon construction is begun. Immediately follows the inevi- 
 table floating of bonds. When completed we have a railroad with at least, 
 fifty million dollars of bonded indebtedness. 
 
 The road was completed in three years, and if the bonds bear 5% interest 
 compounded yearly, the interest will equal the principal in fourteen and 
 two-tenths years. During the three years of construction, there was paid to 
 the people the sum of fifty millions of dollars; in fourteen and two-tenths 
 years the people must return this amount in the form of interest and they 
 will still owe the principal. This process to be repeated every fourteen and 
 
49- 
 
 two-tenths years, forever. A railroad was never known to retire these bonds, 
 but, to the contrary, they are constantly being augmented. 
 
 We have the grotesque spectacle of a road built at a cost of fifty millions, 
 money borrowed for the people, and at the end of fourteen and two-tenths 
 years the road, figuratively speaking, is to be thrown in the junk heap and 
 another built in its place. And that, although the road is in better shape 
 than it was when built, the cost of maintenance having been borne by the 
 people in the meantime. This silly proceeding to be repeated every fourteen, 
 and two-tenths years, forever. 
 
 When we contemplate the thousands of miles of railroad in the United 
 States alone which are receiving this treatment, we begin to realize the 
 enormous drain on industry and we can but little wonder at the predicament 
 of labor. 
 
 As a matter of fact, the practical working of this system is far worse 
 than the picture just drawn. At the end of the first fourteen and two-tenths 
 years the people have returned to the money lenders in the shape of interest,, 
 the full fifty millions. This sum is "reinvested" in the bonds of another 
 road. At the end of the second fourteen and two-tenths period the people 
 will pay to the bondholders the sum of one hundred million in the form of 
 interest and still owe fifty million on each road. This one hundred million 
 is "reinvested" in the bonds of two more roads. At the end of the third 
 period of fourteen and two-tenths years, the people will pay as interest the 
 sum of two hundred million, and still owe fifty million on each of the four 
 roads. We will pursue this figuring no farther, as it is unnecessary. The 
 results of this system are astounding, and that labor must meet this enormous 
 drain is beyond doubt. 
 
 This drain is perpetuated by the fact that the interest on these bonds 
 it; carried on the books of the road as a "fixed" charge. In other words, 
 a charge which must be met the same as coal bills and labor bills, etc. 
 As such they must be deducted from the gross receipts before profits can 
 appear. 
 
 As long as the railroad can enforce the collection of this enormous 
 drain as a "fixed charge," we lose sight of it in the consolation that it is 
 one of the legitimate items of expense in the operation of the road. We 
 have seen, however, that it is not. These bonds represent mere dollars which 
 are sent forth to hoe and to weave. If the railroad was expected to make 
 the profit, the people would not be called upon to return this money. But 
 as it was never intended to be this way, but that the dollars should be 
 "loaned" only, then the use only of the money is to be the factor of 
 earning, and hence we have these dollars, plain dollars, gaily hoeing and 
 weaving and producing far the major part of the profits of the world; 
 but out of profits previously produced by labor and for which labor gets no 
 returns. 
 
 It is the forced payment of this unjust and unearned profit which causes 
 the high freight and passenger rates, which in turn furnishes its quota to the 
 "high cost of living." 
 
 Some political economists describe capital, as they call it, that is 
 money, to be "stored labor." Probably "petrified labor" would be about as 
 lucid. And then reason themselves into the idea that this stored article is 
 brought forward and exchanged for the "fresh supply" today. 
 
50 
 
 This peculiar course of reasoning bids us observe with equanimity the 
 struggle of present labor with labor gone before. In other words, labor not 
 only competes with labor of the present day but must face the ghosts of labor 
 long since called to rest. 
 
 I here include in labor all activities in producing and marketing profit 
 producing commodities. 
 
 One hundred years ago a man produced and marketed one bushel of wheat 
 for one dollar. The consumer paid the dollar, accepted and consumed the 
 wheat. This is a simple and natural transaction. The producer has been 
 paid in full and has the dollar, and the consumer has the wheat. The 
 transaction, as far as the world is, or should be, concerned, is closed. Many, 
 many years since, the producer and consumer have been gathered to their 
 fathers. The wheat is "non est." What possible connection could this simple 
 transaction have with the world today? 
 
 In those days, as now, the system made it necessary to do business 
 upon hired money. Thus it was necessary to contribute a tithe of that dollar 
 to the gentleman who "financed" the transaction. This tithe, of course, fell 
 upon the ultimate consumer and was assimilated by the money lender and 
 stored carefully away in his vault. Verily, ten cents worth of labor preserved, 
 or, commercially speaking, "canned." This process has been repeated upon 
 an ascending scale till that money lender, or his progeny, now have a ware- 
 house full of "canned goods." 
 
 The system still makes it necessary to do business upon hired money. 
 Before labor of today can be expended, it is essential to call upon this store 
 ot "petrified labor." This "ossified" article will not permit "fresh labor" 
 to exist without exacting the lion's share of the profits of the fresh labor's 
 productions. This profit is in turn to be hoarded as "canned labor," to be 
 used in ages to come for the purpose of flimflamming labor out of its just 
 profit. 
 
 Labor in all honesty, which was performed ages ago, cannot, except as 
 a frenzied dream, be crystallized and brought forward in the shape of a silver 
 dollar and made to labor again. But there is the idiotic custom, and the 
 senseless law which permits, yes, invites, this insult to common sense, and 
 provides that, those insulted shall pay for these antics the same as though it 
 was, or could be, real. What a sham. 
 
 The labor that produced that sack of wheat was paid in full, and has 
 gone forever. How silly to conclude that any part of it could be brought for- 
 ward to the present day, in the hands of a useless member of society, 
 a non-producer, and again demand pay. Stating the proposition is its own 
 lefutation. 
 
 The accepted opinion of today is that if you employ a man and pay him 
 $5.00 for his day's work, i. e., his services, that it is upon a par with bor- 
 rowing money, "stored labor," and paying $5.00 per day for its services. 
 That wages is but interest upon his capital, labor, as it were, and that both 
 the laborer and the money lender are entitled to, and do, always have the same 
 principal after the services are performed. 
 
 The impotency of this reasoning is manifest. We have but to submit 
 the two propositions to the same test and discover the difference. 
 
 A laborer's capital is his labor. His expectancy of production is forty- 
 two and six-tenths years. At $1,000.00 per year, net, then his capital to start 
 
51 
 
 •with is $42,600.00 The money lender starts with this same amount of 
 capital, money. I employ the laborer for the full period of his expectancy 
 and I sell bonds at 5% interest compounded yearly. At the end of the 
 period the laborer has the same capital, $42,600.00 changed from labor to cash. 
 The money lender will have at compound interest $340,800.00 as the result 
 of his "investment," and at simple interest will have directly from me 
 $85,200.00 in interest, which, plus the principal, will be $127,800.00. 
 
 This reasoning may be considered faulty by the hypercritical. It will 
 be pointed out that the laborer furnishes but one day's labor at a time 
 while I am using the full $42,600.00 of loaned money each day for the whole 
 time. 
 
 We will now place these parties on a par. Each starts with a capital 
 of $42,600.00 and each gives to me 1-12780 of his capital each day. The 
 laborer will give me his day's work and the money lender gives me $3.30 
 per day. I pay each such a sum for each day's service that they each net 
 53.30. At the end of forty-two and six-tenths years I have paid each $42,600.00. 
 They have both been foregoing for this period to realize on their principal. 
 The laborer has no further claims on me. I have paid him in full for his 
 services and do not have to give him back his labor. No so with the money 
 lender. I have reecived no more from him than from the laborer, nor neither 
 has he "foregone" any more, and I have paid him just the same and in the 
 same way, but now I must give him back all I have ever received from him. 
 The same reasoning applied to the laborer would compel me to labor for 
 the laborer forty-two and six-tenths years to return his pirncipal, or give 
 him another $42,600.00, which would be tantamount to paying him again for 
 the very labor for which I had already paid him. This is the very thing I 
 must do for the money lender, and as a token of good faith that I will do this, 
 I must pledge all my earthly possessions. 
 
 Verily, "fresh labor" once expended is gone forever, the "canned article" 
 is indestructible. "Fresh labor" wilts and must be marketed each day, the 
 "canned goods" keep. "Fresh labor," the perishable article, is in the hands 
 of the laborer, the "canned goods" in the hands of the money lender. The 
 "fresh article" can be bought and paid for, the "canned specimen" can be 
 paid for but never bought. 
 
 The erroneous idea of money is what leads to all the silly reasonings 
 about its rights. All these foolish and unjust antics which money performs 
 are directly traceable to the fact that it is out of its true sphere. 
 
 Take it out of the absurd position of being a profit producing commodity. 
 Permit it to be itself, the "medium of exchange," and it will never "perform 
 such fantaistic tricks before High Heaven as to make the angels weep." 
 
 The present perverted use of money leads to but one ending, the dis- 
 gusting wealth of the few, and deplorable poverty of the many. 
 
 We are liable to consider that this system of loaning money for profit 
 is one which does not concern us unless perchance we are one of the 
 actual borrowers. By being saving and frugal, and building up our business 
 in a small way, we may escape the necessity of becoming an actual bor- 
 rower and then we imagine we are fortunate, and that the system, be it ever 
 so iniquitous, is visited upon others, and although they have our sympathy, 
 we can do nothing for them, as it is an affair peculiarly their own. 
 
52 
 
 This conclusion is the result of a superficial understanding of the 
 question. 
 
 Every dollar borrowed in this world is a debt passed along to the ulti- 
 mate consumer, and you are one of them. Although you may refuse to 
 borrow money directly, you have many, many, others borrowing directly for 
 you, and you will pay the debt and all the interest, as long as you are a 
 consumer. To escape it you must refuse to consume — starve, go naked, 
 use no convenience of life whatsoever, and you do not yet escape it. Your 
 governments, national, state, county, and city are industriously borrowing 
 for you and pledging your labor in payment. You must leave your native 
 land and seek a desert isle. You must renounce the civilized world and all 
 its ways before you can have any hope of escaping these burdens laid upon 
 you by others. 
 
 Take your pocket knife, for instance. You are positive that it is yours, 
 as you have paid for it, and that the transaction is closed. Let us follow 
 its history. 
 
 Not long ago the iron of which that knife is composed was in the mine. 
 This mine was owned by a corporation doing business upon borrowed money, 
 i. e., a large bonded indebtedness. The iron was shipped to the smelter in 
 vessels doing business the same way. The smelter does business in the 
 same way, so also the steel mills, the cutlery factory, the railroad which 
 carries the knife to your market, and to make this line complete, the merchant 
 of whom you bought the knife is indebted to the local bank. 
 
 Your knife then comes to you impressed with the value of the iron in 
 the mine, cost of labor, material, and profit in the various stages of its 
 progress and the interest on the bonds. All these various charges amount to 
 one dollor; you pay it and consider the transaction closed. 
 
 In this you are in error. You will note there is no provision in that 
 dollar for the retirement of bonds. As long as a business is in a flourishing 
 condition it never retires any bonds, but on the contrary they ever increase. 
 Bonds are retired only when the concern has demonstrated its inability 
 to collect the interest from the people. Statistics will bear me out in this. 
 
 As far as the labor, the depreciation of machinery, and profits are con- 
 cerned, the transaction is at an end, but not so with the bonds. The same 
 dollars represented by the bonds have been returned many and many a time, 
 but their ghosts still remain to hoe and weave as successfully as ever. The 
 tail of a comet gone by, but which a deluded public firmly believes to be the 
 whole comet in all its glory. 
 
 These ghosts remain as a constant debt which must some day be paid. 
 If you do not pay it your children will have to meet it. 
 
53 
 
 CHAPTER XI. 
 USURY. 
 
 Usury is the contracting for, or receiving of, interest on money greater 
 than the amount limited by law. This is the modern definition. We have 
 seen that formerly the taking of any interest was called usury. 
 
 Most every state in the Union recognizes the necessity of limiting 
 the inetrest rate and has placed upon its statute books these usury laws. 
 
 California, Colorado, Maine, Massachusetts, Montana, and Nevada have 
 not seen fit to fix this limit. 
 
 The rate as fixed in the other states range from 6% to 12%, and 
 average 8.69!-. 
 
 An infraction of these laws incurs a penalty of forfeiture and in one 
 state also fine and imprisonment. 
 
 The necessity of these usury laws proves two things — first, that money 
 lenders can and do hoard the money and grind the people beyond endurance; 
 and, second, that hoarding money and demanding more than a certain rate 
 of interest, is a crime. 
 
 Any legislative body, in passing a usury statute, admits the first prop- 
 osition, or they would have no need of passing the law, and in passing the 
 law they beg the question, for it is tantamount to saying to the bankers 
 end money lenders: You may pilfer from the people just so much and no more. 
 
 Was a law-making body ever called upon to limit, or prohibit, an honest 
 or just act? Nowhere else, in all the laws, is to be found such an anomaly. 
 
 An act is either a crime or it is not a crime; there is no half way 
 ground. It is as much a crime to steal a loaf of bread as it is to steal a 
 horse. No law makes it perfectly honest to steal 8.6 loaves of bread and 
 a crime to steal 8.7 loaves. Such a law would be laughed to scorn by the 
 very people who now uphold these same asinine usury laws. 
 
 I am well aware of the argument which will be advanced about the 
 limiting by law of freight and passenger rates on railroads, and that the 
 charging of freight and passenger rates is, within itself, just and honest. 
 But this is an entirely different proposition. Railroads are quasi monopolistic 
 in their very nature, and should be controlled by law. In fact, all such 
 institutions must, sooner or later, come under public ownership. Nowhere 
 has the law ever been called upon to limit the price of any commodity in a 
 free and open market. If I have a ton of potatoes for sale; there is no law 
 to say me nay in getting just as much for them as I possibly can. Money 
 as a commodity should enjoy the same rights. If it is right and just to 
 charge any interest on money, then it is right and just, to charge all the 
 market will bear. There is no monopoly of money, and no money trust, 
 or else J. P. Morgan wilfully perjured himself before the Pujo Committee. 
 If, then, there is no abuse of money, why is it singled out from all other profit 
 producing commodities and thus hampered? 
 
 Is it reasonable to suppose that gentlemen engaged in marketing their 
 produce (?) would stand for this discrimination against their wares, unless 
 there was a reason? Can we imagine this coterie of gentlemen, the bankers and 
 money lenders, who have heretofore been more powerful than our govern- 
 
54 
 
 ment, yes, than the people themselves, standing idly by and permitting their 
 wares to be circumscribed by anything so puny as a law, unless it was to 
 their interest so to do? That this seeming paradox is true, I will soon 
 explain. 
 
 It is earnestly contended by the money lenders that money is a com- 
 modity. The argument advanced in support of this contention is: If a man 
 have one thousand bushels of wheat, valued at $1.00 per bushel, and dispose 
 of the same for one thousand dollars, he has simply exchanged commodities 
 and the money in his hands is a commodity, having as much right to produce 
 profit as the wheat, hence his exaction of interest for the loaning thereof. 
 The conviction in his mind that money is a commodity, with the same rights 
 that attach to all other commodities, is the foundation of the idea that it 
 should produce a profit, the same as other commodities. 
 
 That the commodity, money, should be denied by law the right to com- 
 mand as large a profit as the traffic will bear, without strenuous opposition 
 from the interested parties, will not be so hard to understand when once the 
 true condition is perceived. 
 
 Usury laws, ostensibly promulgated for the protection of the people, are 
 a fraud and a snare. They are fostered by and enacted in behalf of the 
 bankers and professional money lenders. This statement will not seem so 
 absurd upon further investigation. 
 
 No business on earth can, year after year, and for a great number of 
 years, increase its earning capacity 8.6% annually. This means doubling its 
 earning capacity in less than nine years. We have some shining lights 
 which seem to refute this statement, but they have exceeded this limit for a 
 short time only, and cannot continue to do so for one hundred years. Even 
 for the comparatively short time that they have done this, it has been by 
 dint of dishonest practice. But we are not concerned with these gigantic 
 law defiers. We mean the great mass of honest business. It does not 
 increase to exceed 1^% per annum. 'Tis evident, then, that 8.6% leaves 
 ample leeway for the garroting of business. The bankers and lenders of 
 large sums of money are in no way hampered by this limit. It is like saying 
 tc them, you may lead your victim out toward deep water, just as far as he can 
 touch bottom, but in no instance to exceed 8.6 feet. 
 
 This is a poor protection to the great majority of men who can not, 
 on an average, keep their heads above water in five feet, to say nothing of 
 the vast mapjority who cannot, percentagely speaking, touch bottom in 1% 
 feet of water. 
 
 Eight and six-tenths feet of water is sure death to all but a few freaks, 
 and a dead man is a non-producer. 8.6% is sure death to all business, except 
 a few monopolistic freaks, and a dead business is a non-producer. 'Tis easy 
 to see that the money lenders have no incentive to kill the goose which 
 lays the golden egg. Their chief concern is garnering the eggs as fast as they 
 are laid. 
 
 The mystery then, why the usury law? Money being hoarded by the 
 professional money lenders, the scarcity thereof becomes distressing, and 
 people can suffer a ruinous rate of interest for a small loan for a short while. 
 This condition causes a number of small loaners to enter the field. What- 
 ever business they do is taken from the banks and professionals. This is 
 a hardship on them in two different ways, it will surely strangle business 
 
55 
 
 and bring the entire industry into ill repute, and also cuts into their profits:. 
 The neat means for putting these amateurs out of business is to make their - 
 calling unprofitable and incidentally force their victims into the bank to 
 establish a credit. The usury law is the means which successfully accom- 
 plishes this end. 
 
 Each state has fixed the usury limit at a figure which leaves a safe 
 margin above what the business of the state can stand, and yet sufficiently 
 low that small loans, for a short while, are unprofitable to these amateurs,. 
 That business is for the banks, and they propose to have it. 
 
 Usury is a protection to the small borrower on short time loans only, 
 but it in no way protects the great mass of business. Its only protection is 
 the fact that it cannot pay any greater rate than its profits will allow; any 
 more means bankruptcy. 
 
 Anything that is 8.6% honest and 91.4% crime, has not enough virtue in 
 its makeup to bring it to favorable notice. 
 
56 
 
 CHAPTER XII. 
 MODERN FINANCING. 
 
 The money of the world is in the hands of the professional money lenders 
 and the banks. In order to finance any project of today it is necessary to call 
 upon this guild for the funds. 
 
 It is impossible to persuade them to make a legitimate investment, i. e., 
 one where they will have to assume their just share of loss, if loss there be. 
 It is much better for them to so adjust matters that they will have the 
 lion's share if profits result and immunity from loss if such occurs. Hence, 
 to accomplish any given object in the commercial world the projectors 
 thereof must assume all loss and absolutely guarantee profit to the money 
 lender, and pledge the whole project to this end. 
 
 This places the commercial world at the mercy of those who traffic in 
 the people's money. 
 
 This gives rise to the following results: We will assume that a poor 
 man has discovered a "prospect," an embryo mine. He has spent years of 
 hardships and privations before making this discovery. Before he can do 
 anything with his discovery, he must develop the same to a sufficient degree 
 to establish its probable value. This may be a showing that that mine is 
 worth one million dollars when placed upon a paying basis. To do this one 
 hundred thousand dollars are necessary. The mine in its present condition, 
 as a non-producer, is, of course, valueless to him; it is of no value to anyone 
 until placed upon a paying basis. 
 
 Two methods present themselves. He may sell the mine as it is for 
 what he can get, or he may borrow the money and pledge the mine. If he 
 sells the mine, under the present condition of financing, he can get but a 
 small fraction of its value, for whatever the price, it is a direct loss to the 
 purchaser in just that amount as we will see in the sequel. 
 
 As purchasers are aware of this loss, and well knowing the other 
 method, which is so much better for them, it is much easier to get money 
 the second way, and ofttimes the only way, to-wit: borrow money enough, 
 presumptively, to place the mine on a paying basis, and pledge the entire 
 mine therefor. 
 
 If the mine is bought outright for fifty thousand dollars, the prospector 
 takes the money and the buyer the prospect. The prospector then goes his 
 v,ay, and another man must be employed to fill his place, and the one hundred 
 thousand dollars must be expended just the same to develop the mine. Here 
 is a direct loss to the purchaser of fifty thousand dollars plus the cost of 
 another man to take the place of the prospector. 
 
 This condition of affairs is averted by the offer of the buyers to loan 
 one hundred thousand dollars on the property and take the mine as security. 
 The prospector takes this offer. By so doing he remains as superintendent 
 in fact for the buyers and agrees that every cent of the borrowed money 
 shall go into the development of the mine. 
 
 This program is followed. Every dollar has been honestly expended on 
 the mine, and several years of the prospector's time and skill have been 
 consumed. Unforseen obstacles arise. The mine has been demonstrated 
 
57 
 
 to be of the known value of one million dollars, but it will require a little 
 more money to put it upon a paying basis. The interest is due and must 
 be paid. The principal is about due. The prospector cannot further finance 
 the mine. If need be the mortgagees will attend to it that the investment 
 will not be alluring to others. 
 
 Inevitably the mortgage is foreclosed. Principal, interest, court costs 
 and attorney's fees easily assimilate the mine, with all the years of the 
 propsector's labor thrown in. 
 
 The net result to the prospector is that he may again go prospecting, if 
 he is not too old, and repeat the program with his next find. 
 
 The net result to the money lenders is the mine, valued at one million 
 dollars, plus say twenty years of the prospector's labor, and less the loan 
 cf one hundred thousand dollars, which it has cost them to develop the 
 rroperty. 
 
 A system which permits this robbery is wrong. I have no quarrel with 
 the individuals who can and do perpetrate these outrages in the name of 
 business. My only foe is the system which makes them possible. "It is not 
 in our stars, but in ourselves that we are underlings.'' 
 
 The foregoing is the correct expose of the methods of modern financing. 
 
 In all industrial undertakings, the same game is in order. It matters 
 not to the financier whether the undertaking is a success or not. He does 
 not in the first instance look at this phase of the matter. His only concern 
 is as to whether the promoter can furnish a sufficiently wide margin of 
 security. If the business is a failure, the margin makes him whole. If 
 the business is a success, he is equally safe, and the people, in each instance, 
 bears the burden. 
 
 How different it would be if the money lending class were eliminated, 
 and every one compelled to invest his money in its true sense. 
 
 Take the mine just mentioned. If the man with money had to honestly 
 invest his money the prospector would be in a position to sell a portion of 
 his holdings for sufficient to develop the same and still reserve an interest 
 unpledged. Or he could sell it all for something and not be robbed of every- 
 thing. 
 
 As long as a contestant in life's struggles can use the stiletto of interest, 
 and these stilettos are in the hands of a few, and the law makes it incum- 
 bent upon the many to get them from the few, and the only way they can 
 be gotten is by an exaction that these borrowed stilettos will never be used 
 for fighting, but for spearing cheeses only, and must be returned every so 
 often, unbroken and untarnished with blood, together with another of the 
 same shape, size, and workmanship, it is easy to see that the many are 
 certainly hors de combat. 
 
 To rectify this will work a hardship on no one, and will be an inestimable 
 blessing to all. It will compel the money lending class to conform to the 
 "square deal," and will permit the many to enjoy the same — a thing now 
 denied them. 
 
 It is useless to prate of the "square deal" when law and custom both 
 sanction and enforce that which is at the very bottom of the "unfair deal." 
 
 We have heard very much in the last few years of the necessity of 
 government control from one school of thinkers, and government ownership 
 from another school. It is a significant fact that all the corporations, whose 
 
58 
 
 colossal disregard of the rights of the people which have given rise to these- 
 differing methods of solution are corporations whose existence was made 
 possible, and whose actual organization was the direct act of the power 
 engendered by interest on money. 
 
 Every line of industry which has been united so as to control prices, 
 i. e., trustified, has received this treatment at the hands of the banks. 
 
 Independent concerns were bought at fabulous prices, placed in a trust, 
 and the price of the products controlled. And all by virtue of the enormous 
 amount of bonds purchased by the banks and money lenders, the burden of 
 which is laid directly upon the people as an indirect tax. 
 
 The ordinary mortal might ask, why should the banks and money lenders 
 be interested in any industrial concern sufficient to purchase and control 
 them? I answer: They are not interested in that way. In organizing any 
 trust, the banks and money lenders have not been called upon to in any 
 way violate their sacred canon to never legitimately invest a dollar. 
 
 With every trust, and with every corporation, there is a stock issue. 
 This stock is for the people, just as far as they will invest. Every dollar 
 thus invested by the people in stock widens the margin of security for the 
 bonds owned by the banks. 
 
 In other words, the banks and money lenders never intended to do more 
 than loan money on bonds, and by trustifying the concerns they control the 
 earnings and thereby make the interest more certain, and a narrower margin 
 of security may be maintained. 
 
 The system of interest on money has already resulted in a condition so 
 Alarming that one stands aghast at its dangers. No undertaking of any 
 magnitude can be consummated without the consent and assistance of one 
 of two groups of financiers in Wall street, New York, and the astonishing 
 part of this matter is, that each group consists of three men, and they are 
 all bankers. . 
 
 The only way to relieve these gentlemen of the duty of private tax 
 collectors is to adopt government ownership of all public utilities and stop 
 traffic in the people's money. 
 
 It is suicide for people to vote municipal bonds in the belief that they 
 are putting money in circulation and thereby securing employment. The 
 money thus earned by them is, after all, but borrowed money, and must be 
 by them returned, every penny, with interest. They are simply adding fuel 
 to the flame which is consuming them. They are drunkards begging 
 at the bar for one more drink. It gives them a moment's satisfaction at 
 the price of an acute aggravation of hell's torments which are sure to follow. 
 
 The good, if any there be, in this custom of borrowing money sinks into 
 utter oblivion when compared with its widespread iniquities. The practice 
 will be speedily wiped out as soon as the question is understood by the 
 people. 
 
 Money drawing unto itself more of its exact self, and without the slightest 
 risk, effort, or loss unto itself, is a hideous monster which fattens, growa 
 strong and arrogant on a diet of its own vomit. 
 
 If I hire a horse for one year, at the end of that year the horse is just 
 that much older. I have had one year of that horse's life and services. 
 If I hire a dollar for that period, the dollar is not one whit the older. 
 When a dollar is worn by time until it will no longer pass as a dollar, the- 
 
59 
 
 government will renew it without charge. The government will not present 
 any of its citizens with a fine thoroughbred three-year-old horse, broke to 
 harness, for one grown old in the service. And yet, according to the 
 accepted opinion, they are each commodities on the market with full and fair 
 nghts of competition and increase. "What fools these mortal be." 
 
 Nothing performs service for mankind without parting with some of its 
 vital substance. It is this vital substance which is converted into the 
 material wealth of the world. Money is no part of this wealth. It is the 
 mere medium of the exchange of the items which go to make up this 
 wealth. Mere certificates of deposit, certifying that the owner has a credit of 
 j jst so much in the world's wealth, but which he cannot withdraw unless he 
 surrenders the certificate. 
 
 What would be thought of a banker if he should attempt to conduct his 
 business on the principle of borrowing from the bank's customers its cer- 
 tificates of deposit, and agreeing to pay therefor, I will not say a ruinous 
 rate of interest, but any interest at all. Yet this is the way we are compelled 
 to do business with the banks. 
 
 We, the people, are the owners of the wealth of the world. Money is 
 tbe credit slips, or certificates of deposit, which we use as a matter of con- 
 venience, and are all hoarded in the hands of money lenders and the banks. 
 These slips or certificates are, by law, made legal tender; we must meet 
 our obligations with legal tender. The credit slips or certificates of deposit 
 are more productive of profit than are the items of wealth for which they 
 stand. The law makes it incumbent upon us to get them. Under this per- 
 nicious system, we are compelled to borrow them, and they are of no more 
 use to us than is the banker's credit slips or certificates of deposit, and must 
 pay for this a ruinous rate of interest. 
 
 If money did anything for humanity, it must part with something, some 
 vital substance of which it is composed. But it does not. It does not even 
 discount time, for we have seen that time and eternity, as to it, are one 
 and the same; it is here forever, omnipotent and indestructible. Upon what, 
 then, does it base its earning capacity? 
 
 We are told in the books that the reason why money should be placed 
 in the realms of earning, or profit producing, commodities is because the 
 money lender is foregoing the use of the money for the period for which 
 it is loaned, and that he should be recompensed for this "foregoing." That 
 is to say, if he did not loan the money to you, he could, and would, invest it 
 in a way which would bring him profit. Right here we are guilty of a false 
 and unwarranted presumption. 
 
 Why should we conclude as a fact, beyond peradventure of a doubt, that 
 his investment would prove profitable, and then erect this false structure 
 and convince ourselves that, inasmuch as his investment is to be profitable, 
 we will borrow his money, do all the work, suffer all the anxiety and take 
 all the chances on loss and bind ourselves to make it doubly sure his money 
 will be a winner. 
 
 To the contrary, the professional money lender, one who has done nothing 
 through life but gain his substance from the people via the interest route, is 
 unsuitable by temperament or experience to invest his money juidciously, and 
 it would be a much more reasonable presmption that his ventures would be 
 failures, flat failures. 
 
60 
 
 It would more often be to his interest to let some one use his money, 
 and he pay them for so doing. The chances are that he would have more 
 in the end, than he would if he attepted to invest it himself. This is an 
 actual fact, as the percentage of failures attest. Yet a silly idea has gone 
 abroad that if the money lender did not accommodate (?) some one with a 
 loan he surely would make as much and more by investing the money him- 
 self. And a thoughtless world surrenders to this logic. 
 
61 
 
 CHAPTER XIII. 
 WEALTH AND CAPITAL. 
 
 The great, and, as yet, unsolved, problem of the world is the cause of the 
 wealth of the few and the poverty of the many. Why does this phenomenon 
 become more and more manifest as communities and nations advance and 
 wealth and population increases? 
 
 The older and more wealthy any community becomes the sharper the 
 line is drawn, till in the centers of wealth and population we find a few 
 wealthy beyond dreams and the many existing in abject poverty. 
 
 Everywhere one goes he sees this condition in a greater or lesser degree 
 of perfection, being less manifest in sparsely settled communities, and in- 
 creasing in rigor as wealth is produced and the population increases. 
 
 We have here a very evident effect, and hence there must be a cause. 
 To discover this and remove it is the duty which self-preservation imposes 
 upon mankind, for it is an effect which will engulf the world sooner or later, 
 and this proud temple of civilization, thus built upon insecure sands, will be 
 findermined, topple and fall, and all will go down with the wreck, both the 
 perpetrators and the sufferers of this malignant injustice. 
 
 Where the wealth producing power is the greatest, there also will be 
 found the greatest poverty of the masses, and the all pervading cry of "hard 
 times" is heard in the most despairing wails. 
 
 Some scientists are content to ascribe this condition to over-production. 
 The fallacy of this is evident. Were it true, this very over-production would 
 refute the plea of hard times, for who could complain if they had more than 
 they could use? A great many other reasons are proffered which are on a 
 par with the foregoing, just as asinine and just as futile. 
 
 That labor and industry are not getting their share of wealth is evident; 
 that all the surplus, above a bare existence, is being assimilated in otber 
 quarters there is no doubt, for we have daily manifestations of a display of 
 this same surplus, and this not by the laboring classes. 
 
 This legerdemain, this acquiring of the surplus of wealth produced by 
 labor, has mystified the scientists and led them along vastly differing lines 
 cf investigation, and caused them to arrive at a multitude of different con- 
 clusions. 
 
 To find the underlying cause of poverty, we need not look to the pro- 
 ducers of the world. We have seen that producers, apart by themselves, 
 will apply, their labors to the soil, and the products thereof, and all live in 
 peace and plenty. It is not till their intercourse becomes complex that the 
 few begin to mount, and the many begin to descend, the ladder of want. 
 
 At this juncture, then, we are to find the mysterious force which causes 
 this phenomenon. Here we are to find a new element injected into com- 
 mercial transactions. 
 
 As the wealth increases, and the complexities of commerce become 
 greater and greater, we will see that this "element" is more and more in 
 profusion, spreading its virus and opening the breach, till we reach the centers 
 of commercial complexities where the phenomenon has produced its greatest 
 demonstration, and we find, as a result, disgusting wealth and despairing 
 
62 
 
 poverty, one upon the upper and the other upon the lower of those two 
 roads which parted at the first point of a "complex" exchange of commodities. 
 
 As the only new element injected at the point of "complex exchange," 
 to-wit: money, legal tender; this in some way must be connected with the 
 force which works such disaster to the producer of wealth. 
 
 Yet we have seen that money, legal tender, is an essential factor in the 
 economical consummation of a complex exchange. Hence it cannot be in the 
 use of money in this capacity that the harm lies. It must then be the use of 
 money in some other capacity, which latter use amounts to an abuse which 
 causes this widespread distress, so evident. 
 
 Taking the cue that it must be an abuse of money, in order to detect this 
 abuse it is incumbent upon us to discover and define the boundaries of the 
 legitimate sphere wherein money can act. It is by this knowledge that we 
 can apprehend the perverted use thereof. 
 
 For a correct understanding of the true province of money, it will be 
 necessary for us to understand the meaning of the terms "wealth" and 
 "capital." I will not enter upon an extended investigation of the definitions 
 of the terms, as this is not necessary, but will be content with the accepted 
 principles as laid down by the masters. 
 
 "The real wealth is the annual produce of the land and labor of the 
 society." — Wealth of Nations, Vol. I, p. 4; by Adam Smith. 
 
 "Wealth consists of objects of value only." — Science of Wealth, book I, p. 
 8; by Professor Amasa Walker. 
 
 "Wealth, as alone the term can be used in political economy, consists 
 of natural products that have been secured, moved, combined, separated, or 
 in other ways modified by human exertion, so as to fit them for the gratifica- 
 tion of human desires." — Progress and Poverty, book I, p. 40; by Henry 
 George. 
 
 These definitions clearly convey the idea that any item included as a 
 factor of wealth is so included because of the value created therein by virtue 
 of labor expended thereon, and, further, that said item when thus prepared 
 must contain the capabilities of gratifying human desires. Money can in no 
 way conform to these requirements. 
 
 The various definitions of capital are as follows: 
 
 "That part of a man's stock which he expects to afford him a revenue is 
 called his capital." — Wealth of Nations, book II, chapter I; by Adam Smith. 
 
 "Capital is that part of the wealth of a country which is employed in 
 production, and consists of food, clothing, tools, raw materials, machinery, 
 etc., necessary to give effect to labor." — Principles of Political Economy, 
 chapter V; by Ricardo. 
 
 "The capital of a nation really comprises all those portions of the produce 
 ,f industry existing in it that may be directly employed either to support 
 numan existence or to facilitate production." — Notes on Wealth of Nations, 
 oook II, chapter I; by McCullough. 
 
 "Whatever things are destined to supply productive labor with the 
 shelter, protection, tools and materials which the work requires, and to feed 
 and otherwise maintain the labor during the process, are capital." — Princi- 
 ples of Political Economy, book I, chapter IV; by John Stuart Mill. 
 
 "The word capital is used in two senses. In relation to product it 
 means any substance on which industry is to be exerted. In relation to 
 
63 
 
 industry, the material on which industry is about to confer value, that en 
 which it has conferred value; the instruments which are used for the con- 
 ferring value, as well as the means of sustenance by which the being is 
 supported while he is engaged in performing the operation." — Elements of 
 Political Economy, book I, chapter I; by Professor Wayland. 
 
 "The common sense of the term is that of wealth devoted to procuring 
 more wealth." — Progress and Poverty, book I, chapter II; by Henry George. 
 
 It appears from these definitions that capital must, as an essential fact, 
 be a part of wealth, as Henry George, in his immortal treatise, Progress and 
 Poverty (book I, chapter I), so aptly expresses it: "Now, as capital is 
 wealth devoted to a certain purpose, nothing can be capital which does not 
 fall within this definition of wealth," and further, on the same page, "But 
 though all capital is wealth, all wealth is not capital. Capital is only a 
 part of wealth — that part, namely, which is devoted to the aid of pro- 
 duction." 
 
 It is evident then that in order for money to be capital it must also be 
 wealth. That it is neither we have but to consult that eminent authority, 
 John Stuart Mill, who says in his Principles of Political Economy, book I, 
 chapter IV, section I: "Money is no more synonomous with capital than it is 
 with wealth. Money cannot in itself perform any part of the office of capital, 
 since it can afford no assistance to production. To do this it must be ex- 
 changed for other things." 
 
 Here we have a trenchant fact, clearly enunciated and bravely admitted, 
 but which is promptly relegated to a condition of "innocuous desuetude" by 
 what immediately follows: "And anything which is susceptible of being 
 exchanged for other things is capable of contributing to production in the 
 same degree." 
 
 This is evidently "one of those lapses which flaw his great work and 
 strikingly evince the imperfections of the highest talent." 
 
 Following this course of reasoning, if Mr. Mill was approaching a lake 
 in an automobile, and was compelled to cross the same, the fact that his 
 automobile "was susceptible of being exchanged" for a boat, would make it 
 capable of performing the functions of a boat itself, and all he would have 
 to do would be to drive right in. Or by the same reasoning he could endow 
 bis machine with the functions of an aeroplane and fly over. 
 
 Mr. Mill, together with all other orthodox writers on this subject, was 
 forced to assume this ridiculous attitude in order to convince himself that 
 money is really wealth, and hence can be capital, and as such is justified in 
 earning profit. 
 
 The great truth that money is not wealth, and hence cannot be capital, 
 is rapidly gaining ground, and it will impress itself more and more as the 
 world realizes the colossal crimes money has committed, and still commits, 
 in the name of capital. 
 
 "Increase in the amount of bonds, mortgages, notes, or bank bills cannot 
 ir crease the wealth of the community that includes as well those who 
 promise to pay as those who are entitled to receive. The enslavement of a 
 part of their number would not increase the wealth of a people, for what 
 the enslavers gain the enslaved would lose. Increase in land values does 
 not represent increase in the common wealth, for what land owners gain 
 "by higher prices, the tenants or purchaser who must pay them, will lose. And 
 
64 
 
 all this relative wealth, which, in common thought and speech, in legislation 
 ?nd law, is undistinguished from actual wealth, could, without the destruction 
 or consumption of anything more than a few drops of ink and a piece of 
 paper be utterly annihilated. By enactment of the sovereign political power, 
 debts might be cancelled, slaves emancipated, and land resumed as the 
 common property of the whole people, without the aggregate wealth being 
 diminished by the value of a pinch of snuff, for what some would lose 
 others would gain. There would be no more destruction of wealth than there 
 was creation of wealth when Elizabeth Tudor enriched her favorite courtiers 
 by the grant of monopolies, or when Boris Godoonof made Russian peasants 
 merchantable property." — Progress and Poverty, book I, chapter II; by Henry 
 George. 
 
 Mr. George here expounds a great principle. Every word of the fore- 
 going reasoning is true. The only criticism which can be offered is that 
 he failed to apply this great principle to money. He specifically excepts bonds, 
 mortgages, notes, and bank bills from the category of wealth, on the ground 
 that "wealth includes as well those who promise to pay as those who are 
 entitled to receive." The wealth of the world would not increase, "for what 
 some would lose others would gain." 
 
 For the purpose of drawing a comparison let us select notes from the 
 list of items excepted from wealth by Mr. George. The reason why notes are 
 excepted is clearly because they are but evidence of the fact that the holder 
 thereof has parted with the amount of money stipulated in the note. For the 
 purpose of this comparison we will assume that the money is wealth. Now. 
 so much wealth has changed hands, the lender has parted with it tem- 
 porarily, while the borrower has acquired it in the same way. The note 
 f.iven is mere evidence of the transaction; it is not wealth itself, but can 
 be exchanged for wealth. 
 
 The holder of the note can negotiate the same for its face value and by 
 so doing be in the same position that he was when he started. In this 
 particular case then the note has performed all the functions of a medium 
 ot exchange. All the note would need is a legal enactment making it a medium 
 of exchange and legal tender and it would have all the qualifications of money. 
 A law like this would add no wealth to the present stock. There has been 
 no labor performed on the note with the view of gratifying a human desire. 
 Even under these circumstances, i. e., being a medium of exchange and legal 
 tender, the note would not be wealth, and, consequently, could never be 
 capital. 
 
 Money, our present medium of exchange and legal tender, is no more 
 and no less than a note, mere evidence of the fact that the owner thereof 
 has a credit in the stock of the world's wealth, which he may withdraw at 
 any time upon surrendering his credit slip, his money. Should he do this, 
 there has been no more wealth created than when the note was given. The 
 real wealth, food and clothing for instance, has but changed hands. The 
 seller has the money, the note, and in order to be placed in the same position 
 which he was in the start, he must negotiate the money, buy other food 
 and clothing. 
 
 In short, money is not wealth. It is mere evidence of credit in the 
 world's stock of wealth, and under a sane and honest law this evidence must 
 be fully surrendered before the holder could withdraw his deposit. 
 
65- 
 
 As money is not wealth, then it coiild never be capital. Not being capital, 
 it is an usurper in the field of profit producing. 
 
 If we could imagine the real Nvealth of the world, a quantity hard to 
 define but which every one knows to be those things created by labor to 
 gratify human desires; to be all piled on one side, and the money of the 
 world on the other, we can clearly see that the destruction of all the money 
 would in no way affect the wealth. Pebbles could be made a medium of 
 exchange and a legal tender, and the world none the loser. 
 
 If this money were really wealth, that school of political economists 
 who so earnestly contend that the wealth of a nation consists of its accumu- 
 lation of money, would indeed experience a catastrophe. They would have 
 absolutely nothing left to eat and nothing to wear. As it is at the present 
 day, under the orthodox rule of the science, we would be in as serious a 
 predicament, for inasmuch as the money would be "susceptible of exchange" 
 for the wealth of the world it would then be capable of assuming the same 
 functions, or, in other words, would become the wealth 01 the world, and. 
 a destruction of the money then would become the destruction of the> 
 world's wealth and we would again be left with nothing to eat and nothing, 
 to wear. 
 
 That such absurd reasoning should be permitted to enslave the world in 
 this advanced day is beyond comprehension. 
 
 Under our present system it will be noted that money is not only per- 
 mitted to participate in the profit of production but participates to the 
 fullest limit of production to bear, and not only this but the real wealth 
 of the world must be pledged as security that this diabolical thievery will 
 succeed, and that under no circumstances can it be called upon to suffer 
 loss. 
 
 We have then discovered the abuse of money which first becomes manifest 
 as soon as money is called into use as the essential factor in the economical 
 consummation of a complex exchange, to-wit: it is allowed to simulate capital 
 and thereby earn- profit under the name of interest, when it is not capital 
 for it specifically provides that it will suffer no loss occasioned in the 
 venture. 
 
 These erroneous claims of money are based upon the following logic: 
 
 Capital, as defined in the foregoing definitions, includes food, clothing, 
 shelter, and whatever is necessary to support human existence during the 
 production of wealth. These are the things for which labor is being per- 
 formed and, strictly speaking, are the things in which it is to be paid. This 
 gives rise to those "complex conditions" spoken of elsewhere in this book. 
 This complex condition is simplified by paying labor in legal tender. By a 
 fiction of the law the money thus used to personate the articles of capita* 
 mentioned above, is considered to be capital. Money thus owned by the 
 concern is so treated and held liable for debts like the rest of the capital. 
 Seizing upon this fact the money lender stoutly maintains that inasmuch as 
 his money is used in that capacity, it is capital and entitled to profit. This 
 we grant provided the money lender will agree with us that inasmuch as his 
 money is thus considered capital, that it has no right to be secured against 
 loss and assured of increase any more than any other form of capital. In 
 short, that they are dollars legitimately invested and entitled to profit and 
 
66 
 
 subject to loss as such. It must look to the success of the enterprise for 
 profit and stand its just share of the loss. 
 
 I think I am warranted in saying that most of us have experienced the 
 importance at times of getting possession of some legal tender. Further- 
 more I think we have realized how difficult this process has become. If 
 cne gets a dollar some one else has lost a dollar. This is the fulfillment 
 of an immutable law. We all have a chance and the game is interesting. 
 When a certain party takes a hand and so deals the cards that he is sure 
 to win every time and the rest all know this, the game becomes dull and 
 insipid. 
 
 As the exchange of commodities become wider and more complex, the 
 more money is abused and the results of this abuse become more and 
 more manifest till the centers of population and complexities in exchange 
 .are reached, when we are confronted with conditions which have perplexed 
 philosophers from time immemorial, the disgusting wealth of the few and 
 pitiable misery and poverty of the many, and this in the midst of plenty and 
 in a day when the powers of production were never greater. 
 
 The untiring struggle of Henry George to rescue the land from the 
 hands of those who have so brazenly and unjustly appropriated the same. 
 and return it to its proper status, I fully appreciate and heartily commend. 
 It is one of the objects which must be attained before the world can be 
 really free and civilized. 
 
 Yet I am constrained to believe that the abuse of money by thus 
 permitting it to usurp the function of capital, is a much more virulent and 
 active poison and is by far the greatest cause of the diseased condition of 
 society. 
 
 It is the money lenders, those fortified against loss and assured of gain, 
 who take the upper road; and the laborers, those fortified against profit and 
 assured of loss, who take the lower road. There can be no doubt about 
 this, for at the ends of the two roads will be found these two classes, the 
 banker in his palace and the laborer in his hovel. The middle classes are 
 doing business on the cross streets, but every year most of them will hold 
 a clearance sale and move a little further down the street toward cheaper 
 quartern. 
 
 Wealth is composed of articles created by labor to satisfy desires of 
 humanity. Labor expended upon an article which does not do this is labor 
 lost, and that article is no part of wealth. Thus labor may be expended 
 ir. carrying a load of rocks from one city to another and back again; this 
 process adds nothing to the world's wealth, and although the labor has been 
 expended it is useless, and the products thereof cannot become wealth and 
 hence can never be capital. 
 
 The production of gold and silver is one of these useless occupations 
 which does not create wealth. It is not performed by the miner with a 
 view of adding to the world's wealth. If his commodities were to be left 
 to the standard of all other commodities and be subservient to a market 
 commensurate with a demand therefor in the trades and arts, he would be 
 a producer of wealth, but he does not do this; the use of his wares in the 
 trades and arts is infinitesimal when compared with the real object of their 
 production to-wit: to take to the mint and have them coined, not into 
 
G7 
 
 wealth, but into tokens of wealth, credit slips, which he can take to the 
 nearest store and exchange for true wealth, his beans and bacon. 
 
 With the exception of the money lending "industry" there is probably none 
 other so useless as that of mining for gold and silver. It is so useless that 
 the miner realizes that he will never get paid from the world's wealth; for 
 the world, having no "desire" for his wares, will not exchange therefor, 
 and his only hope is to strike "pay" in the mine. This "pay," gold and silver, 
 he can have coined into the "medium of exchange" and "legal tender," 
 and then the miner is in a position to compel the producers to share their 
 wealth with him by law. 
 
 To illustrate the uselessness, not to say injustice, of mining to the world 
 at large, let us apply the principles in a simpler form. 
 
 I am a miner and I have a secret cave which contains a certain kind of 
 pebble. I take a certain number of these pebbles and have them declared 
 "the medium of exchange" and "legal tender" by law. There are a thousand 
 men busily engaged in hoeing and weaving and all other industries which 
 produce wealth. In exchanging their commodities their transactions become 
 "complex," and in order to "economically consummate" the same they must 
 have some of my pebbles. In order to get them, were they used in their 
 legitimate capacity, they must exchange with me and give me some of their 
 wealth for that "essential factor" in my hands. If they part with some of 
 their wealth and I get it, then it must be that they have less wealth and I 
 have more. I had no wealth. I would have nothing to eat nor wear if it 
 were not that the law compels my fellow men to get my pebbles and share 
 their wealth with me. My pebbles are useless to them, they do not add to 
 the wealth in their hands, but in order to exchange the wealth they have 
 produced, the law demands this course. 
 
 When I have exchanged all my first installment of pebbles for wealth 
 and have consumed the same, I , being a non-producer of wealth, find myself 
 in the same position I was to start with — nothing to eat and nothing to wear. 
 The pebbles, however, are in the channels of trade performing their true 
 functions. A parity exists between the amount of pebbles in circulation and 
 the commodities in exchange. That is to say, one pebble has been accepted 
 as the token of so much of any given commodity, and it is well understood 
 how many pebbles must be added to any certain transaction to maintain 
 a balance. The producers really require no more pebbles in their business. 
 Left to their own inclinations, they would not give any more of their wealth 
 for pebbles. As they have enough, they have no "desire" for any more. 
 
 But how about me? I am a non-producer of wealth and still have nothing 
 .c eat and nothing to wear. My avenue of escape is open. 
 
 Ignoring the fact that the producers of wealth have no "desire" for more 
 rebbles, I repair to my secret cave and reappear with a second installment. 
 Clearly, I have not added to the world's wealth by this act, but, nevertheless, 
 I am again in a position to foist this second installment of pebbles upon the 
 producers, contrary to their "desire " and to make them share their wealth 
 with me in so doing. This process will continue as long as my cave holds 
 the "pay streak," but when "she pinches out," I will have to become a real 
 producer, and not purloiner, of wealth, or suffer the consequence of nothing 
 In eat and nothing to wear. 
 
68 
 
 There is no escaping the fact that money is not wealth and can never 
 be used as capital. It can only be exchanged for those articles which 
 are capital, and, when exchanged, the money has left your hands and capital 
 takes its place. 
 
 It is this false presumption that you can "eat your cake and keep it too" 
 which leads to the disastrous results which are grinding all hope from the 
 existence of the masses. 
 
 This false conception that money is capital and entitled to the profits 
 due capital is not sufficiently absurd within itself. We are to witness a pro- 
 ceeding which "Out-Herods Herod" in this "tragedy of errors." 
 
 Let us again picture those thousand producers gaily hoeing and weaving 
 and contributing to the world's wealth, and me with my first installment 
 of pebbles, the medium of exchange and legal tender. We now advance to 
 the point where it is necessary for the producers to acquire some of my 
 pebbles, as they must have them in "exchange" and their obligations must 
 be met with "legal tender." Falsely perceiving" that my pebbles are wealth 
 and hence can be converted into capital, and as capital is entitled to earn 
 profit or interest, I immediately detect the importance of hoarding my 
 "capital" so I will always be in control thereof. I say to the producer, I 
 do not wish to exchange my certain "capital" for your uncertain capital. 
 However, if you will pledge your capital that my "capital" will be returned 
 to me at a fixed time, with its full earnings as capital, I will loan you the 
 amount you ask. This is a splendid arrangement for me. I can still remain 
 in the ranks of the "I Won't Works" and yet participate in the world's 
 wealth and not lose an iota of my "capital." 
 
 This is even better than my former position, for now my "capital" is 
 not in the slightest danger of being lost or even lessened, on the contrary 
 it will surely acquire unto itself all the world's wealth, for is not this same 
 wealth pledged to the fulfillment of this glorious end? Formerly I was 
 haunted with a "great unrest" lest my cave "peter out," but now I am free 
 from that care and see my way clear to shift that unwelcome feeling of 
 "great unrest" to the producers. When my "capital" has "got in its work" 
 and the drains upon wealth become apparent, and the producers begin 
 tc realize that they have barely enough left to exist upon, I can easily induce 
 them to believe it is their fate. They will never believe it is the abuse of 
 money, for orthodox political scientists, and some not orthodox, tell us 
 that money is capital, and, missing the true point, they will go far afield in 
 quest thereof and return beaten and humbled to meekly admit that it must 
 be their fate. 
 
 Now comes the climax of absurdities. A producer approaches me with 
 a proposition that he desires to inaugurate an enterprise. His capital con- 
 sists of machinery in a mill. He proposes to "put in" his capital against my 
 "capital." We agree my "capital" to go in as a loan, however. My "capital" 
 being invested the same as his capital in the enterprise is, of course, to be 
 and remain "capital" the same as his capital. 
 
 The business prospers, his capital and my "capital" are both "in it" and 
 we are both correspondingly elated. Reverses come, however. A European 
 war has "cut off" our market, and the business results in a failure. Presto, 
 change. His capital remains capital, but mine — well, mine is not capital 
 
63 
 
 just dollars, loaned dollars, pledged to be returned to me at all hazard with 
 profit. A veritable Dr. Jekyl and Mr. Hyde affair. 
 
 We thus have a manifestation of money insisting upon its rights as 
 capital when it profits so to do, and as assiduously asserting that it is not 
 capital when called upon to assume the losses of capital. 
 
 The permission of such palpable cheating as this is not worthy the 
 traditions of a civilized nation. 
 
70 
 
 CHAPTER XIV. 
 THE SYSTEM IN ACTION. 
 
 In order to fully explain in a way we can understand it is often necessary 
 to clear the subject of immaterial ramifications, and recur to first or funda- 
 mental principles. Let us do this and trace one of these vampires of the 
 world, a loaned dollar, to its lair. 
 
 That we may receive a concrete impression of the facts in the business 
 world as they are today, we will assume the money of the world to be one 
 hundred thousand dollars, the population of the world ten thousand souls, 
 and the capital of the world of a money value of two 'hundred thousand 
 dollars. This gives a per capita showing of ten dollars in the money and 
 twenty dollars in the capital. The money is one-half or fifty thousand dollars 
 in the hands of the professional money lenders, a class typified by the late 
 Russell Sage, and the other half deposited in the banks throughout the 
 land. This half is nominally the people's money, but which we know as a 
 fact will be converted into loaned dollars many times in excess of their true 
 amount. However, for the purpose of this illustration, we are safe in saying 
 that all this money is to be used for loaning purposes. 
 
 The capital of the world we will consider to consist of the products 
 of the soil, fifty thousand dollars; the plant and products of a flour mill, fifty 
 thousand dollars; the plant and products of a woolen mill, fifty thousand 
 dollars, and a railway to provide transportation, fifty thousand dollars. 
 
 Twenty-five men own and control the money, seventy-five men own and 
 control the capital, and the rest furnish the labor to operate the farms, mills 
 and railway. 
 
 The railway by an over valuation of its tangible property, can and does 
 carry a perennial bonded indebtedness at least as great as its true tangible 
 ralue, or fifty thousand dollars. The woolen mill is "trustified," and by 
 the same process is carrying a bonded indebtedness of fifty thousand dollars. 
 The flour mill does not own a dollar of borrowed money and is not over 
 capitalized. The farms are mortgaged for one-half of their products, or 
 twenty-five thousand dollars. 
 
 We then have one hundred thousand dollars in money, two hundred 
 thousand dollars, money value, of capital, and one hundred and twenty-five 
 thousand dollars of debt. 
 
 It will be pointed out that the debts exceed the money. This may 
 appeal to the uninitiated mind as impossible, but when we consider that debt 
 is a growth made possible by the application of interest to the creation 
 thereof, without in any way disturbing the serenity of those gone before, 
 the matter will unfold and display its beauties. 
 
 These various bonded debts are bearing 8% interest annually. As it 
 is a fact well known that the interest on this indebtedness is promptly re- 
 invested in other "attractive securities," it is plain that it amounts to com- 
 pound interest as far as anyone is concerned. At that rate then in nine years 
 the amount of these debts will be equalled by the interest thereon. 
 
 In other words, the owners of caiptal with the exception of the flour 
 mill, have undertaken to utilize labor and thereby create one hundred and 
 
71 
 
 twenty-five thousand dollars, money value, in wealth, and, further, to ex- 
 change this wealth for money and deliver the money to the money lenders'- 
 in the space of nine years, and still reserve a reasonable profit unto them- 
 selves. There is, of course, no hope nor inclination to disturb the original 
 debt. That is to still "ride" in the same old saddle. We now have the con- 
 ditions and will contemplate results. 
 
 It is evident that this one hundred and twenty-five thousand dollars must 
 be derived from the products of these bonded industries. 
 
 We will follow the career of the woolen mill. First bear in mind that 
 the laborers in this mill are not laboring alone for clothing. They must- 
 have flour, and garden truck, and must have them brought to their market 
 by the railway. Saturday night comes and the laborers are to be paid. 
 They are, of course, to be paid in that for which they were laboring — cloth- 
 ing, flour and garden truck, and to have the same delivered to their respective 
 markets. This method has been found impracticable and so civilized nations 
 have hit upon the expedient of the employer giving and the laborer accepting 
 a "medium of exchange" which is to be "legal tender," or, in other words, 
 tokens of credit in the stock of the world's wealth, or, in other words, bank 
 notes payable on demand at the National Bank of Wealth, or, in other" 
 words, warehouse receipts showing the stock in The World's Warehouse, 
 with which he is to be credited. These tokens are money, and it will be 
 particularly noted that in the correct course of business they must be fully 
 surrendered before any of the wealth which they call for will be delivered. 
 Loaning these tokens to the depositaries does not have the effect of gaining 
 possession of the wealth. There is no subterfuge of allowing a profit from 
 something not in existence. 
 
 Remember, this woolen mill industry is being operated on borrowed 
 money. Hence the employer pays the labor in borrowed money. It makes no 
 difference at that whether he got the money directly from the money lender 
 or not. He may have sold clothing to railway employees and the money 
 which they paid him, and which he pays to his labor, was gotten from the 
 railway company, and, in turn, borrowed by them. I think it is a self-evident 
 fact, an "axiom," that a borrowed dollar remains a borrowed dollar till re- 
 turned to the owner, no matter whose nor how many hands it is in. 
 
 The laborer takes this money and flatters himself that it is really his. 
 He assures himself that those dollars are exactly what he was laboring for, 
 and he is aware of the fact that he can take them to the world's clearing house 
 and exchange them for their face value. In all this he is correct, and he is 
 content to rest at that. He can only realize the outward manifestations, he 
 cannot conceive that there is any trick about it. Let us see. 
 
 Now, if those dollars were really his, and he exchanged them for 
 wealth, he would part with the dollars, accept the wealth, and have no more 
 concern except to get them back at any time in the future that he may wish 
 to exchange them again. It may be nine years hence, but no matter how 
 long, he would have to get just the same number of dollars. Is this true 
 of his borrowed wages? When he accepted those borrowed dollars in pay- 
 ment, he accepted them with the same demands thereon that they had in 
 the hands of his employer. That is, in nine years to be returned and as 
 much more with them. When he exchanges them for wealth he is still 
 
72 
 
 beholden to his employers to pay interest thereon, which we have seen will 
 amount to a like sum in nine years. 
 
 It is a recognized fact that bonds are never retired. It seems to be a 
 phyiscal impossibility to do this, and the longer the present system obtains 
 the more and more hopeless becomes the task. I need but to cite the seeming 
 impotency of our own national government in wrestling with this problem. 
 Hence it devolves upon every laboring man to earn the amount of this interest 
 every nine years and present it to his employer that his employer may have 
 the use of the money from the money lender. 
 
 This is the difference between laboring for a "legitimate" medium of 
 exchange, and borrowed dollars. If one labors for properly invested dollars 
 he would take his pay and the transaction would be closed. If, however, 
 he is laboring for borrowed dollars he must then begin to pay interest on his 
 earnings. Just that much labor will be expended for and in behalf of the 
 money lender. 
 
 This principle cannot be impressed too firmly upon your mind. The 
 original borrower of money does not intend to pay either the principal or 
 interest himself. He intends to pass that duty along to the ultimate con- 
 sumer and will make his collections by adding the amounts to the price of 
 his wares. 
 
 When he borrows in the first instance he does not labor for the money, it 
 is a loan in its true sense, and he simply gives his note promising to repay 
 the principal at a specified time with interest. 
 
 When he pays this borrowed money to a third party, as to an employee 
 for example, the employee labors therefor just the same as though he was 
 earning it, when, in fact, he is laboring for the privilege of taking his 
 employer's place as a borrower. In short, he is laboring for a loan only. 
 
 As above explained, the employee is not really laboring for the money 
 but for the wealth which the money represents. We will assume that he 
 labors cue day and receives therefor a borrowed dollar in payment. With 
 this dollar he purchases a meal of victuals. Now, as a fact, he has earned 
 that meal with his day's labor. He has paid for it in full and the transaction 
 should be closed. He thinks it is. He has heretofore been quite positive 
 -on this point. Having thus replenished the inner man, like his Roman 
 prototype of old, his mind lightly turns to the circus as a crowning event of 
 si successful day. 
 
 He little dreams that he will now commence to pay interest on that meal 
 .and will continue so to do as long as the debt remains unpaid to the original 
 lende/. 
 
 This is the condition of the laboring man and all consumers, notwith- 
 standing they have not, and cannot, borrow a dollar directly. They are 
 made the "goat" of that unfortunate system which can be sustained only upon 
 the false principle that money is capital. 
 
 The evil of this system is plain. The people have no voice as to whether 
 a loan shall or shall not be made. And when made, they have no say about 
 the rate of interest to be paid. Therefore, the "Captains of Industry" fix the 
 amount of our loans and set the rates of interest thereon, and we are bound 
 to meet the demand. It is useless to contend that this is a matter of private 
 contract between the borrower and lender. The people, the real parties in 
 interest are not permitted to be parties to the contract. 
 
Remember, the employers are bound, under penalty of losing their mills 
 t>y foreclosure, to get this borrowed money back from the ultimate consumer, 
 with interest. This includes the flour mill, as well as all other industries, as 
 we will see in the sequel. 
 
 The only hope of the laboring man to get the interest on those dollars 
 is from his employer. Laboring for his employer is his only field. His 
 wages then must include a living for himself, and enough surplus to give 
 back to his employer to liquidate the borrowed debt. The employer meets 
 •this demand with borrowed money. He gets it back from labor by adding 
 it to the price of his wares. 
 
 We are now confronted by a most astounding condition. The laborer is 
 in fact borrowing money to pay interest on a debt which he has paid. Thus 
 faying an unjust interest by going deeper in debt. 
 
 The poor old inebriate who begs for one more drink, well knowing the 
 results, is in a better position than the producer of today. He takes his 
 poison voluntarily, but the laboring portion of the consuming world have 
 the chalice of hemlock pressed to their helpless lips by the merciless hand 
 of greed, and are left derelict upon life's highway, mental, moral and phyical 
 wrecks. 
 
 ♦ Now, let us turn our attention to the flour mill which we left doing 
 business on its own money, and at a proper valuation of its plant. The 
 iaborers here, the same as the laborers in the bonded concerns, are laboring 
 not only for flour, but must have garden truck, clothing and transporta- 
 tion service. They also receive money, tokens of wealth, in payment for their 
 services. 
 
 Remember, the price of the production of the bonded concerns is suf- 
 ficiently high to pay the interest on their bonds. The laborers in the flour 
 mill, then, must get wages sufficiently high to meet these prices. The only 
 one to whom they can look is their employer. He must pay them wages 
 sufficiently high that they can pay this interest for the other concerns. Thus 
 his money passes to his laborers and becomes really theirs. There is no 
 duty imposed upon them to return it to him with interest. He meets the 
 drain by putting up the price of his wares. As he sells most of his pro- 
 duction to the laborers of the bonded concerns, he receives in return therefor, 
 from them, borrowed dollars. It is only from his own employees that he 
 gets the legitimate dollars. Gradually his legitimate dollars are diverted 
 to and assimilated by the demand for interest, and, before he is aware, he is 
 paying his labor with borrowed dollars. Mind you, the flour mill has no 
 bonded indebtedness but is compelled to join with its laborers in assisting 
 the bonded concerns to pay their interest. I advert to this condition to show 
 how all capital, whether directly incumbered with loaned dollars or not, 
 is held responsible for the demands of interest. 
 
 Thus legitimate competition is defeated. If a man has a mill on one 
 side of a river, and moves across and builds another mill, these two mills 
 will never come into competition. If they were owned by two different 
 men, in the absence of a "gentlemen's agreement " they would be in com- 
 petition. If, however, the mills were owned by two different men, and a third 
 had a mortgage on each mill, the interest on these mortgages would be a 
 "fixed charge," and would result in nearly the same condition as when both 
 mills were owned by one man. 
 
The mcney being in the hands of so few, and controlling so many dif- 
 ferent enterprises, the world's competition is practically nil., and in '"trusti- 
 fied" industries we see this idea carried to perfection. 
 
 This stifling of competition is made possible by the hoarding of money 
 by interest. 
 
 The fact that money has such an enormous capacity to accumulate itself 
 by interest, leads us to wonder how it it possible for any money to be owned 
 by the people. We should think that the money lenders would have it all ere 
 this. We may cease marveling, for it is a fact that the money lenders do 
 own all the money and a vast deal more in the form of debts. 
 
 I take it for granted that you have ten thousand dollars deposited in 
 the bank. You are quite sure it is yours, for you have no one to say you nay. 
 The question arises, is it really yours? Or have you the use of it merely? 
 And. will you have to return it with interest to some one? This question 
 seems absurd to you, but let us see wherein the absurdity lies? 
 
 Let us consider that you had a house and lot which you sold for this sum. 
 You owned the house and lot, and so, as a fact, you must own the money you 
 got for it. We will see where this money came from. 
 
 The Main Trunk Railway was projected into your section of the country, 
 and fifty million dollars worth of bonds sold to further the enterprise. An 
 official of that road had received this ten thousand dollars for his services, 
 and had purchased your house and lot with the same, and you deposited it 
 in the bank. You would be horrified to think you were paying interest on 
 any part of it. Do not forget that it is still a part of the original fifty million, 
 and that the whole fifty million is still bearing interest, and not the fifty 
 million less your ten thousand. 
 
 This leaves you, as a consumer, paying your pro rata of the interest on 
 the whole fifty million, a process which is destined to continue as long as you 
 are a consumer. All this time you are contributing to the upkeep of the road 
 and a profit to the railway company. This is accomplished, as is evident, by 
 the freight and passenger rates. Hence you are paying interest on a portion 
 of the money you have at the bank. The consumers, as a whole, must pay 
 the interest on these bonds, and your share will be just in proportion to the 
 amount of wealth you consume. Your friends and neighbors will pay the 
 interest on the remainder of your ten thousand dollars. 
 
 It is not hard to understand that the entire fifty millions of dollars are 
 following the same course as your ten thousand, i. e., they are paid out to 
 private individuals and by them deposited in the bank under the im- 
 pression that they were theirs. That we might more readily perceive the 
 principle, let us assume that those to whom the fifty millions were paid are 
 the consumers, to be served by the road. It is now clear that the money in 
 the hands of the railway company is borrowed. It is paid out to its laborers 
 and they deposit it in the banks, thinking it is their money. 
 
 To think they were paying interest on their own money would be out of 
 the question, but, the fact remains, these very same consumers are paying 
 all the interest on all the money that they have thus deposited in the banks. 
 They are furthermore paying this interest with cash, borrowed in the same 
 way, for the interest is to be paid in cash. Labor is not legal tender. 
 
 We will now return to your ten thousand dollars. You were not one 
 of the employees of the road. You are one step farther from the fountain 
 
75 
 
 Lead ci this fifty million dollars. Taking in your class widens the scope 
 of "consumers" to be served by the read. You may or may not have gotten 
 your pro rata share of that particular fifty million dollars of railway money. 
 We will assume that your ten thousand dollars is more than your pro rata. 
 You rest content that, even were it true that I have just been explaining, 
 you would be ahead of the game, for the pro rata in the fifty million upon 
 which you are called to pay interest, is not so large a sum as your ten 
 thousand, and you feel that your friends and neighbors must pay the 
 difference. 
 
 This is all true. Follow me a little further. The particular ten thousand 
 dollars which you have acquired, and which you think is yours, and which you 
 believe stands between you and want, comes to your hands through the railway 
 company, and we will call it "railway money." 
 
 Your next door neighbor did not "cut in" on the "railway money." but 
 has succeeded in acquiring ten thousand dollars of "steel money." He got 
 his in the same way, deposited it in the same bank, and, he fondly thinks, 
 it is his. He flatters himself, just as you did, that even were it true, etc., 
 his friends and neighbors would have to pay, etc. You and your neighbor, 
 unbeknown to yourselves, are working upon a reciprocity basis. You pay 
 part of the interest on his ten thousand. This, you will see, is tantamount to 
 paying the interest on a like amount of your own ten thousand. 
 
 You have been congratulating yourself upon your superior business 
 acumen wherein and whereby you are having your neighbor pay a portion of 
 the interest on your ten thousand dollars. Your neighbor is gaining inspira- 
 tion from the same quarter. 
 
 A mutual neighbor has no "railway money" nor "steel money." His is 
 "tobacco money." He is experiencing all the joy and satisfaction which you 
 and your first neighbor had thought were reserved for you, and for the same 
 reasons, i. e., that even were it so, etc., my friends and neighbors will have 
 to pay, etc. 
 
 I need pursue this illustration no farther. We now clearly understand 
 that all the money in circulation among the people, and which they think is 
 theirs, is really borrowed money, owned by no one but the money lenders. 
 Further, that this money which the people think is theirs is bearing interest, 
 and that the people are paying this interest, and, that, in cash, borrowed in 
 the same way. Thus, borrowing money to pay interest on borrowed money. 
 
 The consumer is not done with paying interest to the bond-holders of 
 the railway on the ten thousand dollars you have in the bank, as the following 
 will bear witness. Some one will borrow this same ten thousand dollars 
 from the banker at 8% per annum and start a hat factory in the neighbor- 
 hood. The price of the finished hat must be sufficiently high to include this 
 interest. The consumers are then paying 8% to the bondholders and 8% 
 to the banker for the same money and at the same time, or 169r. The 
 world's wealth cannot long withstand this annihilating onslaught. 
 
 "A vampire," as defined by Webster, "is a dead person superstitiously 
 believed to return in body and soul from the other world, and to wander 
 about the earth doing every kind of mischief to the living, and to suck the 
 blood of persons asleep, thus causing their death. Hence, one who lives by 
 preying on others; an extortioner." 
 
7b 
 
 Money permitted to assume the role it does under the present system is the 
 colossal vampire of today. It is not a creature of superstitious imagery, but 
 a living personification of fact. It excels the mythical vampire as it does not 
 need to remain in person while sucking the blood of persons asleep. It 
 needs to be present but one year, at which time it will be partially relieved, 
 and, at the end of nine years, it will be fully released from personal super- 
 vision of its "industry," i. e., working on an 8% basis. After the real vampire 
 has been fully released, and has gone to other "attractive investments," 
 the wound in the first victim never heals, but continues to flow its full 
 quota of blood to be delivered at certain fixed times to the vampire. The 
 victim dies a lonesome, lingering" death, without gaining consciousness. 
 
 Another distinction lies in the fact that the mythical vampre can attach 
 itself only to those asleep, while the real vampire attaches to all consumers, 
 irrespective, and they cannot help themselves. 
 
 Money, under the present system, is like unto a little hatchet in the 
 rubber business. A man has a grove of rubber trees, the result of years of 
 growth, but he cannot "tap" the same till he borrows a hatchet. With this 
 borrowed hatchet he makes several incisions in each tree. The hatchet passes 
 to other fields to make other incisions in other trees. Its work in this grove 
 has been accomplished. As long as those trees can be made to run one drop of 
 "sap" this hatchet is assured of the greater portion thereof. 
 
77 
 
 CHAPTER XV. 
 THE MONEY QUESTION. 
 
 The money question has been the theme of political economists tor ages 
 and is yet an unsolved problem. 
 
 That there is something wrong with our present system of distributing 
 wealth, is evident. The palpable injustice of the unequal rewards to capital 
 and labor is recognized at a glance. 
 
 It is clear that some refractory malady taints our industrial activities. It 
 breaks out at the most unexpected times, and, as far as yet known, for no 
 apparent reason. The doctors have continually disagreed as to the seat of 
 the difficulty. A great many remedies have been suggested, and some of them 
 have been tried, but none seem efficacious, the disease, in the meantime, 
 becoming more and more chronic. 
 
 The first indication of an attack of the malady is: First, stringency in 
 money, industrial depression, and panics. These symptoms, if not checked, 
 rapidly develop into the more alarming forms of, second, bankruptcy, en- 
 forced idleness, and confusion. This condition soon results in a genetral de- 
 bility known as "hard times." 
 
 The attacks occur with noteworthy regularity. It would seem as though 
 they were controlled by human intelligence. 
 
 Another noteworthy fact is, that whether the malady is at its worst 
 or the patient convalescing, or in robust health, the phenomenon of the rich 
 growing richer and the poor growing poorer is ever active. 
 
 This is hard to understand. The world is full of plenty, and we have 
 abundance of willing workers to garner the same, and we are constantly 
 improving our means of production. 
 
 Some of the causes of this malady as advanced by those who have at- 
 tended the case are: First, over-production; second, over-consumption; 
 third, over-confidence; fourth, lack of confidence; fifth, over-population; 
 sixth, increase of labor saving machinery. This is enough to indicate the trend 
 of thought along these lines. 
 
 I will not endeavor to examine these theories in an exhaustive manner. 
 To my mind,' if the cause is over-production, the laboring class has never 
 known it. If it is over-consumption, the laboring class gives no evidence 
 thereof. If it is overconfidence, I do not know what in. If it is lack of confi- 
 dence, I also do not know what in. It cannot be over-population, for the 
 trouble is manifest alike in the populous cities of the East and sparsely 
 settled communities of the West. If it is labor saving machinery, then I 
 would be condemning a pedestrian to "hard times" if I gave him a ride in my 
 automobile. 
 
 None of these theories are substantial. They are but vain groping in the 
 dark for an outlet. 
 
 Our present monetary system has been apprehended as the culprit by 
 many, but, as yet, I am not aware of any conviction. Money has always been 
 able to successfully refute any of the specific charges laid against it. 
 
78 
 
 The principal charges contained in the indictment heretofore filed are: 
 First, 'greenbacks," or non-interest-bearing government notes, are essential 
 for "exchange" and "legal tender." 
 
 Second, the full and unlimited coinage of silver, at the ratio of 16 to 1, 
 must be preserved. 
 
 The defense interposed to the first count is: 
 
 Xo notes should be issued by the government unless they are "redeema- 
 ble" in the standard coin. The "sound money" of recent renown. 
 
 To the second count the defense is: 
 
 "Binietalism" is wrong, and the only right method is a "single standard," 
 and that standard should be gold. 
 
 These questions were fully and ably argued by learned counsel on each 
 side, before that great jury, the people, with the resultant verdict: 
 
 First, that "greenbacks" are not needed. 
 
 Second, the "gold standard" is correct. 
 
 A fair and candid statement of the result of this verdict is, that the same 
 malady still exists. 
 
 It is plain that the cause of this malady is as yet undiscovered. The 
 diagnosis of the case was misinterpreted, and the wrong remedies have been 
 administered. 
 
 We must rediagnose the case, noting carefully each symptom and 
 comparing them, one with the other. 
 
 The first symptoms of disorder do not in any way indicate a constitutional 
 weakness, that is, a general deficiency in essential vitality; but, to the con- 
 trary, gives unmistakable evidence of local disturbance. Some particular 
 organ becomes deranged, and, if permitted to continue, will soon spread 
 its poison to other organs and thus the whole structure will become dis- 
 eased. 
 
 The secondary symptoms unmistakably ratify this conclusion, for we see 
 at this stage definite manifestations of an advancing breakdown. 
 
 Further proof of the conclusion that the malady is local in its incipiency, 
 lies in the fact that it quickly responds to treatment, no matter what stage. 
 Under this "treatment" the entire "system" seems to undergo a complete 
 change, and, like magic, becomes what seems to be a sound and healthy 
 whole. For some mysterious reason, while thus enjoying apparently the 
 "best of health," this elusive organ will again become deranged and will 
 continue to spread its poison virus with ever increasing malignancy until again 
 checked by this "treatment." 
 
 The spectacle of the periodic return of this malady and its yielding to 
 this mysterious "treatment," is familiar to all. It is our duty to discover the 
 cause of this disturbance, and, if in our power, remove the same. 
 
 A careful analysis of the question will disclose the cause and prompt 
 action on the part of the people will remove it. 
 
 Money, as the medium of exchange, will perforce assume a certain ratio 
 to commodities. The unit of money will assume a certain relative position 
 to the unit of any given commodity. Thus we say a bushel of wheat is worth 
 a dollar. Now, we do not mean that a dollar in money is of the same value 
 as the bushel of wheat. That would be absurd, for we know that a dollar 
 in money is absolutely of no value. What we do mean is, that a bushel of 
 wheat is worth just the same as any other amount of a commodity is, which 
 
79 
 
 we say is worth one dollar. Just as we say a certain article is one yard 
 long, or that it weighs one pound, we mean that it is just as long or weighs 
 just as much, as any other article of the same length and weight, and the 
 standard units of weights and measures simply designate to our minds what 
 these conforming weights and measures must be. 
 
 It would be as logical to say, a yard of silk is "worth" a yard measure, 
 or that a pound of diamonds is "worth" a pound weight. This language 
 would not change the fact that when we say a piece of silk is worth a yard 
 measure, we mean that it is just as long as any other piece of cloth that is 
 one yard in length, and that the diamonds weigh just the same as any other 
 commodity which weighs one pound. The standard units of weights and 
 measures being used only as a means of comparing these commodities, a sort 
 of a "medium of exchange" of the comparative units of commodities. 
 
 The function of dollars, in their particular sphere, is the same as the 
 units of weights and measures, being a fixed standard for purposes of com- 
 parison only, and none of them can by any construction, no matter how 
 strained, ever become the commodities with which they deal, either directly 
 or by proxy. 
 
 If the market conditions are such that wheat is rated as worth one 
 dollar per bushel, oats worth one dollar per bushel, and hay worth twenty 
 dollars per ton, it means that one bushel of wheat will make an even 
 exchange for one bushel of oats, and that it will take twenty bushels of 
 either to exchange for a ton of hay. If wheat goes to one and one-half dollars 
 per bushel, it simply means that it would take one and one-half bushels of 
 oats to make an even exchange for one bushel of wheat. Money figures 
 in all these transactions as an abstruse reckoner of the differing values of 
 commodities. Having, then, no connection with the real values of com- 
 modities, it matters not in the first instance what the amount of money 
 upon which it is based may be, but this relative value, when once established, 
 is of the utmost importance to preserve and that the amount of money in 
 circulation be maintained at, or as near, that point as possible. 
 
 Maintaining this fixed and stable amount of money in free circulation 
 is as important to the business interests as is the normal flow of blood in a 
 living body. If you increase the flow beyond normal it develops one set of 
 maladies; if you decrease the flow, others appear. 
 
 The maintaining of this equilibrium is mandatory. The slightest change 
 either way produces like results. Thus, if the ratio of the money unit to 
 the units of commodities becomes fixed and settled upon the basis of a 
 certain amount of money in circulation, and that ratio should happen to be, 
 on any given stage of the market, that one bushel of wheat is equal to one 
 dollar, we imperceptibly slip away from the true ratio, as will be hereafter 
 explained, and really accept as a fact that the bushel is worth one dollar, and 
 inversely, that the dollar is worth one bushel. 
 
 This being true, we can readily see how an "inflation" or a "contraction" 
 of the money in circulation will effect the matter. If an "inflation" to 
 twice the amount of money in circulation occurs it will result in the pro- 
 portion of one bushel of wheat to two dollars, thereby lessening the "pur- 
 chasing power" of the original dollars. If the money is "contracted" to one- 
 half of the former amount, then the ratio will be one bushel of wheat to one 
 half dollar, thereby increasing the "purchasing power" of the original dollars. 
 
80 
 
 That the thought expressed in the phrase "purchasing power" of a dollar 
 should ever have been "harvested" is incontestible proof that there is a class 
 in the world whose interests lie absorbed in the welfare of that dollar. 
 
 I wish my reader to get his mind firmly fixed upon this fact, as it will 
 be of great assistance in understanding this problem, i. e., that the "inflation" 
 cr "contraction" of the currency in no way affects the owners of the com- 
 modities, the wealth of the world. , Their relative proportions both as to 
 quantity and value are always the same, subject only to the fluctuations caused 
 by production and the law of supply and demand. They take no reckoning 
 of the greater or lesser "purchasing power" of the dollar. Thus, as far as 
 commodities are concerned, if the money is "inflated" to twice its former 
 volume, and the proportion then reads, that one bushel of wheat is equal 
 to two dollars, it also means that if oats were formerly worth one dollar that 
 they are now worth two dollars per bushel. As to the wheat and oats the 
 proportion remains the same, that is, that one bushel of wheat is still worth 
 one bushel of oats. If the currency is "contracted" to one-half its former 
 volume, and the proportion is that one bushel of wheat equals one-half dollar, 
 this also means that one bushel of oats, which was formerly equal to one 
 dollar, is now equal to one-half dollar. We still find no change in the 
 proportion of wheat to oats; they still equal each other. 
 
 Aside from the trouble of readjustment, which, to be fair, must be 
 universal, the owners of commodities, the wealth, have no concern about the 
 volume of money in circulation. This again points to some class, not owners 
 nor producers of wealth, who are vitally interested in the "purchasing power" 
 of a dollar, and that it be maintained at the highest possible standard. 
 
 This "class" is not hard to detect. It is those gentlemen who make their 
 "living" by manipulating dollars, their stock in trade. These are the money 
 lenders and bankers. 
 
 Before tracing the subtle alchemy of their "industry," it will be necessary 
 to discover the basis upon which this industry is built. 
 
 As said above, we "imperceptibly slip away from the true ratio" in 
 considering the question of the effect of "contraction" and "inflation" of the 
 currency. 
 
 Just as we get to understand that the owners of the commodities of the 
 world are not affected in any way in their relative standing to each other by 
 p. change in the volume of the currency, we are confronted with this problem: 
 If I have ten thousand bushels of wheat, which have by the settled ratio of 
 commodties to money been ascertained to be as one bushel to one dollar, and 
 [ sell at that price, I have simply exchanged my wheat for other commodities, 
 say oats at one dollar per bushel, for future delivery. I accept an order on 
 the world's stock of oats in the form of money which now bears the ratio of 
 one dollar equals one bushel. It is evident that if this ratio is changed before 
 I elect to surrender my order and take the goods, I will be affected by the 
 change. Thus, if the money is "inflated" so that the ratio will at that time 
 be one bushel of oats equals two dollars, I will be able to get but five thousand 
 bushels. If, on the other hand, the currency is "contracted" and the ratio 
 becomes one bushel of oats equals one-half dollar, then I will be able to get 
 twenty thousand bushels with my money. 
 
 All this goes to show that while a man's possessions are in the form of 
 .-•ommcdities he is not concerned in the volume of money in circulation, but 
 
81 
 
 when he exchanges his commodities for money, the change in the volume 
 thereof becomes vital. 
 
 It is thus evident that one who is honestly using his money in business 
 should be protected in this transition from wealth to the evidence thereof. 
 The money in circulation must be kept at a stable quantity. Any sudden 
 changes therein disorganize the whole system. The money must, in order 
 to remain at a stable parity with commodities, increase in volume at the same 
 ratio that wealth increases. The only useful function of the miner in the 
 production of gold and silver to be coined, is to so increase the volume of 
 money that this parity may be maintained. 
 
 The fact that the law compels a man to do business with the adopted 
 "medium of exchange," and to accept from his debtors and to give to his 
 creditors "legal tender," makes it imperative that his capital on hand and his 
 credits against outstanding capital, money, will be continually chang- 
 ing in amount relatively as to each other. This being true, he should not be 
 compelled to suffer loss, nor permitted to gain a profit thereby. 
 
 The true relations of money and commodities being understood, we will 
 review the great case against money and find wherein the counts in the indict- 
 ment failed and the cause thereof. 
 
 The first count, that "greenbacks" or non-interest-bearing notes should 
 be issued by the government, and used as "medium of exchange" and "legal 
 tender" failed for the reason, that to thus empower the government to period- 
 ically issue any substantial amount of these "greenbacks" would result in an 
 "inflation" of the currency in just the amount of the issue, and would result 
 in a corresponding loss to those holding the money at that time. This would 
 be unfair, not to say dishonest, on the part of the government. 
 
 The second count, that the full and unlimited coinage of silver at the 
 ratio of 16 to 1 must be preserved, turns upon the point whether this unlim- 
 ited coinage of silver was or was not causing the stable parity of money to 
 c( mmodities to become disarranged by increasing the medium of exchange 
 faster than the wealth of the world increased, thus causing "inflation." If 
 it was doing this "demonetization" of silver was a corrective proceeding. If 
 it was not, an abuse was solemnly legalized. We must, however, abide the 
 verdict and conclude that silver was "inflating" the currency. 
 
 It is evident from the terms of this indictment that the state conceived 
 the "malady" to be an undue "contraction" of the currency, as both counts 
 contemplate an "inflation" thereof as the proper remedy. The defense takes 
 the opposite view and maintain that the trouble is "inflation" and that "con- 
 traction" is the cure. 
 
 These positions of the contending parties are dictated by their interests. 
 "Contraction" strengthens money at the expense of commodities; "inflation" 
 strengthens commodoties at the expense of money. Both wrong, both dis- 
 honest, and both despicable. 
 
 The unavailing campaigns of "greenbacks" and "silver" seems to have 
 settled any farther attempts at "inflation." We are now on the "gold stand- 
 ard," and for the purpose of this investigation we will admit that this best 
 conserves the stable parity between money and commodities, so important 
 to maintain, and the production of gold will be just sufficient to maintain that 
 parity with the increasing wealth of the world. 
 
82 
 
 Notwithstanding the fact that our monetary system is thus theoretically 
 perfect, we still have a vivid conviction that something is wrong. The same 
 old "malady" keeps continually "breaking out." 
 
 Of the two evils of "inflation" and contraction," the former is by far the 
 lesser. It is an error on the side of the weak against the strong; it is "to err 
 on the side of mercy," as it were. The results therefrom do not, and cannot, 
 cause such widespread misery. This impels us to the conclusion that the 
 seat of this "malady" is to be found in the realm of "contraction." 
 
 To become convinced that it is the periodic "contraction" of the currency 
 which causes our industrial troubles, one has but to observe the actual work- 
 ings of the system. 
 
 I take it as a fact beyond doubt, that every dollar of our money is now 
 bearing interest to Wall Street. The greater part of them are also bearing 
 interest, many times over, to the banks. 
 
 Wall Street "stung" the people with its first loan to them, and has been 
 "stinging" them with the same "stinger" ever since. As soon as it could 
 withdraw its "stinger" from one place it has promptly inserted it in another, 
 even to the present day. During this period the people have been "stung" 
 millions of times with the same "stinger" and every sting is still furnishing 
 its full percentage of blood. 
 
 By this process it develops that whatever money there is in circulation 
 is there by leave of the money lenders and bankers. Business is dependent 
 upon the amount of money thus permitted to circulate. 
 
 This being a fact, we will watch actual results. We have noted that 
 the first symptom or indication of the "breaking out" of the "malady" is 
 a stringency of money. On all sides we hear the complaint that "money is 
 tight." This complaint is well founded; money is tight and scarce. It is being 
 taken out of circulation by the owners thereof. This is easily accomplished. 
 Upon the receipt of a telegram from headquarters every bank throughout 
 the country joins with Wall Street in refusing to make loans. It is in the 
 power of the owners of this money to decrease the amount of money in circu- 
 lation down to the checking accounts, and the change in our pockets, in one 
 day. This, of course, does not take into consideration money in safety deposit 
 vaults, which is really not in circulation anyway. 
 
 We would then have a "contraction" of the currency sufficient to put the 
 "purchasing power" of a dollar as high as a thousand-dollar bill would be 
 when things are normal. 
 
 This is, however, a very dangerous game, for such a palpable steal would 
 be detected and someone would get hurt. So the same idea is carried out, but 
 with dignified judgment. 
 
 The currency is periodically "contracted" far enough to "milk" or 
 "squeeze" business to the breaking point, when all of a sudden the pressure 
 is relieved, money is turned loose via the interest route, and we hear the 
 hired trumpeters of the system proclaiming the return of "prosperity" through- 
 out the land. 
 
 It will not avail our money lending brethren to deny that they do this. 
 Everyone who has had dealings with banks has witnessed this mysterious 
 and ever recurrent practice of refusing loans. But granted that they do not 
 do it, the mere fact that they can is enough to startle every citizen of the, 
 world and awaken him to a realization of his perilous position, 
 
83 
 
 The people, as a whole, in their dense ignorance of the true condition of 
 affairs, look upon these disturbances as a thing of course, much the same 
 as the ancients considered all calamities to be a vistation upon them manifest- 
 ing God's displeasure. When "prosperity" returns they think God has re- 
 lented. Little they know that this "prosperity" is the placing of loaned dollars 
 where they will do the most good in preparing the crop of milk and honey 
 to be harvested on the next "milking" and "squeezing" raid. 
 
 This legalized highwaymanry and brigandage is the direct result of per- 
 mitting money to be guaranteed against loss and assured of interest. It is 
 by this process that the guns, knives and "jimmies" of the profession are 
 stolen, with which they "take the road" on their periodical raids. 
 
 I say stolen, because money is not capital, and cannot by any of the laws 
 of political economy, or any other economy, be allowed to become capital by 
 proxy, and thus enjoy the rights to earn as capital. I furthermore say that 
 any man or set of men who will willfully take from his fellowman the fruits 
 of his labor by a trick and a cheat is even more despicable than a highway- 
 man or a brigand. The latter take physical chances in their depredations, 
 while the former hide behind a silly law and are immune. 
 
 I do not think any considerable number of men who are in the money 
 loaning business are bad. They honestly think theirs is a respectable busi- 
 ness and they do not know the evils thereof. 
 
 This is a most dangerous power, acquired through the erroneous conclu- 
 sion that money is capital. Thus the ignorance of the poeple of the true status 
 of money is the "capital" by which people are deprived of their title to their 
 money. Taking advantage of another's ignorance and "roping him in" is 
 known in common parlance as a "confidence," "bunko," or "skin" game. 
 
 In order that these games may be smoothly accomplished, it is of the 
 utmost importance that the victim shows no "lack of confidence." We have 
 all been admonished that it is this "lack of confidence" which causes trouble. 
 How true! 
 
 After being "bunkoed" we are taught that "repudiation" is a most sinful 
 thing. We accept these teachings and "come again." 
 
 I will be accused of intemperate language and unjust maledictions against 
 the dispensers of our thrice blessed "prosperity," but I only repeat the same 
 epithets used by themselves when speaking of others who have been guilty 
 of no greater and no more despicable "tricks." 
 
 I refer to the minions of the sugar trust who "inflated" the standard of 
 weight in the matter of paying duty to the government; and modesty forbids 
 me to print the expletives if some of these same gentlemen had sold a thou- 
 sand yards of silk, measured by the present standard, and upon electing to 
 purchase a thousand yards had discovered that someone had "contracted" the 
 yardstick till it was only eighteen inches in length, and he was compelled to 
 give it full credit as being still a yardstick. 
 
 In everyday life we look with disfavor upon the practice of keeping two 
 scales on hand, one for buying and the other for selling, one "inflated" and 
 the other "contracted." And yet the owners of our money are operating 
 upon the very same principle. They deal with the world's wealth with either 
 an "inflated" or "contracted" currency; the one a buying scale, the otner a 
 selling scale, to be used alternately as best serves their wishes. 
 
84 
 
 The difference between a legitimate or honest dollar and a loaned dollar 
 is the same as that which exists between the real fly and the bogus fly with 
 a string attached of the angler. When the real flies are hovering over the 
 lake, the fish are in high glee; "prosperity" is theirs. Every fly they catch is 
 really and truly theirs and serves the purpose intended. But when the bogus 
 flies with the invisible "leaders" attached appear they are deluded into the 
 same conviction that "prosperity" is again with them. To their sorrow they 
 find this to be a delusion. That invisible little string attached, the "leader," 
 is their undoing. It is the same little invisible string attached to loaned 
 dollars that lands the major portion of the world's production of wealth, and 
 unless the people prove more apt at discovering the delusion than do the 
 fishes they will continue to strike at the same old bait. 
 
 We have heard a great deal about the evils of the stock exchange, and 
 how the market for certain stock will be "bulled" or "beared" to suit the 
 avarice and designs of the operators. 
 
 We are very thankful that we are too wise to become one of the "sheep" 
 in this arena, and yet we are the sheep in a much more vital game; the 
 stakes are not stock, but our actual bread and butter, and we have absolutely 
 no chance in the game. 
 
 By permitting money to become centralized by the unfounded notion that 
 it is capital, and thus entitled to earn, we put the power into the hands of 
 tLose who hoard the money to "inflate" or "contract" the currency at will. 
 This automatically "bulls" or "bears" the fruits of our labor to suit the avarice 
 and designs of the owners of the currency. 
 
 We are thus the victims of a gambling game (sure thing) beside which 
 the New York stock exchange is but a social session of ping-pong. 
 
85 
 
 CHAPTER XVI. 
 RECAPITULATION AND REMEDY. 
 
 Money is an essential factor in the economical consummation of a com- 
 plex exchange. It is the medium by which the items which constitute the 
 world's wealth are economically exchanged one for the other. It has no 
 other use. 
 
 To fulfill this function, an exchange contemplates full and complete sur- 
 render of the title in both the money and the commodity. Any exchange 
 wherein the title to the commodity is surrendered and that of the money is 
 not, is abortive. It is the first step in that chain of unfair and unfounded 
 advantages which money enjoys. 
 
 One who borrows money for profit is one who hopes to share in this 
 unfair and unfounded advantage. He is alike culpable with him from whom 
 he borrows. The borrower exchanges these dollars, to which he has no title, 
 for commodities, and thereby acquires the title to the commodity. The one 
 with whom he exchanges is deceived and deluded in the belief that he is 
 acquiring title to the money. He is not. He is only borrowing it, and must 
 return the principal, every dollar of it, in the form of labor before he gets 
 the dollar, and must further, as a consumer, pay his share of the interest 
 thereon. The speed with which this will be accomplished depends on the 
 amount of business he undertakes. If he does nothing but "consume," he 
 will be a longer time in consuming his money. If he goes into business, the 
 increased cost of labor and material, on account of the fact that these same 
 laborers are the ones charged with paying, each his share of the interest, will 
 work the transfer with more alacrity. 
 
 The principal must be returned, the very same dollars which were bor- 
 rowed (any argument that the same dollars which were borrowed are not the 
 cnes returned, is futile; it is only begging the question). The interest is 
 supposed to be paid from the products of labor, which said products must 
 first be exchanged for cash. As all the cash, the principal of this debt, must 
 be returned to pay the debt, it becomes necessary to exchange them for more 
 borrowed money to meet the interest on borrowed money. There is no end 
 to it. 
 
 This neat piece of flimflamming is not possible without a "go-between;" 
 fome great captain of industry with the required confidence of the money 
 lenders in his ability to compel the people to return this loan with interest. 
 Our own governments, national, state and municipal, are playing in this inter- 
 esting role of a "go-between," and consciously or unconsciously assisting in 
 perpetrating this deception. 
 
 If A has money, and C has a horse, and C desires to sell his horse, that is, 
 exchange the title to his horse for the title of A's money, and makes this 
 proposition to A, it is evident that A could not make a counter proposition to 
 C whereby he would loan C the money and accept the title to his horse in 
 exchange. C is far too shrewd to entertain any such a one-sided bargain. So 
 A loans the money to B, B accepts C's proposition, and C accepts the money 
 in payment for his horse. C thinks he has sold his horse, because B said 
 nothing about the money being a loan. He has not, however. He has been 
 
86 
 
 fiimflammed into doing the very thing he just refused to do; he has parted 
 with the title to his horse and has accepted a loan of the money in payment. 
 
 If B had not been in a position whereby he could force C to return the 
 money with interest he would have been compelled to tell him it was a loan. 
 Under the circumstances this is not necessary. C is neatly duped and rests 
 content in the belief that he has the title to the money, and "where ignorance 
 is bliss it is folly to be wise." 
 
 This deception, wherein a loan is made to appear a sale, being the first 
 step, the second step is to make the deluded one pay a profit to the one who 
 deluded him in the shape of interest. This is accomplished by another decep- 
 tion. This interest is added to the sale price of the commodity B is vending 
 and covered under the blanket of a "fixed charge." C is thereby deluded into 
 the belief that he is paying for the cost of production of the article only when 
 he is in fact paying in addition thereto interest to B for and in behalf of A. 
 
 B thus abstracts from C the amount of the loan with interest, in due 
 time, to meet all requirements, and with a neatness and dispatch that makes 
 a court decree seem puerile, and incidentally keeps full and complete title 
 to the horse. 
 
 C is still wondering how this is done. The transaction gives him a feeling 
 of "great unrest." He has a vivid conception that his cost of living is very 
 high, but as yet he cannot connect the sale of his horse with the trouble. 
 
 The results would have been worse if B had bought C's labor with these 
 borrowed dollars. C would fondly believe that the money was his when in 
 f;ict he had been working all the time to secure a loan, and upon which he 
 may now begin to pay interest. 
 
 The final statement of the conditions are: A "sits tight;" C's horse be- 
 comes B's, and is so manipulated that this same horse compels C to look for 
 a job that he may get the interest on his loan, and, placing it carefully along- 
 side the principal on a platter, present it to B, that he (B) may give it to A 
 and thereby release his horse from A's mortgage, C all the time paying the 
 upkeep of the horse and a profit to B. 
 
 The final balance sheet shows the condition of business at the close of 
 this transaction as follows: 
 
 Profit Loss 
 
 A Interest None 
 
 B One Horse None 
 
 C None One Horse and Interest 
 
 This process, continuously repeated, results in A getting all the currency, 
 B getting all the capital, and C the opportunity to "get wise." 
 
 By this means A gets full and complete control of the currency — a catas- 
 trophe unforeseen and disastrous to the Republic. 
 
 This control of the currency makes possible the periodic "inflation" and 
 "contraction" of the currency, which have been evident in the past and which 
 are so familiar in the present, and which cause the heartrending miseries of 
 poverty to stalk gaunt-eyed through homes where peace and plenty should 
 be the rewards of honest labor. This condition places all business upon the 
 insecure ground of human weakness swayed by avarice. At any moment, 
 structures which have taken years of toil and application to erect may be 
 torn from their foundations and left smoldering wrecks, monuments by the 
 wayside, to mark the graves of martyrs to that erroneous idea that money 
 
87 
 
 is capital, and, as such, has the right to profit, and more, to have that profit 
 guaranteed. 
 
 The notion that money is capital is false, and the notion that it is an 
 especially favored type of capital which knows no law of loss is unfounded. 
 
 The phenomena of the rich growing richer and the poor growing poorer 
 in the midst of plenty; and of panics, industrial depressions, enforced idle- 
 ness, and hard times, ever recurring and at the most unexpected times, and 
 for no known cause, we have thus approached from the side of cause and 
 traced to effect, and have then retraced our steps from effect back to the 
 cause. The way is cleared of all obstructions. The chain of evidence is com- 
 plete. Money stands convicted as charged of false impersonation, to-wit: 
 Then and there, in the state and county aforesaid, money did falsely and 
 fraudulently, and with intent to commit a felony, represent itself to be capital; 
 wherein and whereby it, money, did, falsely and feloniously, take, steal and 
 carry away divers and numerous products of labor, in the form of interest, 
 from the people, etc. 
 
 This makes possible another crime charged against money, and of which 
 we, the jury, give a verdict of guilty as charged, to-wit: Tampering with the 
 currency in periodically raising and lowering the "standard of value" by 
 successively "inflating" and "contracting" its volume in circulation, thereby 
 indulging in that detestable practice of maintaining two sets of scales at its 
 place of business, one for buying, and the other for selling, purposes. 
 
 THE REMEDY, 
 
 Every evil has its remedy. The right of any question is the remedy for 
 its wrong. 
 
 Although it takes the people of the world a long while to fully comprehend 
 a wrong when they see it, and longer still to insist upon a right when it is 
 apparent, blinded as they are by mercenary agents and their own pressing 
 needs of the moment, we know that deep in every human breast is a hatred 
 of wrong and a love of right. This bit of human nature will in time assert 
 itself. To eliminate an evil practice from the world's activities, nothing 
 
 will work more like magic than to make that practice unprofitable. 
 
 Taking interest on money by a private individual is taking something for 
 nothing; he has nothing whatever to give in return. This practice must be 
 prohibited by law. , 
 
 This will remove the incentive to hoard money and thus take it out 
 of its natural channels. 
 
 Money being thus released will flow readily through its natural channels, 
 and the necessity of borrowing will be removed. Labor and its products will 
 then command money, and when once gotten it will be the possession of him 
 who gets it. 
 
 All banking and money lending should be done directly by the govern- 
 ment. The profit thus acquired would be an equitable tax for governmental 
 purposes. This tax would be apportioned among the consumers in 
 proportion to their respective amounts of consumption. The rich man, 
 being a greater consumer, would pay his just amount of tax, and the poor 
 man would pay in proportion. 
 
 There would be no dodging this tax unless one should refuse to con- 
 sume. Every borrower would become a tax collector without pay. This 
 
88 
 
 would do away with that vast and complicated machinery for tax collecting 
 
 now in vogue. 
 
 The people are paying this tax to the banks now, and, in addition thereto, 
 all the expenses of government. 
 
 The following figures are taken from the last United States census 
 report: 
 
 Total receipts of United States for the year 1913 $1,014,131,605.49 
 
 Total disbursements of United States for the year 1913 1,010,812,448.78 
 
 Total interest bearing debt for 1913 965,706,610.00 
 
 Total interest on said debt for 1913 at 4% 38,628,264.40 
 
 I»isbursements less interest on debt 972,184,184.38 
 
 Cash on hand in all banks, national, state, and private, and all 
 
 trust companies, June 4th, 1913 1,560,709,447.05 
 
 Loans, discounts, bonds, securities, etc., of said banks and trust 
 
 companies on said date 20,033,992,043.88 
 
 Interest on these loans at 5% 1,001,699,602.20 
 
 The same report states that these loans now average 6.19%. 
 Excess of interest over disbursements less interest on na- 
 tional debt $29,515,417.82 
 
 It is evident from the above figures that the people are now paying to 
 Wall Street and the banks a greater sum than the entire disbursements of 
 the Federal Government. This sum is paid to private individuals who 
 have no right thereto either in rhyme or reason and who give absolutely 
 nothing in return therefor. 
 
 By this method of permitting private parties to exact interest for the 
 use of money, they have been able to accumulate $20,033,992,043.88 of interest 
 bearing debt with $1,560,709,447.05 of cash. It is not difficult to divine the 
 mysterious disappearance of the fruits of labor. This ill-gotten wealth is 
 in the hands of a few, the bankers and their minions, those travleing the 
 upper road which branches at the first point of a "complex exchange." The 
 people from whom it was so deftly purloined and who are to continue paying 
 interest thereon, are those who travel the lower road. These roads do not 
 parallel each other but are constantly diverging, and the longer they are the 
 fiirther apart are the termini. 
 
 At present the people pay to the Federal Government $1,014,131,605.49 
 and to the banks the sum of $1,242,107,506.72. 
 
 The former sum represents the entire cost of maintaining the best 
 government under the sun. In return therefor we receive all the protection, 
 rights and privileges which an enlightened government implies. For the 
 latter sum we receive nothing. 
 
 The government's charge would not be interest, as now understood, but 
 would be an indirect tax upon the people for revenue only. 
 
 This change will cause no confusion whatever. Business will be con- 
 ducted on the same principles as at present. A few very "wealthy" gentle- 
 men would be "out of a job," and they might be brought to a realization of 
 some of the consequent horrors thereof. They will have enough laid by 
 t. carry them through the "hard times," however, and may join in the glad 
 Chorus when "prosperity" comes to the people in. its tjue sense, 
 
89 
 
 This will take the power away from the banks of periodically "in- 
 flating," and "contracting" the currency, and thereby precipitating the untold 
 miseries which follow in the wake of panics and industrial depression. 
 
 The bankers will be called upon to "render unto Caesar that which is 
 Caesar's." This is fair and just, and they cannot honestly refuse. 
 
 The government will have no incentive to hoard the money. The money 
 collected by this tax will be paid out for governmental purposes as at 
 present. 
 
 The private individuals will have no incentive to hoard money as they 
 will have no right to levy a tax upon the use of the same any more than 
 they have the right now to issue revenue stamps for a tax upon liquor. 
 
 It may be contended that the government's thus assuming the function 
 of the banks would be entering in competition with private business. 
 
 This is impossible as banking is in no sense a business. The essence 
 of business is to give value received, or, at least, a semblance thereof. In 
 this the banking business is totally deficient. They give absolutely nothing 
 in return for their gains. 
 
 This question is one which challenges your attention. That the world 
 is cursed with the sight of great wealth rubbing elbows with extreme poverty, 
 wherever civilization exists, is a well recognized fact. This cannot be satis- 
 factorily explained by those sophists who prate about different degrees of 
 ability in mankind. Look at the question from your own standpoint. I wager 
 tnat right in your own circle of acquaintances you know men, brainy, indus- 
 trious and sober, yet they are very poor, and others exactly the reverse who 
 roll in wealth and luxury. 
 
 This can be explained only by recognizing the fact that one has some 
 advantage, vouchsafed by law, which the other has not. That advantage is 
 one which permits him to appropriate the production of the other and give 
 nothing in return. The alpha and omega of this condition is the simple cus- 
 tom of permitting money to be perverted, i. e., diverted, from its natural 
 channels in commerce, and permitted to become a commodity, and more, a 
 profit producer. 
 
 This is, if not the sole means, the greatest cause for the dangerous cen- 
 tralizing of wealth in the hands of the few, and corresponding poverty and 
 misery of the many. 
 
 No nation can long survive a condition wherein a portion of its people 
 are morally and intellectually pauperized by abnormal wealth, and the re- 
 mainder morally and intellectually pauperized by abnormal poverty. Greece, 
 Rome and Poland exemplify this fact. 
 
 The danger of this condition was foreseen by Abraham Lincoln, whose 
 wonderful insight of events seems Godlike. At the close of the Civil War 
 Mr. Lincoln said: "We have just passed through a crisis which threatened 
 the very life of our nation, but I see in the future a greater danger which 
 threatens. It is the centralization of the wealth of the nation in the hands 
 of the few." 
 
 This fateful catastrophe may be avoided if the people will rise in their 
 majesty and remove the unjust means now employed to consummate it. 
 
 THE END.