is able by brawn or brain to create that which shall correspond to his hunger, physical, intellectual, social, political, æsthetic, moral or religious, is a producer of wealth, worthy of a degree of honor proportioned to the difficulty and delicacy of the task involved in his creative labor. A True Socialism. Every step of advance in human civilization is marked by two great characteristics; first that it is usually the result chiefly of the intellectual or moral force of someone, or at most a few great souls whom God raises up for that purpose; and, second, that the practical benefits growing out of their invention, discovery, thought or toil, soon become the common property of all men. The safety lamp invented by Sir Humphrey Davy soon illumined every coal mine. The latest subtle investigations and the most astounding results elaborated by Edison are soon seen in the cheapened modes of travel, increased agencies for adding to the common comfort of men everywhere. Even the paupers in public hospitals participate in the latest discoveries made by the researches of the great students of biology, medicine and surgery. Nothing can be more unphilosophical, more shallow, more suicidal, than the attempt to draw a sharp line between the "toiling masses," including therein only those who labor with their hands, and the rest of mankind, attributing to the first class the function of creating wealth, and looking upon all the rest as drones and consumers. In every civilized community like our own the population is a solidarity in which all participate in the fruits of the labor of each. All who work conscientiously and intelligently, whether with brawn or brain, contribute to the common fund which we call wealth, and each man in proportion to his capacity shares therein. The Independent. THREE ANGELS. Three Angels share the lot of human strife, BANKS AND THEIR USES. T. J. MORGAN. It is clearly evident that there is a widespread misapprehension regarding the nature, uses and powers of banks. In many minds banks stand as the symbol of the money power, and banks and bankers come in for their share of the abuse that in some quarters is so profusely heaped upon men who have money. Apparently a good many people think that a bank is a soulless corporation, organized in the interest of greed, and managed as an instrument of oppression. It is very easy, therefore, to see how a very strong prejudice can be created in the minds of working people against banks and how they may be led to overlook entirely the beneficial influence which these institutions. constantly exert. What Banks Are. What is a bank? A description is perhaps better than a definition. A company of individuals unite, form an organization with a president and board of directors, and take out a charter authorizing them to carry on business according to the laws of the State or nation. Those desiring to co-operate with them contribute money which constitutes the capital stock, and receive in turn certificates of shares indicating the amount of each man's holding. The stockholder is entitled to his pro-rata of the profits, if there are any, and in many States, if not all, he becomes responsible in proportion to his stock for all the debts that may be incurred or of losses sustained. The officers erect, purchase or rent a building suitable for the transaction of business, which, in common parlance, is known as the bank; they provide vaults for the safe keeping of money, valuable papers and books entrusted to them, provide the necessary furniture, and engage the services of competent cashiers, tellers, bookkeepers, and begin the transaction of business. Banks undertake to do a variety of things, such as caring for and settling estates, col. lecting notes, etc., but the three principal things are receiving deposits, lending money and effecting exchanges. In every community there are thrifty people who have money which they do not care to keep in their homes where it is exposed to loss by fire or theft, but who prefer to take it to the bank, put it on deposit, where it will be kept in safes, and ready to be paid to them whenever they need it. A bank gives to a whole community a sense of security and serves as a constant check upon thieves and robbers. If it were generally known that surplus money were kept in stores and private houses the temptation to thieves" to break through and steal" would be very great; but the knowledge that the surplus money of the community is kept in the bank, under lock and key and under the eye of watchful policemen or special guards, largely removes the temptation to burglary. Banks thus become the protectors of private property, the conservators of public order, and, indirectly, the promoters of public morality. How Exchange is Effected. The bank performs a most useful service by effecting exchanges. Almost everybody nowadays who handles any considerable amount of money and deals with a large number of persons transacts his business without gold or silver or even paper money, but by means of bank checks. The church treasurer gathers up the Sunday collections, carries them to the bank and deposits them; then he draws checks on the bank with which to pay the pastor's salary, the janitor's wages, the coal bills, the sums designated for the various missionary causes, and for all other items of expense during the year. The merchant at the close of each day's business sends his surplus cash to the bank and then pays all the multitudinous bills that come in to him by checks on the bank, and thus it is with all other classes of citizens. Not only does the bank effect local exchanges thus between the grocers, butchers merchants, doctors, pastors, teachers, and others, but it effects exchanges also between residents in the community and those outside. When the farmer comes to town and sells a load of corn he carries his money to the bank and deposits it for safe keeping, and as occasion requires he pays his bills to the storekeeper, the doctor and others by checks on the bank. The man who buys his corn instead of paying him money which he may lose or have stolen from him, usually gives him a check on the bank, which he can carry and put on deposit as if it were greenbacks or silver or gold. The local merchant who has bought goods in a distant city or in several cities, draws a check upon the bank, or purchases from it a bill of exchange which he sends the creditor, instead of being obliged to send money by express at large expense, or through the mails at great risk. A great organization like the American Baptist Home Mission Society, whose receipts and disbursements during the year aggregate about one million dollars, handles very little money. The ten District Secretaries, located in different parts of the United States, church treasurers and contributors desiring to send money to the Society go to the local bank, purchase a draft and send it to the treasurer, which he places on deposit in the city bank where he does business. During the year these deposits often reach an aggregate of half a million dollars. Then when the treasurer wishes to pay the salaries of missionaries, whether in Maine, Oregon, Texas or Mexico, he does not need to go to the trouble and expense and risk of sending to each one in cash the exact amount due him, but he simply draws a check upon the bank and mails that to the missionary; thus the transfer of money from New York City to every part of the continent is made without expense to the Society and without risk, for if any check is lost in the mails or destroyed in any manner, or even stolen, it is worthless without the endorsement of the payee, the missionary to whom it is sent; and if it is not found a duplicate can be issued in its stead. How it would be possible to carry on modern business without modern banks I do not know. Bank Loans. But the greatest service perhaps which the bank renders is that of lending money. In order to meet the heavy expenses of carrying on its work, the bank must have some source of income. Banking is a matter of business and not of philanthropy. Accordingly banks lend to customers on approved security, not only their own money (capital stock), but a certain per cent. of the money entrusted to them as deposits, being careful to keep enough on hand to pay their depositors who may call for their money. A large proportion of the business in any community is carried on by a system of credit, and if no money could be borrowed from the banks business would be necessarily very much reduced in quantity, as well as hampered in freedom. The commission merchant in the village buys from the farmers whatever they have to sell-wheat, corn, cattle, hogs, horses, etc.—and pays them cash, but in the meantime he must send these articles to market, be at large expense for shipment, care, etc., and in order to do this he very frequently finds it necessary to borrow from the bank money enough to pay the farmers and meet his expenses until he shall be able to sell his accumulated purchases and reimburse himself for his outlay. The village merchant, in order to accommodate the farmers by selling them goods on time, waiting for his pay until they have sold their crops, goes to the bank and borrows money with which to pay for his goods and meet current expenses for clerk hire, store rent, family living, etc. Without this accommodation from the banks multitudes of village storekeepers would be unable to carry on their business. Wholesale merchants in great cities often sell large quantities of goods, sending them all over the country and giving the retail merchant time in which to pay for them; the wholesale merchant, meantime, goes to the bank, borrows sufficient money to pay to manufacturers and others for the goods he has purchased, and which he has sold on credit. The manufacturer employs in his mill a multitude of people in the production of various articles, whether of steel rails, locomotives, woolen goods, clothing, agricultural implements or jewelry, which cannot be disposed of until some time in the future; mean. time, in order that the men who work for him may receive their stated wages at the end of the week, so as to provide the necessities of living for their families, he goes to the bank and borrows money with which to pay them. If he could not do this the workmen would suffer great inconvenience and oftentimes serious hardship. These instances might be multiplied one hundred fold, but they are sufficient to indicate the fact that modern business is largely a business of credit, which is rendered possible chiefly by the modern banks. Banks are thus a sort of reservoir into which the little streams of savings flow from a multitude of sources, and from which in the form of loans they go out to stimulate trade of all kinds and to benefit every class in the community. The Business of Banking. It is doubtful if any branch of business in our day has received more thoughtful attention, or is conducted more in accord ance with sound principles and honest methods, than the system of banking. Mistakes are sometimes made, and occasionally bank officers prove to be dishonest, but it may be confidently asserted that bankers, as a class, are honorable, upright, useful members of the community, performing a varied, delicate and invaluable service. It is a mistaken notion that all bankers are rich. The privilege of handling other people's money does not necessarily make one a rich man; it is not infrequently the case that the only real wealth the banker has is his business ability, his integrity, and his reputation for uprightness-wealth worth possessing. It is often the case that the stock in the bank is held by widows, by orphans, by schoolteachers, by pastors, by farmers, by mechanics and others, who have saved something out of their scanty earnings and laid it by for a rainy day in the form of a little bank stock on which they receive their share of the profits earned. The stockholders are the real bankers, and the senseless cry against bankers, therefore, is often a cry against the most worthy people in the community. It is a mistake to suppose that banking is necessarily a profitable business. There are a great many perils attending it, a great many risks, and unless a bank is managed not only with scrupulous fidelity and incor. ruptible honesty but with great sagacity, it is very liable to be met with bankruptcy. Times of distrust are especially perilous for banks, and anybody who needlessly and without cause stirs up unjust prejudice against banks and bankers not only endangers them, but the entire community which is served by them. He is a public enemy, and should be treated accordingly. (I am not a banker.) It is a mistake to suppose that bankers are necessarily "Shylocks," intent upon money getting; multitudes of American bank officers, directors, stockholders, are Christian men and women, giving liberally according to their means for every good work. They pay taxes for the public improvements and for current governmental expenses; they contribute to the support of the church, to the prosecution of missions, and for all worthy charitable enterprises. Some of the world's greatest philanthropists have been its great bankers.-The Baptist Outlook. CONCERNING INTEREST. T. J. MORGAN. Some months ago I sat riding across Arizona in a Pullman sleeper in company with three gentlemen who lived at Phoenix. They were strangers to me, but I was interested in listening to their conversation. One of them, a business man of certainly ordinary intelligence, expressed himself with great plainness and some asperity against money lenders, saying, substantially, that if a non-resident had loaned to some man in Arizona $1,000 at 10 per cent. for ten years and had received his interest, he had gotten all his money back and was entitled to nothing further, and that if he insisted upon taking the $1,000 originally loaned he was robbing the country to that extent, because he was taking out $1,000 more than he had put in. His statements seemed to be accepted by his companions as correct. This is by no means an isolated instance. There are multitudes of people who look with a good deal of bitterness upon all money lenders; the terms "bloated bondholders," "Shylocks," "money kings,' usurers," "gold bugs," and others, are applied as expressive of a very wide-spread and deep-seated conviction that men who lend money for interest are a bad lot; that their business is nefarious, and that their creditors are victims of oppression. " " What is Money? What is money? Money stands as the representative of labor, of toil, of effort, of thrift; it is a form of wealth. A group of men are engaged in manual labor-we will say cleaning the streets of a city-and receive as compensation for their hard toil $1.50 a day; at the end of the week they receive their wages amounting to nearly $10 each. Suppose that each one of them is able to save out of his week's earnings $5. One of them puts his $5 every week into a savings bank and allows it to accumulate until it becomes $100; a second invests his money in a horse; a third with his buys a little piece of ground; a fourth with his purchases a cottage; while a fifth expends his in drink, and has nothing to show for it but drunkenness, debauchery and decayed powers of body and mind. In each of the four cases first named the wealth accumulated represents energy, industry, toil, thrift, and is a credit to the owners. Every right-minded man will agree in commending their thrift while condemning the fifth as a spendthrift. Now, what shall they do with their wealth? The man who has a piece of land rents it to his neighbor for a pasture and receives a little income every month; the man who has a horse hires him to some one who has none and receives in return pay for the horse's services; the man who has bought a little cottage leases it for a small monthly compensation, and each of these men is regarded as doing a legitimate, praiseworthy business; none but the thriftless, the indolent, would think of abusing them for their thrift. They stand as representatives of the class of people who constitute the real bone and sinew of civilized life. The man who has deposited his savings in a savings bank receives a stipulated sum for the use of his money in the form of interest; perhaps it is less in amount, though attended with less risks than that received by either of his associates. Why should they be commended for thrift, and he be denounced as a money-lender? His method of utilizing his accumulated wages so as to make it profitable to him is just as legitimate, just as honorable, just as praiseworthy, as if he had invested it in horses, lands, or houses. There is no difference in the principle. Providing for Old Age. Let us look at it in another way. A B is a hard-working, industrious, thrifty man, who by labor, self-denial, sagacity, has accumulated a few thousand dollars, which represents a life of toil; he has reached the age where he is no longer able to endure the heat and burden of the day, is incapable even of transacting ordinary business, and must now rely upon what he has saved during the years when he was able to toil. If he should consume the principal it would soon be exhausted, and he would find himself an object of charity or an inmate of the poor-house; instead of that he offers to lend his capital to those who are in need of money and can profitably utilize it in some form of business, and on the interest received from his carefully garnered store he is able to keep the wolf from the door and spend his declining years in comparative independence and comfort. If, instead of accumulating his savings in the form of money, he had accumulated them in the form of a farm and a home and then by the aid of hired labor had secured from it a support during his declining years, no one would have criticised him for that. Why should he be criticised if, for ample reason, he has seen fit to accumulate his savings in the form of money to be loaned at interest? Let us look at it from another point of view. By means of hard labor and honorable methods C has accumulated $10,000, but is suddenly smitten down by death, leaving a widow and orphan children, whose only support is what the father and husband had left to them in the form of money. They are unable to utilize this money in any manner of trade or active business, and so they loan it to those who can utilize it in trade, and they receive from it a stated income in the form of interest, which barely suffices to meet the necessities of life. Who shall begrudge the widow and the orphan the annual income in the form of interest? And yet they are money lenders, bond holders. Capital Produces Wealth. Look at it from still another point of view. Dhas secured from the Government 160 acres of public land, on condition that he will live on it and make it his home. But he is single handed. He has no house in which to live, no tools with which to work, no fence, and absolutely nothing but his hands, and so is helpless. He has, however, good character and reputation for industry and integrity, and so is enabled to borrow from a neighbor enough money with which to build a house, fence his land, buy a team and a few tools, and some seed, and enough food to last him until he can raise a crop. Thus aided he begins the work of developing a farm, and in the course of time, by very hard work and the practice of small economies, he is able to pay not only the interest on the sum borrowed, but the principal as well, and has left for himself a comfortable home. The money which he borrowed was the means that enabled him to lift himself from absolute poverty and helplessness on to a plane of self-support, comfort and independence. Why should he think hard of the moneyiender? Should he not, rather, be grateful that there are men who have money to lend? These illustrations are sufficient to show that there is a legitimate field for money lending and that loaning money on interest is just as legitimate and praiseworthy as working for wages, or letting, for hire, horses houses, lands, or any other form of wealth. Who are Shylocks? Of course, a money lender may be exacting, and may take advantage of other men's necessities, and so may grind the poor and oppress the unfortunate; so may a physician charge too high for his services or a pastor demand a greater salary than he earns. My own personal experience is, that the men who employ labor are the ones who are quite as likely as any other class to fail to receive full returns for money paid that incompetent cab driver who nearly overturned me in the street and left me on the sidewalk instead of leaving me at my destination; that plumber who did a bad piece of work for me while insisting upon full pay; the man who charged me $5 for a worthless pair of spectacles; the tailor who sold me that suit of clothes that proved to be practically worthless; and many others whom I might mention, come to my mind as I write as illustrations of the fact that "Shylocks" are not alone in a class by themselves who are to be abused for dishonest methods. Perhaps the most common complaint made against money lenders is because of exceptionally high rates of interest charged, but my impression is, after thirty years' experience both in borrowing and lending, that ordinarily the high rate of interest is due almost entirely to the exceptional risks that are taken. Money is likely to command a high rate of interest where there is a great scarcity of it and where the security offered is not of the best. It is very frequently the case that men who lend money at a high rate of interest lose more than enough of their principal to counterbalance any advantage which the high rate of interest offers. Besides what has been said, it should be borne in mind that were it not for capital in the form of money that could be borrowed on interest there would be very little industrial progress of any kind. Business would stagnate; enterprise would be shackled. Credit is the life of trade, and money lending the foundation of business.-The Baptist Outlook. |