ONE PER CENT. 



85 



ductive instruments to which wages can point as 

 the fruit of the laborers' thrift ! It cannot be 

 doubted that an enormous amount of waste of 

 wealth, of unproductive consumption, often of 

 the worst kind, has been the result of the aug- 

 mented wages of the working-classes. High 

 wages, if justified by the value of the work given 

 for them, are what every man in the country 

 should rejoice over, and wages so earned are an 

 excellent basis to establish a tendency to apply a 

 portion of them to capital and saving. But high 

 wages, exacted by strife, and accompanied by 

 little and inferior work, evoke a spirit most hos- 

 tile not only to saving, but also to a rise of the 

 laborers in civilization, in an improved moral 

 and social condition. They gravitate to gross, 

 wasteful, impoverishing consumption. 



There remains, lastly, to notice one more pow- 

 erful begetter of impoverishment — loans granted 

 to foreign countries. For a period now extend- 

 ing beyond ten years they have been given away 

 with a profusion truly astonishing. The terrible 

 disasters of the crisis of 1825, and the lessons 

 which it taught, had been forgotten. The desire 

 to lend to the multitudinous states of South 

 America had revived, and had swollen almost into 

 a passion. Peru and Venezuela, Honduras and 

 Guatemala, Turkey and Egypt, had swallowed up 

 many millions' worth of English wealth ; and 

 what has been the return ? The generous opera- 

 tion has been constantly repeated to the British 

 colonies, to Australia and New Zealand ; but with 

 this difference, however, in comparison with the 

 self- civilized countries just enumerated. The 

 proceeds of these loans were invested by the col- 

 onists in railways, in developing the emigration 

 of laborers, in the providing of clothing and other 

 necessaries for their maintenance — in a word, in 

 the production of wealth or capital. England 

 lost, for the time, what she lent ; but she gained 

 additional fields, more numerous flocks, greatly- 

 enlarged supplies of wool, all as directly enriching 

 her as if the colonies had been so many additional 

 English counties. Thus she obtains not only the 

 interest on these loans, which is always duly re- 

 mitted, but also a mass of goods which she re- 

 quires for her factories, or her food. Trade is 

 generated as if between two English provinces ; 

 exchanges of wealth proceed expansively. The 

 mills of England are more active, and her ware- 

 houses more full, precisely because her loans are 

 capital at work to produce wealth for her service. 

 The difference between such loans, and iron-clads 

 and palace-money lent to Turkey, is vast indeed. 

 Nevertheless, the depressing force for the 



time, if the loans have ranged beyond the amount 

 of England's saving, produces its inevitable ef- 

 fects. The same tale has ever to be repeated : it 

 is the squire of £50,000 a year spending £100,000 

 in draining. The creation of fixed capital, the 

 construction of machinery for producing wealth, 

 which repay their cost only after long years, is as 

 sure a creator of poverty for the time, if not made 

 out of savings, as if they had been raised up 

 for amusement and then thrown into the sea. 

 And it is very desirable, in this connection, to 

 understand the process of granting loans. They 

 are levied in the city apparently in money ; they 

 are described in pounds ; they are never spoken 

 of but as money ; yet money is wholly absent 

 from them. Loans are not, and cannot be, lent 

 in money by England — for the very simple but 

 very decisive reason that she does not grow gold 

 and silver in her fields or factories. If some 

 trifling portion of such grants crosses the water 

 in coin or ingots, those ingots have been pur- 

 chased with English goods: And it is those 

 goods which eveutually are the only things which 

 England can send away. And, in actual fact, 

 most loans are directly and at once remitted in 

 goods. The Australian colonist who commands 

 the credit granted in London by the loan he has 

 obtained, at once purchases supplies of clothing, 

 machinery, iron, and other products of an old 

 country, and transports them across the ocean. 

 It is absolutely certain, in ultimate analysis, that 

 no country can lend anything else but what she 

 has. Australia and California can lend gold ; 

 it is the natural produce of their lands, as iron- 

 ore is of England's : but the city would be under 

 an entire delusion if it imagined that the gigantic 

 receipts which swell the account at the bank of 

 the lucky borrowers were money about to cross 

 the water in ingots. The city possesses ma- 

 chinery of exchange — notes, checks, clearing- 

 houses, bills, paper of all kinds ; but the realities 

 are not in them, they are to be found only in the 

 goods which the machinery moves. 



A full understanding of this fact will enable 

 us to perceive clearly how loans directly attack 

 English wealth, English goods, and diminish 

 them. When they take their departure there is 

 less left at home to use and enjoy, less merchan- 

 dise to do business in, lighter weights for rail- 

 ways to carry, and — which is the important 

 matter — less wealth to buy with, less to give to 

 the shops and warehouses to procure the articles 

 which they contain. 



We now reach the question, What has the 

 rate of discount in the city to do with this state 



