CONGRESS, UNITED STATES. 



143 



What I am endeavoring to impress upon the 

 House is that there should not be such a con- 

 dition of law, such an administration of its 

 finances by Government, as to give facility for 

 this usury. Why, sir, if men can lend their 

 money for seven, eight, nine, ten, eleven, 

 twelve, and fifteen per cent, interest, it is be- 

 cause of the high rate of interest paid by the 

 Government. It is axiomatic in finance (if 

 there is any such thing as an axiom in 

 finance) that upon Government securities 

 money can always be borrowed at the lowest 

 rate of interest when the Government is at 

 peace and when everybody has confidence in its 

 ability to pay its obligations. Now, of this 

 $4,000,000,000 of invested debt the Govern- 

 ment is a borrower for $2,300,000,000, or 

 more than one-half; and it borrows it at never 

 less than five per cent, and from that to six per 

 cent. The Government, which offers the best 

 security, pays these rates. Then, when you 

 come to the next best security, which is perhaps 

 on town, city, and county bonds, it is neces- 

 sary to pay six and seven per cent. When you 

 get to the next best security, say railroad bonds, 

 seven or eight per cent, interest is required ; and 

 when you come to borrow for business pur- 

 poses, because of the risks in business paper, 

 the business man must pay eight or nine per 

 cent, in Massachusetts; and going from the 

 money-centres southward and westward the 

 rate reaches ten, twelve, fifteen, and twenty 

 per cent. 



" Now, I want the Government, for its im- 

 mense loan, to come into the market as a 

 borrower at a lower rate of interest, and then 

 the rate upon the next best class of securities 

 will range lower, and so on till the rate of 

 interest on all forms of indebtedness comes 

 down. That is why I want 3.65 per cent, 

 interest bonds issued by the Government and 

 offered as an investment to the people. Let 

 the Government go into the market as a bor- 

 rower at that rate, and the general rate of 

 interest will come down. You cannot get it 

 down by simple legislation against taking 

 usury. That is impossible, because men loan 

 their money at what they can get for it on the 

 best security they can get; and upon this 

 axiom of finance, low rate of interest with 

 good security and high rate of interest with 

 poor security ; and the business investment is 

 the lowest security." 



Mr. Dawes, of Massachusetts, said: "Mr. 

 Chairman, those who are in favor of this bill 

 and of the policy of expansion which is sure 

 to follow from it, as well as those who are op- 

 posed to the bill and to that policy, all alike 

 agree that the present condition of things is 

 fraught with evil of an alarming character, 

 demanding the attention of the people's Repre- 

 sentatives on whom that people have waited 

 patiently for action till patience itself is well- 

 nigh exhausted. 



" The President of the United States and the 

 Secretary of the Treasury call your attention 



to this condition of things, and press upon us 

 immediate action ; the President putting it be- 

 fore all other matters in his message. The two 

 gentlemen who contend upon this floor for the 

 honor of the fathership of this measure vie 

 with each other in calling attention to the ne- 

 cessity of action. We are told, on the one 

 hand, by the Executive, that there is labor 

 enough and capital enough in the country ; 

 that labor is knocking at the door of capital 

 and anxious for employment ; that capital, for 

 some reason or other, closes its vaults and 

 holds more fast than ever its grip upon the 

 money of the country. We are told by our 

 distinguished friends who have advocated this 

 measure that the people are crying out for em- 

 ployment; that twenty-five or thirty thousand, 

 more or less, in my own State, and twice that 

 number in Pennsylvania, are to-day without 

 employment ; that the banker and the capital- 

 ist are clutching the money and holding it back 

 from active operation in business. 



" So, Mr. Chairman, you see that those who 

 look upon this measure from opposite sides 

 agree that the evil and the mischief to be 

 remedied are the same. It comes, then, to 

 the question "whether the measure before the 

 House will remedy the evil. There is no lack 

 of earnestness in the demand for the remedy. 

 There is great diversity of opinion as to what 

 will prove a remedy. Those who pursue the 

 line of policy indicated by the bill declare that 

 the evil lies in the policy favored by those who 

 oppose it ; and with equal earnestness they are 

 met by the other side with the argument that 

 it is the very condition of things you propose 

 to aggravate and perpetuate that has brought 

 about the calamities all of us deplore. It 

 would be quite well for us to answer the ques- 

 tion why it is that labor is out of employment 

 and that capital is not willing to trust itself in 

 the hands of the laborer. My colleague, in 

 attempting to answer this question, says that 

 while you can borrow money enough on Wall 

 Street or in any other money market on call 

 at two or three per cent., when it is attempted 

 to borrow it for investment in active business 

 for any length of time you must pay six or 

 eight per cent. The fact is substantially as 

 stated by my colleague. The reason he gives 

 why the capitalist will not loan his money at 

 the same rate on investment that he will upon 

 call is, as h& says, because he is afraid that 

 the Executive and Congress will contract the 

 currency. 



"Now, I insist upon it that there can be no 

 question that the reason why you are obliged 

 to pay more for money on time than on call is 

 because of the apprehension that Congress is 

 going to inflate the currency, not to contract 

 it. And it is because the capitalist knows that 

 an inflated currency is not worth as much as a 

 contracted currency ; that it will not purchase 

 as much; that its purchasing power is less. 

 And if he is to be paid nine months or a year 

 hence in a currency whose purchasing power 



