— i6 — 



is unsafe, in that it furnishes no security to the holder of the paper 

 money issued by such banks ? 



We will now show that such a system of banking is too costly. 



If we ascertain from time to time the total wealth existing in any 



country, it is easy to determine the actual annual rate of increase, by 



dividing the intervening time into years, and ascertaining the per 



centage corresponding to one year, by a little calculation. 'I'hus the 



United States census, for i860, gives the assessed valuation of the 



Total real and personal wealth as - $12,084,560,005 



The same for 1870, .... 14,187,986,732 



The same for 1880, .... 16,902,993,543 



The rate of increase, per annum, for the ten years ending 1870 

 is less than 2 1-2 per cent. The rate of increase per annum, for the 

 ten years ending 1880, is less than three per cent. We presume that 

 the average rate of interest in this country is not less than 7 or 8 ])er 

 cent; if it is seven, it is nearly three times as much as the average 

 increase of wealth. 



Now, if the average increase of wealth, per annum, in the United 

 States is 2 1-2 per cent, and the average rate of interest is 7 per cent, 

 wtiere does the 4 1-2 i)er cent come from, which money-lenders 

 demand for the use of their money, in excess of the said average? 

 And since, not only money-lenders, but all capitalists, demand a 

 similar rate for the use of their capital, our dilemma increases. Hy 

 what process of arithmetic can the situation be explained !" If all 

 capitalists and money-lenders w^ere to demand and receive but 2 1-2 

 per cent, all those who have no capital, but who earn their living by 

 their labor, could not accumulate, and at the end of each year would 

 find that all that they had appropriated would be what they had con- 

 sumed. But the fact is that most capitalists and money-lenders do 

 receive a much higher rale, and some large fortunes have been 

 accumulated so rapidly, that the percentage of increase can only be 

 expressed by hundreds. ("an it be exj)lained by sui)posing that so 

 large an amount of capital is idle, or receives no interest, and that 

 another large amount receives so small an interest as to account for 

 the difference between the average increase of wealth, and all the 

 varying rates of interest to capitalists and money-le^ws from that 

 which exceeds the average increase of wealth, to that re])resented by 

 the most rapid accumulation ? May we not venture to introduce here 



