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About The Conservative (Nebraska City, Neb.) 1898-1902 | View Entire Issue (Dec. 22, 1898)
6 Conservative * ritosi'Kitous Or Financial s. Financial Theories , IIV 1)11. S. A. IIOIIINSOX , Cliainnan of Committee on Finnneo , of the Now York Board of Trudo nnd Transpor tation. If there is anything which our friends who advocate free silver and fiat paper money claim to ABSOLUTE KXOW- know with absolute LEDUK BY FIAT MEN. lute certainty , it is that the gold standard is in the inter est of the creditor class and ruinous to debtors. ( Instance , Hon. Charles A. Towne , in Omaha Bee ) . This they all declare at every opportunity , and by teaching the people of the West and South that they are the debtors , and that the rich people of the East are their creditors , they have caused much prejudice and bitterness against the East. The term , "New York gold bug" has been so used that it lias come to mean to silver men and other fiatists a robber who is too cowardly to resort to force to despoil his victims. They carry their charges against the rich of the East still further , and claim that with the help of the gold standard they prac tically enslave even their neighbors ; that they have made New York a city of tenants by so impoverishing the major ity of its citizens that they are com pelled to rent instead of own their homes ; they assert that every family would own a homo if it could , and then present statistics to prove that compara tively few own their homes in New York. They also insist that the large average number of persons occupying a house in New York shows conclusively that those who rent are obliged to crowd together to reduce their expenses to the narrow limit of their incomes. They also posi tively assert that no one can long pay interest on money borrowed to do busi ness with , and not become bankrupt. Believing that facts would furnish the best answer to these claims and charges ; that the East is FACTS VS. FICTIOX. the great debtor .section of our country and that the most successful business men are the largest debtors , I indxtced the president and secretary of the New York Board of Trade and Transportation to ask each member of that body for an accurate and specific statement of his , or their in debtedness. This board is composed of about 800 firms and individuals , engaged almosl exclusively in mercantile COMPOSITION OF cantile and manufacturing THE BOARD. facturing pursuits , and it is probable that no other associa tion of equal numbers has a higher average of substantial success and en during prosperity among its members it is not in any sense an exchange , am' lothing is bought or sold in the board ; only three of its members are bankers. Many have not yet responded to the equest , but as those owing little or lothing would be quite as willing to send a statement as the heavy debtors vould be , and could do so with muck ess inconvenience , it is fair to infer hat those who have responded furnish an average that is well within that which a statement from all would fur- lish so far as proving a large indebted- icss is concerned. We have specific statements from 144 firms ( some of them ncorporated ) and individuals. These 144 members owed at the time ; hey responded , $148,908,144.97. Of this amount $183,302,191.72 was commercial ndebtedness , and $15,545,953.25 was se cured by mortgage on real estate. Of the mortgage indebtedness , $10,789- 050 was that of individuals secured by nortgage on their private real estate , and $4,750,903.25 was that of firms and was secured by mortgage on real estate jelonging to the firms. Probably most of the mortgage indebtedness was due to the savings banks of New York , be cause while these banks can loan 05 per cent of their deposits on first mortgage , ; hey are permitted to loan but 50 per ient of the market value on improved real estate , and only 40 per cent on un improved , and are thereby restricted to choice loans. As these banks have large deposits in banks of discount , much of the commercial indebtedness is undoubt edly due for savings banks money bor rowed from banks in which they have deposits. Many of the members of the New York Board of Trade and Trans portation being large employers of labor , some of them employing more than 5,000 men , they undoubtedly borrow a great deal of money belonging to those in their employ who have savings bank ac counts. The number of depositors in the savings banks of the state of New York on July 1 , 1898 , was 1,823,031 , and the amount duo them was $787,212,475 , the average deposit being $431. The inter est paid to these depositors for the year ending July 1 , was $27,350,719 ; a con siderable part of which Was ; probably paid by members of this board. These banks not being permitted to pay inter est on more than $3,000 due any deposi tor , are emphatically the banks of the thrifty wage earners. Here wo have reliable evidence that the average indebtedness of 144 mem bers of an assoria- ixcoxTUOvEimUon osed of BUS PROOF. hghly } suncessful business men , is $1,034,084.34. If the 800 firms and individuals belonging to the board are as heavy debtors as those who have responded , and it is probable that the average for all is larger , the total amount of their liabilities is $827 , 207,472. If it were possible to got as definite information regarding the debts of all the successful business men of the United States , it would certainly prove hat they have enough experience to each them what is best for debtors. Consider this indebtedness in connec- iou with the facts that the total amount of real estate THINK OF THIS AND - m Q f fc ALL MORTGAGES. United States , January 1 , 1890 , was iG,019,079,985 , while the total of mort- ; ages on acres , including acres in farms and in suburban and town property , was " 52,209,148,431 , of which but $1,085,000,000 vas on farms occupied by their owners , and you will see that the successful bus- ness men of the country owe very nuck more than the amount of farm nortgages , and probably as much as the entire mortgage indebtedness in the Jnited States. Again ; the state , coun- ; y , municipal and school district debts , ess the sinking fund , of Montana , Wy oming , Colorado , New Mexico , Arizona , Utah , Nevada , Idaho , Oregon , Wash- ngton , California , Nebraska , Iowa , tforth Dakota , South Dakota , Texas , Mississippi , West Virginia , Florida , and Kentucky , on January 1 , 1890 , was but $142,003,897 , which is $0,844,251.97 less ; han the indebtedness of the 144 inem- jers of the New York Board of Trade and Transportation , who have responded ; o our request. The state , county , mu- licipal and school district debts , less the sinking fund , of all the United States , ixcepting Maine , New Hampshire , Ver mont , Massachusetts , Rhode Island , Con necticut , Newr York , New Jersey and Pennsylvania , on January 1 , 1890 , amounted to but $607,241,827 , which is probably much less than the indebted ness of the members of our board. These men are debtors because they can make a profit on borrowed capital ; very few of them DEBTS MAKE be THEM CASH. but long and largo experience has taught them that it pays them to use the money of those who cannot make as much out of money as they can. By borrowing not more than half the actual value of their improved real estate , they get money for less than the income which they derive from the property mortgaged. Many of them own enough United States or other first- class bonds to enable them to borrow all the money they ever borrow , on call , hypothecating their bonds as security , thereby having the interest on their bonds , and getting money for about half the interest they would have to pay on money borrowed for a definite time. For a number of years money has been so abundant that they very rarely had to pay over 4 per cent for call loans , and most of the time at the rate of but from 1 to 3 per cent per annum. It would be absurd to call these men "slaves of the money power ; " they , and the many others AUB THEY NIG- GBRBTOOASn. women employed by them , together with our farmers and other honest