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The Ethics Of Borrowing

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Francis E. Nipher, in one of the "sound money" pamphlets with which the money sharks are fiooding the country, discusses the ethics of "borrowing" from a gold Standard standpoint in an unusually frank though cold-blooded and repulsive manner. He says: "The borrower is a man who wishes to build and enjoy a flner house than he can build with his own money, and he believes that his business will justify him in doing so. Of that he must necessarily be the' sole judge. It must be assumed that.he is to rely on his own judgment, and must be responsible for his own acts. The borrower is a man who wishes to plan a larger business than he can carry with his own mearis, believing that he will find it more profitable to do so. He is a man who wishes to improve his farm, or to increase its extent, beliving that it will be to his advantage. It is the borrower, who is responsible for the planning and the execution of the business which is to yield the profit. The lender has no part in it. If the borrower cannot see gain enough in his plan to enable him to pay the agreed interest and the principal, and leave a profit, as a man of prudence and honor, he should not borrow. And it must be fundamentally assumed that he knows that every time-transaction, in any kind of business, involves the interest and future actions of others, and may result in disappointment. The community should not be asked to insure him a profit, or to insure him against loss, in an affair which he alone has planneü." And that is where Mr. Nipher oecomes misleading. Bimetallists ask the community to insure the success of no man's venture. What they do ask is that the community or the nation shall insure that' every man's time oblTsrations shall be measured by a Standard which shall come as near as possible to unvarying stabüity and be an impartial arbiter between borrower and lender. But as a man of "prudence and honor," this is just what Mr. Nipher does not want. The "future interest and action of others" have made it necessary for the great bulk of the debts owed in and by this country to be paid in a much dearer money than they were contracted to be paid in, to the manifest loss of the one and gain of the other. This is not an affair which the borrower alone has planned. Indeed the borrower had nothing to do with it. It was planned and executed by the wold's big creditors (finajiciers) with consummate skill and the fact that it has enabled all crediteurs. Mg and litUe, to get something- for nothing, to acquire wealtl. not justly their own, has made them, as a dass, defend its iniquity and seek to hide its rottenness behind the breastworks of national honor, faith of the nalion, etc. And then he says: "Let us suppose that the gold dollar is increasing in value, that it is beeojning harder to pay debts and that borro.wing money is becoming lest and less profitable on this acoount, and this .notwithstanding the fact that the rate of interest has been steadily falling during the last thirty years. Isn't a man supposed to know the condition of the .markets when he goes into them? Suppose a man borrows an elevator fuli of wheat hoping to make some money "hoarding" it far higher prices. Is not every man supposed to know thai in such a transaetion disappointment and loss are possible? Is the country to be asked to debase its cuinage and to elect some paternally inclined person president of the United States because people do no: behave theraselves wisely?" And the logic of this is that men of the borrowing class, men whose intelligence, industry and perseverance has subdued and developed a continent in the last halt century, were to anticípate that their creditors would, through eonnivance with a great and powerful government, so manipúlate the national Standard of value that the burden of all debts are enormously and dislionestly increased. The' elevator of wheat is an illustra■ tion not in point. The Citizen has a right to expect that his government will maintain an honest and equitable measure of value. With the certainiy that the money which is borrowed today must be returned toröorrow in money of a dearer standard, there will be few borrowers. And here comes the most astonishing proposition of all. "There is not a farmer in the country who would hesitate to take advantage of a rising wheat market. And he would not care one farthing whether the increasing price of his wheat was due to a short erop, or to the operations of speculators. He hails such a situation with delight, notwithstanding the fact that it may bring want and sorrow to the poor. This is considered as justifiable in a man whose wealth is in the food products, which the poor nrust have in order to sustain life. Why should it be considered improper for one to take advantage of a similar rise in the value of money, whioh' is merely a convenient medium of exchange in trade? "If money is known to be increasing in value, it serves to encourage people to save their money. It encourages habits of thrift. It would also be a matter which should be considered by those who borrow, just as one should consider a similar tendency in the price of iron, if he deals in that article. There would be an end to all business, if men could plead the baby act when their proflts are not to their liking." This is. the first time in the financial controversy that a writer of presumed standing, on either side, has confessed to anything less than a stable and unvarying standard as his ideal "honest raoney," or has suggested even that a national standard of value is a proper subject for stock exchange gambling. But this fellow, in his effort to please the powers for which he writes, and with refreshing bluntness, unmasks the gold standard position. "Why 3hould it be considered improper to take advantage of a similar rise in the value of money which is merely a convenient medium of exchange in trade?" From the standpoint of the gold Standard it is not improper. They have had the advantage of a greater rise in the value of money in the last 25 years than the world has ever witnessed before. They desire to hold this advantage and secure the added advantage of a still further rise. It does not matter if this rise robs the debtor of the just rewards of his toil. It does not matter iflt stagnates trade and paralyzes industry. It does not matter what happens so long as the bond-holding classes get their pound of flesh. Of course, it is not improper to make a man who is foolish enough to borrow pay two for one. He should know better. He should know that the money kings have the power to manipúlate the value of money and that they are going to manipúlate it in their own interests. But a proposition to lessen the burden of debt is a norse of another color. It is dishonest, anarchistic, a stealthy assassination of national honor. But we know full well that money is more than a medium of exchange and a Standard of value. It is a record of deferred payments. And Mr. Nipher should know, if he is conversant with the world's financial history, that nothing brings an end to business so quickly as the knowledge that this record has been tampered with in the interests of the lender, that the borrower must not only pay legitímate hire but an unearned increment which renders his business unprofitable. On the whole, this and other novices, who essay to teach the people on the subject of finance and economy, are serving the cause of bimetallism well. The better the true position of the gold-bugs is known the more intelligent voters will be arrayed on the other side. THE DE MOOR AT will issue on June 17th a sixteen page edition of eig-ht thousand copies which will reach every home in Washtenaw County and every student in the University. This edition will be devoted to an exhaustive exposition of the resources and attractions of Ann Arbor and vicinity - a repository of information which will insure its preservation for future reference. The publication of this edition will give the merchants of Ann Arbor an unexampled opportunity to talk to their customers. It will be the one grand opportunity of the year to reach every consumer in Washtenaw County at a moderate cost. George J. Mann, of Lodi, who was the candidate of the Democratie party for the office of county treasurer in 1896, will again be a candidate for the nomination for that office this fall. Mr. Mann is a representative farmer as well as a representative Democrat, a man of strict integrity and good business capacity and if renominated he will be elected and make an excellent treasurer. According to Detroit papers, there will be a reduction of nearly $2 a thousand in the tax rate this year over that of last year. This is due, it is claimed, partly to the reduced budget and partly to the increase in valuation. The assessors have finished their work and leave the assessed valuation at $206,609,470, something like $800,000 larger than the valuation last year. The tx rate will be $15.23 per thousand. Now, if Ann Arbor's assessor can only show an increase in valuation and make glad the heart cf the citizen.


Old News
Ann Arbor Democrat