USURY OPPRESSES THE POOR--Continued.
The influence of any act is not limited to the person acting. The
righteous act of a righteous man blesses himself and his generation
and generations yet unborn. So the influence of a wrong act is not
limited to the wrong-doer, but extends to others and is harmful to
those who had no voluntary part in the act. Though the wrong be a
personal habit and the sinner be himself the greatest sufferer, yet it
is impossible to avoid causing distress to others who are themselves
innocent.
Equity between those who participate in a wrong does not make a wrong
act righteous. Thieves may be just among themselves, in the division
of the spoils secured from others, but that does not make them upright
men, nor does it make their business honest. If it were possible to
preserve equity between the borrower and the lender upon usury, yet
that would not justify the act nor remove the evil. The collection of
their profits, which they divide equitably among themselves, imposes a
burden upon others who have no part in the transaction. Their
satisfactory agreement does not make the transaction less detrimental
to the general good. It may the rather partake of the nature of a
conspiracy against the public welfare.
The promoter of an enterprise on borrowed capital is practically but
the agent of the lender. He may be the director and manager but he so
conducts his undertaking as to gather the usury from others. When the
opportunities for profitable investments become rare, and money
accumulates and is lying idle, such promoters with their schemes are
encouraged in order to gain a profit on the investment, though others
suffer by it.
There lies upon this table a booklet, written in 1841, which charges
and proves complicity between the bankers and brokers of New York at
that time. The bankers loaned the brokers the money which they
reloaned at very high rates. The banks refused accommodations to those
in pressing need, compelling them to go to the brokers and to submit
to their extortionate demands.
Though there may be an equitable arrangement between the owner of
property and his broker and between the broker and his promoter, yet
in the last analysis it will be found that this equitable arrangement,
in its ultimate result, is of the nature of a conspiracy to compel the
innocent poor to pay the profits of both; their consent is not first
secured nor do they gain a single advantage and they are helpless to
resist.
Though the transaction may have been between the rich, a rich lender
and a rich borrower, yet the final result is that the interest is paid
by the poor. In Calvin's letter of apology he supposes a case of
equity between a rich land owner who is in need of ready money and the
man who has money to buy a farm, but instead lends to his rich
landlord and takes a mortgage. In this case the tenants of the
borrower must pay the interest and finally the principal also. This
increases the hardness of their hard lot. Though Calvin seems to
appreciate the severe conditions of the ordinary tenant in his day,
yet he fails to recognize that the very illustration he gives would
result in greater oppression.
When one entrusts his money to a broker for investment he does not
come in contact with those who earn the interest. It may pass through
a number of agents and the source from which the interest is drawn is
not regarded. When one entrusts his money to the "Security Co." in
their great building, surrounded by all appearances of unlimited
wealth, it is not realized that the interest returned is wrung from
the poor. Money does not lie in the vaults. It is loaned to others who
as agents do collect or gather from the poor. A loan is made to a
milling company and the interest is gathered from all who buy their
flour. A loan is made to a landlord and he collects the usury from his
tenants. A loan is made to a street car company and increase is
collected from the employes and from every rider. A loan is made to a
merchant and he collects from his customers.
It is easy to see who pay the interest when we make a common
pawnbroker our agent and see in his dingy rooms the evident distress
and needs of his callers. Many shrink from his oppressions who are
deceived by the splendid surroundings of the "Security Co." But the
interest is exacted from the same class as truly by one as by the
other.
Usury oppresses the poor by raising the price of all that he consumes.
Without being consulted and without the power of resistance he must
pay tribute to property for the very necessities of life.
He lives in a rented house. The owner has placed a mortgage on this
house and the tenant must pay the interest and more in his rental or
be ejected. The bread he must have is from wheat raised on mortgaged
land and the interest must be met in the price of wheat. The mill is
mortgaged in which it is ground and the interest must be paid in the
increased price of flour. The railroad is bonded and the interest on
the bonds must be paid in the price of its transportation, and the
merchant has a loan to enable him to do business and the interest on
this loan must be met in the increase of the profits on flour and all
other goods he handles. By usury a tribute is levied on his bread from
the wheat in the field until it reaches his tables.
In the same way he pays interest in the price of his meat, which is
raised on a mortgaged farm, transported over a bonded railroad,
dressed in a mortgaged abattoir and sold by a dealer doing business
on borrowed capital.
The same is true of his clothes; a first tribute must be paid to
property by the raw cotton or wool, then the transportation and the
factory and the merchant, in addition to the compensation for their
services, must meet also the interest upon their loans, and the whole
is summed up in the price the poor man must pay. He has no option in
the matter; he has no alternative, no method by which he can escape.
The same is true with regard to his fuel and his light.
The same is true with regard to car fares. In every ride he pays an
enormous tribute to invested wealth. The writer made a careful
estimate of the accounts of a car line in a small city where the
number of riders bore small comparison with the crowded cars of any
metropolis. When the cost of maintenance of the plant, including the
wear and tear and all repairs, and the cost of operation, covering all
current expenses, including taxes, were compared with the receipts
from the patrons of the road, it was found that less than two cents
per passenger was necessary to pay these charges and that three cents
had gone to pay the interest on the enormous bonded indebtedness and
dividends on the inflated stock.
The wage-earner, the pensioner and every person living upon an annuity
or fixed income from any source, must thus pay usury or interest on
obligations they never incurred. A large portion of their living is
thus taken from them, and under a system of general usury they have no
way of avoiding it. They must pay an enormous tribute to property in
providing the common necessaries of life.
Usury lowers the poor man's wages. The owners of property forbid its
use until such a concession is made by the laborer as they may demand
for the material and tools of production. Those who will use them and
give the owner the highest return for their use secure the work,
_i.e._, those who will bid the labor the lowest, who will use the
tools and work up the material the cheapest.
The demand of capital has come to absorb a large portion of the
produce of labor. In 1890 the wage-earners created a value of
$3,579,168,172 and received out of it wages amounting to
$1,981,228,321, leaving in the hands of the employers $1,687,939,851.
Labor thus received a little less than 53 per cent. of its product. In
1900 the wage-earners created a value of $4,640,784,931 and received
out of it wages amounting to $2,323,407,257, leaving in the hands of
employers $2,317,377,674. The employers and employes divided labor's
product so evenly that the difference does not amount to one-eighth of
one per cent.
The decade 1890 to 1900 has been of unprecedented prosperity to
capital, but the advantages to labor have not appeared. When the
number of laborers at the beginning and the close of the decade are
considered the annual income of the wage-earner at the close of the
decade is actually $7 per year less than ten years ago.
The tribute to property must first be gained, the wages are secondary.
If the tribute is not paid the enterprise is regarded as not
successful and the industry closes.
There is no protection for the laborer except the selfishness of
capitalists themselves in competition to secure the services of labor.
But the selfish strife has rather resulted in the combination of their
capital to dispense with labor or to cause the same labor to produce
more by the employment of more capital. The effect is to give
employment to capital rather than to labor. If labor can be dispensed
with by borrowing more capital, then a loan is secured and the laborer
is dismissed. Thus capital is made to crowd out the laborer and gains
for itself his reward. This diminishes the call for labor and
increases the number of the unemployed and they become competitors for
the privilege of working. The opportunities for labor becoming fewer,
the strife for work becomes fiercer. The laborer is helpless to
resist, as his wants do not stop; his family must be fed and clothed
and housed. The struggle is unequal between "flesh and blood" and a
material thing that, by a false economy, is given not only the power
of self-support but also continuous increase. For this reason
combinations of laborers never have been and never can be successful
in a conflict with capital. So long as the false principle is
admitted, all efforts must fail. So long as it is granted that
property has earning power, the effort will be made by the owners of
property, and always successfully made, to have property receive the
larger portion of the reward. The true order will be reversed; the
laborer will be given a mere subsistence while the increase will be
claimed for the capital; the very opposite of the true order, the mere
preservation or subsistence of the capital, while all the increase
belongs to the laborers.