All men have sacred rights that must be regarded. That these rights are equal is so familiar and stale an expression that it hardly need be spoken. "All men are created equal," each having rights, that are inalienable, and each having the right to resist the encroachment on his rights by another. To protect these rights governments are instituted.
The vital energy of a man is his own and his right to it must be regarded. Since the abolition of chattel slavery this has been indefeasible except for crime.
He has a right to his own vital energy and to all that his own vital force produces. He has a right to his property inherited, earned, or however secured, except by fraud. He has no claim against the vital energy of his fellow man, nor has he any claim whatever against the property of another.
The working man needs capital. His vital energy must waste unless there is material upon which it may be expended. There must be the tree, land or material in some form, upon which he can work. But give him the world raw and unsubdued and he can transform it again as he has. He can build again everything on land and sea, the farms, towns, and cities, and the floating palaces. He can again digout the mines and refine the silver and gold, mould the clay, smelt the ore and shape the iron. His needs and his power, however, give him no claim to the property of another.
The man of property is dependent upon the laborer. He may be the owner of farms, forests and mines, of horses, flocks and herds, of railroads and oil wells, yet these will not minister to him nor serve him without the laborer. His coffers may be filled with gold, and his barns bursting with grain and his stalls filled with fatlings, yet all this wealth is useless and lost, unless touched with the vital energy of an intelligent laborer. But his dependence and losses give him no right to the labor of another.
He has no right, no just claim, to the services of another man, his equal. All his wealth cannot confer the right. Wealth is but a thing, in itself without rights, and can therefore add nothing to the rights of its owner.
He may however use his wealth to command service by might, but not by right. A club is but a thing having no will and no rights, yet in the hands of a savage it adds greatly to his power and may be used by him to oppress another of his tribe. A ruffian with his gun meeting a defenseless man may so command him, that he is ready for the most abject obedience. An armed highwayman may compel a brave man "to stand and deliver." So a man may use hisproperty to secure the service of another but it gives him no right to that service.
The usurer, who has himself no rights against his fellows, uses a thing, his property, as an instrument or weapon to command service.
He may place his hand upon every material thing another must have, and withhold it, and the other is shut up and compelled, he has no alternative. He must yield to the demands or suffer. Many men are driven to the last extremity before they will borrow.
But if the borrower is very willing and urgent for the loan, this does not change the nature of the act. The game may be shot upon the wing as it is endeavoring to escape, or it may be snared in a trap by a tempting bait. The wild broncho may be captured in chase, or beguiled into the corral.
The voluntary sacrifice of others to the usurer does not make his gains just. The foolish ones are now willing to invest in lottery tickets, yet that does not make the lottery lawful. Slot machines are being put out of the cities, because so many are ready to part with their nickels. If there were none ensnared by them, they could stand harmless.
The borrower may be greatly elated with the hope of gain, but the injustice is the same, whether the services be secured by compelling force, or by guile, or by the folly of the victim.
If we admit the supremacy of man over the material creation, all subordinate to him, and no right to be,except to serve him, and also admit the equal rights of all men, there is no escape from the conclusion that the usurer can have no rightful claims to any portion of the labor of the borrower, without surrendering to him some portion of his property as compensation for the services received. He must have less property when the service is rendered and the borrower must have more property if the rights of both are regarded.
A false impression prevails, that the lender in some way gives the loan to the borrower; that the borrower becomes somewhat the owner of the property. The borrower is encouraged in this illusion and it becomes a plausible basis for the claim upon his services.
When a loan is made to a bank it is called a "deposit" and rightly, for it is only placed in the banker's hands and does not in any part become his. This is true of any amount, great or small, whether the deposit draws interest or not. The lender never loses his sense of ownership of the whole amount, nor does the banker encourage the fiction that he has become part owner.
Every loan is but a "deposit." The ownership of no part passes to the borrower. It is seldom that the loan or "deposit" is not safer in the keeping of the borrower than in the hands of the owner himself, when secured by mortgages or personal sureties. The usurer gains the earnings of the borrower butparts with no property. He receives the service but gives nothing.
Two usurers, A and B, are neighbors. A has a garden he wishes dug. He has an ax but no hoe. B has wood that he wishes cut. He has a hoe but no ax. The laborer appears and wishes to do their work. Usurer A agrees to lend him his ax to cut B's wood on the condition that he shall return it unimpaired and work his garden for its use.
He cuts the wood, but has no hoe to dig A's garden for the use of the ax. Usurer B now lends the laborer his hoe to dig the garden, but takes the cutting of the wood for the use of the hoe. The confused borrower knows he is defrauded of his work, though each seems to have a plausible claim upon him.
A does not give the hoe to the laborer. He retains the full ownership but deposits it in the workman's hands to be returned unimpaired. B does not give away his ax, he only places it in the laborer's hands also to be returned unimpaired. The full hoe and full ax is returned and they have taken the services without compensation.
The result is just the same as if A and B had traded tools and A had given the laborer a hoe to dig the garden, "the tool and the material with which to work," and B had given him an ax to cut his wood, "the tool and the material with which to work," without a pretence of a payment for his labor.
Taking only a part of the borrower's or laborer'sservices does not relieve it of injustice. The nature of the oppression is the same, only less heinous and flagrant. He who took a penny belonging to another is a thief as truly as the man who took a pound. Petit larceny and grand larceny differ only in the amount stolen. The man who takes three per cent. of the labor of another wrongfully defrauds as the man who takes fifty per cent. The nature of the wrong is the same; they only differ in degree.
It is a well known fact, however, often repeated, that ninety-five out of every hundred who go into business with borrowed capital, that is, who pay interest on "their material and tools," do give the vigor of their lives to the service of usurers and at the end have nothing.
The element of time is only a figment that clouds the question of right and deceives the borrower. In order that the labor of another may be appropriated it is necessary to give him time to work. The laborer may dig in A's garden a day or all summer and he may chop wood for B a day or all winter. The result is the same. It is necessary that the borrower be given time to earn something before it is or can be appropriated. The question is, how rapidly can he earn, and how soon can his earnings be collected? Long time loans with the frequent payments of the earnings of the victim are the ideal conditions of the usurer.
That usury or interest must be held under the restraints of law is recognized in nearly all countries. It is treated as a necessary evil that cannot be abolished, and therefore must be controlled. Bacon said, "It is permitted on account of the hardness of men's hearts."
The laws differ in the various states. The rate of interest authorized by a particular state is not invariably fixed, but is changed as the condition of the people seems to demand.
That which determines the rate, of any particular people, at any particular time, is the productive ability of the borrower. The rate now in England is about three per cent. The conditions being such that the productive power of the borrower is very limited. In the United States, where the natural resources are not all occupied, and the avenues for successful effort more numerous, the average is seven per cent. In the western states of the United States the rates are higher than in the eastern, for the material resources lie so open and undeveloped that the productive power of the borrower is far greater than in the older eastern states.
The basal for the rate of interest is the benefit orthe advantage of the loan to the borrower. What can the borrower do or make with this capital? How great a benefit can he gain by it? The rate is based on the earnings of the borrower.
The transfer from R. R. station to R. R. station across this city is twenty-five cents. That I may make my train and meet my appointment, that prompt and rapid transfer is of greater value to me, but that does not give the hackman the right to an increased charge.
The fare to the distant city is ten dollars, but to me, with important business waiting and suffering, it is worth an hundred. The conductor does not ask me what my profits are to be from this trip. He collects the same fare of all for the same service, whatever their interests may be in the passage.
The letter which is freighted with a proposition that affects my future life is two cents. Because of great value to me the postal service is no more than a letter of idle gossip.
Railroad freight rates are at times arbitrarily fixed on the basis of the benefit to the patron. The rates of freight from a coal mine are sometimes made by a railroad on the basis of the profits of operating the mine. The rates to a quartz mine in the mountains are often so regulated. A contractor, dependent on a transportation company, must often share his profits. Such rates are regarded as unjust and oppressive and efforts are made to correct the evil by law.
A is crossing the city and can without inconvenience carry a note to a party for B. That accommodation without sacrifice or inconvenience on the part of A is no basis for a charge upon B, though the delivery of the message was of value to B, but if A discovers that in delivering that note he can make it a matter of business gain to himself, that would not justify B in claiming a part of the profits A secured for himself. While A served his own business he also favored B. It would be unreasonable and unjust for B to forget the favor and make a charge against A, because in the delivery of the note A managed to gain a profit.
Two farmers are without barns. It will require the labor of a number of years to secure the requisite amount of lumber and other material to enable them to erect their barns. One of the farmers undertakes to shelter and protect from decay the lumber of both, until the requisite amount can be secured. This is a real favor to the other and is accepted readily. He even offers to pay him for the care and liability. But he discovers afterward that his neighbor, by wise, careful and skillful piling, has made from this lumber a shelter for his stock and grain. That he has so managed as to gain for himself a benefit. Then, with the false principle of usury he makes a charge for the keeping of the very thing for which he was willing to pay a price.
A gentleman not wanting his coach for a time, but wishing it to be kept in perfect repair, and his team fed and exercised, to be kept sleek and strong, leaves it in his coachman's care. The coachman agrees to keep from decay, and to replace should one die, and at the end of the term, return the coach in perfect condition, no mar or wear, and the team sleek and strong from good care, feed and daily exercise. But the coachman discovers that in the daily exercise of the team he can carry a party of business men to and from their offices, and secure for himself a gain. He, at the end of the term, returns the carriage and equipage complete as he received it. The owner has had his property perfectly cared for during the term he could not use it. But the owner learning of the benefit to the keeper, which would not have been possible without his equipage, demands a portion of the benefit which cost him nothing, nor in the least diminished his property.
A gentleman has a warm, rich and beautiful robe, but is about to travel a number of years among the countries of Cuba, Porto Rico, and the Philippines, where he will not need it, and afterward visit Siberia, where he will need and use it. Another undertakes to relieve him of all care of it during these years and deliver it to the Siberian home ready for his use. He protects it from the moths in summer, and guards it against all touch or taint, and delivers it in the perfect condition in which it was received. In justice hedeserves a reward from the owner, and if he received no benefit, would receive it, but it is found that he needed it for his comfort by the way, and that without it he should have perished. Then the owner demands a reward for the benefit the carrier received. The owner did no service. He received a positive benefit, but the porter, who carried the burden all the way, must pay interest or rental because he was kept from perishing by it.
The surprise or discovery feature is introduced into the above illustrations to emphasize the false basis upon which the rates of interest rest. In the actual practice of usury the lender may have full information as to the use of the loan and its advantages to the borrower. If we eliminate this feature the basis still remains untenable. By no tortion of ethics can I demand that he, who does me a favor, shall pay me for the privilege.
A man has one thousand dollars of money he is not using. He gives it to another to keep or place in a drawer in his vault. To care for this and be responsible for it, a commission is allowed, for it is no benefit to the keeper. Even an amount is asked for the drawer in the vault, without responsibility. To care for this a term of years is deserving of a reward. But now keeping the property equally safe, and returning every dollar when the owner calls for it, is not satisfactory to the usurer. If this money has in any way proved a benefit to the keeper, throughhis wisdom and energy and skill, he demands an increase. What is this loan worth to you? is the question of the usurer to the borrower.
The basis of legal interest rates is the amount of benefit the borrower gains by the loan. If his opportunities in a state are favorable, and he may by diligence make a large gain, the rates are high. If in another state his opportunities are so limited that, strive as he may, he can make little gain, the legal rates will be low.
The basis is so absurd that many have urged the repeal of all laws regulating the rates of interest. "Why should the laws presume to level the rates for a whole state? The possibilities and opportunities of gain are infinitely varied. Every borrower knows his own conditions and the amount of advantage the loan is to him and he should be permitted to pay for money whatever he is willing to pay."
One writer thus expresses it, "No man of ripe years and of sound mind, acting freely, and with his eyes open, ought to be hindered, with a view to his advantage, from making such bargains in the way of obtaining money, as he thinks fit; nor anybody hindered from supplying him upon any terms he thinks proper to accede to."
Jeremy Bentham is often quoted to prove the absurdity of all laws regulating the rates of interest, and yet all his elaborate arguments are based on this false principle.
If usury is wrong only when the borrower can make no profit, and is right whenever the borrower can make a gain by it, and the rate of interest is to be measured by that gain, then all laws are illogical that limit the rate, and may be classed among those restraining trade.
The true ethical principle that should govern the relation between the owner of property and the person holding that property as a loan, does not differ from the principle that is recognized as prevailing in all the other relations of life. The party to whom the service is rendered is under obligation. The party served is the one who must pay for the service. The party served must pay in proportion to the amount of service rendered him. If that service is great, then the payment must be large. If the service is slight, then the payment is small, and when there is no service then no payment can be claimed.
This principle is recognized in all worthy and upright transactions. It is the service rendered that is rewarded in a court of justice. An employe recovers his wages from his employer for his services rendered. The condition of the employer's business does not enter into the count. It may have been unprofitable or a great success but that cannot affect the claim either way.
A physician charges for the services given a patient. The recovery or death of the patient can neither increase nor diminish them.
In service we always surrender something ofourselves or of our own, and each knows the sacrifice or effort he has made; he cannot know the value of this to the other, and he need not know. Full compensation is due from the party served but no compensation is due when no service is given nor property surrendered.
The usurer's whole claim is for the service of his property. But he does not surrender a particle of his wealth. He does not become poorer in making his loan. He holds all his wealth as fully as before, whether it be a loan of money or grains or tools. There has been no outgo of property for which, in any other relation, he could claim a reward or compensation from his fellow. He simply deposits his property with his fellow and takes security for its safe keeping. It must be preserved perfectly and restored fully.
When we consider the true principle, that compensation is due always for services rendered, the obligation is upon the lender for the care and preservation of his property. The borrower in any and every case gives a real and valuable service in preservation and restoration at the end of the term, while the lender renders no personal service nor does he part with a particle of his wealth.
There is always a service rendered in caring for and preserving the property of another. It may be very great or it may be very small. It may be so greatthat no one would undertake it though the property should be freely given him.
In 1800 the "Faithful Steward" was wrecked in Delaware bay near the shore. It had on board a large number of passengers, emigrants, who nearly all perished. Few lives were saved and all the property was lost. One young man, of the kin of the writer, swam ashore through the breakers. Before he left the vessel an old man offered him a stocking full of gold if he cared to try and save it. Though young and vigorous he would not undertake to try to save it for it. This was an extreme case of risk and danger.
In another extreme case the service may be very small, reduced to the minimum, for instance, caring for the gold of another by locking it up in a fire and burglar-proof safe. For this simple service a comparatively small charge is made. But caring for the property of another is always some service that earns a reward great or small.
The nature of the service is not changed and the principle still holds when the deposit is made with a person who gives ample pledges for its full return; the principle still holds when the deposit is made in a farm and secured there by mortgage, making it safer than in the iron vault.
The true ethical principle, equity between man and man, requires that the holder of the property of another shall be compensated by the owner of theproperty for his services in caring for and preserving it. The amount of compensation depends on the difficult or favorable conditions attending its care. These conditions greatly vary, perhaps in no two cases are exactly alike, and so there can be no fixed price or rate at which one will receive and care for the property of another. The extreme limit of liberality permitted is that he may care for the property of another for nothing. He is not permitted to pay a price for the privilege. The revealed divine law, true ethics and equity and duty of self preservation forbid him. Perfect preservation of any amount, large or small, for any time, long or short, whatever the incidental advantages to the borrower, is the highest compensation a borrower is permitted to give for any loan. The demand for more than this by the owner is to be resisted as unjust and oppressive.
An express company receives a package of money for which it receipts and becomes responsible and agrees to deliver to the owner at some distant point. For this service it receives compensation in accordance with the amount of service. If the conditions are dangerous and the distance great the charge is large. If the conditions are very favorable and safe the charges are small.
If the amount of service is reduced to the minimum, in rare cases, no charge may be made. But that a price should be paid for the privilege of caring for and conveying it, is inconsistent with themanagement of an honest business. The purpose would be either to rob the owner of his wealth or to rob the employes of their services.
An insurance company undertakes to protect a property for a term of years, to a distant date. A rate is given for protection from a single element, as fire. If all destructive agents are included the rate is higher. The rate is higher for a long than a short period. All the business world recognize the value of this service and nearly every kind of property may now be insured. The premium is cheerfully paid by the owner of the property for the service rendered him. It is a real and valuable service to have his property protected, preserved, or restored, so that it cannot be lost before the distant date. It is conceivable that a property might be so indestructible that the risk would be practically nothing and a policy might be issued without a premium, but that a price should be paid for the privilege of protecting any property is utterly inconsistent with rational insurance.
Now usury presumes to reverse this ethical order and requires that the insurance company shall pay the owner of the property for the privilege of protecting it. Under usury the property given into the care of another, and called a loan, must be perfectly protected and preserved by the borrower, restored if lost, and returned in full to the owner at the agreed distant date, and a price paid for the privilege of performing the service.
The true ethical principle and equity in the relations between the owner of a property and the one who holds, protects and preserves it, require that the owner shall render to the holder a just compensation. This will vary in different conditions, it may be very small, it may in rare cases be entirely eliminated; but they also utterly forbid that the party rendering the service shall pay for the privilege of serving.
One may submit to an injustice in order to gain an advantage. He can do better for himself by submitting than by resisting. His employer may be hard and oppressive but this is the best job he can get and he holds on, but that does not justify the oppressions of the employer up to the breaking point. It may be to the advantage of a borrower to submit to the exactions of usury, that is, he may gain more wealth by borrowing upon interest than not, but that does not relieve usury of its oppression up to the breaking point when it can no longer be endured. There is no better ethical basis for low interest than high interest. Low rates of interest are oppressions that may be suffered or endured for a possible gain, but high rates are intolerable. The principle is the same whatever the rate of interest, whether it be low or high. They only differ in the degrees of their severity.
That wealth can produce wealth is the assumption of Shylock.
Shylock—"When Jacob grazed his Uncle Laban's sheep—This Jacob from our holy Abraham wasThe third possessor; ay, he was the third."Antonio—"And what of him? Did he take interest?"Shylock—"No, not take interest; not as you would say,Directly interest. Mark what Jacob did."* * *Antonio—"This was a venture, sir, that Jacob served for;A thing not in his power to bring to pass—But swayed and fashioned by the hand of Heaven.Was this inserted to make interest good?Or is your gold and silver, ewes and rams?"Shylock—"I can not tell; I make them breed as fast."—Merchant of Venice.
Shylock—"When Jacob grazed his Uncle Laban's sheep—This Jacob from our holy Abraham wasThe third possessor; ay, he was the third."Antonio—"And what of him? Did he take interest?"Shylock—"No, not take interest; not as you would say,Directly interest. Mark what Jacob did."* * *Antonio—"This was a venture, sir, that Jacob served for;A thing not in his power to bring to pass—But swayed and fashioned by the hand of Heaven.Was this inserted to make interest good?Or is your gold and silver, ewes and rams?"Shylock—"I can not tell; I make them breed as fast."—Merchant of Venice.
It is only intelligent energy that can produce wealth. Even the natural resources must be subdued and shaped by intelligent energy to be of service to man. Trees do not betake themselves into the form of houses. Land does not transform itself into farms and gardens. Coal does not come to our fires without hands. Ore is not iron, nor is clay pottery. They must be carefully manipulated by the intelligent laborer.
Nothing man can make has the power of self propagation. All wealth is as barren as silver and gold, though Shylock claimed he could make them breedlike ewes and rams. Life alone is productive, and the secrets of life man has not touched.
A tree or animal grows by the life that is in it, but the accretions of wealth are from the efforts of intelligent energy outside of itself. Wealth is an effect, a result. The vital energy of a person, of "a willing intelligent being" produces wealth, but it does not follow that it has the qualities of its cause. It has no intelligence, nor has it self-determining power, nor is it vital, nor has it energy, it has not in itself the force to overcome its inertia, the energy must be applied. It has no power to increase or grow. A fortune is built, as a building is built, brick after brick is added by intelligent hands.
All wealth must have the living hands applied to cause it to increase even the smallest amount. There is no such thing as "productive" capital. It is so called when it is used to gather and appropriate the earnings of others, but wealth in none of its forms has the quality or power of producing.
Money, the most familiar form, is barren. A bag of dollars stored for ages will not have increased a single coin. No one holds or handles money on the assumption that it will increase in his hands. Money is a care, and the broker who holds or handles it relies for his compensation, not on the increase of the dollars in his hands, but on the increase from some producer to whom he lends it. If there is noborrower he takes a direct commission from the amount itself, as trustee or administrator or custodian.
Money is readily exchanged for any other property. Money has a number of functions but in exchange it is a medium by which the value of articles is conveyed. It takes the place of the bags which conveyed the wheat, of the crates which contained the potatoes, of the baskets which carried the peaches, and the wrapping which held the cotton or the wool.
Col. Irish, who was chief of the Bureau of Engraving and Printing at Washington, when he died, and under whose administration the present building was erected, at one time sent to the wife of the writer a ten dollar bill, wrapped up so that it looked like a picture, cabinet size; this was accompanied by a note, to be opened first. In this note he said he took pleasure in sending her an excellent likeness of our late lamented president, which he would be pleased to have her accept. If she should prefer it in some other form, it was a peculiarity of this likeness that it would change instantly at the will of the holder into any form desired; that this was the peculiarity that troubled him, as he had been unable to decide what would please her best, and had finally decided to send it in this form, and let her change it into any other she might like better.
Money is a peculiar medium which will hold and carry the value of anything. You pour in your wheat and take it to the merchant, who empties your wheatand fills it with clothes, he carries it to the dealer in any article needed and the vessel is instantly emptied and refilled.
The values of the products of laborers in the various occupations of life or the products of the various climates are thus readily exchanged by money, but the gain is not in the money. The art in trade is to study and know the products and needs of the laborers of one class or country, and the varied products and needs of the producers of another class or local community. The skill in trade is in supplying the needs of one from the products of the other.
The profit in trade is the gain from securing for an article a greater portion of the product of those whose needs are supplied, than was given to those who produced it. The harvester cost the manufacturer twenty days' work. The farmer, who needs and purchases it, pays forty days' work for it. The farmer may produce one hundred bushels of wheat with twenty-five days' work, but the mechanics in the city, who need it for bread, may give twice that amount of labor for that quantity of wheat. There is a wide field for skill and profit in trade, when the products and needs of all classes and all lands are considered. But money does not add to wealth in trade. There is nothing produced by it in trade. It is but the tool by which values are conveyed, and no more productive than baskets or crates or sacks. Intelligent energy produces all the profits that are secured by trading.
Modern apologists for usury, knowing that money is unproductive itself, call it a tool for production, and as it can be readily transformed into any tool, they try to avoid the logical conclusion that the taking of interest on money is unjust and oppressive to the producer.
But no tool is productive. All tools are but the reaching out of man for the better control and mastery of material things.
The tool is but dead matter; the productive efficiency is in the vital energy of the intelligent laborer. The most complicated and ingenious tool ever made is useless without the operator. It is as helpless as the wire without the electric current; as helpless as the body without its life, for the body is but man's tool, preserved, and kept efficient, and made productive, by the living energy alone.
Tools are but the reaching out of the vital energy beyond the body. Tools are but the means, invented and constructed, by which the man can overcome his physical limitations and accomplish wonders, the impossible to a creature wanting in his intelligence.
These glasses enable dim eyes to see clearly. There is no ability in the glasses to see; they would be of no use on blind eyes. I see, these spectacles cannot see. Enlarge and so place these lenses that I can see bacteria, or the mountains of the moon, yet this microscope or this telescope has no more life nor sight than this single lens. I, with it, see the minutecreation or examine the distant planet. It is but the extension of my eye.
This pen and paper and this book are but the means by which I reach and reason with my fellow-men. They are but my tools to convey my thought. I am reasoning with you, not this paper and ink.
My hand is the natural tool with which I labor. I may work in the garden and plant the seed and destroy the weeds with my hand alone, and there is no dispute but that I do the work. I take a small weeder in my hand and greatly increase my efficiency. I take a hoe and reach out further and greatly add to my efficiency. I am the efficient agent. There is no power in the weeder or the hoe. I take my plow, as my tool, and I tear up the soil and prepare it for my harvest. I take the complicated harvester and gather it into my barn. In every part of that process the tool is but the reaching out of my energy beyond my body. There is no place where that tool becomes vitalized and productive.
I am a porter, I carry packages in my hands. To increase my efficiency I build me a cart, and smooth a roadway, by which I am able to carry more and heavier packages with ease. I construct a roadway across the continent, and with the power which I employ I carry the commerce of the nation. I build ships and direct them from continent to continent and handle the commerce of the world. Now there is no place from this simple carriage in the hand, tothe complicated and stupendous system of transportation, where the tool is not wholly dependent on the vital intelligent energy.
When the vital principle leaves this body, then hands, eyes and the whole body is helpless. Withdraw the vital energy from these means by which man extends his power beyond the body, and all the implements of agriculture will not produce a harvest, and the wheels of commerce on land and sea would instantly stop.
There is no place in the most complicated machine where it begins to produce. The machine may show the greatest ingenuity in its invention and the perfection of skill in its construction, and the intelligence necessary to its operation may be reduced to the minimum, yet no where and at no time can it produce of itself.
When a criminal is arraigned in court the responsibility is placed upon the person, the intelligent energy, always. It matters not by what tools the burglary or other criminal act was committed. The man who handled the tools is held accountable for the results. His tools may show the greatest ingenuity and the highest skill in their construction but they do not share his guilt. He is the efficient and responsible cause. If this were not so justice could be so perverted that the preservation of the order and the security of society would be impossible.
Every tool is itself produced, and its maker must berewarded or paid once, but there the claim for the tool ends. The laborer who constructs the machine cannot demand repayment over and over. The skilled mechanic who produced this pair of lenses must be paid, but he has no claim for second payment. To secure repayment he must make another pair. The maker of this pen and this paper must be paid, but that ends his claim. The maker of the hoe or cart or engine must have the reward he has earned, but can prefer no second claim.
There is no question when the laborer makes and owns his own tool. The labor of constructing the tool must be rewarded as well as the laborer in its operation.
When the tools are complicated and require the skill of many, the makers of the machine are usually different persons from the laborers who operate it. In this case the payment of all must come from the finished product. Those who constructed the machine and those who operate it must be paid by the consumers.
If the shoe plant is built and operated, then from the shoes produced must come the payment for all. The workmen who built the plant and the engines and machinery for the manufacture of the different parts of the shoe, must be paid by the consumer of shoes. The workmen who built the plant must be as fully compensated as those who operate it, but being compensated, they have no claim forrecompensation for the same work. To be paid again they must build a new plant. The operators must be compensated for every shoe they make, but they can not reclaim payment over and over again. To receive more pay they must make more shoes.
Both classes of laborers have a right to full compensation for all the labor performed. Neither party has a right to demand a second payment for the same labor.
It would be manifestly as unjust for the constructors of the plant to compel the operators to pay them over and over again, as it would be for the operators of the machine, having supplied the community with shoes, to demand payment over and over without making another shoe. The shoes will wear out, so will the machines. It is as unreasonable for the first class of laborers to compel the operators of their machinery to keep the same in repair, as for the operators to compel their customers to keep their shoes in perfect condition. For the first laborers to receive a new payment they must build a new plant, and for the operators to receive a new payment they must make new shoes.
The confusion of ideas comes in when there intervenes a third party between these two classes of laborers. This third party meets the demands of the class of laborers who build the plant and machines, from hoarded wealth, and then exacts payment from those who operate it. This is then called productivecapital, but it is no more productive than the money in the bank vault. The producing, so called, is but the exacting of a part of that which the operators produce. It is the exacting of payment that never pays. The operators are compelled to be forever buying, yet the plant is never bought. The capitalist is forever selling, yet the plant is never sold.
Usually, the usurer is a fourth party that stands yet behind the third party, taking no risks, demanding complete security for his loan and also an increase out of the products of the operators. The third party assumes all care and guarantees against all losses and depends for his compensation on a portion of the product after the demands of the fourth party are satisfied. This third party may be an active producer. All that he receives may be fully earned in care, oversight and management of the business of the plant.
But the fourth party can have no claim for his services, he has no part in the production. The absurdity, the figment that his capital is productive, is introduced to cover the evident fraud of appropriating, without compensation, a portion of the products of the operators. He has no more claim to an increase of his capital year by year and a doubling in a term of years, than the laborers who built it have to the same plant, perfect and unworn at the end of a term, and in addition, another plant equal in every respect. They built but one, they have no claim upon a second. For the usurer, who takes theirplace, to double his wealth, and yet the debt be undischarged, is a flagrant fraud.
The underlying falsehood is that wealth changes its nature when put in the hands of a live man and becomes productive. It is acknowledged that wealth lying in the vault is barren and at the same time it is claimed that it produces in the hands of an intelligent agent. But it is the same dead, helpless, barren thing wherever it may be found and whatever form it may be made to take. The dollar taken from the vault and exchanged for a hoe does not receive this new quality. The hoe is as dead as the dollar. When this hoe is in the hands of the workman it is the same barren thing is was before he picked it up. These glasses are precisely the same when astride my nose as when lying on the table. It is not true that wealth in any form, though it be that of a useful tool, takes on this new quality or attribute when in the hands of a live man.
A man's labor is more productive with suitable tools than without them. The same energy will secure far greater returns. If it were not so he would not trouble to make tools or use them. But to call tools productive agents and so reward them is to rob intelligent energy, skill and inventive genius of that which they alone can produce. This degrades the man to the level of the tool or exalts the tool to the height of its maker.