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ECOtfGMi; 
 
 DEPART'* 
 
 
 j\ 
 
 THE CAUSE OF A CRISIS. 
 
 MONEY. 
 
 j 
 
 ;|No one, I suppose, will dispute that the ruling power in the indus- 
 al world is money. 
 
 t is money that hires labour, that buys goods, that starts 
 erpnses, that is lent as capital, paid as interest, collected as 
 :es. The farmer may want his land tilled, and the labourer may be 
 idy to till it, but unless the farmer has money to pay wages the soil 
 nains untilled and the labourer unemployed. The shopkeeper may 
 ve clothes (and other goods) offered for sale, and the man outside 
 y be sorely in want of them, but unless he has money to buy them 
 ,th the clothes remain unsold and the man unclothed. 
 
 Affairs are so constituted that nothing can be done without money, 
 oney failing, exchange ceases; and exchange ceasing, production 
 ps, for production cannot be carried on without exchange. No one 
 duces everything for himself. He must get food from one, clothes 
 m another, tools from this man, materials from that, transport 
 >m a third, and none of these things can be got for nothing ; some- 
 ing must be given in exchange, and the only thing that will be 
 epted is money. 
 
 Money, in short, is to the industrial body what blood is to the 
 siological body. Not only must it be present but it must circulate, 
 tiat is this money, the circulation of which is so vital a necessity ? 
 oin,” says some one. “ We see and handle it daily.” 
 
 ell, coin is one form of money certainly, and in its way a most 
 portant form ; still it is only one form, and a very subsidiary 
 m. The man Avho is recognised by all as a “ moneyed 
 n ” has very little coin, often not more than a few shillings in his 
 ssession, and the greater his wealth the smaller always is the pro- 
 rtion that he holds in coin. 
 
 The largest transactions are effected without any coin passing at all. 
 is only in petty transactions, or for small balances, that coin passes, 
 'lie great mass of business transactions is effected either by paper in 
 ome form, or by the balancing of contra accounts. 
 
 This money that rules the market, that employs labour, that starts 
 mterprise, that the rich lend and the needy borrow is not a material 
 ubstance at all, though material substances such as coin or paper are 
 argely used to represent and to transfer it. 
 
 It is general purchasing power —command of the goods and services 
 of others, based on a recognised claim for past services rendered, real 
 or imaginary ; a claim for something transferred, something done or 
 something permitted. For something transferred, as for goods sold, 
 
I 
 
 2 
 
 or cash deposited in a bank, or lent on a mortgage or a debenture. 
 For something done, as for work performed or enterprise started. 
 For something permitted, as for permission granted to use a given 
 piece of land. 
 
 The service rendered is a thing of the past. The goods sold have 
 probably been long ago consumed ; the cash lent has passed into 
 the general circulation and can no longer be identified; the enterprise 
 has either failed and disappeared, or has succeeded and now maintains 
 itself; the land is being put to use by the tenant, not by the landlord 
 who gave him permission to use it, and who has no concern with 
 the land (while the lease runs) but to receive the rent. 
 
 In every case all that remains to the claimant is his claim, a claim, 
 not for some particular goods, as grain or boots, but for value, for 
 general purchasing power, or command of the goods and services of 
 others to a specified amount; which purchasing power, transferable 
 from hand to hand, is recognised as money, no matter in what form 
 it be embodied, whether as coin, as paper, or as simple entry to credit 
 at a bank ; and circulation of money consists in the passing of this 
 general purchasing power from person to person. The balance that a 
 man has at his bank is recognised as money, and gives him the pur¬ 
 chasing power of money, and the cheques with which he transfers it, 
 or the coin for which he cancels it, are also money. The motionless 
 balance and the moving cheque confer the same power, and go by the 
 same name. In other words, the thing itself and the material 
 instrument that transfers or embodies it are spoken of as if they 
 were the same. And no great harm results, for the difference is only 
 the difference between Statics and Dynamics. The one represents 
 money at rest, the other money in motion. 
 
 But the point to be attended to is that money itself, in the sense in 
 which the business world understands the term,—this thing which > 
 buys good, hires services, fetches interest, and so on—is not a 
 material substance at all, though material substances are often used to 
 embody or to transfer it, but general purchasing power or command of 
 goods and services of others. When it is to a large amount it is as 
 often called capital as money. The man of business means the same 
 thing by the two terms, and uses them indifferently. What the closet 
 philosopher means by them is of small consequence. 
 
 A sovereign and a bank note, or cheque for <£1, are alike in this, 
 that they are both useless in themselves, useful only to exchange away 
 for other things, and that they both represent purchasing power to 
 the amount of twenty shillings. But they differ in this, that the 
 purchasing power of the cheque or note depends on the solvency of 
 the person or bank on whom it is drawn, while the purchasing power 
 of the sovereign is independent of any particular person’s solvency, 
 and is good everywhere. (There are of course other highly impor¬ 
 tant differences between coin and paper, but they do not concern the 
 present question.) But since, as we have seen, money consists of 
 purchasing power, and purchasing power consists for the most part of 
 registered claims on persons liable to fail at any moment, this larger 
 part may disappear at any moment; and when a crisis occurs much 
 of it does so disappear, and “ money becomes scarce.”. Thus, suppose 
 a tradesman is paying <£100 rent to a landlord, <£100 interest to a 
 
3 
 
 money lender, spending <£100 in wages, and making <£100 profit for 
 himself, then here is ,£400 circulating. Suppose now that through a 
 bad speculation, a defaulting cashier, or any other cause, he fails in one 
 of his liabilities, say the interest, and the money lender sells him up, 
 the source of all four incomes being dried up, all four incomes 
 disappear together. The quantity of real wealth—of goods—is 
 exactly what it was. It is dispersed but not annihilated; but the 
 <£400 which that business put into circulation has disappeared. It 
 never had any substantial existence. It may revive no doubt. The 
 landlord will relet the premises, the money lender (if he has got his 
 money back) will find a fresh investment, the employes will find 
 another employer, and the ruined man another occupation. But for 
 » the present all four incomes have gone, and none of them revive 
 immediately. Indeed, when such failures are numerous and on a large 
 scale, as in a commercial crisis, it often takes a long time, months, 
 sometimes years, before complete recovery. 
 
 * It is in view of this danger that a party in America insist on the 
 
 State coining annually large quantities of silver, so that money (as 
 they think) can never become scarce nor crises occur. 
 
 Such a device, however, would be quite ineffective for the purpose, 
 because the superiority (in some respects) of paper over coin as a 
 circulating medium is so enormous that the great bulk of transactions 
 would continue to be effected by paper, no matter how plentiful 
 coin was. 
 
 <£1,000 is much safer kept in the form of a simple entry to credit in 
 a ledger than as a bag of sovereigns. It is much easier transferred 
 from person to person, and saves an infinity of trouble and risk in 
 transport from place to place. Moreover a cheque need not be written 
 till it is wanted, and if destroyed, another can be written, while 
 sovereigns would have to be carried about always, and once lost or 
 destroyed could not be replaced. 
 
 Paper does not supersede coin from any scarcity of coin, but because 
 of its greater convenience, though for reasons which we need not go 
 into, it cannot altogether supersede coin. 
 
 The only result then of forcibly increasing coin beyond the imme¬ 
 diate requirement of trade would be to lesson its purchasing power. 
 If a given number of sovereigns are sufficient for present transactions, 
 doubling their number would only halve their value. Whatever now 
 costs <£1 would then cost £2 ; and the paper, which expresses itself in 
 pounds, would have to express double values. 
 
 TRIBUTE V. EARNINGS. 
 
 Whoever wishes to get a clear idea of the industrial problem must 
 begin by realising thoroughly the fundamental difference between Tribute 
 and Earnings. This is the key to the whole question. 
 
 Society consists of two classes : 
 
 1. The class that lives by producing goods, or rendering active 
 service of some sort; that is by work, the reward for which, called 
 fees in the case of professional men, profit in the case of employers, 
 salary or wages in the case of subordinate workers, may be summed 
 
4 
 
 up in the word earnings. And 2. The class which neither produces 
 goods nor actively earns anything, but lives on the earnings of 
 others, having acquired possession of something, land or money, 
 which it has no present intention of using itself, hut which is 
 necessary to other people and which it charges them for the mere 
 permission to use. These two charges, Eent and Interest, we 
 express together by the term Tribute. 
 
 No doubt there are persons who, while doing nothing to earn their 
 income, yet do other work, often very valuable work, gratuitously ; 
 of such are scientific men like Darwin, statesmen, like scores who 
 could be named, and so on. And there are others who enjoy two 
 distinct incomes, one from Tribute, which they do not earn, and one 
 from useful work, which they do earn, so that the two classes appear » 
 superficially to merge into each other. 
 
 Dor all that, the two kinds of income remain perfectly distinct. 
 Tribute (Kent and Interest) accrues all the same, whether the claimant 
 works or plays; whether he is well or ill; even whether he is alive or ® 
 dead ; for the claim once established is immortal, and continues (unless 
 the landlord is bought out, or the creditor paid off) from heir to heir, 
 from generation to generation. 
 
 Once land is let, or money lent, the day of tribute comes round with 
 unfailing regularity. The tenant’s crop may fail, the borrower’s 
 enterprise may break down, but the tribute comes due all the same. 
 
 The system may be just or unjust, beneficial or injurious ; we are not 
 here concerned with the ethics of the matter, but with the facts only. 
 
 Grasp well before proceeding further this fundamental difference 
 between Tribute and Earnings, and realise that everybody’s income is 
 resolvable into one or the other. 
 
 We shall express the class that lives on tribute by the letter T, and 
 the class that lives by work by the letter W. 
 
 TRIBUTE CAN ONLY BE PAID BY WORK. 
 
 W can only pay T by work, that is by producing goods or ren¬ 
 dering active services for him. (For brevity’s sake, and to avoid 
 having constantly to give double illustrations, we shall say—by 
 goods.) 
 
 But though the tribute can only be paid by goods it is not payable 
 in goods, but in money. T is not obliged to take W’s goods, and yet 
 can insist on payment all the same. 
 
 If T received his tribute in goods he would have to live up to his 
 income or lose a portion of it. He would have to use the goods, for 
 many of them would spoil immediately, while all would begin to 
 deteriorate, besides incurring costs of storage and guardianship. If 
 the goods consisted of articles of maintenance or enjoyment, food and 
 clothes for example, the food would have to be eaten and the clothes 
 worn as soon as possible, or they would spoil. If they consisted of * 
 “ wealth devoted to production,” of tools and raw material for example, 
 of goods whose only use was to produce other goods, they would have 
 to be applied to the work for which they were adapted, or they too 
 would begin to deteriorate, and go to waste. * 
 
5 
 
 The result would he that nothing would liang on sale, lie idle or go 
 to waste. Everything would be put to the use for which it was fit 
 without delay. There would be great consumption widely diffused; 
 there would be rapid sale of goods, incessant demand, employment 
 for all, active industry, circulating money, rising wages. 
 
 If T received his tribute in money, but spent that money at once, 
 the result would be the same. 
 
 T, however, does not either receive his tribute in goods, nor yet 
 spend it all. He receives it in money, and he finds it quite easy to 
 save that. That does not spoil by keeping, nor yet incur expense 
 of storage. On the contrary, it brings him in interest. So he saves, 
 not by storing goods nor hoarding coin, but simply by contracting his 
 expenditure, and leaving the unexpended balance somewhere as an 
 unsatisfied claim. He abstains from taking from W goods equivalent 
 to the full amount to which he is entitled, and yet does not waive his 
 claim. In other words, he refuses to allow W to pay his debt in the 
 only way in which he can pay it, and yet charges him for not paying 
 it. 
 
 What is W to do P T’s refusal to buy lessens the general demand 
 for goods, cuntracts the market, brings down prices. 
 
 W cannot use the rejected goods himself because, owing to the 
 differentiation of industry, each producer lives by producing a single 
 article, or class of articles, often of a kind that is of no use to him at 
 all, always more in quantity than he can find use for, even if they are 
 the kind of articles he uses. The farmer, for example, cannot eat all 
 the grain he produces, the clothier wear all the clothes he makes, the 
 cutler use all the tools he manufactures, and even if he did, it would 
 not enable him to find the tribute required of him. Nor can he 
 dispose of these goods amongst his fellow Ws, for, as a class, they are 
 generally in the same plight as himself, and for the same reasons. 
 Some of them there are whose business is simply to buy and sell 
 (shopkeepers, dealers, etc.) ; these we may call vendors. Others 
 there are whose business is simply to render services, or produce goods 
 for the vendors to sell, they themselves receiving wages ; these we may 
 call labourers. The vendors, in whose hands the goods are collected, 
 can neither use them nor sell them to each other, and the labourers 
 cannot buy them because, after satisfying their most pressing wants, 
 they have not money enough left to buy anything else. In short, the 
 poor cannot buy the goods, and the rich won’t. So trade becomes 
 dull, employment scarce, earnings fall. There is no scarcity of real 
 wealth, i.e., of goods, yet there is distress among those who produce it 
 because the money—the purchasing power—has accumulated in the 
 hands of T, who w r on’t spend it, but only lend it. 
 
 To put it another way. Let a farmer and a cloth-maker represent 
 the workers, one owing £20 a year rent to a landlord, the other <£20 
 interest to a money lender. Tribute day arriving, the workers expect 
 to be able to find the tribute due by the sale of their products. What 
 they sell to each other amounts to a mere exchange of products, 
 beneficial to each no doubt, but of no use in helping to find the 
 tribute. For this they look to the Tribute receivers to buy, i.e., to 
 take their tribute out in goods. T, however, won’t; he intends to 
 save, so the workers have to scrape together all the ready money they 
 
6 
 
 can get, and with which they had intended to carry on their business, 
 and they hand that over—,£40 in all—to T, who promptly puts it into 
 the savings bank. 
 
 Now money being taken as the sign of real wealth, the politician, 
 the statistician, the economist, seeing .£40 in the bank, which was not 
 there before, announce this as the year’s savings—as the national 
 accumulation for the year—whereas a moment’s reflection will show 
 that there has been no saving or accumulation of real wealth at all. 
 The farmer has simply got his usual yield of farm produce, which 
 must be presently eaten (unless it is left to rot), and the cloth-maker 
 has got his usual output of finished goods which also must be 
 presently put to their destined use (unless they are uselessly put by 
 for the moth and rust to corrupt) ; all that has happened out of the 
 usual way is that the <£40 which was in the hands of the workers is 
 now in the bank, to the great loss of the workers who, having now no 
 ready money to go on with, are obliged to go to the bank and borrow 
 the <£20 each they require to carry on with. Next tribute day comes 
 round and the workers have their usual output of goods only, but now 
 double their former liabilities, and more ; they have each his =£20 rent 
 or interest to meet, and the £20 additional they borrowed from the 
 bank, with interest added. And T still persists in “ saving ” and 
 won’t buy, but yet insists on his tribute; there is of course an 
 immediate collapse of everything. Indeed there is a collapse anyhow, 
 for the matter has gone too far to be remedied. 
 
 Now if T had not economised, but taken his tribute out in goods, 
 there would have been no apparent saving, but the workers would 
 have met their liabilities without either parting with their cash or 
 borrowing, and industry would have gone on as usual. It was T’s 
 “ saving ” that wrought the whole mischief. 
 
 Of course in real life a general break down does not come to pass 
 in a single year, because T does not—cannot—do what for sake of 
 illustration we have supposed, and save his whole income; he only 
 saves iV or ^ of it, and therefore a crisis only occurs once in every 10 
 or 11 years; and when it does occur it is not a complete break down, 
 because not all the Ts save, and because numerous unnoticed little 
 breaks down are continually happening which ease the accumulating 
 strain, and avert a complete catastrophe. Money is so identified in 
 our minds with real wealth as signifying it, and being convertible into 
 it, that we fail to realise that the sign does not imply the existence of 
 the thing signified. 100 sovereigns in any one place does not imply 
 the existence of £100 worth of goods in that place, any more than the 
 existence of the goods implies the existence of the sovereigns. Still 
 less, if possible, does an entry to credit in a bank imply the existence 
 of either goods or sovereigns. 
 
 Still a good part of the rejected goods can be got off to the richer Ws, 
 for the Ws are of all grades, from the Prime Minister with £10,000 
 a year down to the out-of-work with nothing. At these extreme 
 points W may be said to pay no tribute ; the rich, because they are so 
 independent that they need incur no liabilities (as for the rent they may 
 pay, that is purely voluntary and for their own convenience, seeing 
 they are rich enough to buy their own land and houses if they 
 want to). The poor, on the other hand, having no credit, can incur 
 
7 
 
 no liabilities, broadly speaking, so they also pay no tribute. Really 
 they bear the whole burden of it, but they bear it in poverty and toil, 
 in non-receipt of wealth, not in visible transfer of it as tribute. 
 
 The business of finding the tribute falls mainly on the Ws who lie 
 between the extremes of rich and poor, and cover the general class of 
 employers. These can for a time continue to find the tribute required 
 of them, notwithstanding T’s refusal to buy their goods, partly by 
 lowering their prices and inducing the richer Ws to buy, thus reducing 
 their own earnings; and partly by cutting down the wages and 
 lengthening the hours of their employes, thus taking it out of their 
 earnings. Of course they never adopt the former course till they have 
 carried the latter to the furthest point practicable. 
 
 » The employer is the base on which the whole system rests. For 
 
 the landlord and the money-lender as such produce nothing, and the 
 labourer, though he does produce, does not come into possession of 
 what he produces; that belongs to his employer. 
 
 1 To the employer comes the landlord for his rent, the money-lender 
 
 for his interest, the labourer for his wages. 
 
 If the employer fails, all fail with him; and if he fails in one point 
 he fails in all. For if he fails in his own profit he cannot live, and 
 there is an end of him as an employer. If he fails in rent the landlord 
 ejects him, and stops his work, and his work ceasing, the money¬ 
 lender’s interest and the labourer’s wages cease with it. If he fails in 
 his interest the money-lender sells him up, which also stops his work, 
 and with it again the landlord’s rent and the labourer’s wages. As 
 for his labourer, as he is usually paid weekly, monthly, periodically, 
 somehow as the work goes on, he has rarely much to claim, so we may 
 leave him out as a probable danger. But rent, interest, and wages 
 all depend on the employer, and failure in any one liability brings 
 down the extinguisher on him, and extinguishes the others as well as 
 himself, all four incomes disappear together. 
 
 But besides the Ws who supply T’s income there grows up another 
 class of Ws who enable him to spend it—who live by supplying his 
 wants, so that when his accumulated tribute demands break down 
 W who supplies them and his income goes too, these others lose their 
 income. So that a whole series of incomes disappear together. 
 
 When a crisis comes there is as much distress amongst the Ts 
 as amongst the Ws. Above the cry of the foreclosed farmer, of 
 the sold-up tradesman, of the unemployed labourer, there rises the 
 cry of the wealthy gentleman of “ independent means,” whose great 
 and sudden fall from opulence to penury attracts special notice; 
 of the widow and the orphan who have lost all their “ savings,’’ 
 and who attract special and deserved pity. And really 
 everybody seems to imagine that a pile of accumulated real 
 wealth has suddenly and mysteriously disappeared. When all that 
 has really disappeared is the power of a number of persons who do 
 no work to claim the earnings of those who do. All the real wealth 
 
 1 is just as abundant as it was; the stock of goods, of actual utilities 
 is not lessened an iota. Nothing has disappeared but incomes—- 
 claims. Yet the business relations of society consist of such an 
 interlacing network of these claims that their cessation throws every¬ 
 thing into confusion, and the wheels of the great industrial machine 
 
8 
 
 slacken, its output diminishes, and wide confusion and distress result. 
 
 But since T does not hoard his money, but invests it (be., passes it on 
 to someone else to spend) it gets spent after all. True. But the 
 expenditure is now taxed, and the tax falls on W. If T. has <£1,000 
 coming to him from W and spends it on a house for himself, employ¬ 
 ing W to build it, then so many men are employed, the house is built, 
 and the claim is wiped out. 
 
 But if he lend it to someone else to build a house, then as before, 
 so many men are employed, and the house is built, but the claim is 
 not wiped out, but continues incurring interest, which the worker 
 somevjhere has to pay. 
 
 Wo doubt the borrower who builds the house benefits in a way by 
 the loan, or he would not borrow. But the mischief is that T’s refusal 
 to buy his goods compels him to borrow, for if T spent all his income 
 as he got it, the demand for goods would be so great and continuous, 
 and the money—the purchasing power—instead of accumulating in 
 the hand of a single class, would be so quickly and widely diffused u 
 
 that W would be under no necessity to borrow, and could build his 
 own house with his own earnings. 
 
 Saving money so far from adding to accumulations, as the authorities 
 teach, diminishes them by checking production ; for goods are produced 
 only to be consumed ; and if A, the customer, refuses to have them, B, 
 the producer, will not produce them. 
 
 To most people it seems a mere truism that the greater the consump¬ 
 tion the less the goods. But it is not true. The very converse is the 
 truth. For the greater the consumption the greater the demand, and 
 the greater the demand the more active the production. Consumption 
 calls forth the goods that it consumes. Indeed, it calls forth more 
 than it consumes, for by far the grea.ter part of the articles we 
 require—all indeed, except food, tobacco, and a few other things—are 
 more or less durable, outlast their first use, outlast many successive 
 uses, and so are produced faster than they are worn out, and thus give 
 rise to accumulations. This durability of most of the articles we 
 produce is indeed the chief cause of accumulating wealth. 
 
 Saving money then is not saving goods, but only throwing Ihem on 
 the market unsold, causing what is called “ overproduction,” bringing 
 down profits, embarrassing trade, checking production, and lowering 
 earnings. 
 
 The goods remain unsold, not because nobody wants them, for 
 millions want them badly, but because the money, the purchasing 
 power, the command of goods and services, has accumulated in the 
 hands of the fortunate few who don’t want them, leaving in the hands 
 of those who do want them barely enough to supply their most 
 pressing wants. 
 
 And precisely because T already has so much, he can get more still, 
 with no effort of his own. Because he commands the present he can 
 also command the future; for whatever fresh opportunities of wealth 
 producing come to light, W is to too poor to take advantage of them, 1 
 so they fall into T’s hands. 
 
 Does someone discover a new method or devise a new machine P It 
 cannot be tested, perfected, brought into use without money; there¬ 
 fore T, who has the money, buys it up for a trifle. 
 
9 
 
 Does S'omeone else find valuable minerals P T generally owns the 
 land and claims them. Even if they are on Crown land W has not 
 the money to develop them, T has, so he buys it up again, and W has 
 to work for him as a hired servant. 
 
 Does Government open up fresh lands by new roads p They are too 
 far away or too densely timbered to be of much immediate profit, so 
 W, who can’t wait for the distant golden future, either lets T take 
 them up, or if he does take them is sooner or later bought out by T, 
 who can wait, and who, letting the land for a small profit in the 
 present, can sit comfortably waiting in his chair for the later but 
 inevitable rise of land value. 
 
 So no matter what the enterpise may be, nor how promising, nor 
 how thoroughly well able W may be to manage it, so far as knowledge 
 and skill go, it falls into T’s hands, and W has to work under him 
 for mere ordinary current wages. 
 
 So T saves habitually; and the richer he is, and therefore the less 
 need there is for him to save, the more he saves. 
 
 No matter how well assured his future may be, there are always 
 reasons in plenty to induce him to go on saving. 
 
 There is the love of power, which is gratified by the reflection that 
 he has plenty, increasingly plenty, money to spend if he likes. 
 
 There is the importance and influence with others which the reputa¬ 
 tion of having plenty of money confers. 
 
 There is the natural desire to leave one’s children as well off: as 
 possible. And last, but not least, there is the pernicious doctrine, 
 taught by the highest authorities, that these savings of his are real 
 additions to the national wealth, and represent the fund by which 
 industry is carried on and comforts are diffused. 
 
 Notwithstanding all that has been said, saving money in an excellent 
 thing when kept within limits—very narrow limits—for it is a form 
 of insurance. 
 
 Like insurance, it adds nothing to accumulations, but it averts 
 suffering. There is no better way for a man to make provision against 
 sickness, or accidents, and for old age, and to give his children a fair 
 start in life than by contracting expenditure, and so saving money. 
 
 By this means no goods need be put by to spoil or to deteriorate, 
 to be destroyed or stolen; in any case to lie uselessly idle till wanted. 
 There is no cost of storage and guardianship; and when the time for 
 calling in the provision arrives it comes in money, which will com¬ 
 mand exactly what may be wanted, instead of in the shape of old and 
 more or less damaged goods, which are sure not to be all of them just 
 what is required. 
 
 For these three purposes, and to a limited, reasonable extent, saving 
 money is emphatically good. Nothing is saved by it but a claim 
 upon somebody else; but this claim-saving avoids both cost and 
 waste, and is thus a gain to society at large, as well as a convenience 
 to the saver. The payment falls on W, and comes out of daily pro¬ 
 duction, not out of an imaginary store of previously accumulated 
 goods ; but the W who pays it himself benefits by the system, for 
 by it he in like manner can make provision for his own future. 
 
 It is the savings—the needless and excessive savings of the rich 
 that do the mischief. The savings of the poor do no harm, or, rather, 
 
10 
 
 they would do no harm but for the oppressive burden caused by the 
 savings of the rich, to which their savings of course add fresh 
 increments. 
 
 Nothing seems more ridiculous than the way in which intelligent 
 and otherwise well-informed people point from time to time with 
 satisfaction to the country’s accumulated savings—not in barns and 
 storehouses, but in the ledgers of lendiug societies, above all in the 
 savings banks. These last are the very type and specially quoted 
 example of the kiod of savings which economists applaud and incul¬ 
 cate, and hardly anyone seems to realise that they are savings on paper 
 only, not in fact; that they represent not accumulated wealth, but accu¬ 
 mulated debt, and that the larger the sum of them the greater the 
 burden that W, that industry generally has to bear, and the harder it 
 is becoming to bear it; the more so, too, inasmuch as every investor, as 
 soon as his savings reach a certain point, retires from business to 
 live on his savings, thus taking one from the list of W to add one 
 more to the list of T, and so making it harder than ever for the 
 ranks that he leaves. There is an idea that, though A, who saves nomi¬ 
 nally may not save really, yet, by deferring payment he enables B 
 to save instead, which comes to the same thing. Yes, it comes 
 to the same thing, for nothing is saved in either case. The 
 goods, if it is goods, are consumed; the money, if it is 
 money, is spent, alike in the one case as in the other. What sur¬ 
 vives is the claim. The idea, too, that if A had not lent his money he 
 would have spent it unproductively, while B, having to pay interest 
 on it, is bound to spend it productively is a pure assumption, 
 and an unlikely one too. For the very fact that A has 
 saved money shows that he is not a reckless, wasteful, man, and 
 therefore that if he had spent it himself instead of lending it,, 
 he would probably have spent it well. While the fact that B wants to 
 borrow, though it may indicate that he is a skilful man who only 
 wants money to carry out successfully some useful enterprise, may 
 just as easily indicate that he is reckless in the present, or over¬ 
 sanguine as to the future, or dishonest, and only wants to get hold of 
 of money somehow, or in desperate straits and catching at any straw, 
 Indeed, this last is a very common motive for borrowing, and often 
 succeeds in getting what it wants. But whether the money be bor¬ 
 rowed to secure success or to postpone ruin, whether it be employed 
 for wise enterprise or wild speculation, whether the venture succeed 
 or fail, in every case the investment of the savings represents con¬ 
 sumption and expenditure, not storing up, and the result in case of 
 success is an entirely fresh creation. Old goods have been consumed 
 to produce new goods, and money spent to make more money. 
 
 Accumulations of real wealth are not due to saving, except in so far, 
 to a small extent, as saving means simple avoidance of waste. What 
 real accumulations are due to is the industry that produces more in the 
 day than the day’s wants, the improvement of instruments and pro¬ 
 cesses that increase the productiveness of labour, and, above all, the 
 durability of most of the articles we produce, most of which (all except 
 food, tobacco, and a few others) outlast their first use, outlast many 
 successive uses, and so are produced faster than they are worn out, 
 and so accumulate. 
 
11 
 
 Expenditure is constantly being confounded with consumption; 
 but spending money is one thing, consuming goods is another. 
 Expenditure is merely exchanging money for goods. The two things 
 change hands, but remain undiminished by the transaction. Food is 
 produced to be eaten, fuel to be burnt, clothes to be worn, everything, 
 in short, is produced for the purpose of being consumed, or, at any 
 rate, of being put to use. The longer the things last, fulfilling their 
 use before they are consumed, the better; but the main thing is 
 that they shall be put to use, and not left idle, much less rot, which 
 they will do if not used; and whether they are consumed by the 
 person who produced them, or are sold by him to somebody else to 
 consume, is of no consequence. 
 
 Suppose, however, that the “ savings ” which figure in the ledgers of 
 savings banks and similar institutions, and to which the authorities 
 point with such satisfaction as evidences of an accumulated fund of 
 real wealth, were really, as represented, a substantial something in the 
 “ capitalist’s ” possession, which is on no account to be dissipated, but, 
 on the contrary, perpetually added to by fresh saving. Suppose, in 
 short, that the great thing, especially in hard times, is to save money, 
 not to spend it, except in clearly profitable work, the profitableness of 
 which is to be estimated by the profit to the capitalist himself. Let us 
 give a little parable, and see how the theory works out. 
 
 There is a crisis on hand. Trade is dull, money scarce, employment 
 hard to find, wages falling. 
 
 T has ,£1,000 “ put by,” and looking out of the window he sees a 
 group of labourers ragged and hungry. On one side are clothiers’ and 
 bakers’ shops with clothes and food offered for sale. On the other 
 side are tools and raw material for work also offered for sale. Behind 
 are the millions of the human race with wants unsatisfied, which those 
 unemployed men, fed with that food and provided with those tools 
 would only too gladly satisfy. But the labourers must remain un¬ 
 employed, the goods unsold, the bread uneaten, the clothes unworn, 
 the wants unsatisfied, because the purchasing power, the “ money ” as 
 it is called, is locked up in T’s possession. 
 
 T looks out of his window at the labourers waiting for work, at the 
 shopkeepers waiting for custom, and the sight pains him, for he is a 
 kindly man. 
 
 “ Dear me,” he sighs, “trade is dreadfully dull. What are all these 
 poor people to do to earn a living ? ” 
 
 His wife, who is kind too, says, “ Give them a shilling apiece. That 
 will at least enable them to buy bread.” 
 
 But T, who has studied political economy, shakes his head and says, 
 “ No, that would never do. Gratuitous alms only pauperise, relieving 
 the evil for the moment only to intensify it by and bye ; degrading the 
 men and impairing their usefulness.” 
 
 “ Well,” says the wife, “ suppose you clear that waste piece of ground 
 at the back of the house and make a lovely pleasure ground of it. 
 That will give the men employment.” 
 
 But T says sadly, “ No, that would be worse still. It would dissipate 
 my savings, and so do away with the very fund that maintains labour. 
 It would be downright sin in these times to waste good money in 
 frivolous unproductive expenditure. There is a crisis, my dear, and 
 
12 
 
 we must all save so that capital may again become abundant and trade 
 revive.” 
 
 “ Well,” says the wife, “ set them to do something really useful—to 
 produce something that you really want—potatoes, cloth, anything.” 
 
 But T, reflecting a little, says “No, I am very sorry, but I don’t 
 hapj>en to want either potatoes or cloth, and, in fact, there is nothing 
 particular that I do want just at present; and I don’t even see my 
 way to making a profit in any way, because really trade is so bad just 
 now that there is no opening anywhere ; everything is overdone, and 
 goods are almost unsaleable. 
 
 So neither of them know what to do, and they feel quite sad, till 
 T suddenly says he will go to the Premier and see if some public 
 work can’t be got for the unemployed. So he goes to the Premier. 
 But the Premier points out to him (what he knows already) that 
 times are bad, and the Treasury necessarily suffers. Customs have 
 fallen off; rates are hard to collect ; people must not be pushed. 
 This is no time for starting fresh public works, rather for reducing 
 them. There is nothing for it but patience, and—saving. A little 
 private charity perhaps; a good deal of it indeed; only the charity 
 must be very warily bestowed; restricted to absolute necessaries, 
 and the men must be given to understand distinctly that it is charity, 
 and that they have no real right to it, and so ought to feel very 
 grateful for it. In short the relief must be made pretty uncomfortable 
 and humiliating, or there will be a rush for it, and the men will be 
 pauperised. 
 
 But meanwhile the wife, who doesn’t half understand, but does 
 wholly detest the doctrines of Political Economy, can stand the sight 
 of those poor men no longer, so she calls them in and says: “ There, 
 go into the garden and dig and I will pay you. I am not allowed to 
 give you anything in charity, but set to work and earn something.” 
 
 Now the garden is all in apple-pie order, so the men ask won¬ 
 der in gly what they are to do. 
 
 “Oh!” she says, “Do anything. Dig it all up if you like, only 
 go to work.” 
 
 1 So they go to work. They grub up the roses and root out the 
 bulbs, and dig up the paths, and the fountain, and the summer houses, 
 and turn the whole place upside down, and leave it a desolation. 
 They do, say, ten shillings w r orth of damages each, and she pays them 
 ten shillings each for doing it. 
 
 This money has not disappeared but only changed hands, but there 
 remains an actual destruction of useful property to the amount of ten 
 shillings by each man. 
 
 Now to trace the result. 
 
 Take the first man as a sample of the lot. He is the richer by ten 
 shillings. He steps across the street and spends it in goods. He is 
 still the richer by ten shillings, only it is now ten shillings worth of 
 goods instead of ten shillings worth of silver. 
 
 But the shopkeeper is also now the richer by ten shillings. True, 
 he had to give the goods for it, but unsaleable goods are worth nothing, 
 and his goods were unsaleable. It was a real gain to him to convert 
 his unsaleable goods into ten shillings worth of general purchasing 
 power. 
 
 
13 
 
 He next spends this ten shillings in employing an idle shoemaker to 
 make him a pair of boots, and still remains richer by ten shillings. 
 That is ten shillings worth of boots. But the shoemaker is also now 
 the richer by ten shillings, and he transfers it to a carpenter to make 
 him a table, and the carpenter transfers it to a locksmith to make him 
 a lock, and so on indefinitely; each successive man becoming in turn 
 the richer by ten shillings in some shape or other. 
 
 But for T’s wife, none of these goods—boots, table, lock, etc , worth 
 ten shillings each, would have been produced; so that society is the 
 richer by the whole series of them through her act. 
 
 No. 1 wanted boots from No. 2, but had nothing to give in return 
 that No. 2 wanted; and No. 2 wanted a table from No. 3, but could 
 not make the lock that No. 3 wanted; and so they all stuck fast. 
 Each wanted something from the other, but the wants did not fit and 
 trade stood stid, because the money which fits all wants (broadly 
 speaking) was locked up in T’s possession till his wife set it free. 
 Directly she turned the tap the stream flowed fcrth, trade revived, 
 and production began afresh. 
 
 So what the philanthropist and the statesman knew not how to do 
 Has been accomplished in a moment by the impulsive act of a 
 simple-minded woman. Her apparently foolish and really wasteful 
 act indirectly caused the production of goods many times exceeding 
 in value the property she caused to be destroyed. But it is a poor 
 view that estimates the utility of work by the mere production of 
 goods. For if No. 1, instead of ordering boots, had paid his ten shillings 
 to a schoolmaster to educate his boy, and the schoolmaster had passed 
 it on to a dentist to pull out an aching tooth, and so on through a 
 whole series of technically unproductive but none the less useful ser¬ 
 vices, would not the result have been as well worth the outlay ? But 
 for T’s wife the boy would have remained untaught, though the 
 schoolmaster stood ready to teach; and the tooth would have gone on 
 aching though the dentist sat idle in his surgery, and a whole train of 
 difficulties would have remained unremoved and wants unsatisfied just 
 for lack of the half-sovereign which that good woman set spinning. 
 
 Now this is substantially what happens in real life. Saving, in the 
 sense of cessation of spending, stops everything, production as well as 
 exchange, for one cannot go on without the other. If A ceases to 
 buy B’s goods B will cease to produce them, unless C buys them 
 instead; that is, unless one man’s increased expenditure counterbalances 
 and so cancels another’s saving. 
 
 Of course there must be a basis of goods already existing, or else 
 T’s purchasing power will be of small use. But in real life there 
 always is this basis. In the worst times the difficulty always is not 
 that there is a deficiency of goods but that the goods don’t sell, and 
 the reason they don’t sell is never that the goods are not wanted, but 
 that the people who want them have not got the money to buy them, 
 the money—the purchasing power (no matter in what form embodied) 
 having accumulated in T’s hands through T’s habit of refusing to 
 take W’s goods in satisfaction of his debt, and so piling up an 
 accumulation of claims against him. 
 
 In the business world, what constitutes a “moneyed man” (or 
 capitalist, as he is generally called) and gains him command over the 
 
14 
 
 goods and services of others is not goods or sovereigns, but claims. 
 Not goods, for most moneyed men have no goods except what they 
 want for their own enjoyment, while of those who possses large stocks 
 of goods, many can’t sell them or can’t get paid for what they sell, 
 while many others carry on their business on the credit system, and 
 owe most of their earnings beforehand. 
 
 Not sovereigns, for few moneyed men have more than a few in their 
 possession, and what sovereigns they receive they promptly pass on to 
 the bank, converting their “ money ” into a claim on the bank. The 
 sovereigns do not accumulate anywhere (except to a certain extent as 
 necessary bank reserves), they pass from hand to hand, as much among 
 the Ws as among the Ts : It is the claims that accumulate. 
 
 Note, too, for it is very significant, that whenever a business man 
 talks of “ realising his capital,” he does not mean converting his money 
 into goods, but his goods into money, and he forthwith converts this 
 money into a claim, getting rid of the coin at the first opportunity. 
 
 A crisis, then, is caused by the weight of accumulating claims, 
 mostly pure tribute claims, pressing upon and exhausting earnings, 
 and so breaking down industry. It is caused in fact by savings— 
 accumulated and invested. 
 
 As a crisis approaches, the symptoms of its approach intensify. 
 Employers finding themselves getting short of money begin to borrow, 
 to renew bills, to entangle themselves in tribute more and more, 
 thereby hastening the catastrophe; so that, like a stream approaching 
 a waterfall, the current quickens before the final plunge. People say 
 then that it was the borrowing, the reckless trading on credit, that 
 produced the mischief, when really the borrowing and the credit were 
 but the natural symptoms and effects of the growing pressure on the 
 workers. They had to borrow in order to keep going. Tension is at 
 its height when a bank fails, or a big firm collapses; innumerable 
 other people are involved in the failure, these involve others, and so 
 ruin spreads in all directions. People now say it was the bank failure 
 that did the mischief, whereas it really represented only that crack at the 
 weakest place that indicated the intensity of the strain and the 
 coming catastrophe that was bound to come somewhere. Of course 
 accident, indefensibly rash speculation, or swindling may precipitate 
 or aggravate the crash, but it is bound to come in any case. 
 
 In all this we have an exact picture of our own commercial crisis, 
 and of the conditions that preceded it. 
 
 (a) Nothing necessary to the continuance of productive work was 
 wanting. The land was as abundant and as fertile as before; the 
 minerals w 7 ere there, the labourers were there, and as willing to work; 
 the food, the tools, and everything necessary to keep the work going 
 were all present, besides more being in course of production daily. 
 
 (5) No break or hitch had occurred in the processes of production. 
 The harvest was (as it turned out) above the average; the mines were 
 more fully developed and giving greater promise than ever; the fruit 
 trade had received a new impetus; we had timber and fish, and all 
 kinds of natural products ; and as to wool, the rain fell and the sun 
 shone, and the grass grew, and the sheep eat it, and turned it into wool 
 as usual, without our having anything to do with it. Our whole 
 
15 
 
 industrial machine was in perfect order and full swing, when suddenly 
 it stopped ! Why ? Because Tribute had outrun Earnings. 
 
 It is said that the crisis was caused by loss of confidence. But 
 there was no loss of confidence— then. 
 
 People were over confident, not under confident. They thought the 
 West Coast minerals were going to give abundant employment for 
 willing workers, a home market for farm produce, and golden fortunes 
 for investors; and in their excessive confidence they ran mining shares 
 up to fancy prices. They thought the ocean steamers that had begun 
 to call regularly for our fruit had already established fruitgrowing 
 for exportation as a national industry. They had such confidence in 
 an immediate prosperous future that they cheered on the Government 
 j to borrow recklessly, and to make railways right and left, in places 
 
 where there was no rational prospect of their ever paying working 
 expenses; in one case to tap a district that actually did not want a 
 railway at all. 
 
 I It was not till the crash of a failing bank sounded in their ears, and 
 
 firms went down like ninepins that people began to lose confidence ; 
 and even then confidence was only shaken, not lost. Investors were 
 throwing up their shares in all directions, not eagerly, and because 
 they had lost confidence in their investments, but unwillingly, regret¬ 
 fully, from sheer inability to meet their calls. And why could they 
 not meet their calls ? Because the strain of accumulating tribute 
 had reached the breaking point, and at the first note of danger some 
 of the tribute leviers, taking fright or being pressed themselves, began 
 to call in their claims; the people called on had to call in theirs, 
 and so it went round. 
 
 It has been noticed with surprise that just before the crisis in 
 Victoria the accumulations in the savings banks were unusually large. 
 Just so. “Accumulations” will always be found to be large just 
 before a crisis, for the simple reason that they are accumulations of 
 claims, not of goods, and are exactly what cause the crisis. 
 
 The failure of the bank that startled the whole community and 
 initiated the general breakup, so far from being the cause of the 
 depression was the first movement in relief, though like other cracks 
 caused by intense pressure, it hurt exceedingly. And all our well- 
 meant attempts to lighten the calamity and let the victims down easy 
 by “ giving time ” for payment are only prolonging the agony and 
 widening its area. 
 
 Because tribute having outrun earnings (that is claims having 
 accumulated beyond the power of payment), trade cannot recover nor 
 work proceed as before till the excess is—not paid—but wiped out. 
 You may enable the immediate debtor to scrape through somehow by 
 “ giving time,” but this only shifts the ruin to someone else, generally 
 from the non-worker to the worker. The loss is bound to fall some¬ 
 where ; and the longer it is put off the greater will be the number of 
 those, quite unconnected with the failure, who must suffer grievous 
 loss by the mere stagnation of business, and the longer they will 
 suffer. 
 
 Neither the failure of the V.D.L. Bank as a particular fact nor the 
 crisis as a general fact affected the real factors of production. The 
 land was as abundant and as fertile as ever; the minerals remained 
 
16 
 
 awaiting development; all our inexhaustible natural resources re¬ 
 mained unimpaired; the men were as able and as willing to work; 
 the food, the tools, and all the requisites of production were ready to 
 hand, as before; but the soil and the minerals have to remain un¬ 
 developed, the labourers wander about begging for employment; the 
 tools rest idly in back yards or linger unsold in the stores. Why ? 
 
 Because the purchasing power has accumulated in the hands of the 
 leviers of tribute (who are now losing heavily themselves, and are 
 afraid to re-invest till affairs have settled down again), and the 
 workers, drained dry and with unsatisfied claims still hanging over 
 
 them, can do nothing. 
 
 It is the accumulation of mere claims, airy, unsubstantial, but none 
 the less formidable claims, that has worked all the mischief, concen- t 
 
 trating the money in the wrong hands, in the hands of the people who 
 don’t work instead of in the hands of those who do. 
 
 And the capitalist, gorged with his “ savings,” looks with his good 
 wife sadly out of the window at the misery around him, and wishes v 
 
 that “ something could be done” to set business going again. 
 
 Bent and interest saved and invested, saved again and reinvested to 
 appear as fresh savings (in bank ledgers), cause tribute to accumu¬ 
 late faster than earnings—claims to outrun the power of payment. 
 
 A penny put out to interest and compound interest at 5 per cent, 
 in the time of Christ would long ere this have amounted to a sum far 
 exceeding the value of all the real wealth existing in the world. The 
 interest upon it would far exceed the annual earnings of the whole 
 human race, including what was required for bare maintenance. Why, 
 
 then, has not industry broken down long ago ? Because (as Flurscheim 
 expresses it) the penny every now and again gets lost; because every 
 now and again the workers, more or less of them, fail and go insolvent, 
 and so much of the claims get wiped out. The burden itself breaks 
 down by its own weight. Bor of course industry cannot break down, 
 production cannot cease. So long before any great general catastrophe 
 can occur slight partial catastrophes called commercial crises occur; 
 a number of great firms collapse, spreading ruin all around them; 
 commercial relations are thrown into confusion, trade is paralysed, 
 production is checked, labourers are thrown out of employment, and 
 a vast amount of suffering is produced, but so many claims are wiped 
 out, so much of the burden is reduced, trade revives, and work 
 gradually recommences. 
 
 A commercial crisis is a calamity no doubt, and a terrible one, 
 but it is a calamity that averts a still greater calamity. It 
 is a timely and partial breakdown that averts a later, wider, 
 and more disastrous breakdown. It is a catastrophe in a miti¬ 
 gated form that is bound to come sooner or later, and that the longer 
 it is delayed the heavier it will be. And as the catastrophe is incom¬ 
 plete so is the recovery. The burden is not abolished but only 
 reduced. The worker is not set free, but only so far relieved as to bo 
 able to get up and stagger along again, till the ever accumulating 
 burden causes another partial breakdown and another partial recovery. 
 
 There are good times and bad times in trade, but the good times are 
 good only by contrast. There are times when profits rise above the 
 average and employment becomes more abundant than usual, and 
 
17 
 
 wages therefore rise too, but poverty and distress abide with us all 
 through. Life continues to be to most a bare struggle for existence. 
 'While tens are doing well, hundreds are barely making both ends 
 meet. While wages rise above the average they still remain below—• 
 far and away below—the point which would secure to him whose toil 
 produces all wealth, not merely a sufficiency of wholesome food and 
 good shelter, which the working horse gets always, but what every 
 willing human worker has a right to expect and what alone makes life 
 worth having—relief from the monotonous, incessant round of toil for 
 others enrichment, some leisure for recreation and amusement, not to 
 mention instruction and improvement, some cheering hope of a 
 gradual rise to a better condition, and freedom from that ever haunt¬ 
 ing anxiety about the future. 
 
 Is the picture too dark ? It is dark truly, but not hopeless. Far 
 from it. We have but to take one step further and the light breaks in 
 abundantly. 
 
 ALL TRIBUTE ARISES FROM PRIVATE OWNERSHIP OF LAND. 
 
 Private Rent (as distinguished from State Rent) arises from the fact 
 that someone has got possession of a piece of land which he does not 
 intend to use himself, but forbids anyone else to use, except on pay¬ 
 ment of tribute— payment not for service of any sort rendered; but 
 for mere permission to use that portion of the earth’s surface,* which 
 payment he will either spend on his own enjoyment or invest for 
 fresh tribute. 
 
 And Interest arises from private rent, thus: If I have .£1,000 saved 
 for my old age, then if it consists of the actual food, clothes and other 
 goods that I expect to want in my old age, it will cost me much in 
 tarns, cellars, burglar-proof safes, and other precautions, with the 
 possibility that it may be destroyed or stolen, notwithstanding all my 
 precautions and the certainty that many of the goods will be spoilt by 
 the time I require them. 
 
 It would pay me well to let some responsible person use these goods 
 gratis, on the simple condition that he would give me back a like 
 amount of goods at a specified date. It would even pay me to pay 
 him to take them on these conditions. But, of course, the savings 
 that represent provision for old age are never really made in this way, 
 viz., in stored up goods. 
 
 If my £1,000 consist of coin, then it will certainly cost me less to 
 store it, but still it will cost me something, and there is always the 
 risk of robbery. Again it would pay me well to let some one else 
 use the money on mere security given that he would return it when 
 wanted. 
 
 But if it consist, as in practice it always does, in a mere suspended 
 claim for payment, then no doubt it would cost nothing to keep, but 
 I can’t keep it. The essence of the deferred claim is that I don’t 
 receive my payment but get, or allow, someone else to use it. 
 
 * I am speaking, of course, of economic or ground rent only, not of that portion of 
 so-called rent which represents a charge for improvements effected. 
 
18 
 
 But there seems no reason why this other person should pay me 
 for doing what is as much for my convenience as for his; and in fact 
 he would not pay me anything, but for this— 
 
 That so long as I can with this <£1,000 buy land, which 
 
 WILL BEING ME TRIBUTE IN THE SHAPE OF RENT, I WILL LET NO 
 ONE HAVE IT EXCEPT ON TRIBUTE IN INTEREST EQUAL TO WHAT I 
 COULD GET IN RENT. 
 
 Here, then, is the origin of Interest. 
 
 If the land were nationalised, and land was consequently no 
 longer available for private investment, borrower and lender would 
 stand on equal terms, and there would be no reason why either should 
 pay the other for what was a matter of mutual convenience, 
 
 Rent would then go to the State to be expended in public benefits f 
 
 instead of to a private landlord to be expended on himself, or saved 
 and re-invested for further tribute, which is worse still. 
 
 Imagine all the millions now invested in land thrown upon the market 
 for investment. Everyone with savings now wants someone to take V 
 
 care of them. For they must be taken care of somewhere and some¬ 
 how. Hoods can be stored up, but only at cost and risk, and with the 
 certainty of destruction to some and deterioration to all. Coin also 
 can be stored, but also only at some cost and risk. And as it fetches 
 no interest when so stored, there is no object in storing it. All saving 
 then practically comes round to the savings bank type of savings— 
 to mere claims for payment suspended, by one person against another. 
 
 And how and where can these claims be kept suspended ? 
 
 Say that there is £1,000 coming to me, and that I want to save it, 
 that is, to let the payment stand over somewhere. There are only two 
 ways in which I can effect this: One is to refuse to accept the pay¬ 
 ment from the person who owes it and to allow or to request him to 
 let the amount stand over for a specified time ; which means that the 
 debtor may himself consume the goods or spend the money due to me 
 on condition of producing fresh goods or earning fresh money for me to 
 the amount required at the time appointed. But I shall of course want 
 some security that he will really pay the debt at the time appointed, 
 and suppose he can’t, or won’t, give that security P Then I must accept 
 payment from him and hunt about for some responsible person who 
 will consume these goods, or spend this money under the proposed 
 conditions of repayment. But when it comes to hunting for a 
 borrower, instead of being hunted by him, the days of interest are 
 about over. Consider the position. Savings by the million set free, 
 with no land available to invest them and therefore seeking a respon¬ 
 sible caretaker, and in a hurry to find him; for till he is found, the 
 saving remains either as an uncollected debt in the hands of a doubtful 
 debtor, or as a bag of sovereigns hidden away privately and temptingly 
 to the thief, or else as a deposit in a bank which pays nothing, but 
 on the contrary charges for the custody (for of course it will pay 
 nothing for the deposit when thousands are applying to deposit), 
 and realise that the same cause (the nationalisation of the land that > 
 
 has closed land ownership, as distinguished from land use, against 
 investment) that has increased the eagerness to lend lias, at the same 
 time, diminished the eagerness to borrow; for those who want to 
 use land—to build, to cultivate, to mine—can now get all the security 
 
19 
 
 of tenure they require by simply renting from tlie State, or from the 
 Municipality. All the money that the intending user had to part with, 
 as purchase money to get the land, can now be kept to work it, and 
 the worker can snap his fingers at the money lender. 
 
 If such a revolution were effected suddenly, it would dislocate 
 society, throw everything into confusion, and cause widespread suffering 
 for the moment ; but if accomplished gradually, by the State (or 
 preferably by the local bodies) being empowered to acquire the land 
 compulsorily, at fair compensation, bit by bit (to let to the workers 
 in restricted areas) wherever it was wanted and as it was wanted, it 
 would only produce a steady fall of interest as the field of investment 
 narrowed, and the necessities of borrowers diminished, till interest 
 sank to zero ; and those with savings laid by, for the only legitimate 
 purpose for which savings need be made (that is to provide against 
 accident and for old age and to give one’s children a fair start in life) 
 might even offer payment to responsible persons to “ hold ” their 
 savings for them ; that is, pay the borrower for borrowing,—but for 
 this ; that the State, which represents the best security of all, could 
 always find use for the money in setting all the unemployed to con¬ 
 struct public works and render useful public services of all kinds. 
 The State would never either be called upon to return what it received, 
 for each lender who wanted to realise his deposit could do so by 
 simply transferring his title to deposit to someone else who wanted 
 to come in, as is now done with Consols; so the land once nationalised 
 the State would get the benefit of the national savings and capital 
 would have nationalised itself. 
 
 Printed at “The Mercury” Office, Hobart. 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 Syracuse, N. Y. 
 PAT. JAN. 21, 1908