Individual Liberty - Evernote

upon as a decidedly indeterminate economic factor. All that his theory means, so far
as I can grasp it, is that interest exists because people can do more with capital than
without it, and that interest actually is, in fact, this surplus obtained by the
employment of capital.
Now, so defining interest, the Anarchists do not wish to abolish it. Such a wish would
be absurd, for it would be a wish to lessen the world's wealth and productive power.
To Anarchists the only consequence of this new definition is the necessity of finding
another term to represent that which they do wish to abolish; namely, payment by
borrower to lender for the use of capital.
But, once this necessary term is found or devised, the old question recurs: will free
and mutual banking make it possible to procure capital without paying for its use?
To the determination of this question three other questions lead up, and I will put them
to Mr. Ingalls straightway.
1. If a thousand men engaged in different lines of business unite to form a bank of
issue; and if this bank of issue unites with other similar banks for clearing purposes;
and if said bank lends its naturally well-known circulating credit to its members (or to
others, for that matter) against conditional titles to actual and specific values given by
the borrowers, - do these loans of the bank's credit cost the bank anything beyond the
salaries of manager and assistants, rent of building, expenditure for paper and
printing, losses by depreciation of securities, and sundry incidentals?
2. Do not statisticians and economists agree that a discount of one-half of one per
cent. covers the expenses referred to in the preceding questions?
3. If men were free to unite in the formation of such banks of issue, and subject to no
penalty or tag whatsoever for so doing, would not competition between the banks thus
formed force the price of the service rendered by them down to cost; that is, one-half
of one per cent., - or to a figure closely approximating it?
Now, I insist, and I have a right to insist, that Mr. Ingalls shall answer these three fair
and pertinent questions directly, without extraneous discussion, without any mingling
of considerations or speculations not absolutely essential to the answers. For either
these direct answers will be what I think they must be, and then the case of the
Anarchists (so far as finance is concerned) is established; or else they will be
something else, and then the case of the Anarchists falls.
If it falls, of course I shall have nothing more to say, and the publication of Liberty
will be discontinued; but, if it is established, then I shall be ready to discuss with Mr.
Ingalls those interesting but at present non-essential questions of collection of debts,
enforcement of contracts, the comparative good and evil of discounting the future
results of labor, etc., etc., etc.
By way of caution, let me add that the Anarchists do not look forward to a time when
there will be no sporadic cases of payment for the use of capital, - such, for instance,
as the example cited by Mr. Ingalls where an inducement is given to the endorser of a
note. They simply claim that under freedom borrowing and lending will so generally