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take the shape of an exchange of credits at the mere cost of the exchange that interest - or, rather, what we used to call interest before Mr. Ingalls appropriated the term to a different purpose-will disappear as an influential economic factor. Mr. Ingalls then offered his answers to the three questions propounded by the editor of <strong>Liberty</strong>, and Mr. Tucker dissected them as follows: To my first question Mr. Ingalls answers that the bank of my hypothesis could issue its notes at a cost not exceeding its running expenses and incidental losses. So far, then, my claim is sustained. For he answers further that such a bank could not exist in the absence of a motive for its existence. It remains for me, then, only to supply the motive. The task is easy. The thousand business men of my hypothesis would unite to form a bank of issue, and would connect this bank of issue with other similar banks for clearing purposes, because thereby they could establish a collective credit having circulating power, which each of them could obtain in exchange for his equally good but less reputable individual credit, having to pay therefore nothing but the cost of this exchange of credits. In other words, these business men would form such a bank as I describe in order to borrow money at less than one per cent. instead of paying, as they do now, from four to fifteen per cent. Is the motive sufficient? To my second question Mr. Ingalls answers that the cost above referred to would probably be met by a discount of one-half of one per cent. Sustained again. I have not to discuss here why bank employees "should be expected to work for bare support." It suffices for the argument to know that what these employees are now willing to accept for their services can be paid to them out of funds provided by a discount of one-half of one per cent. And this Mr. Ingalls admits. When we have exhausted the present issue, then I will consider with him how many tears I can afford to shed over the sad fate of those bank presidents for whom a discount of one-half of one per cent. provides salaries of only ten, fifteen, and twenty thousand dollars. To my third question Mr. Ingalls answers that under free conditions competition would tend to reduce discount to its lowest term, - ordinarily something above cost. I take it that Mr. Ingalls means by this that in banking - a business which under freedom is accompanied by no physical conditions that place a natural limit upon competition - the force of competition would have a tendency of the same strength as that which it has in other businesses similarly free from physical limitations, in other words, that the tendency would be strong enough to cause the price to hover around the cost limit, now rising a little above it, now falling a little below it, but averaging cost, or perhaps a shade more. If this is his meaning, then I am sustained again. The discussion now centers, therefore, upon the following question, which I put to Mr. Ingalls: Is the desire to borrow money at less than one per cent., instead of at four per cent. or more, a sufficient consideration to induce business men to form such banks as I have described? If Mr. Ingalls answers that it is not, he must show why it is not. If he answers that it is, then the proposition which, according to Mr. Ingalls, has never been demonstrated, will have received its demonstration; the proposition, namely, that free and mutual
anking will make it possible to procure capital without paying for its use (the discount being charged, not for the use of capital, but to meet expenses incidental to the transfer of capital). With apology to Mr. Ingalls for my persistence, I must continue the "unilateral inquest" a little further, regretting that I have not been relieved from doing so by an unequivocal answer to my last question. The qualified answer that Mr. Ingalls gives is this: The desire to borrow at less than one per cent. is a sufficient motive to business men as borrowers to induce them to embark in mutual banking, but the desire to lend at more than four per cent. is a sufficient motive to business men as lenders to keep them from embarking in mutual banking. Now I must ask for answers to the following questions: (1) Does the business man who. has capital but lacks cash - that is, the business man who wishes to borrow - sacrifice, by engaging with others in mutual banking, any opportunity of lending (at four per cent. or any other rate) which he enjoys before so engaging? (2) If so, what? (3) If not; if the business man in question, by embarking with others in mutual banking, does not thereby damage himself as lender; is not the desire to borrow at less than one per cent. a sufficient consideration to induce him to so embark? I respectfully insist on answers to these questions. Mr. Ingalls is a very able and sincere writer on economic problems. He deservedly exercises an influence on the class of people to whom <strong>Liberty</strong> appeals. Repeatedly during its publication he has come forward with a denial of the position that mutual banking will make it possible to borrow money without interest. I have now determined to force him, once and for all, to make good this denial by proof, or else to retract it. Mr. Ingalls seems to imagine that the answers which he now gives to my last series of questions are as equivocal as his answer to my previous question. Not so. The terms in which he answered my previous question implied two opposite motives influencing at the same time a business man fulfilling a double capacity, - a borrower and lender, - and canceling each other. As my question did not concern men, who, as individuals, were in the market as lenders, but only those who were in the market as borrowers, this answer was equivocal. But the answers now given to my last questions distinctly recognize the borrowing business man and the lending business man as two individuals, and this recognition removes all the equivocation; for the desire of a lender to lend at a high rate cannot cancel the desire of a borrower to borrow at a low rate, provided the borrower, by association with other borrowers, can provide himself with a source from which to borrow at a low rate, - a condition not as paradoxical as it seems, since the fact of association creates a credit that before had no existence. The present answers, then, being straight-forward and satisfactory, let us review the admissions which I have secured. Mr. Ingalls has admitted that business men desiring to borrow have an adequate motive for embarking in mutual banking; he has admitted
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Individual Liberty by Benjamin Rick
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In 1877 he edited The Word in Princ
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of the upholders of the existing so
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machine which makes his shirts or t
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and employed for the benefit of all
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employed in the protected industrie
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that it is an ideal utterly inconsi
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social order. It was not yet too la
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its borders; and it seems plain tha
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manifestation; the policeman on the
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"All legislations have adopted this
Page 23 and 24: Her foe, Authority, takes many shap
Page 25 and 26: dominion, to authority, and are so
Page 27 and 28: But it is not the most effective me
Page 29 and 30: of sociology has made such a preten
Page 31 and 32: Liberty and Organization Thirty-fiv
Page 33 and 34: coerce the peaceful non-co-operator
Page 35 and 36: organism will speedily disorganize.
Page 37 and 38: This tendency is simply the progres
Page 39 and 40: masterly document will tell him wha
Page 41 and 42: unlettered blacks out of mischief,
Page 43 and 44: Connected with the Massachusetts br
Page 45 and 46: Defining the object of the Church a
Page 47 and 48: worse than despotism," should oppos
Page 49 and 50: form. I should like to know upon wh
Page 51 and 52: etween the popular conception of li
Page 53 and 54: ignorant, though enthusiastic and e
Page 55 and 56: The Futility of the Ballot No super
Page 57 and 58: The Anarchists never have claimed t
Page 59 and 60: Is the Somebody the beggar, the inv
Page 61 and 62: "If James did not lend the plane to
Page 63 and 64: land unfitting it for a basis, it h
Page 65 and 66: In 1889, Mr. Hugo Bilgram first pub
Page 67 and 68: not in this, but in limiting by law
Page 69 and 70: no winter, water-pipes would never
Page 71 and 72: the question whether, in the transa
Page 73: upon as a decidedly indeterminate e
Page 77 and 78: show that I have denied his positio
Page 79 and 80: heresy as an engineer would be to d
Page 81 and 82: original borrower of the notes shou
Page 83 and 84: In the existing unideal world the c
Page 85 and 86: science by his overpowering demonst
Page 87 and 88: unintelligible except on the hypoth
Page 89 and 90: for their customers' business paper
Page 91 and 92: very small. Thus gold would be need
Page 93 and 94: made in bank notes, unless we also
Page 95 and 96: passing through their hands, as a r
Page 97 and 98: would decrease notably, - would fal
Page 99 and 100: therefore its issue can have no eff
Page 101 and 102: chooses; it is none the less establ
Page 103 and 104: monopoly complained of is this - th
Page 105 and 106: "Suppose a natural spring free to a
Page 107 and 108: advantages of land by the landlord,
Page 109 and 110: not infrequently its commendation.
Page 111 and 112: y the virus of political corruption
Page 113 and 114: of B's notes, returns them to B, wh
Page 115 and 116: labor." Exactly. But the principle
Page 117 and 118: protecting power to lend its aid to
Page 119 and 120: of his income, exclaimed, on learni
Page 121 and 122: y occupancy and use. This would des
Page 123 and 124: equal liberty is to secure this fun
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The city laborer may live in a crow
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they can be and will be, though not
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But perhaps Egoist means the exchan
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say to the householder: "Here, I ca
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it will lead to serious results, fo
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eturn." Anarchism holds, on the con
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view. Evidently then these municipa
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mining, it would not follow that th
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difference that I pointed out to Mr
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illustration? Moreover, the illustr
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hypothetical individual, Smith. But
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getting to an occupancy-and-use ten
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All that Mr. Horr has to say about
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in the name of sense is there about
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The Single Taxer starts with the pr
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dog, instead of giving bark for bar
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In steadfastly pursuing this course
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trusts, instead of growing out of c
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from the efforts of a single indivi
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is because they are symptoms of a s
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their superior officers; in other w
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Anarchistic Socialism. What Anarchi
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Here the ghost appears, all form an
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Yes, as The Anti-Monopolist says, U
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injury to no other? Why don't you t
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A very acute criticism of Mr. Spenc
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achieved for any length of time wit
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If a man were to declare that, when
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clear logic of the principle which
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