mercial community from the earliest days
until now when money has bad any fixed
value.
What is speculation? What does the gen-
tleman call sound business? What has
made the commerce of the United States
but speculation and the reaching out of the
arms of merchants to the trade of foreign
countries, and finding a sale for the products
of other lands? Speculation! Without
speculation the commerce of the United
States could not exist one day. It is specu-
lation going solely upon judgment in many
cases, failing and failing and failing again,
but out of this failing they come to final
success. The first new thing in a country
has hardly ever been successful; but they
have gone into the hands of men who have
made them successful by repeated trials and
repeated efforts time and again, and thus the
commerce of the country has been made
what it is. The rate of interest has de-
pended upon the wants of men who have
properly employed money in carrying out
these enterprises, and in supplying the com-
mercial requirements of the country.
How can a man who desires to operate
with money, the gentleman asks, do it when
money fluctuates? How can a man who de-
sires to farm, do it when oats are fluctu-
ating? How can a man who desires to go
into business of any kind, do it when the
prices of merchandise are fluctuating? Does
the man who goes into business require to
know what will be the prices of merchan-
dise? Does he require that the prices shall
be fixed bylaw? He takes the risk of the
market. So the man who wants money
does not require to know whether it will
fall or not. He makes up his mind accord-
ing too the best of his judgment, and comes
to a determination whether be can employ it
profitably at the rate he borrows it, knowing
that the price of money as well as the price
of anything else is constantly fluctuating. In
every business, in every calling, is the ele-
ment of fluctuation. But the fluctuation of
money has nothing to do with this question,
because the man knows what he is to pay
by his contract, and that is what he must
calculate upon.
But how allowing the right of making
private contracts makes money fluctuate I
do not see. If I see that I can employ
money at an advantage for six months at
twenty per cent., I make the contract, and it
does not fluctuate during that time. During
that time it is fixed and immutable. If I
borrow more money three years hence, at a
different rate, that has no reference to what
I borrow to-day.
How is it in England? The Bank of
England fluctuates, changing its rate every
day. To-day, perhaps it is eight per cent.
and to-morrow five or six. They fix the
rate as they think proper. They ask no
48 |
consent from anybody. It is a power given
to them ill their charter. The security is
that they state the rate of interest publicly
in the market on the day on which they in-
tend to sell at that price. To-day they say it is
eight per cent., and ask who wants it at that
price. If it is not worth eight per cent. to-
day no man will be willing to take it, and
to-morrow they may publish that the rate of
interest is five per cent,, and ask who wants
money to-day at five per cent. The thing is
open, fair and above board. There is no
chance for men to grind the face of the poor
that gentlemen have talked about so much. If
a man has good security to offer he goes into
the market and takes the money he requires
at eight per cent,, or five per cent., or what-
ever may be the published rate.
When a man goes into the market to make
a contract for money be goes exactly as he
would go to-day to buy gold. The first
broker charges him 2 60 and the next one per-
haps 2.58, and be buys it where be can get it
at the lowest rate. So in borrowing money,
be goes round to find where he may get the
money at the least rate upon his security.
The man is safe. It is a fair open transac-
tion. The lender estimates the risk which
he runs in taking that security, and fixes the
rate at which he will lend the money, and
the borrower takes it or not as he pleases.
It is notorious that in New York city,
where the rate is seven per cent., money is
loaned at five, when the security is undoubt-
ed. If the security is not undoubted the
price runs up, until the security gets so bad
that no man will touch it at any price.
The money borrowed on real estate, to
which the gentleman from Kent referred, is
not one tithe of the money used. The money
borrowed upon real estate is generally used
to make improvements upon that estate; but
the bulk of the money used is used for com-
mercial purposes in the country and goes
from one end of it to the other. It is con-
stantly circulating. The amount of money
borrowed in the State of Maryland for a
whole year on real estate I do not believe
equals the amount borrowed on the streets of
Baltimore in a period of commercial activity
in a single day. They go and borrow it
upon the security of commercial paper, or
bonds, city bonds, or Maryland bonds, or
others, which are held until the note is paid.
There is very little money borrowed for com-
mercial purposes on real estate.
The gentleman says that in Baltimore and
in Maryland we are not subject to the spas-
modic contractions of the New York mar-
ket. I tell the gentleman that if this morn-
ing, at 8 o'clock, it had been telegraphed
to Baltimore that money was tight in New
York, at ten o'clock you could hardly squeeze
out a dollar in Baltimore. As fast as the
telegraph could bring them there would be
calls for money from New York, and in any |