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Show ED!S0N-F0RD PLAN'S ATTACK ON INTEREST Abolition of Rent No More Plausible Plausi-ble Than Abolition of Pay on Loans, Expert Shows. It Is no more unreasonable to pay Interest In-terest on a loan of money than to pay rent on a house, declares William T. Foster, Director of the Pollack Foundation for Economic Research. In exposing the fallacy of the attack on Interest charges by Henry Ford and Thomas A. Edison in their commodity money scheme to do away with the present financial system. Mr. Foster's argument Is reviewed In the present article which Is one of a series prepared pre-pared by the American Bankers Association. Asso-ciation. "The Ford Edison commodity money plan is regarded as a step toward the abolition of all Interest charges," Mr. Foster says. " 'Interest,' says the Dearborn Independent, 'Is a tax that few ancient tyrants would have dared Impose. Interest In actual modern practice Is a contrivance whereby all production is taxed by parasites, and whereby money Is given a supremacy over men, material and management which It cannot sustain.' Renting Money "But Is there really anything more terrible about paying for the use of money than about paying for the use of anything else? Suppose a farmer finds himself In need of a harvesting machine, and without enough money to buy one. In that case he can either borrow a machine of Neighbor Brown or borrow money and buy a machine. The farmer would consider it right to pay In some way for the use of the machine. Why should he expect to borrow money which is honored in the markets in payment for the Bame machine without paying for the use of the money? "Now let us suppose that the farmer farm-er uses the machine so successfully that he saves a thousand dollars. With that money he can buy a farm and he can let Neighbor Brown have the use of It. Neighbor Brown naturally natu-rally would expect to pay rent. Instead In-stead of buying the farm, however, he could lend the thousand dollars to his neighbor In order that his neighbor might buy the farm. In that case Neighbor Brown should expect to pay for the rent of the money. All this seems clear. When the transactions are as simple as these it is plain that there Is just as great propriety in ; charging for the use of money as in charging for the use of things that i money will buy. Loaned Money Builds a School "We may assume, however, that the farmer does not want to buy land and Neighbor Brown does not want to i borrow money. In that case the ; farmer deposits his thousand dollars j in a bank and the bank pays him in-j in-j terest for the use of his money. But the bank can pay Interest only if it makes profitable use of his money. Now the bank finds that the city needs a high-school building, and has decided to borrow enough money to construct It. In order to obtain the money the city has issued bonds, each of which Is a promise to pay one thousand thou-sand dollars at a specified date, and Interest in the meantime at a specified rate. The bank buys one of these bonds. Thus the farmer has had a part In. providing the city with a school building; and the farmer has just as much right to expect interest for the use of his money as though he had loaned the money directly or indirectly in-directly to. Neighbor Brown." |