| Show SEEING THINGS B B By y l f Melvin e I 1 11 A A. Tay Taylor Ta oJ 1 I President First National Ba Bank k of Chicago From an address given give at the annual conven convention t. t 10 f American nl Bankers' Bankers Association Atlantic City N. N J. J Another group of our citizens wise cautious a and d sane w who o omay may be seeing things are are those who believe that t the e country is IS headed heade ded d toward financial ruin rUIn through debt and taxation t N No one will de deny nv that these items are a assuming staggering pro proportions but when we examine the other side of the ledger is IS the situation as bad as it appears Have we not forgotten the growth of the country Do we we- properly appreciate the change that that has taken place from the forest and pasture of one hundred and fifty ye years ago o to the the agricultural supremacy of the last quarter of the nineteenth century and again to the industrial achievement of the present lay day One hundred ye Years years rs ago government was a simple matter TI The 0 S 'S population w was v small n and thinly scattered over great re t areas aleas The r pioneer was busy s subjugating the new lands building hom homes s and ll j bringing the natural resources of the country under his dominance 1 1 t c f f i Th The expense of administration then was small j. j t Ol r 1 But as the population increased as cit cities e and towns were b built as the work of the pioneer was largely arg IY finished and as great in industrial industrial in- in n centers grew up the regulation and direction of our daily activities became more and more complex and go government eminent became an ever over increasing and expanding function and cOl consequent sequent growing growing growing grow grow- ing charge Statistics are ov overwhelming as to th the increase of our national wealth and national income Income Our mounting debt may be the taxes we pay may be v ts but hut is the debt out but ut of proportion to our wealth and our ability to pay For what after all are our debts created Those who have been taught prudence and caution in the matter of borrowing money usually say that t a debt should not be assumed except for productive purposes but if we will carefully 3 analyze our own case we shall doubtless be forced to admit that hat I some of our most satisfying possessions are those aC acquired through the purchase of productive non property No one would maintain that a home is a liquid or remunerative e tive asset and yet et its ownership of a vine a fig tree and and a roof all our own owl gives a sense of security and i 11 pride de and joy that nothing nothing nothing noth noth- ing else can produce Home o o ownership is eloquently advocated as a panacea for form m many of f the ills iUs of the present day and yet we know that this end I Ican can only be accomplished in any large way through the assumption assumption tion of individual debt I The one safe guide for the contraction of such a debt is the reasonable assurance of an au income which will meet the charge charn of I the loan and ultimately accomplish its liquidation I If Ifo we ve can justify individual e expenditures for productive non-productive purposes for the personal welfare of the individual does it require any violent wrench of economics to find a warrant for the ex expenditure expenditure pen in behalf of the community for community welfare Excepting the war debt which was gladly and willingly assumed assumed assumed as as- by all alI I think it is safe to say that a large part of new securities securities securities se se- emitted in recent years has been of a m municipal character acte f Has the issue of these securities gone too far and has the purpose for which the mou money y has been exp expended ded justified the debt A writer recently contributed an article to a western paper papel- entitled entitled en en- titled What Us He rightly I think attributed our panic of things to a lack of proper appreciation of the blessings blessing we we enjoy Among other things he said To those who remember the time when 40 an acre was considered considered considered con con- an outrageous price for land in eastern Iowa a spring sealon seat seal seaton seaton on a farm wagon a luxury possessor and the possessor of a top ton buggy a 3 nabob when there was scarcely a furnace or of a bath tub in the entire entire en en- tire state of Iowa when the only refrigerators in town were those i in the butcher shop This Age when one only has to touch a button to get a light with the strength of a hundred candles when you turn one faucet and get cold water and turn another and get that which is hot when houses without bathrooms and slid furnaces are exceptions when schoolhouses in small towns are better appointed appoint appoint- ed than state capitols used to be and country children are taken to and from school in auto busses and city schoolhouses are not considered quite up to equipped with a swimming pool when workmen drive to their daily work in gas cars and there are enough autos in the state of Iowa to take every man woman and child in the state o out t for a joy ride at the same time it seems seems seems' as though some genii had rubbed a modern Aladdin's lamp and that we are living in Fairyland The truth is that these things handed to the young people of today are the results of toil and thrift thrift the the subjugation of a wilderness wild wild- erness erness-by erness by men and who asked only a chance to try their them r strength and to the triumphs of science and the discovery ry of truth To this pampered generation these facts the toil the sacrifice the hardships and privations privations arc unknown The rich heritage IP is accepted as a matter of course couie often c often without so much muchas as a. af a than thank you and frequently with complaint because there is not more If national lif life is to survive and be happy happy and y and it will will- the will the homes of the city the town and the country shelter must shelter in pleasure and comfort a contented people This can only be done by capital investment that cannot be made with rare exceptions in one lump from sum accumulated savings Who Vho of us now would woul willingly return to the conditions of fifty or one hundred years ago Much l of our rec recent nt debt has been for fair good roads In most parts of the country these cost in the neighborhood of per mile but the they add immediate increased value of 10 to 25 25 per acre to every foot of ground they traverse and they certainly add increased dollars to item every produced on farm bordering or near them to say nothing of the comfort and happiness which r safe and easy traveling brings over them brings to the rural communities Would we stop building roads and would it be a good investment investment invest invest- m ment to do so As the writer just quoted says borrowed money has gone into the erection and equipment of splendid school b buildings in city town or country Yd we like to go back t to o the little red schoolhouse with one window indo y an aan oil lamp a si sin single blackboard 1 I. I and three three-f three foot Ot rule might be used sed for u mole mor th l one pur purpose purpose purpose pur- pur pose w We would not and we will not H A very large sum has been and is is being 1 by th the far far far- mers of the country to pay existing debts purchase o more land landor or to improve and the property which they they already own V Would we have it otherwise 1 We Ve dont don't hesitate to app approve ove the b br r f money by our ourI I customers firms or corporations for the Hie p por m l e eo 9 o n plant anti expansion expansion sion and to meet increasing the requirements ts Qt their growing business We Ve purchase and free freely the e securities of our railroads and utilities for the construct construction on of stations terminal facilities and business homes many of which are in themselves themselves' decidedly non We V e the soundness of these enterprises by the yardstick yardstick yardstick yard yard- stick of or an an ample excess of value over debt incurred and a satisfactory satis satis- factory income factory income to provide with reasonable the service service service ser ser- vice and amortization of the loan If we applied the same sanle yardstick yard stich to the municipal and farmer debt which are causing many of our citizens such concern is it not clearly and easily to be seen that these debts too are equally justified justified justified jus jus- and secured Most 1 of our states have very salutary laws regulating they thel theis issuance issuance is- is of securities by states themselves and the subdivisions thereof These are based upon sound principles of ample property proper proper- ty values and wise tax limitations The farmer who borrows 50 per r ac acre upon his land is merely merely merely mere mere- ly capitalizing a part of the value which has to him through the increasing ever-increasing demand of an increasing population for the purpose of contributing to his individual family comfort There is however another element which robs this bogey of increasing debt of much of its alarm for me that is that all of the securities issued are being purchased by our own people Weare Weare we weare are simply borrowing from our neighbors and paying them back The increasing wealth of the nation is being spent in making the nation a better and happier place in which to live If we were ourselves by the sale of our securities securities securities ties to others and the payment of large sums as a charge thereon to Lo foreign people we might well welI be disturbed But the debt is our own and we in turn own it and better still we are not borrowing to make these securities investments They are being made fr from accumulated earnings from the saving of the people and still are not all alI these savings are accumulations as is witnessed by the constant increase in savings deposits amounting to 1 more Imore than 10 per cent annually to say nothing of the tremendous increase increase increase in in- crease in current bank balances We Ve are rapidly becoming a nation of investors s and property owners and cry aloud as alarmists may I do not believe you can make bolsheviks of such people 1 I I |
