,*APT] #b 
,ECONOMICAL ,PROPOSITIONS 

#ahdfahdf 

,PEOPLE 3 

,AU?OR 3 ,LYS&] ,SPOON] 

,TEXT 3 

,LYS&] ,SPOON]1 ,POV]TY3 ,ITS ,ILLEGAL ,CAUSES & ,LEGAL ,CURES4 ,BO/ON3 ,BELA ,M>%1 ,NO4 #be ,CORNHILL4 #a#h#d#f4 

,*,A,P,T,] #b3 ,E,C,O,N,O,M,I,C,A,L ,P,R,O,P,O,S,I,T,I,O,N,S 

,PROPOSITION #a4 ,EV]Y MAN-SO F> AS1 CONSI/5TLY ) ! PR9CIPLES ( NATURAL LAW1 HE CAN ACCOMPLI% IT-%\LD BE ALL[$ TO HAVE ! FRUITS1 & ALL ! FRUITS ( HIS [N LABOR4 

,?AT ! PR9CIPLE ( ALL[+ EA* MAN TO HAVE1 7SO F> AS IT IS CONSI/5T ) ! PR9CIPLES ( NATURAL LAW ?AT HE CAN HAVE17 ALL ! FRUITS ( HIS [N LABOR1 W\LD CONDUCE TO A MORE JU/ & EQUAL DI/RIBUTION ( WEAL? ?AN' N[ EXI/S1 IS A PROPOSITION TOO SELF-EVID5T ALMO/ TO NE$ ILLU/RATION4 ,IT IS AN OBVI\S PR9CIPLE ( NATURAL JU/ICE1 ?AT EA* MAN %\LD HAVE ! FRUITS ( HIS [N LABOR2 & ALL >BITR>Y 5ACTM5TS BY GOV]NM5TS1 9T]F]+ ) ?IS RESULT1 >E NO?+ BETT] ?AN ROBB]Y4 ,IT IS ALSO AN OBVI\S FACT1 ?AT ! PROP]TY PRODUC$ BY SOCIETY1 IS N[ DI/RIBUT$ 9 V]Y UNEQUAL PROPORTIONS AMONG ?OSE :OSE LABOR PRODUC$ IT1 & ) V]Y LITTLE REG>D TO ! ACTUAL VALUE ( EA* ONE'S LABOR 9 PRODUC+ IT4 ,& ?IS FACT IS NOT ! RESULTEXCEPT 9 A P>TIAL DEGREE-( ! SUP]IOR M5TAL CAPACITIES1 :I* 5ABLE SOME M51 CONSI/5TLY ) HONE/Y & FAIR COMPETITION1 TO COMPASS MORE ( ! MEANS ( ACQUIR+ WEAL? ?AN O!RS2 BUT IT IS ! RESULT1 9 A V]Y IMPORTANT MEASURE1 ( >BITR>Y & UNJU/ LEGISLATIVE 5ACTM5TS1 & FALSE JUDICIAL DECISIONS1 :I* ACTUALLY DEPRIVE A L>GE PORTION ( MANK9D ( !IR RI<T TO ! FAIR & HONE/ EX]CISE ( !IR NATURAL P[]S1 9 COMPETITION ) !IR FELL[M54 ,?AT SU* IS ! TRU? WILL BE SE5 H]EAFT]4 

,?AT ! PR9CIPLE ( ALL[+ EA* MAN TO HAVE ! FRUITS ( HIS [N LABOR1 W\LD ALSO CONDUCE TO ! AGGREGATE 9CREASE ( WEAL?1 IS OBVI\S1 = ! REASON ?AT EA* MAN BE+1 AS HE !N W\LD BE1 DEP5D5T UPON HIS [N LABOR1 9/EAD ( ! LABOR ( O!RS1 = HIS SUBSI/5CE & WEAL?1 W\LD BE UND] ! NECESSITY TO LABOR1 & CONSEQU5TLY W\LD LABOR4 ,! AGGREGATE WEAL? ( SOCIETY W\LD !RE=E BE 9CREAS$ BY JU/ SO MU* AS ! LABOR ( ALL ! MEMB]S ( SOCIETY %\LD BE MORE PRODUCTIVE ?AN ! LABOR ( A P>T4 ,IT W\LD ALSO BE' 9CREAS$ BY ! OP]ATION ( ANO!R PR9CIPLE1 TO WIT3 ,:5 A MAN KN[S ?AT HE IS TO HAVE ALL ! FRUITS ( HIS LABOR1 HE LABORS ) MORE ZEAL1 SKILL1 & PHYSICAL 5]GY1 ?AN :5 HE KN[S-AS 9 ! CASE ( ONE LABOR+ = WAGES-?AT A PORTION ( ! FRUITS ( HIS LABOR >E GO+ TO ANO!R4 ,UND] ! 9FLU5CE1 !N1 ( ?IS PR9CIPLE1 ?AT EA* MAN %\LD HAVE ALL ! FRUITS ( HIS [N LABOR1 ! AGGREGATE WEAL? ( SOCIETY W\LD BE 9CREAS$ 9 TWO WAYS1 TO WIT1 FIR/1 ALL M5 W\LD LABOR1 9/EAD ( A P>T ONLY2 &1 SECONDLY1 EA* MAN W\LD LABOR ) MORE SKILL1 5]GY1 & EFFECT1 ?AN HIR$ LABOR]S DO N[4 

,PROPOSITION #b4 ,9 ORD] ?AT EA* MAN MAY HAVE ! FRUITS ( HIS [N LABOR1 IT IS IMPORTANT1 AS A G5]AL RULE1 ?AT EA* MAN %\LD BE HIS [N EMPLOY]1 OR WORK DIRECTLY = HIMSELF1 & NOT = ANO!R = WAGES2 BECAUSE1 9 ! LATT] CASE1 A P>T ( ! FRUITS ( HIS LABOR GO TO HIS EMPLOY]1 9/EAD ( COM+ TO HIMSELF4 

,PROPOSITION #c4 ,?AT EA* MAN MAYBE HIS [N EMPLOY]1 IT IS NECESS>Y ?AT HE HAVE MAT]IALS1 OR CAPITAL1 UPON :I* TO BE/[ HIS LABOR4 

,PROPOSITION #d4 ,IF A MAN HAVE NOT CAPITAL ( HIS [N1 UPON :I* TO BE/[ HIS LABOR1 IT IS NECESS>Y ?AT HE BE ALL[$ TO OBTA9 IT ON CR$IT4 ,& 9 ORD] ?AT HE MAY BE ABLE TO OBTA9 IT ON CR$IT1 IT IS NECESS>Y ?AT HE BE ALL[$ TO CONTRACT = SU* A RATE ( 9T]E/ AS WILL 9DUCE A MAN1 HAV+ SURPLUS CAPITAL1 TO ,IOAN IT TO HIM2 = ! CAPITALI/ CANNOT1 CONSI/5TLY ) NATURAL LAW1 BE COMPELL$ TO LOAN HIS CAPITAL AGA9/ HIS WILL4 ,ALL LEGISLATIVE RE/RA9TS UPON ! RATE ( 9T]E/1 >E1 !RE=E1 NO?+ LESS ?AN >BITR>Y & TYRANNICAL RE/RA9TS UPON A MAN'S NATURAL CAPACITY & NATURAL RI<T TO HIRE CAPITAL1 UPON :I* TO BE/[ HIS LABOR4 ,&1 ( CONSEQU5CE1 !Y >E NO?+ LESS ?AN >BITR>Y & TYRANNICAL RE/RICTIONS UPON ! EX]CISE ( HIS RI<T TO OBTA9 ALL ! FRUITS1 ?AT HE HONE/LY CAN OBTA91 FROM HIS LABOR4 

,! RATE ( 9T]E/1 :I* ! CAPITALI/ WILL DEM&1 WILL DEP5D UPON A V>IETY ( CIRCUM/ANCES1 & ESPECIALLY UPON ! RISK ( LOSS ATT5DANT UPON ! LOAN-9 O!R WORDS1 UPON ! *>ACT] ( ! SECURITY (F]$ BY ! BORR[] = ! PAYM5T ( ! LOAN4 ,?IS SECURITY & CONSEQU5T RISK WILL DIFF] 9 ! CASES ( DIFF]5T 9DIVIDUALS4 ,! LEGISLATION1 !RE=E1 ?AT PRESCRIBES A FIX$ RATE ( 9T]E/1 BEYOND :I* NO CONTRACTS MAY GO-ESPECIALLY IF ?AT LIMIT BE1 AS IT USUALLY IS1 ! L[E/ AT :I* CAPITALI/S WILL LOAN MONEY ON ! MO/ APPROV$ SECURITY-9 EFFECT DEPRIVES ALL ?OSE1 :O CANNOT (F] ! MO/ APPROV$ SECURITY1 ( !IR RI<T ( HIR+ CAPITAL AT ALL4 

,! GREAT MASS ( ?OSE1 :O1 BY REASON ( NOT HAV+ ! MO/ APPROV$ SECURITY TO (F]1 CANNOT BORR[ CAPITAL AT ALL AT SIX P]C5T1 C\LD YET1 )\T DIFFICULTY1 BORR[ 5\< TO EMPLOY !IR [N H&S UPON1 7SAY FROM TWO TO T5 HUNDR$ DOLL>S17 ON ! CR$IT ( !IR SKILL1 9DU/RY1 9TEGRITY1 & ABILITY1 & ( ! VALUE :I* !IR LABOR W\LD ADD TO ! CAPITAL BORR[$1 IF !Y W]E ALL[$ TO CONTRACT = SEV51 EI<T1 N9E1 OR T5 P]C5T 9T]E/ 5\< TO PAY = ! RISK ( LIFE1 HEAL?1 LOSSES BY FIRE1 !FT1 ROBB]Y1 @&C42 :I* RISKS IT IS P]FECTLY RI<T ?AT ! CAPITALI/ %\LD BE GU>D$ AGA9/ BY AN ADDITIONAL RATE ( 9T]E/4 

,! EFFECT ( USURY LAWS1 !N1 IS TO GIVE A MONOPOLY ( ! RI<T ( BORR[+ MONEY1 TO ?OSE FEW1 :O CAN (F] ! MO/ APPROV$ SECURITY4 ,A MAN (F]+ ! MO/ APPROV$ SECURITY1 CAN OBTA9 MONEY AT SIX P]C5T2 :ILE ANO!R1 :OSE SECURITY IS NOT SO ACCEPTABLE1 BUT :O1 NEV]!LESS1 C\LD OBTA9 MONEY AS READILY AT SEV51 EI<T1 OR N9E P]C5T1 AS ! O!R DOES AT SIX1 CANNOT N[ OBTA9 IT AT ALL1 SIMPLY BECAUSE HE IS =BIDD5 TO CONTRACT = SU* A ,TATE ( 9T]E/ AS W\LD1 9 ! AV]AGE ( LOANS1 COMP5SATE CAPITALI/S = ! ADDITIONAL RISK OR 9CONV5I5CE ATT5DANT UPON ! ONLY K9D ( SECURITY HE HAS TO (F]4 

,! CONSEQU5CE IS ?AT ! LOANABLE CAPITAL ( SOCIETY IS MONOPOLIZ$ ALMO/ 5TIRELY BY ?OSE FEW1 ?OSE V]Y FEW1 :O WI% TO BORR[1 & CAN (F] ! MO/ APPROV$ SECURITY :ILE ! MASS ( ?OSE1 :O HAVE NOT CAPITAL ( !IR [N1 BUT :O1 IF LEFT FREE TO MAKE !IR [N CONTRACTS1 W\LD BE ABLE TO OBTA9 A PORTION SUFFICI5T TO EMPLOY !IR [N H&S UPON1 >E N[1 = ! WANT ( CAPITAL ON :I* TO BE/[ !IR LABOR1 COMPELL$ TO SELL !IR LABOR TO ?OSE :O HAVE1 BY MEANS ( ! USURY LAWS1 MONOPOLIZ$ ! CAPITAL4 ,& !Y >E COMPELL$ TO SELL !IR LABOR AT SU* A PRICE AS WILL 5ABLE ! EMPLOY] TO MAKE A L>GE PR(IT UPON !IR LABOR2 OR1 9 O!R WORDS1 5ABLE HIM TO PUT 9TO HIS [N POCKET AN IMPORTANT PORTION ( ! FRUITS ( !IR LABOR4 ,ALL ?IS IS ! EFFECT ( ! USURY LAWS4 ,! SAME LAWS ?AT 5ABLE HIM TO MONOPOLIZE ! LOANABLE CAPITAL1 5ABLE HIM ALSO TO MONOPOLIZE ! LABOR ( ?OSE :O CANNOT BORR[ CAPITAL ON :I* TO BE/[ !IR LABOR4 

,TO ILLU/RATE ! OP]ATION ( ?IS PR9CIPLE1 LET US SUPPOSE ?AT A CAPITAL ( FIVE HUNDR$ DOLL>S IS NECESS>Y TO EMPLOY ! LABOR ( ONE MAN2 ?AT1 UND] ! USURY LAWS1 ,A1 [+ TO ! APPROV$ *>ACT] ( ! SECURITY HE HAS TO (F]1 CAN BORR[1 & DOES BORR[1 AT SIX P]C5T 9T]E/1 FIVE HUNDR$ DOLL>S CAPITAL MORE ?AN HE WANTS TO EMPLOY HIS [N H&S UPON2 ?AT ,B IS A POOR MAN1 :O CANNOT BORR[ CAPITAL AT SIX P]C5T1 &1 !RE=E1 [+ TO ! PROHIBITION ( ! USURY LAWS1 CANNOT BORR[ IT AT ALL2 ?AT HE IS CONSEQU5TLY COMPELL$ TO SELL HIS LABOR TO ,A1 :O HAS BORR[$ ! NECESS>Y CAPITAL TO EMPLOY HIS LABOR2 ?AT ,A BUYS ,B'S LABOR = A YE>1 &1 AFT] PAY+ HIS WAGES1 & ! 9T]E/ ON ! FIVE HUNDR$ DOLL>S ON :I* HE HAS EMPLOY$ ,B TO LABOR1 HE 7,A7 REALIZES ONE HUNDR$ DOLL>S PR(IT4 

,?IS PROBABLY IS NOT AN EXTRAVAGANT SUPPOSITION2 = IT IS PROBABLE ?AT EMPLOY]S1 :O BORR[ !IR CAPITAL AT SIX P]C5T1 & MANAGE !IR BUS9ESS JUDICI\SLY1 DO G5]ALLY REALIZE AT LEA/ AN HUNDR$ DOLL>S PR(IT FROM ! LABOR ( EA* ADULT MALE LABOR] !Y EMPLOY4 

,N[ IT IS PLA9 ?AT IF ,B HAD BE5 ALL[$ TO BORR[1 & HAD BORR[$1 7AS HE PROBABLY C\LD HAVE DONE17 ?IS SAME FIVE HUNDR$ DOLL>S CAPITAL AT N9E P]C5T1 & HAD !N EMPLOY$ HIS [N H&S UPON IT1 HE C\LD HAVE PUT 9TO HIS [N POCKET EI<TY-FIVE DOLL>S MORE ( ! FRUITS ( HIS LABOR ?AN HE DID :5 LABOR+ = ,A = WAGES-= HE C\LD HAVE HAD ALL ! FRUITS ( HIS LABOR1 7?AT IS1 ! AM\NT BO? ( HIS WAGES & ! PR(ITS MADE BY ,A17 ) BUT ?IS ABATEM5T1 VIZ41 ?AT BE MU/ HAVE PAID ?REE P]C5T MORE 9T]E/ = HIS CAPITAL ?AN WAS PAID BY ,A4 ,?IS ?REE P]C5T 9T]E/1 ON FIVE HUNDR$ DOLL>S1 W\LD BE FIFTE5 DOLL>S-:I*1 D$UCT$ FROM ! HUNDR$ DOLL>S ?AT W5T 9TO ,A'S POCKET AS PR(IT1 LEAVES EI<TY-FIVE DOLL>S TO GO 9TO ,B'S [N POCKET1 OV] & ABOVE ! AM\NT HE RECEIV$ AS WAGES :5 LABOR+ = ,A4 

,?IS SUPPOSITION ILLU/RATES FAIRLY ! OP]ATION ( USURY LAWS1 9 DEPRIV+ ! MASS ( M5 ( ! FRUITS ( !IR LABOR4 ,!SE LAWS GIVE A MONOPOLY ( ! LOANABLE CAPITAL TO A FEW 9DIVIDUALS4 ,!SE 9DIVIDUALS1 HAV+ A MONOPOLY ( CAPITAL1 >E ABLE TO TAKE ADVANTAGE ( ! NECESSITIES ( ALL ?OSE :O HAVE NOT CAPITAL ( !IR [N1 & >E =BIDD5 TO BORR[ ANY1 ON :I* TO LABOR4 ,!Y ?US COMPEL !M TO SELL !IR LABOR AT A PRICE ?AT WILL GIVE !IR EMPLOY] A L>GE SLICE \T ( ! PRODUCTS ( !IR LABOR4 ,! LAWS !MSELVES >E ! CONTRIVANCES1 NOT ( ! RETIR$ RI* M51 :O HAVE CAPITAL TO LOAN- = !Y1 ( C\RSE1 WI% TO C>RY !IR MONEY TO ! L>GE/ & FREE/ M>KET -BUT ( ?OSE FEW 05T]PRIS+0 0BUS9ESS M510 AS !Y >E CALL$1 :O1 9 & \T ( LEGISLATURES1 >E MORE 9FLU5TIAL ?AN EI!R ! RI* OR ! POOR2 :O CONTROL ! LEGISLATION ( ! C\NTRY1 & :O1 BY MEANS ( USURY LAWS1 CAN SPONGE MONEY FROM ?OSE :O >E RI*]1 & LABOR FROM ?OSE :O >E POOR] ?AN !MSELVES-& ?US MAKE =TUNES4 ,& !Y >E ALMO/ ! ONLY M5 :O DO MAKE =TUNES-= ALMO/ ALL =TUNES >E MADE \T ( ! CAPITAL & LABOR ( O!R M5 ?AN ?OSE :O REALIZE !M4 ,9DE$1 L>GE =TUNES C\LD R>ELY BE MADE AT ALL BY ONE 9DIVIDUAL1 EXCEPT BY HIS SPONG+ CAPITAL & LABOR FROM O!RS4 ,& ! USURY LAWS >E ! MEANS BY :I* HE DOES IT4 

,! REASON GIV5 = USURY LAWS IS1 ?AT !Y PROTECT ! POOR FROM ! EXTORTIONS ( ! RI*4 ,BUT ?IS REASON IS A FALSE ONE-= !RE IS NO MORE EXTORTION 9 LOAN+ CAPITAL TO ! BE/ BIDD]1 ?AN 9 SELL+ A HORSE1 OR R5T+ A H\SE TO ! BE/ BIDD]4 ,! TRUE & FAIR PRICE ( CAPITAL1 AS ( EV]Y?+ ELSE1 IS ?AT PRICE :I* IT WILL BR+ 9 FAIR & OP5 M>KET4 ,& ?OSE :O FALSELY PRET5D TO BE 9T]E/$ TO PREV5T ! RI* EXTORT+ MONEY FROM ! POOR1 9 ! %APE ( 9T]E/ ON CAPITAL1 >E ! V]Y M5 :O WANT NO?+ BUT AN OPPORTUNITY = !MSELVES BO? TO EXTORT CAPITAL FROM ! RI*1 & LABOR FROM ! POOR1 ?AT !Y MAY ?US FILL !IR [N POCKETS AT ! EXP5SE ( O!R M5'S RI<TS4 ,! PROTECTION !Y (F] TO ! POOR1 IS ! PROTECTION ( =BIDD+ !M TO BORR[ CAPITAL ON :I* TO EMPLOY !IR LABOR1 & ?US COMPELL+ !M TO SELL !IR LABOR AT A PRICE ?AT 5ABLES ! PUR*AS] TO MAKE A L>GE PR(IT UPON IT2 IT IS ! PROTECTION1 :I*1 AS 9 ! CASE ALREADY SUPPOS$1 W\LD REALLY EXTORT FROM !M EI<TY-FIVE DOLL>S ( !IR LABOR1 TO SAVE !M FROM ! PRET5D$ EXTORTION ( FIFTE5 DOLL>S 9 ! %APE ( 9T]E/4 ,LEAVE ! RI* & ! POOR TO MAKE !IR [N B>GA9S 9 REG>D TO ! 9T]E/ ( CAPITAL1 & IT IS AS C]TA9 AS ! LAWS ( NATURE1 ?AT CAPITAL WILL F9D ITS WAY 9TO ! H&S ( ?OSE :O >E TO P]=M ! LABOR UPON IT4 ,9 FACT1 ! USURY LAWS IMPLI$LY ADMIT ?AT SU* W\LD BE ! RESULTELSE :Y DO !Y PRESCRIBE SU* RATES ( 9T]E/ AS MU/ NECESS>ILY CONF9E ALL LOANS TO A FEW 9DIVIDUALS8 

,( ALL ! FRAUDS1 BY :I* LABOR IS *EAT$ \T ( ITS E>N+S BY LEGISLATION1 & ( ALL ! MONOPOLIES E/ABLI%$ BY LEGISLATION1 PROBABLY NO ONE IS MORE PURELY TYRANNICAL 9 ITS *>ACT]1 OR MORE DE/RUCTIVE AT ONCE ( ! NATURAL RI<T ( 9DIVIDUALS TO MAKE !IR [N CONTRACTS1 & ( ! JU/ DI/RIBUTION ( WEAL?1 ?AN ?AT MONOPOLY ( ! RI<T ( BORR[+ MONEY1 :I* =BIDS ! MASS ( M5 TO OBTA9 CAPITAL1 ON :I* TO BE/[ !IR LABOR1 & ?US COMPELS !M TO SELL !IR LABOR AT A PRICE F> BEL[ ! AM\NT ( ITS ACTUAL PRODUCTS4 

,! LAW1 ?AT ALL[S ALL M51 )\T DI/9CTION1 TO BORR[ CAPITAL1 PROVID$ !Y CAN BORR[ IT AT SIX P]C5T 9T]E/1 IS1 9 ! EQUALITY ( ITS OP]ATION1 LIKE A LAW ?AT %\LD ALL[ EV]Y MAN P]FECT FRE$OM TO PR(ESS & 5JOY HIS [N PECULI> RELIGION1 PROVID$ HIS PECULI> RELIGION WAS ! P>TICUL> >ID ONLY ONE ?AT WAS ALL[$ BY ! ,/ATE TO BE PR(ESS$ & 5JOY$ BY ANY ONE4 

,A /ATUTE1 ?AT %\LD =BID ONE MAN TO BORR[1 AT ANY RATE ( 9T]E/ :ATEV]1 MORE CAPITAL ?AN LIE C\LD MANAGE BY HIS [N LABOR ALONE1 W\LD NOT BE TOL]AT$1 = ! REASON ?AT IT W\LD BE AN 9FR+EM5T ( M5'S NATURAL RI<TS TO BORR[ ALL !Y C\LD2 YET IT W\LD NOT BE HALF SO UNEQUAL OR P]NICI\S1 NOR SO UNJU/ AN 9FR+EM5T ( 9DIVIDUAL RI<TS1 NOR PROBABLY SO DE/RUCTIVE ( ! EQUAL DI/RIBUTION ( WEAL?1 AS >E ! USURY LAWS1 :I* ALL[ ONE MAN TO BORR[ 5\< TO EMPLOY A HUNDR$ LABOR]S UPON1 :ILE !Y =BID ! HUNDR$ LABOR]S TO BORR[ EA* 5\< TO EMPLOY HIS [N H&S UPON4 

,:AT A *ANGE W\LD BE WR\<T UPON ! FACE ( SOCIETY1 IF EA* ADULT MALE LABOR]1 :O IS ,D,[ OBLIG$ TO SELL HIS LABOR1 W]E TO RECEIVE1 DUR+ ! PRIME ( HIS LIFE1 EI<TY-FIVE DOLL>S ANNUALLY ( ! FRUITS ( HIS LABOR MORE ?AN HE DOES N[2 & IF ALL OLD] & Y\NG] P]SONS1 & FEMALES1 :O >E ,D[ OBLIG$ TO SELL !IR LABOR1 W]E ALSO TO RECEIVE A SIMIL> GREAT] PROPORTION ( ! FRUITS ( !IR LABOR4 ,YET IF ! SUPPOSITION BE=E MADE BE CORRECT1 :AT PREV5TS SU* A RESULT8 ,IF ! ABOLITION ( ! USURY LAWS ALONE W\LD NOT ACCOMPLI% IT1 ! ABOLITION ( !SE & ! O!R TYRANNICAL & UNCON/ITUTIONAL RE/RA9TS UPON ! FRE$OM ( 9DU/RY1 & M5'S RI<TS ( CONTRACT1 H]EAFT] TO BE PO9T$ \T1 W\LD1 ,I ?9K1 C]TA9LY ACCOMPLI% IT1 AT LEA/ 9 ! CASE ( ALL HONE/1 9DU/RI\S1 & ORD9>ILY SKILLFUL LABOR]S4 

,PROPOSITION #e4 ,! LABOR] NOT ONLY WANTS CAPITAL1 ON :I* TO BE/[ HIS LABOR1 BUT HE WANTS TO OBTA9 ?IS CAPITAL AT ! L[E/ RATE ( 9T]E/1 AT :I*1 9 ! NATURE ( ?+S1 HE CAN OBTA9 IT4 ,?AT HE MAY OBTA9 IT AT ! L[E/ POSSIBLE RATE ( 9T]E/1 IT IS NECESS>Y ?AT FREE BANK+ BE ALL[$4 

,! CORRECTNESS ( ?IS PROPOSITION WILL BE SE51 :5 IT IS2 CONSID]$ :AT BANK+ REALLY IS4 ,BANK+ IS LOAN+ ONE'S CR$IT1 7= CIRCULATION AS CURR5CY17 9/EAD1 ( LOAN+ MONEY4 

,IF A MAN CAN AF=D TO LOAN MONEY = SIX P]C5T 9T]E/1 HE CAN C]TA9LY AF=D TO LOAN HIS CR$IT = ?REE4 ,& :Y #a ,BECAUSE :ATEV] PR(IT A MAN MAKES BY LOAN+ HIS CR$IT1 IS CLE> GA94 ,IT CO/S HIM NO?+2 = HE1 /ILL 5JOYS ! USE ( ! H\SES1 L&S1 OR O!R PROP]TY1 ON :I* HIS CR$IT IS BAS$1 9 ! SAME MANN] AS IF HE HAD NOT LOAN$ ! CR$IT BAS$ UPON !M4 ,BUT ! 9COME1 :I* A MAN D]IVES FROM ! LOAN ( MONEY ITSELF1 IS OBTA9$ ONLY BY ! SACRIFICE1 OR AT ! EXP5SE ( ! CROPS1 R5TS1 OR O!R 9COMES1 :I* HE MI<T D]IVE FROM ! L&S1 H\SES1 OR O!R PROP]TY1 :I* HIS MONEY W\LD PUR*ASE4 ,IF1 !RE=E1 A MAN CAN AF=D1 = SIX P]C5T 9T]E/ ON HIS MONEY1 TO GIVE UP ALL' ! CROPS1 R5TS1 & O!R 9COMES1 :I* HE MI<T OBTA9 FROM ! L&S1 H\SES1 OR O!R PROP]TY1 :I* HIS MONEY W\LD PUR*ASE-1 IT IS PLA9 ?AT = ?REE P]C5T HE C\LD AF=D TO LOAN HIS CR$IT1 :I* CO/S HIM NO?+ BUT ! RISK & TR\BLE ATT5DANT UPON ! LOAN1 7:I* RISK & TR\BLE1 BY ! WAY1 >E NOT MAT]IALLY1 &1 9 G5]AL1 P]HAPS NO GREAT]1 ?AN 9 ! LOAN ( MONEY47 

,IT CAN H>DLY BE SAID ?AT !RE IS ANY PR(IT 9 LOAN+ MONEY ITSELF2 = ! 9T]E/ OBTA9$ IS G5]ALLY NO MORE ?AN A FAIR PRICE OR EQUIVAL5T = ! CROPS1 R5TS1 OR O!R 9COMES1 :I* ! PROP]TY ?AT MI<T BE PUR*AS$ ) ! MONEY1 W\LD YIELD4 ,BUT 9 ! LOAN ( CR$IT1 !RE IS AN ACTUAL PR(IT ( ! :OLE AM\NT ?AT IS RECEIV$ AS 9T]E/1 AFT] PAY+ ! TR\BLE & RISK ( BANK+4 

,IT IS CLE>1 !RE=E1 ?AT IF MONEY CAN BE LOAN$1 AS IT N[ IS1 = SIX P]C5T 9T]E/1 CR$IT C\LD BE LOAN$ AT TWO1 ?REE1 OR F\R P]C5T4 

,S9CE1 !N1 ALL BANK+ PR(IT IS A NET PR(IT )\T CO/1 & NOT1 LIKE ! 9T]E/ ON MONEY1 AN EQUIVAL5T = ! CROPS1 R5TS1 & O!R 9COMES ( PROP]TY1 ?AT ! L5D] MI<T HAVE RETA9$ & 5JOY$2 & AS ! MAT]IALS = BANK+ CR$IT >E ABUNDANT1 & ALMO/ SUP]ABUNDANT1 IT IS OBVI\S ?AT IF FREE COMPETITION 9 BANK+ W]E ALL[$1 ! RATE ( 9T]E/ ON BANK+ CR$IT W\LD BE BR\<T V]Y L[1 & BANK LOANS W\LD BE )9 ! REA* ( EV]YBODY :OSE BUS9ESS & *>ACT] %\LD MAKE HIM A REASONABLY SAFE P]SON TO LOAN TO4 ,PROBABLY EV]Y SU* P]SON C\LD BORR[1 AT SIX P]C5T1 CAPITAL 5\< TO EMPLOY HIS [N H&S UPON2 & MANY W\LD D\BTLESS BE ABLE TO BORR[ IT = FIVE1 F\R1 OR EV5 ?REE P]C5T4 

,SUPPOSE SU* W]E ! RESULT1 & SUPPOSE FIVE HUNDR$ DOLL>S CAPITAL TO BE 5\< TO EMPLOY EA* MAN'S LABOR1 ! ONLY DIFF]5CE BETWE5 ! ANNUAL 9COME ( A MAN1 :O %\LD [N HIS CAPITAL1 & ( ONE :O %\LD BORR[ HIS7 W\LD BE B>ELY ! 9T]E/ PAID BY ! LATT]-?AT IS1 FIFTE51 TW5TY1 TW5TY-FIVE1 OR ?IRTY DOLL>S1 ACCORD+ AS HE %\LD PAY ?REE1 F\R1 FIVE1 OR SIX P]C5T 9T]E/4 ,:AT A *ANGE W\LD BE RAPIDLY WR\<T 9 ! CONDITION ( MANK9D BY A SY/EM ?AT %\LD SUPPLY ALL ! DE/ITUTE ) ! USE ( CAPITAL ON SU* T]MS AS !SE4 

,IF FREE BANK+ W]E ALL[$1 ! LOANABLE CR$IT C\LD NOT BE MONOPOLIZ$ BY A FEW BORR[]S1 AS ! LOANABLE MONEY N[ IS4 ,! MAT]IALS = BANK+ CR$IT >E SO IMM5SE1 SO NE>LY ILLIMITABLE 9DE$1 & EXI/ 9 SU* A V>IETY ( %APES1 & >E DI/RIBUT$ AMONG SO MANY PROPRIETORS1 ?AT IT W\LD BE IMPOSSIBLE TO CONC5TRATE !M1 AS MONEY IS N[ CONC5TRAT$1 9 ! H&S1 OR BR+ !M UND] ! CONTROL ( A FEW CORPORATIONS1 OR CONF9E ! LOANS BAS$ UPON !M TO A FEW FAVORITE 9DIVIDUALS4"9#a 

,BANK+ CR$IT IS ! BE/ K9D ( CR$IT = ! BORR[]-& = !SE REASONS4 

#a4 ,IT IS OBTA9$ AT ! L[E/ POSSIBLE RATE ( 9T]E/4 

#b4 ,IT !N 5ABLES ! BORR[] TO BUY1 AT CA% PRICES1 :ATEV] HE WI%ES TO BUY4 

#c4 ,CIRCULAT+ LIKE MONEY ITSELF1 & DIVISIBLE LIKE MONEY ITSELF 9TO SMALL AM\NTS1 IT 5ABLES ! BORR[] TO BUY HIS COMMODITIES1 OR MAT]IALS1 9 SU* QUANTITIES1 ( SU* QUALITIES1 & ( SU* P]SONS AS IT WILL BE MO/ = HIS 9T]E/ TO BUY !M-9/EAD ( HIS BE+ COMPELL$1 AS HE IS :5 HE BUYS HIS COMMODITIES ON CR$IT1 TO BUY !M 9 SU* QUANTITIES1 ( SU* QUALITIES1 & ( SU* P]SONS1 AS IT MAY *ANCE ?AT HE CAN BUY !M ON CR$IT4 

,SO GREAT >E ! NECESSITIES ( ! POOR = MAT]IALS UPON :I* TO BE/[ !IR LABOR1 & = ! NECESS>IES ( LIFE1 SU* AS FOOD1 CLO?+ & FUEL2 & SO GREAT >E ! DIFFICULTIES 9 ! WAY ( GETT+ CA% TO MAKE !IR PUR*ASES )1 ?AT !Y >E COMPELL$ TO MAKE MO/ ( !IR PUR*ASES ON CR$IT2 TO MAKE !M ( P]SONS :O DO NOT WI% TO GIVE !M CR$IT1 & :O WILL NOT GIVE !M CR$IT1 EXCEPT AT EXTRAVAGANT PRICES2 & ALSO (T5 TO BUY COMMODITIES NOT ! BE/ ADAPT$ TO !IR WANTS4 ,9 MAK+ !IR PUR*ASES T9D] !SE CIRCUM/ANCES1 !Y NOT ONLY SUFF] S]I\S LOSSES 9 ! K9DS & QUALITIES ( ! COMMODITIES PUR*AS$1 BUT !Y >E ALSO OBLIG$ TO PAY FIVE1 T51 FIFTE51 OR TW5TY P]C5T MORE = !M1 ?AN !Y W\LD HAVE TO PAY IF !Y HAD CA% TO BUY )4 ,PROBABLY ALSO ! RETAIL] 7( :OM MANY ( !IR PUR*ASES >E MADE7 HAS HIMSELF B\<T HIS GOODS ON CR$IT ( ! :OLESALE DEAL]1 & PAID FIVE1 T51 OR FIFTE5 P]C5T MORE ?AN IF FIE HAD B\<T ) CA%4 ,& ?IS 9CREAS$ PRICE1 PAID BY ! RETAIL]1 F9ALLY FALLS UPON ! CONSUM]1 9 ADDITION TO ! 9CREAS$ PRICE :I* ! CONSUM] ALSO PAYS ON ACC\NT ( HIS [N WANT ( CA% TO BUY )4 ,FREE BANK+ W\LD OBVIATE ALMO/ 5TIRELY !SE 5HANC$ PRICES ( COMMODITIES1 & !SE LOSSES FROM ! WANT ( ADAPTATION 9 ! COMMODITIES TO ! WANTS ( ! PUR*AS]S2 BECAUSE1 IF FREE BANK+ W]E ALL[$1 ALMO/ EV]YBODY1 :O WAS WOR?Y ( CR$IT AT ALL1 BO? RETAIL] & CONSUM]1 C\LD OBTA9 IT AT ! BANKS1 & !N MAKE HIS PUR*ASES = CA%2 &1 HAV+ 1CA% TO PUR*ASE )1 HE W\LD BE UND] NO NECESSITY TO BUY ONLY SU* COMMODITIES AS W]E BE/ ADAPT$ TO HIS WANTS4 

,IT W\LD PROBABLY BE A MOD]ATE E/IMATE TO SUPPOSE ?AT ! POOR SUFF] AN AV]AGE LOSS-9CLUD+ ! LOSSES ON PRICE1 QUALITY1 & ADAPTATION TO !IR WANTS-( FIFTE5 OR TW5TY P]C5T ON ALL !IR PUR*ASES1 OV] :AT !Y W\LD PAY T9D] A SY/EM ( FREE CR$IT CURR5CY4 ,SUPPOS+ !IR PUR*ASES TO BE FROM TWO TO F\R HUNDR$ DOLL>S A YE>1 !IR LOSSES1 AT ! RATE M5TION$1 W\LD BE FROM ?IRTY TO EI<TY DOLL>S ANNUALLY-AN AM\NT SUFFICI5T1 IF LO/1 TO KEEP !M POOR2 OR1 IF SAV$1 TO GIVE !M A COMPET5CY4 

,PROPOSITION #f4 ,ALL CR$IT %\LD BE BAS$ UPON :AT A MAN HAS1 & NOT UPON :AT HE HAS NOT4 ,A DEBT %\LD BE A LI5 ONLY UPON ! PROP]TY ?AT A MAN HAS BE=E & :5 ! DEBT BECOMES DUE2 & NOT UPON HIS E>N+S AFT] ! DEBT IS DUE4 ,IF1 !RE=E1 A MAN BE ABLE TO PAY A DEBT :5 IT BECOMES DUE1 HE %\LD PAY IT 9 FULL2 IF UNABLE TO PAY IT 9 FULL1 HE %\LD PAY TO ! EXT5T ( HIS ABILITY2 & ?AT PAYM5T %\LD BE ! 5D ( ?AT TRANSACTION4 ,! DEBT %\LD BE NO LI5 UPON HIS FUTURE ACQUISITIONS4 

,! ONLY EXCEPTIONS TO ?IS RULE %\LD BE1 #a1 :]E ! DEBTOR1 PREVI\S TO ! DEBTS BECOM+ DUE1 HAS DI%ONE/LY SQU&]$ OR MISAPPLI$ ! MEANS1 :I* BE %\LD HAVE RETA9$ = ! PAYM5T ( HIS DEBT2 &1 #b1 :]E HE HAS OMITT$ TO DO SOME?+1 :I* HE WAS PLA9LY B\ND TO DO1 T[>DS PUTT+ HIMSELF 9 A CONDITION TO PAY4 ,BUT IF HE HAVE BE5 HONE/ & FAI?FUL 9 ! P]=MANCE ( EV]Y?+1 ?AT1 ON HIS P>T1 HE WAS B\ND TO DO1 ! DEBT %\LD BE B9D+ ONLY TO ! EXT5T ( HIS ABILITY AT ! TIME ! DEBT %\LD BECOME DUE4 ,& ?IS1 IT WILL BE SE5 H]EAFT]1 9 ! *APT]S ON ! LEGAL NATURE ( DEBT1 IS ! :OLE LEGAL OBLIGATION ( A DEBT 9 ANY CASE2 &1 9 ! CASE ( MO/ DEBTS1 IT IS ALSO ! :OLE MORAL OBLIGATION4 

,UND] ! OP]ATION ( ?IS PR9CIPLE1 NE>LY ALL DEBTS W\LD BE SETTL$ AT ONCE ON !IR BECOM+ DUE2 & BE !N SETTL$ F9ALLY & =EV]4 ,! CR$ITOR W\LD !N KN[ :AT HE HAD GOT1 & W\LD HAVE NO OCCASION TO SP5D ANY FUR!R TIME1 ?\<T1 OR MONEY1 9 H>ASS+ ! DEBTOR BY ATTEMPTS TO GET MORE4 ,& ! DEBTOR1 ON HIS P>T1 W\LD KN[ ?AT HE WAS A FREE MAN2 & W\LD AT ONCE 5GAGE 9 ! BE/ EMPLOYM5T HE C\LD F9D1 )\T BE+ LIABLE TO BE DI/URB$ OR OB/RUCT$ BY HIS =M] CR$ITOR1 9 ! PROSECUTION ( IT4 ,?US CR$ITOR & DEBTOR W\LD BE LIKELY !NCE=? TO BE MORE USEFUL1 BO? TO !MSELVES & SOCIETY1 T9D] ?IS >RANGEM5T1 ?AN T9D] ! OPPOSITE ONE1 :I* MAKES ! CR$ITOR ! 5EMY ( ! DEBTOR1 & 9CITES HIM TO AN EXP5SIVE1 CRUEL1 P]PETUAL1 DE/RUCTIVE & G5]ALLY PR(ITLESS W> UPON HIM1 HIS FAMILY1 & HIS & !IR 9DU/RY4 

,IT MAY BE SUPPOS$ BY SOME1 ?AT CR$IT W\LD ,DOT BE GIV51 IF ! LEGAL OBLIGATION ( DEBTS W]E LIMIT$ 9 ?IS MANN]4 ,BUT M5 W\LD AS LIEF GIVE CR$IT ON ?IS PR9CIPLE1 AS ON ANY O!R1 IF !Y W]E TO UND]/&1 :5 ! CONTRACT WAS MADE1 ?AT SU* WAS ITS LEGAL EFFECT2 & IF !Y W]E ALSO TO BE AT LIB]TY TO MAKE !IR [N B>GA9S 9 REG>D TO ! RATE ( 9T]E/ -= !Y W\LD !N *>GE AN ADDITIONAL 9T]E/ SUFFICI5T TO COV] ! ADDITIONAL RISK1 IF ANY1 ?AT !Y MI<T SUPPOSE TO RESULT FROM ?IS PR9CIPLE1 ,& IT W\LD BE F> BETT] = DEBTORS TO PAY A SLI<T ADDITIONAL 9T]E/1 & HAVE ! B5EFIT ( ?IS PR9CIPLE1 ?AN TO MAKE !IR CONTRACTS UND] ALL ! LIABILITIES ( ! ,OPPOSITE ONE4 ,! PAYM5T ( A SLI<T ADDITIONAL 9T]E/ W\LD BE EQUIVAL5T TO PAY+ A SLI<T PREMIUM = BE+ 9SUR$ AGA9/ ! CALAMITY ( AN >RE>AGE ( DEBT & P]PETUAL POV]TY1 9 CASE ( ANY MISCALCULATION OR MIS=TUNE ON !IR P>T4 

,BUT ! PROBABILITY IS1 ?AT ! RISK TO CR$ITORS W\LD BE NO GREAT]1 NOT EV5 SO GREAT1 UND] ! OP]ATION ( ?IS PR9CIPLE1 AS IT IS )\T IT-& = !SE REASONS4 

#a4 ,?IS PR9CIPLE W\LD BR+ AB\T A G5]AL PRACTICE ( %ORT CR$ITS1 & PROMPT SETTLEM5TS2 :I*1 = A V>IETY ( REASONS1 TOO OBVI\S TO NE$ 5UM]ATION1 >E ALTOGE!R SAF] & BETT] = BO? DEBTORS & CR$ITORS4 

#b4 ,! DEBTOR1 UND] ?IS PR9CIPLE1 HAS A MU* /RONG] MOTIVE ?AN HE HAS UND] ! OPPOSITE ONE1 TO ! PRACTICE ( HONE/Y1 9DU/RY1 & FRUGALITY1 &-IF UNABLE TO PAY ! :OLE ( HIS DEBT-TO ! PAYM5T ( ! MO/ ?AT IT IS 9 HIS P[] TO PAY1 :5 ! DEBT BECOMES DUE4 ,= HE KN[S ?AT HE CAN ?US NOT ONLY CANCEL HIS DEBT1 AT ITS MATURITY1 & BE FREE FROM IT =EV]1 BUT SAVE HIS *>ACT] & CR$IT ALSO4 ,BUT UND] ! PR9CIPLE ( P]PETUAL LIABILITY1 :5EV] A MAN F9DS ?AT HE HAS MADE AN ]ROR 9 HIS CALCULATIONS1 & ?AT IT WILL BE IMPOSSIBLE = HIM TO PAY HIS DEBT 9 FULL1 ?AT NO EX]TION ON HIS P>T CAN SAVE HIM FROM AN >RE>AGE ( DEBT1 HE IS APT TO ?9K & FEEL ?AT HE IS RU9$1 NOT ONLY 9 HIS PRES5T =TUNE1 BUT 9 HIS FUTURE CR$IT & PROSPECTS4 ,HE !RE=E BECOMES DI%E>T5$1 1& P]HAPS IDLE1 PRODIGAL1 & DI%ONE/- SAY+ TO HIMSELF4 0,I MAY AS WELL DIE = A L>GE SUM AS A SMALL ONE40 ,SO F> AS ?IS FEEL+ OP]ATES UPON ! DEBTOR-& ?AT IT WILL OP]ATE TO A GREAT] OR LESS EXT5T UPON ALL DEBTORS IS 9EVITABLE-! CR$ITOR SUFF]S A CORRESPOND+ P]C5TAGE ( LOSS ON HIS DEBT-A LOSS ?AT1 UND] ! OPPOSITE PR9CIPLE1 W\LD HAVE BE5 SAV$4 

,BUT :5 A DEBTOR CONTRACTS A DEBT ) ! KN[L$GE ?AT1 AT ITS MATURITY1 ALL ?AT CAN BE REQUIR$ ( HIM BY HIS CR$ITOR1 WILL BE1 ?AT HE %ALL HAVE PRACTIC$ 9TEGRITY1 9DU/RY1 & FRUGALITY1 & ?AT HE %ALL MAKE SU* PAYM5T AS ! PRACTICE ( !SE VIRTUES MAY HAVE 5ABL$ HIM TO MAKE1 & ?AT1 UND] !SE CIRCUM/ANCES1 ,DOT ONLY HIS DEBT WILL BE CANCEL$1 BUT HIS *>ACT] & CR$IT SAV$1 HE HAS ! /IMULUS ( ALL !SE MOTIVES OP]AT+ UPON HIM DUR+ ! :OLE P]IOD FROM ! TIME ! DEBT IS CONTRACT$1 UNTIL IT BECOMES DUE4 ,& :5 A MAN IS GOV]N$ BY !SE MOTIVES1 DUR+ ! :OLE P]IOD M5TION$1 HE WILL ALMO/ UNI=MLY BE ABLE TO PAY1 AT !IR MATURITY1 ALL SU* DEBTS AS W]E PRUD5TLY CONTRACT$2 UNLESS HE MEET ) SOME UNUSUALLY H>D =TUNE4 ,& EV5 9 ! CASE ( H>D =TUNE1 HE W\LD /ILL BE ABLE G5]ALLY TO PAY ! GREAT] P>T ( HIS DEBT2 = IT IS NOT (T51 IF EV]1 ?AT A MAN1 9 ! %ORT 9T]VAL BETWE5 ! TIME ( CONTRACT+ A DEBT1 & ! TIME ! SAME DEBT BECOMES DUE1 MEETS ) SU* HEAVY MIS=TUNES AS TO SWALL[ UP EV]Y?+ 9 HIS H&S4 

#c4 ,IF ?IS PR9CIPLE ( LAW W]E ACT$ UPON1 WE %\LD HAVE NO 9SOLV5T OR BANKRUPT LAWS1 AS N[1 DIS*>G+ M5 FROM !IR CONTRACTS >BITR>ILY1 )\T REG>D+ :E!R !Y HAVE BE5 HONE/ OR DI%ONE/1 PRUD5T OR PR(LIGATE1 FRUGAL OR EXTRAVAGANT1 =TUNATE OR UN=TUNATE4 ,UND] ! PRES5T SY/EM1 9SOLV5T & BANKRUPT LAWS >E 9DISP5SABLE TO SAVE HONE/ DEBTORS FROM HOPELESS & P]PETUAL POV]TY & WANT4 ,YET AS !SE LAWS APPLY TO L>GE NUMB]S ( DEBTS1 9/EAD ( A S+LE ONE1 IT IS IMPOSSIBLE ?AT !Y %\LD MAKE SU* DISCRIM9ATIONS BETWE5 ! HONE/ & DI%ONE/1 ! FRUGAL & ! EXTRAVAGANT1 ! =TUNATE & ! UN=TUNATE DEBTOR1 AS W\LD BE MADE 9 ! CASE ( A S+LE DEBT1 DEBTOR1 & CR$ITOR4 ,! CONSEQU5CE IS1 ?AT UND] ! PRES5T SY/EM1 CR$ITORS HAVE1 & CAN HAVE1 LITTLE O!R SECURITY = ! HONE/Y ( !IR DEBTORS1 ?AN :AT ! PR9CIPLES & 9T]E/S ( ! LATT] MAY AF=D4 ,BUT UND] ! O!R SY/EM1 ! DEBTOR W\LD BE HELD LIABLE1 ON EA* DEBT1 TO ! SCRUT9Y ( HIS CR$ITOR2 & W\LD FAIL ( A RELEASE FROM HIS LIABILITY1 IF DI%ONE/Y1 PR(LIGACY1 OR EXTRAVAGANCE W]E PROV$ AGA9/ HIM4 

,:I* ( !SE TWO SY/EMS AF=DS ! BE/ SECURITIES TO CR$ITORS1 IT H>DLY NE$S FUR!R >GUM5T TO DEMON/RATE4 

#d4 ,UND] ! PRES5T SY/EM1 DEBTORS1 UND] C]TA9 CIRCUM/ANCES1 >E ALMO/ COMPELL$1 BY ! NECESSITIES ( !IR CONDITION1 TO WRONG !IR CR$ITORS4 ,= 9/ANCE-A DEBTOR1 BE=E HIS DEBT BECOMES DUE1 F9DS ?AT IT WILL BE \T ( HIS P[] TO PAY ! :OLE ( HIS DEBT AT ! TIME IT BECOMES DUE4 ,HE KN[S ?AT ?IS >RE>AGE WILL BE A BURD5 UPON HIS FUTURE ACQUISITIONS1 & ?AT1 IF HE SUFF] IT TO BECOME KN[N1 IT WILL ALSO BE AN OB/ACLE TO HIS OBTA9+ SU* FUR!R CR$IT AS MAY BE NECESS>Y = ! SUCCESSFUL PROSECUTION ( HIS 9DU/RY4 ,BUT HIS DEBT NOT BE+ YET DUE1 & HIS 9SOLV5CY NOT HAV+ YET COME TO LI<T1 HE HAS /ILL A CR$IT 9 ! COMMUNITY4 ,HE AVAILS HIMSELF ( ?IS CR$IT 9 ! DESP]ATE HOPE TO RETRIEVE HIS =TUNE1 & SAVE HIS CR$IT2 OR1 IF ?IS CANNOT BE1 ) ! 9T5TION ( PUTT+ AS F> (F AS POSSIBLE ! EVIL DAY ( OP5 9SOLV5CY & RU94 ,HE ADOPTS ! PR9CIPLE ?AT HE WILL NEV] /OP PAYM5T SO LONG AS HIS CR$IT IS AVAILABLE4 7,& PUBLIC OP9ION JU/IFIES HIM 9 ADOPT+ ?IS PR9CIPLE4 ,! PUBLIC G5]ALLY REG>D A MAN AS A FOOL1 OR A C[>D1 :O SUBMITS TO OP5 9SOLV5CY SO LONG AS HE CAN GET CR$IT47 ,HE1 !RE=E1 MAKES NEW DEBTS TO PAY OLD ONES2 BORR[S MONEY AT RU9\S RATES ( 9T]E/2 MAKES DESP]ATE MOVES 9 HIS BUS9ESS2 EV]Y /RUGGLE TO EXTRICATE HIMSELF ONLY S9KS HIM DEEP] 9 ! MIRE2 F9ALLY HE GETS TO ! 5D ( HIS CR$IT2 HIS RACE IS RUN2 ! 9SOLV5T LAWS COME 9 TO SETTLE ! MATT]2 & HIS :OLE >RE>AGES ( DEBT1 & ! CONSEQU5T LOSSES ( HIS CR$ITORS1 >E P]HAPS T51 TW5TY1 OR FIFTY TIMES GREAT] ?AN !Y W\LD HAVE BE51 IF HE HAD SETTL$ ) HIS FIR/ CR$ITOR1 BY PAY+ ALL HE HAD TO PAY1 :5 BE FIR/ F\ND ?AT HE WAS 9 >RE>S4 ,:I* ( ! TWO SY/EMS1 !N1 IS ! BE/ = CR$ITORS1 AS A CLASS8 

#e4 ,CR$ITORS1 AS A CLASS-M5 :O HAVE MONEY & CAPITAL TO LOAN-HAVE AN 9T]E/ ?AT !IR CU/OM]S1 ! BORR[+ CLASS1 %\LD CANCEL !IR DEBTS1 BY PAY+ :AT !Y CAN1 AS SOON AS !Y F9D !MSELVES 9 S]I\S >RE>S1 NOT ONLY = ! REASON ?AT !IR >RE>S WILL !N USUALLY BE MANY TIMES LESS ?AN :5 SETTLEM5TS >E PO/PON$1 AS N[1 TO ! LATE/ POSSIBLE P]IOD1 BUT BECAUSE ! DEBTORS WILL !N BECOME GOOD & SAFE CU/OM]S TO ! MONEY L5D]S AGA94 

#f4 ,! PR9CIPLE1 ?AT A DEBT IS OBLIGATORY ONLY TO ! EXT5T ( ! DEBTOR'S MEANS :5 ! DEBT BECOMES DUE1 W\LD NE>LY1 IF NOT :OLLY1 PUT AN 5D TO A CLASS ( CONTRACTS1 ?AT >E IMMORAL & FRAUDUL5T1 9 9T5T1 IF NOT 9 LAW1 ON ! P>T ( ! CR$ITORS1 & :I* \<T NEV] TO BE 5=C$ AGA9/ DEBTORS4 ,!SE CONTRACTS >E ( ?IS K9D4 ,AN OLD & EXP]I5C$ MAN TAKES ADVANTAGE ( ! 9EXP]I5CE & ! SANGU9E ANTICIPATIONS ( A Y\NG MAN1 TO SELL HIM PROP]TY AT 5ORM\S PRICES1 GIV+ HIM CR$IT = ! :OLE1 OR A P>T1 BUT WELL KN[+1 FROM HIS [N SUP]IOR JUDGM5T & EXP]I5CE1 ?AT ! Y\NG MAN WILL NOT AT ALL REALIZE HIS ANTICIPATIONS1 OR EV5 REALIZE 5\< FROM ! PROP]TY TO CANCEL HIS LIABILITY4 ,BUT HE SELLS ! PROP]TY TO HIM ON ! CALCULATION ?AT ! LATT] WILL BE ABLE TO PAY AT LEA/ ! REAL VALUE ( ! PROP]TY2 & ?AT1 AS = ! BALANCE1 HE IS A Y\NG MAN1 HE WILL BE ABLE TO WORK IT \T2 OR HIS FRI5DS WILL PAY IT = HIM2 OR ! POSSESSION ( ?IS PROP]TY WILL 5ABLE HIM TO GET CR$IT ( O!RS1 & ?US HE WILL BE 5ABL$ TO PAY ?IS DEBT BY ?R[+ AN EQUIVAL5T AM\NT ( LOSS UPON SOMEBODY ELSE4 ,SU* CONTRACTS >E PLA9LY IMMORAL & FRAUDUL5T1 ON ! P>T ( ! CR$ITOR1 BO? T[>DS ! DEBTOR1 & T[>DS O!RS"9#b-AL?\< !IR IMMORALITY & FRAUD >E ( A *>ACT] NOT SUSCEPTIBLE ( BE+ LEGALLY PROV$ & DEFEAT$ 9 P>TICUL> CASES4 ,! ONLY WAY ( DEFEAT+ !M SEEMS TO BE1 TO ADOPT ! PR9CIPLE ?AT NO CONTRACT IS B9D+ BEYOND ! LIMITS ( ! DEBTOR'S MEANS4 

,BUT IT IS UNNECESS>Y1 9 ?IS PLACE1 TO GO 9TO A DETAIL ( ALL ! B5EFITS1 ?AT W\LD RESULT TO BO? DEBTORS & CR$ITORS FROM ! ADOPTION ( ! PR9CIPLE1 ?AT A DEBT IS A LI5 ONLY UPON ! DEBTOR'S MEANS AT ! TIME ! DEBT BECOMES DUE4 ,!SE B5EFITS >E OBVI\SLY ( ! MO/ IMPORTANT *>ACT]4 ,& WE %ALL H]EAFT] SEE ?AT ! PR9CIPLE IS ONE ( NATURAL LAW1 :I* ALL C\RTS1 )\T ! AID ( LEGISLATION1 & 9 DEFIANCE ( ALL LEGISLATION1 >E B\ND TO MA9TA9 & C>RY 9TO EFFECT4 

,PROPOSITION #g4 ,CR$ITORS %\LD HAVE LI5S UPON ! PROP]TY ( !IR DEBTORS1 9 ! ORD] 9 :I* !IR DEBTS >E CONTRACT$2 7) SAME EXCEPTIONS H]EAFT] TO BE NAM$27 & ! CR$ITOR HAV+ ! FIR/ LI51 %\LD BE PAID 9 FULL1 BE=E ! SECOND RECEIVES ANY PORTION ( HIS DEBT4 ,& ?IS PR9CIPLE %\LD APPLY TO ALL ! CR$ITORS RESPECTIVELY -EA* PRIOR CR$ITOR HAV+ A RI<T TO FULL PAYM5T1 BE=E A SUCCE$+ CR$ITOR CAN RECEIVE ANY?+4 ,& IT %\LD BE HELD LEGALLY FRAUDUL5T 9 A DEBTOR1 7EXCEPT 9 CASES H]EAFT] M5TION$17 TO PAY A SUBSEQU5T CR$ITOR TO ! PREJUDICE ( A PRIOR ONE4 

,!SE PR9CIPLES >E JU/ 9 !MSELVES-!Y >E ! PR9CIPLES ( NATURAL LAW-& ! EFFECT ( !M W\LD BE MU* BETT]1 = BO? DEBTORS & CR$ITORS1 ?AN ?OSE ?AT N[ PREVAIL4 

,?AT !Y >E JU/ 9 !MSELVES1 AS BETWE5 CR$ITORS1 IS OBVI\S FROM ! FACT1 ?AT A P]SONAL DEBT1 AS1 = 9/ANCE1 A PROMISSORY NOTE1 OR A BOOK ACC\NT1 IS1 9 EQUITY1 A LI5 UPON ALL A DEBTOR'S G5]AL PROP]TY1 9 V]Y NE>LY ! SAME MANN]1 EXCEPT 9 =M1 ?AT A MORTGAGE IS A LI5 UPON A SPECIFIC P>CEL ( REAL E/ATE4 ,! SECOND CR$ITOR1 !RE=E1 9 A P]SONAL DEBT1 /&S 9 ! SAME RELATION TO A PRIOR CR$ITOR1 ) REF]5CE TO ! G5]AL PROP]TY ( ! DEBTOR1 ?AT A SECOND MORTGAGEE DOES TO A PRIOR ONE1 ) REF]5CE TO A SPECIFIC P>CEL ( REAL PROP]TY1 ON :I* !Y BO? HOLD MORTGAGES4 ,HE1 9 EFFECT1 TAKES A SECOND LI5 UPON ! DEBTOR'S G5]AL PROP]TY2 & HE1 ( C\RSE1 TAKES IT1 SUBJECT TO ! 5CUMBRANCE ( ! PRIOR LI51 :I* IS 5TITL$ TO BE FIR/ SATISFI$4 

,ONE GREAT OB/ACLE 9 ! WAY ( CAPITALI/S LOAN+ CAPITAL TO POOR M51 UND] \R PRES5T SY/EM1 IS1 ?AT ! CR$ITOR HOLDS NO CLAIM UPON ! CAPITAL HE HIMSELF HAS LOAN$1 OR ITS PROCE$S1 = ! SECURITY ( HIS DEBT1 9 PREF]5CE TO SUBSEQU5T CR$ITORS4 ,IF BE C\LD HOLD ! FIR/ LI5 UPON ! CAPITAL LOAN$1 & UPON ! VALUE ?AT %\LD BE ADD$ TO IT BY ! LABOR ( ! BORR[]1 IT W\LD !N G5]ALLY BE SAFE TO L5D CAPITAL TO M5 :O W]E DE/ITUTE ( ANY O!R PROP]TY4 

,IT IS A GREAT DEFECT 9 ! DOCTR9E ( LI5S1 AS N[ ADM9I/]$1 ?AT IT 9 G5]AL RECOGNIZES ! PR9CIPLE ( LI5 ONLY 9 RELATION TO SPECIFIC >TICLES ( PROP]TY2 :I* >TICLES CAN BE US$ BY ! DEBTOR1 BUT CANNOT BE EX*ANG$ BY HIM = ANY O!R PROP]TY BETT] ADAPT$ TO HIS USE4 ,?IS PR9CIPLE DOES NOT 5ABLE A BORR[] TO GIVE HIS CR$ITOR SECURITY UPON MONEY1 :I* HIS CR$ITOR LOANS TO HIM TO BE EMPLOY$ 9 BUS9ESS1 & :I* MU/ BE EX*ANG$1 & P]HAPS PASS ?R\< HALF A DOZ5 DIFF]5T =MS BE=E IT IS REPAID TO ! CR$ITOR4 ,:AT IS WANT$ 9 ORD] TO SECURE A CR$ITOR = MONEY1 :I* HE HAS LOAN$ TO BE EMPLOY$ BY ! DEBTOR 9 BUS9ESS1 OR = PROP]TY ( ANY K9D :I* HE SELLS ON CR$IT1 & :I* ! DEBTOR IS TO BE P]MITT$ TO CONV]T 9TO PROP]TY ( ANO!R K9D1 IS1 ?AT HE 7! CR$ITOR7 %\LD HAVE A PRIOR RI<T1 OV] ANY SUBSEQU5T CR$ITOR1 TO ! PROCE$S ( ?AT MONEY1 OR O!R PROP]TY1 9TO :ATEV] %APE IT MAY AFT]W>DS BE CONV]T$ BY ! DEBTOR4 ,& ?IS OBJECT CAN BE ACCOMPLI%$ ONLY BY ADOPT+ ! G5]AL PR9CIPLE1 ?AT A PRIOR CR$ITOR HAS A PRIOR LI5 UPON ! G5]AL PROP]TY ( HIS DEBTOR1 = ! FULL SATISFACTION ( HIS DEBT4 

,IF ,A LOAN CAPITAL TO ,Z1 :5 ,Z IS FREE ( DEBT1 IT IS C]TA9LY RI<T ?AT ,A %\LD BE PAID \T ( ! PROCE$S ( ! CAPITAL HE HIMSELF HAS LOAN$1 9 PREF]5CE TO ANYBODY ELSE4 ,IT IS !RE=E RI<T ?AT HIS DEBT %\LD BE A LI5 UPON ?AT CAPITAL1 OR ITS PROCE$S1 9 ! H&S ( ,Z2 & ?AT ,Z %\LD HAVE NO ,TI<T1 )\T ! CONS5T ( ,A1 TO DISPOSE ( IT1 OR ITS PROCE$S1 TO ! PREJUDICE ( ,A1 = ! B5EFIT ( ANY ?IRD P]SON4 ,& HE %\LD HAVE NO MORE RI<T TO DISPOSE ( IT1 TO ! PREJUDICE ( ,A1 = ! B5EFIT ( A SUBSEQU5T CR$ITOR1 ?AN = ! B5EFIT ( ANY O!R P]SON4 

,IF1 !RE=E1 ,B SUBSEQU5TLY GIVE CR$IT1 OR LOAN CAPITAL TO ,Z1 BE=E ! DEBT ( ,A IS PAID1 7OR HAS EXPIR$ = WANT ( PAYM5T17 HE GIVES HIM CR$IT SUBJECT TO ALL ! DISADVANTAGES ( ! PRIOR LI5 ?AT ,A HAS UPON ! PROP]TY ( ,Z4 ,& ?IS PRIOR LI51 :I* ,A HAS UPON ! PROP]TY ( ,Z = ! CAPITAL FIR/ LOAN$ TO HIM1 WILL BE A LI5 ALSO UPON ! CAPITAL LOAN$ HIM BY ! SUBSEQU5T ,CR$ITOR1 7,B17 UNLESS ,B1 AT ! MATURITY ( ,A'S DEBT1 %ALL BE ABLE TO PROVE ?AT P>TICUL> PORTIONS ( ! DEBTOR'S PROP]TY1 /ILL REMA9+ DI/+UI%ABLE FROM ! RE/1 >E P>TS1 OR PROCE$S ( ! SPECIFIC CAPITAL LOAN$ TO HIM BY HIMSELF1 7,B47 ,?AT IS1 ! FIR/ CR$ITOR1 :5 HIS DEBT BECOMES DUE1 WILL HAVE A PRIMA FACIE LI5 UPON ALL ! PROP]TY 9 ! H&S ( ! DEBTOR2 & ! BURD5 ( PRO( WILL BE UPON ! SUBSEQU5T CR$ITORS TO %[ ?AT SPECIFIC PORTIONS ( ! PROP]TY1 :I* CAN /ILL BE DI/+UI%$ FROM ! DEBTOR'S G5]AL PROP]TY1 W]E LOAN$ TO ! DEBTOR BY !MSELVES1 & W]E !RE=E NOT 9CLUD$ 9 ! FIR/ CR$ITOR'S LI54 ,ALL ?OSE PORTIONS ( ! SUBSEQU5T LOANS1 OR !IR PROCE$S1 :I* %ALL HAVE BECOME 9DI/+UI%ABLY MIX$ ) ! FIR/ LOAN1 OR ITS PROCE$S1 OR :I* ! SUBSEQU5T CR$ITORS %ALL HAVE NO LEGAL PRO( TO DI/+UI% FROM ! FIR/ LOAN1 OR ITS PROCE$S1 WILL BE HELD ABSOLUTELY LIABLE = ! SATISFACTION ( ! FIR/ CR$ITOR'S DEBT4 

,?IS PR9CIPLE1 ( ! PRIORITY ( RI<TS ON ! P>T ( CR$ITORS1 WILL BE MORE FULLY ILLU/RAT$ H]EAFT]1 9 ! *APT]S ON ! LEGAL NATURE ( DEBT2 & ! PR9CIPLE WILL !N BE %[N TO BE A LEGAL ONE1 :I* C\RTS >E B\ND TO C>RY 9TO EFFECT4 ,9 ?IS PLACE1 ,I %ALL ONLY PO9T \T SOME ( ! ECONOMICAL RESULTS1 ?AT W\LD FL[ FROM ITS ADOPTION4 

#a4 ,ONE ( !SE RESULTS W\LD BE ?AT IT W\LD BE SAFE = A CAPITALI/ TO LOAN CAPITAL TO A POOR MAN1 IF ! LATT] W]E BUT FREE ( DEBT1 W]E A MAN ( 9TEGRITY & FRUGALITY1 ( ORD9>Y CAPACITY = BUS9ESS1 & W]E 5GAG$ 9 A BUS9ESS ?AT WAS ORD9>ILY PR(ITABLE2 BECAUSE ! CAPITALI/ W\LD HAVE A LI5 = HIS DEBT1 NOT ONLY UPON ! CAPITAL ITSELF1 ?AT HE HAD LOAN$1 7OR ITS PROCE$S17 BUT ALSO UPON ALL ! VALUE ?AT %\LD BE ADD$ TO IT BY ! LABOR ( ! DEBTOR4 ,IF1 = 9/ANCE1 A CAPITALI/ %\LD SELL TO A %OEMAK]1 ON CR$IT1 TWO HUNDR$ DOLL>S' WOR? ( LEA!R1 OR 

%\LD LOAN TO HIM TWO HUNDR$ DOLL>S ( MONEY ) :I* TO BUY LEA!R1 TO BE WR\<T BY ! LATT] 9TO %OES1 BE W\LD HOLD A LI51 9 PREF]5CE TO ANY SUBSEQU5T CR$ITOR1 NOT ONLY UPON ! LEA!R ITSELF1 BUT UPON ! %OES MANUFACTUR$ FROM ?AT LEA!R4 ,ALL ! ADDITIONAL VALUE1 ?AT %\LD BE GIV5 TO ! LEA!R BY ITS BE+ WR\<T 9TO %OES1 W\LD ADD SO MU* TO ! CR$ITOR'S SECURITY = HIS DEBT4 

,! PR9CIPAL DRAWBACK UPON ?IS SECURITY IS ?IS1 VIZ41 ?AT ! TABOR] & HIS FAMILY MU/ HAVE !IR SUBSI/5CE \T ( ! PROCE$S ( !IR LABOR-9 O!R WORDS1 FROM ! SALE ( ! %OES MANUFACTUR$4 ,! AM\NT ( ?IS DRAWBACK WILL DEP5D UPON ! NUMB]1 HEAL?1 ECONOMY1 & 9DU/RY ( ! DEBTOR'S FAMILY4 ,9 ! CASE ( A Y\NG MAN1 JU/ SETT+ \T 9 LIFE1 ) A WIFE1 & )\T *ILDR51 ! NECESS>Y CO/ ( A FRUGAL SUBSI/5CE1 SU* AS A PRUD5T & REASONABLE P]SON W\LD BE SATISFI$ )1 7AT LEA/ UNTIL HE HAD ACCUMULAT$ CAPITAL 5\< ( HIS [N TO1 EMPLOY HIS [N H&S UPON17 W\LD PROBABLY NOT CONSUME EV5 ONE HALF ! VALUE ?AT W\LD BE ADD$ TO ! CAPITAL BY HIS LABOR4 ,9 ! CASE ( L>G] FAMILIES1 A L>GE PROPORTION ( ?IS VALUE W\LD BE CONSUM$4 ,BUT 9 FEW OR NONE1 UNLESS IT W]E 9 CASE ( SICKNESS1 W\LD IT BE SO NE>LY CONSUM$ AS TO IMPAIR ! CR$ITOR'S SECURITY4 ,?IS IS EVID5T1 FROM ! FACT ?AT LABOR]S N[ SUPPORT !IR FAMILIES SIMPLY 'UPON ! WAGES !Y RECEIVE = !IR LABOR1 AL?\< !IR WAGES DO NOT AM\NT TO MORE ?AN ONE BAIT1 TWO ?IRDS1 OR ?REE F\R?S ( ! VALUE1 :I*- !IR LABOR ADDS TO ! CAPITAL ON :I* !Y >E EMPLOY$1 7! RE/ GO+ 9TO ! POCKETS ( !IR EMPLOY]S47 ,IF1 !N1 !Y W]E TO HAVE-AS1 :5 !Y W]E !IR [N EMPLOY]S1 !Y W\LD HAVE-! :OLE ( ! VALUE ?AT %\LD BE ADD$ TO ! CAPITAL BY !IR LABOR1 !Y C\LD NOT ONLY SUBSI/ AS WELL AS !Y DO1 N[1 BUT HAVE CONSID]ABLY MORE ?AN 5\< BESIDE TO REPAY ! CAPITAL BORR[$1 ) 9T]E/-BECAUSE ! CAPITAL BORR[$ WILL ITSELF BE SUFFICI5T TO REPAY ! LOAN & 9T]E/1 IF BUT SIX1 SEV51 EI<T1 N9E1 OR T5 P]C5T1 71ACCORD+ AS ! RATE ( 9T]E/ MAY BE17 %ALL BE ADD$ TO ITS VALUE BY ! LABOR]4 ,ANY LABOR]1 HAV+ ORD9>Y CAPACITIES1 C\LD ADD ?IS AM\NT ( VALUE TO TWO1 ?REE1 OR FIVE HUNDR$ DOLL>S CAPITAL1 & /ILL HAVE N9E T5?S ( ! :OLE VALUE OR PROCE$S ( HIS LABOR LEFT1 ) :I* TO SUBSI/ HIMSELF & FAMILY4 ,& !SE N9E T5?S ( ! -:OLE VALUE OR PROCE$S ( HIS LABOR1 7:5 HE HAD TWO1 ?REE1 OR LIVE HUNDR$ DOLL>S CAPITAL TO WORK )17 W\LD UNQUE/IONABLY AM\NT TO MU* MORE ?AN HE W\LD RECEIVE AS WAGES1 :5 HE SOLD HIS LABOR TO AN EMPLOY]4 

,! O!R DRAWBACKS ON ! SECURITY M5TION$1 79 ADDITION TO ! SUBSI/5CE ( ! LABOR] & HIS FAMILY17 >E ! RISKS ( ! HEAL? & LIFE ( ! BORR[]1 & ! RISK ( ACCID5TS BY FIRE1 @&C4 ,!SE RISKS1 ON ! AGGREGATE ( LOANS1 W\LD BE SMALL1 & W\LD BE GU>D$ AGA9/ BY CR$ITORS1 BY SMALL ADDITIONAL RATES ( 9T]E/1 7IF USURY LAWS W]E ABOLI%$17 BY LIFE 9SURANCE1 & BY 9SURANCE ON ! CAPITAL AGA9/ FIRE4 ,! CO/S ( GU>D+ AGA9/ ALL !SE RISKS W\LD AM\NT TO NO MORE ?AN A SMALL ADDITION TO ! RATE ( 9T]E/ ON ! CAPITAL1 &1 BE+ ?US PROVID$ =1 W\LD 9T]POSE NO S]I\S IMP$IM5T TO ! LOAN ( CAPITAL TO POOR M54 

,ONE PR9CIPAL1 IF NOT 9SUP]ABLE OB/ACLE1 9 ! WAY ( LOAN+ CAPITAL TO POOR M51 9 ! PRES5T /ATE ( ?+S1 IS ?AT ! -CR$ITOR HAS NO LEGAL SECURITY ?AT ! DEBTOR WILL NOT CONTRACT O!R DEBTS AFT]W>DS1 & ?AT ! CAPITAL1 :I* BE HAS LOAN$ TO HIM1 WILL NOT BE APPLI$1 EI!R BY ! 1DEBTOR HIMSELF1 OR BY ! 9SOLV5T LAWS1 TO ! PAYM5T ( !SE DEBTS TO O!R M54 ,?IS OB/ACLE W\LD BE 5TIRELY REMOV$ BY ! ADOPTION ( ! PR9CIPLE ( ! PRIOR RI<T ( ! PRIOR CR$ITOR4 

#b4 ,ANO!R RESULT ( ?IS PR9CIPLE W\LD BE ! G5]AL DI/RIBUTION ( CR$IT4 ,A CAPITALI/1 AB\T TO LOAN MONEY1 W\LD BE V]Y CAUTI\S ( LOAN+ TO A P]SON ALREADY 9 DEBT = CAPITAL BORR[$ ( O!RS-LE/ ! CAPITAL LOAN$ BY HIMSELF %\LD BECOME 9DI/+UI%ABLY MIX$ ) ?AT BORR[$ ( ! PRIOR CR$ITORS1 & BE DEVOT$1 9 :OLE OR 9 P>T1 TO ! PAYM5T ( SU* PRIOR CR$ITOR'S 1CLAIMS ,HE W\LD1 !RE=E1 SEEK = BORR[]S :O W]E FREE ( DEBT1 ?AT HE MI<T AT LEA/ HOLD A SECURE LI5 UPON ! CAPITAL1 :I* HE HIMSELF %\LD LOAN TO !M4 ,! PR9CIPLE W\LD ?US OBVI\SLY PREV5T ! ACCUMULATION ( L>GE CR$ITS 9 ! H&S ( S+LE 9DIVIDUALS4 ,& BY PREV5T+ L>GE ACCUMULATIONS ( CR$IT 9 ! H&S ( S+LE 9DIVIDUALS1 IT W\LD PROMOTE ! DI/RIBUTION ( ! SAME AGGREGATE AM\NT ( CR$IT1 9 SMALL] P>CELS1 AMONG A L>G] NUMB] ( 9DIVIDUALS4 ,& ! SAME AGGREGATE AM\NT ( CR$ITS1 ?AT N[ EXI/ 9 ! COMMUNITY1 IF PROP]LY DI/RIBUT$1 W\LD PROBABLY PUT 9TO ! H&S ( NE>LY OR QUITE EV]Y LABOR] 9 ! C\NTRY AIL AM\NT ( CAPITAL SUFFICI5T = HIM TO EMPLOY HIS [N H&S UPON4 

,?IS PR9CIPLE ( ! PRIOR RI<T ( ! PRIOR CR$ITOR W\LD BE NO OB/ACLE TO BANK+1 NOR TO A BANK]'S PAY+ A SECOND NOTE :ILE A PRIOR ONE WAS /ILL 9 CIRCULATION-BECAUSE A BANK]'S NOTES >E PAYABLE ON DEM&1 & >E DUE IMM$IATELY ON !IR BE+ ISSU$4 ,IF1 !RE=E1 ! HOLD] DO NOT PRES5T !M :5 DUE1 7?AT IS1 IF HE DO NOT PRES5T !M IMM$IATELY ON !IR BE+ ISSU$17 SU* OMISSION IS A VOLUNT>Y WAIV]1 ON HIS P>T1 ( HIS RI<T TO PRIORITY ( PAYM5T1 & ALL[S ! BANK] TO PAY HIS NOTES 9 ! ORD] 9 :I* !Y >E PRES5T$ = PAYM5T4 ,! SAME PR9CIPLE W\LD APPLY TO ALL O!R DEBTS ?AT W]E NOT DEM&$ :5 DUE4 

,AGA92 AL?\< ?IS PR9CIPLE1 ( ! PRIOR RI<T ( ! PRIOR CR$ITOR1 W\LD BE AN OB/ACLE 9 ! WAY ( A DEBTOR'S GETT+ A SECOND CR$IT1 7UNLESS ( ! SAME CR$ITOR17 BE=E A PRIOR ONE HAD BECOME DUE1 IT W\LD BE NO SU* OB/ACLE AFT] ! =M] ONE HAD BECOME DUE1 EV5 ?\< HE %\LD HAVE BE5 UNABLE TO PAY ! FIR/ CR$IT 9 FULL-BECAUSE1 AT ! MATURITY ( ! FIR/ CR$IT1 HE W\LD-IF ! PR9CIPLE ( ,I ,I ,PROPOSITION #f #aa BE CORRECT-CANCEL IT BY PAY+ TO ! EXT5T ( HIS MEANS1 :I* W\LD LEAVE HIM !NCE=? A FREE MAN4 

,! RESULT ( ! TWO PR9CIPLES /AT$ 9 PROPOSITIONS #f & #g1 VIZ47 #a1 ?AT A DEBT IS B9D+ UPON A DEBTOR ONLY TO ! EXT5T ( HIS MEANS2 &1 #b1 ?AT A PRIOR CR$ITOR HAS A PRIOR LI5 ON HIS DEBTOR'S PROP]TY1 W\LD BE TO 9DUCE CAPITALI/S 9DIVIDUALLY TO SEEK \T SEP>ATE LABOR]S1 ( CAPACITY1 9DU/RY1 & 9TEGRITY1 :O W]E FREE ( DEBT1 & FURNI% !M RESPECTIVELY ) :AT CAPITAL !IR BUS9ESS %\LD REQUIRE2 & ?US SAVE BORR[]S FROM ! NECESSITY ( GETT+ CR$IT1 AS !Y DO N[1 9 PETTY P>CELS1 ( SEV]AL DIFF]5T P]SONS4 ,?AT SU* W\LD BE ! RESULT IS OBVI\S - BECAUSE1 #a1 A CAPITALI/ W\LD PREF]1 AS A G5]AL RULE1 NOT TO BECOME ! SECOND CR$ITOR ( A DEBTOR2 &1 #b1 AS CAPITALI/S W\LD NOT WI% TO BECOME ! SECOND CR$ITOR ( A DEBTOR1 IT W\LD BE 9DISP5SABLE1 AS A G5]AL RULE1 ?AT ! FIR/ CR$ITOR %\LD ADVANCE CAPITAL 5\< TO 5ABLE ! DEBTOR TO PROSECUTE HIS BUS9ESS ADVANTAGE\SLY1 ELSE HE MI<T LOSE A P>T ( :AT HE %\LD LOAN HIM4 ,! DEBTOR1 HAV+ A RI<T TO CANCEL HIS DEBT1 BY PAY+ TO ! EXT5T ( HIS MEANS1 W\LD DO SO :5EV] ! CR$ITOR %\LD REFUSE TO FURNI% SUFFICI5T CAPITAL TO 5ABLE HIM TO PROSECUTE HIS BUS9ESS PR(ITABLY4 ,& ! CR$ITOR1 :5 HE %\LD SEE ?AT HIS DEBTOR WAS US+ CAPITAL ADVANTAGE\SLY1 W\LD *OOSE TO ADVANCE TO HIM :ATEV] MI<T BE NECESS>Y1 BECAUSE SU* ADVANCE W\LD BE A PR(ITABLE 9VE/M5T ( HIS CAPITAL4 ,OIL ! O!R H&1 :5EV] HE %\LD F9D ?AT HIS DEBTOR WAS NOT US+ CAPITAL ADVANTAGE\SLY1 HE W\LD )HOLD ANY FUR!R ADVANCES1 &1 AT ! MATURITY ( ! CR$IT GIV51 CLOSE ! CONNECTION ) AS LITTLE LOSS1 IF ANY1 AS POSSIBLE1 BY ACCEPT+ PAYM5T TO ! EXT5T ( ! DEBTOR'S MEANS1 9 FULL DIS*>GE ( ! DEBT4 

,! OP]ATION ( !SE PR9CIPLES1 !RE=E1 W\LD BE ! E/ABLI%M5T ( A SORT ( P>TN]%IP RELATION BETWE5 ! CAPITALI/ & LABOR]1 OR L5D] & BORR[]-! =M] FURNI%+ CAPITAL1 ! LATT] LABOR4 ,\T ( ! JO9T PROCE$S ( ?IS CAPITAL & LABOR1 ! LABOR] W\LD FIR/ TAKE 5\< = AN ECONOMICAL SUBSI/5CE :ILE P]=M+ ! LABORAS IT W\LD BE NECESS>Y ?AT HE %\LD1 9 ORD] ?AT HE MI<T P]=M IT4 ,ON ALL ! REMA9+ PROCE$S ! CAPITALI/ W\LD HOLD A LI5 = ! AM\NT ( CAPITAL LOAN$1 & ALSO = SU* AN AM\NT ( ! 9CREAS$ VALUE GIV5 TO IT BY ! LABOR1 7SAY SIX1 SEV51 EI<T1 N9E1 OR T5 P]C5T17 AS %\LD HAVE BE5 AGRE$ ON BETWE5 !M1 UND] ! NAME ( 9T]E/4 

,?IS QUASI P>TN]%IP BETWE5 ! CAPITALI/ & LABOR]1 BY :I* ! LATT] IS MADE SURE ( HIS SUBSI/5CE :ILE LABOR+1 & BY :I* ! CAPITALI/ IS MADE TO RISK HIS CAPITAL ON ! F9AL SUCCESS ( ! 5T]PRISE1 )\T ANY CLAIM UPON ! DEBTOR 9 CASE ( FAILURE1 IS ! TRUE RELATION BETWE5 CAPITAL & LABOR1 7OR1 :AT IS ! SAME ?+1 BETWE5 ! L5D] & BORR[]47 ,& :Y8 #a4 ,BECAUSE CAPITAL PRODUCES NO?+ )\T LABOR2 & IT IS IMPOSSIBLE ?AT ! LABOR] %\LD P]=M ! LABOR1 )\T HAV+ HIS SUBSI/5CE MEAN:ILE4 ,= !SE REASONS1 IT IS RI<T ?AT ! SUBSI/5CE ( ! LABOR]1 :ILE BE/[+ HIS LABOR UPON ! CAPITAL1 %\LD BE ! FIR/ *>GE UPON ! JO9T PROCE$S ( ! CAPITAL & LABOR40"9#c 

#b4 ,IT IS RI<T ?AT ! CAPITALI/ %\LD BE MADE TO RISK HIS CAPITAL ON ! F9AL SUCCESS ( ! 5T]PRISE1 )\T HAV+ ANY CLAIM UPON ! DEBTOR 9 CASE ( FAILURE1 7?AT IS1 :5 ! DEBTOR P]=MS HIS P>T 9 ! 5T]PRISE HONE/LY & FAI?FULLY27 BECAUSE1 BEYOND ?IS PO9T1 ! CAPITAL MU/ BE RISK$ BY SOMEBODY1 7! CAPITALI/ OR LABOR]17 9 EV]Y 5T]PRISE4 ,& 9ASMU* AS PR(IT 79 ! %APE ( 9T]E/7 IS AS MU* ! OBJECT ( ! CAPITALI/1 9 FURNI%+ ! CAPITAL1 AS 79 ANO!R %APE7 IT IS ( ! LABOR] 9 FURNI%+ LABOR1 IT IS AS MU* RI<T ?AT HE %\LD TAKE ! RISK ( LOS+ HIS CAPITAL1 AS IT IS ?AT ! LABOR] %\LD TAKE ! RISK ( LOS+ HIS LABOR1 7?AT IS1 ALL OV] & ABOVE HIS SUBSI/5CE47 ,! RISK IS !N FAIRLY DIVID$ BETWE5 !M2 :]EAS IT W\LD NOT BE1 IF ! LABOR] W]E TO RISK BO? HIS LABOR & ! CAPITAL4 ,IF ! PR(IT IS TO BE DIVID$ 9 CASE ( PR(IT1 ! LOSS \<T TO BE DIVID$ 9 CASE ( LOSS4 ,IT IS SUFFICI5T TO MAKE ! 5T]PRISE A JO9T ONE1 IF ! PR(IT IS TO BE DIVID$ 9 CASE ( PR(IT4 ,& IF IT BE A JO9T 5T]PRISE1 IT IS AS MU* RI<T ?AT ! RISK ( LOSS %\LD BE JO9TLY BORNE1 AS ?AT ! *ANCE ( PR(IT %\LD BE JO9TLY 5JOY$4 

,BUT ?IS JO9T RISK1 BETWE5 ! CAPITALI/ & LABOR]1 OR L5D] & BORR[]1 AS TO ! F9AL RESULT ( AN 5T]PRISE1 9 :I* ! LABOR ( ! ONE & ! CAPITAL ( ! O!R >E TO BE JO9TLY EMPLOY$1 = !IR JO9T PR(IT1 IS NOT ONLY RI<T AS BETWE5 ! IMM$IATE P>TIES1 BUT IT IS ALSO RI<T & EXP$I5T ON G5]AL PR9CIPLES ( ECONOMY-& = ?IS REASON1 VIZ41 ?AT :5 BO? CAPITALI/ & LABOR] >E 9T]E/$ 9 ! RISKS & RESULTS ( AN 5T]PRISE1 ! 5T]PRISE WILL !N HAVE ! B5EFIT ( TWO HEADS1 9/EAD ( ONE1 9 JUDG+ ( ITS FEASIBILITY & PROBABLE RESULTS1 & ALSO 9 DECID+ UPON ! BE/ PLAN ( EXECUTION4 ,9JUDICI\S 5T]PRISES WILL !N BE MORE ,IIKELY TO BE AVOID$2 & LESS LABOR & CAPITAL WILL1 !RE=E1 BE WA/$ ON SU* 5T]PRISES ?AN N[ >E4 ,:5 A CAPITALI/ LOANS MONEY TO A LABOR]1 & KN[S ?AT HE WILL HAVE A CLAIM ON ! SUBSEQU5T E>N+S ( ! LABOR] = ANY CAPITAL ?AT MAY BE SUNK 9 ! 5T]PRISE1 HE 7! CAPITALI/7 DOES NOT LOOK1 = HIMSELF1 9TO ! M]ITS ( ! 5T]PRISE AS HE W\LD IF HE KNEW ?AT HIS ULTIMATE SECURITY = HIS CAPITAL DEP5D$ SOLELY UPON ! SUCCESS ( ! 5T]PRISE1 9/EAD ( DEP5D+ ALSO UPON ! SUBSEQU5T E>N+S ( ! LABOR]4 

.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.- 

      "9#a ,ONE ( ! GREATE/-PROBABLY ! GREATE/-( ALL ! EVILS RESULT+ FROM ! EXI/+ SY/EM ( PRIVILEG$ CORPORATIONS = BANK+ PURPOSES1 IS ?AT !SE 9CORPORATIONS AMASS1 OR BR+ TOGE!R1 & PLACE UND] ! CONTROL ( A S+LE DIRECTORY1 ! LOANABLE CAPITAL ?AT WAS PREVI\SLY SCATT]$ OV] ! C\NTRY1 9 SMALL AM\NTS1 9 ! H&S ( A L>GE NUMB] ( SEP>ATE [N]S4 ,IF ?IS CAPITAL HAD BE5 SUFF]$ TO REMA9 ?US SCATT]$1 IT W\LD HAVE BE5 LOAN$ BY ! SEP>ATE [N]S1 9 SMALL SUMS1 TO A L>GE NUMB] ( P]SONS2 EA* ( :OM W\LD ?US HAVE BE5 SUPPLI$ ) CAPITAL SUFFICI5T TO EMPLOY HIS [N H&S UPON1 ) ! MEANS ( CONTROLL+ HIS [N LABOR1 & !REBY ( SECUR+ TO HIMSELF ALL ! FRUITS ( HIS LABOR1 EXCEPT :AT HE %\LD PAY AS 9T]E/4 ,BUT :5 ALL ?IS SCATT]$ CAPITAL IS COLLECT$ 9TO ONE HEAP1 & PLAC$ UND] ! CONTROL ( A S+LE DIRECTORY1 IT IS USUALLY LOAN$ 9 L>GE SUMS1 TO A FEW 9DIVIDUALS-G5]ALLY TO ! DIRECTORS !MSELVES & A FEW O!R FAVORITES4 ,IT PROBABLY IS NOT LOAN$ TO ONE T5?1 ONE TW5TIE?1 OR ONE FIFTIE? AS MANY DIFF]5T ,P]SONS1 AS IT W\LD HAVE BE5 IF IT HAD BE5 SUFF]$ TO REMA9 9 ITS ORIG9AL /ATE1 & HAD BE5 LOAN$ BY ITS SEP>ATE [N]S4 ,9DIVIDUALS1 9/EAD ( BORR[+ ONE1 TWO1 ?REE1 OR FIVE HUNDR$ DOLL>S TO EMPLOY !IR [N B&S UPON1 AS W\LD BE ! CASE BUT = !SE 9CORPORATIONS ( CAPITAL1 N[ BORR[ FIVES1 T5S1 & HUNDR$S ( ?\S&S ( DOLL>S1 UPON :I* TO EMPLOY ! LABOR ( O!RS4 ,?IS PROCESS ( CONC5TRATION1 MONOPOLY1 & 9CORPORATION1 BY MEANS ( :I* ONE MAN1 A DIRECTOR1 OR A FAVORITE ( A BANK1 IS 5ABL$ TO BORR[ CAPITAL 5\< TO EMPLOY ! LABOR ( T51 TW5TY1 OR AN HUNDR$ M51 ( C\RSE DEPRIVES T51 TW5TY1 OR AN HUNDR$ O!R M5 ( ! ABILITY TO BORR[ EV5 CAPITAL 5\< TO EMPLOY !IR [N H&S UPON4 ,( CONSEQU5CE IT COMPELS !M TO SELL !IR LABOR TO HIM :O HAS MONOPOLIZ$ ! CAPITAL4 ,& !Y MU/ SELL !IR LABOR TO HIM AT A PRICE ?AT WILL GIVE HIM A PR(IT-G5]ALLY A L>GE PR(IT4 ,?AT IS1 !Y MU/ SELL IT = MU* LESS ?AN ! AM\NT ( WEAL? IT PRODUCES4 ,9 ?IS WAY T51 TW5TY1 OR AN HUNDR$ M5 >E LIT]ALLY ROBB$ ( AN IMPORTANT PORTION ( ! FRUITS ( !IR LABOR1 SOLELY ?AT A S+LE MONOPOLI/ MAY BE GORG$ ) WEAL?4 ,IT IS ?US ?AT ! LEGISLATION1 :I* CREATES !SE L>GE 9CORPORATIONS ( PRIVILEG$ BANK]S1 OP]ATES TO PLUND] ! MANY ( ! FRUITS ( !IR LABOR1 & PAMP] ! FEW ) ! SPOILS47,RETURN7 

      "9#b ,MUTUAL B5EFIT IS ! ONLY F\NDATION = ! MORALITY ( CONTRACTS2 OR1 AT LEA/1 TO BE MORAL1 A CONTRACT %\LD CONTEMPLATE NO 9JURY TO EI!R P>TY47,RETURN7 

      "9#c ,IF ! CAPITALI/ W]E TO HIRE HIS LABOR1 9/EAD ( ! LABOR] HIR+ ! CAPITAL1 ! SUBSI/5CE ( ! LABOR] W\LD /ILL BE AS MU* A *>GE UPON ! CAPITAL1 AS IT IS :5 ! LABOR] HIRES ! CAPITAL1 & MAKES HIS [N LIV+ ! FIR/ *>GE UPON 1! JO9T PROCE$S ( ! CAPITAL & LABOR47,RETURN7 

,FROM 3 ,AN>*Y ,>*IVES4 

,*RONOLOGY 3 
,NOVEMB] #c1 #ahde 3 ,*APT] #b -- ,PUBLICATION4 
,FEBRU>Y #a1 #bag 3 ,*APT] #b -- ,ADD$4 

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