SIGNIFICANCE.
As there are two economic classes of the people in the United States,[[105]] so “there are two views, both of which must be understood.” The |SEMI-OPTIMISTIC VIEW.| view presented by writers like Mr. Edward Atkinson is known to some people as worthy of regard, notwithstanding that these writers knock their heads against a mountainous wall of facts. “They argue that the mortgage is an indication of prosperity.” Mr. Atkinson says, in the “Forum” for May, 1895, writing (before the complete mortgage returns given above had been reported) concerning the census returns for 33 States:
“The first startling fact is that in these 33 States and Territories nearly 7,000,000 mortgages have been recorded in ten years for a total sum of nearly $9,500,000,000. The final statement, covering the whole country, which has not yet been published, discloses the fact that 9,517,747 mortgages were executed in the decade 1880-89 to the amount of $12,094,877,793.”[[106]] * * *
And then because “on the first of January, 1890, the amount of these mortgages remaining unpaid in the whole United States was $6,019,679,985,[[107]] Mr. Atkinson says: “It therefore appears that during the decade one-half of the mortgage debt incurred had already been paid.” But he forgets to deal with the process of losing property by the thousands of the debtors who appeared without property in 1890.
And being uncertain about mortgages on acres and lots at the beginning of the last decade, he infers that “the least estimate of the sum due on acres and lots at the beginning of this period (1880-90) would be $1,500,000,000.” And continues that “these original mortgages executed prior to 1880 must have been wholly liquidated, mostly by payment.” * * *
As regards this point we have equal or even greater reason to say that those mortgages have mostly been liquidated by an absolute loss of property, because at the end of the decade we have had many millions of propertyless families.
But the chief feature of the situation Mr. Atkinson wishes to vindicate is that the mortgage growth indicates prosperity and not the system of tenancy and landlordism as in Great Britain. He says:
“The evidence is conclusive that the increase of hired farms does not imply the permanent establishment |AFRAID OF PRIMOGENITURE.| of the relations of landlord and tenant after the English fashion. It does not imply the concentration of land in fewer hands, but rather the reverse. It does imply better and more intelligent methods of agriculture, larger and more varied crops produced from lessening areas of land throughout the whole great grain-growing section,”[[108]] and so on.
As to the prosperity, I will say, that a family securing a large amount of borrowed money or capital at low rates of interest may |CONDITIONS OF PROSPERITY.| prosper under mortgage by efficiently applying the capital on its wealth, by efficiently applying the labor energy of the family members, and, especially, by efficiently applying hired labor upon its farm or any other kind of property. So that, only those mortgagor families can have prosperity, which are aided by many agencies in drawing incomes from their land. While all the poorer families must be ruined by the mortgages.
As to the argument that we have no establishment of tenancy after the English fashion of primogeniture, it is enough to refer the reader to the third chapter of this work, and beg him to understand it well by reading a second time. For the effects of primogeniture and dividogenesure are the same, as both principles demand that millions of individuals should divide the sole results of their applied energy with the few owners of capital and wealth, or else these millions must starve without employment. They produce economic slavery in England and in the United States, where most of the people are now propertyless and therefore helpless.
Dividogenesure, however, differs from primogeniture by including all mortgagors into its sphere of oppression.
And it seems to me perfectly naive to assert that “larger and more varied crops are produced from lessening areas of land throughout |LOGIC QUEER.| the whole grain-growing section” of the country. For it really means that the more land the people lose through mortgages, the better crops they will produce, and hence the best crops must be produced by them when they lose all the land they formerly owned.
But Mr. Atkinson does not here deal with the fact that more than 64 per cent of the population in 420 cities and towns, and 77 per cent of it in the 28 largest cities are also tenants of homes, beside the tenants of farms he writes about. He does not speak of the fact that the 420 cities and towns actually belong to less than 24 per cent of their population, and that the 28 great cities in the United States really belong to less than 14 per cent of their population; and that the whole population of the 448 cities and towns are bound, by dividogenesure, to work in one or other way for the small per cent of their wealthy neighbors, the only independent population that holds the others in slavery. A dealing with these tenants would disprove his position. See appendix I.
Mr. G. H. Holmes, writing in the “Annals of the American Academy and Social Science Quarterly,” gives a more balanced view on the subject. He says:[[109]]
“While mortgage debtors must admit that they have done better to obtain real estate on credit |PINCHING EFFECTS.| than not to obtain as much of it as they have done, or not to obtain it at all, they are nevertheless in a situation where they feel the pinching effects of a reduction or loss of income more than real-estate owners do who are not debtors. This is owing to the interest that is wanted by the mortgagee.”
While a still better view is given by Rev. Wm. Bliss, editor of the Encyclopedia of Social Reform.[[110]] He says:
“The mortgage indicates a hope of progress, but also a slavery to interest under which many sink.”
It is exactly the point of reality, for many propertied families borrow money with the hope of getting economically better off, but the |DECEITFUL HOPES OF VERY MANY.| hopes mostly deceive them, and they find themselves in the trap of slavery on account of paying too high rate of interest for the loans they obtain. And it is this slavery to interest that makes them absolutely propertyless, slaves to dividogenesure.
And it follows that the claim of Mr. Atkinson, that mortgages are profitable to both the mortgagor and the mortgagee is only true in the cases of paying the rates of interest not exceeding 3 per cent per annum, which, however, does not exist in America. And if this rate had been in existence, then, an effective application of all possible agencies of production could make the mortgages profitable to the mortgagors and the mortgagees. While under the present conditions they are only ruinous to the former and most profitable to the latter.
But let us see the other view on mortgages which must be understood too.
“The view that America is becoming a nation |SEMI-PESSIMISTIC VIEWS.| of tenants is well known,” says Mr. J. P. Dunn, Jr., writing in the Political Science Quarterly for March, 1890, after describing the situation as regards the Western States.[[111]]