Nequa; or, The Problem of the Ages

by Alcanoan O. Grigsby; Mary P. Lowe

"But this inducement," I said, "would only reach the farmers. It would be necessary to offer some other kind of inducement to secure the trade of the city workmen."

"That is easily provided for," said Norrena. "Your farmer's trade, notwithstanding the fact that you pay as much for the product as you can sell it for, will net one profit on the goods for which you exchange it. With all this farm trade secure, you can begin to furnish employment to city workmen in various ways, converting the raw material into finished products to supply your increasing trade. This will enable you to make valuable customers out of all the workmen for whom you can find employment. Another inducement will be, to return one-half of the net profits on their trade in the shape of a check which will be good at the exchange for products. This will still leave one-half as a contribution to the educational and land purchase fund. I believe, however, that with a vigorous and comprehensive educational work, but few would ever draw anything in the shape of a dividend out of the business, but leave it as a permanent investment to enable them to secure homes, or as an insurance fund to support them in sickness and for the benefit of their families in case of death."

"You seem to have unlimited faith in this plan of organizing business," I said.

"And why should I not have?" asked Norrena. "These principles have been tried in this country and we know by experience that they cannot fail, wherever they are intelligently and honestly applied, on a scale large enough to constitute one good object lesson as to what can be accomplished. The system, in practice, will demonstrate that money is not a necessity. Money however, will still come into your hands, even more freely, and as long as you have debts that must be paid in money, you will have use for it. But when the debts are all paid, money might cease to circulate, as you would then have learned by actual experience, that you would get along better without it than with it."

"That puts me in mind," I said, "that in your lecture you stated that the people in this country, in their movement to establish equity in business, established banks to manage their money account. If the movement here was started by the very poor, how did they get money for the necessary cash capital?"

"By the accumulation from cash purchases made in their exchanges," said Norrena. "Their exchanges were a system of banking products, but they issued checks on the deposit of money as well as products. As these exchanges offered superior inducements, they received their full share of cash trade from the beginning, and nearly all of it when their exchange was complete. Hence they found no difficulty in establishing their own banks under the law, and as they never loaned their deposits, their banks could not break, and people who had money to deposit, brought it to them for safe keeping. As the tendency of this locking up of deposits was to curtail the circulation of money, the exchanges provided against any oppressive stringency, by loaning on good security, without interest, checks which were redeemable in products at the exchanges. It was estimated by the statisticians of that time, that every dollar locked up in the exchange banks, brought six dollars of trade per annum to the exchange stores on which the regular customers at these exchanges made an average of ten per cent., or sixty per cent. upon deposits."

"Were these exchanges incorporated as joint stock companies?" I asked.

"They were," said Norrena, "but not always. The real object of the order was to ultimately eliminate the stock corporation and substitute the equal co-partnership. Hence when incorporated, every regular customer was a stockholder to the same amount, and the stock might be paid for by turning their dividends back into the business as a permanent investment. In other words, they might pay for their stock out of what they were able to save in their cost of living by their abandonment of the profit system. And further, in order to protect themselves from the danger of a constructive indebtedness in the shape of dividend exacting stock, no certificates were issued, and the stock paid for was always redeemable in exchange certificates payable in goods at the option of the shareholders, or by order of the directors of the corporation, for failure to patronize the exchange whenever practicable. As governments were especially friendly to corporations, it was deemed best by many, to incorporate and secure these advantages."

"This," I said, "was certainly the full measure of justice to be secured by a stock corporation, but how were others which were not incorporated, organized in order to secure the full measure of justice to members?"

"There was," said Norrena, "no patent on the application of the Golden Rule in business, and among business men there was a large number who really wanted to see equity established in human affairs. Hence there was nothing to hinder a merchant from entering into contracts with organized consumers, to sell his business to them, and retain the management at an agreed salary, under such rules and regulations for the conduct of the business as they might adopt. By this means many were enabled to exchange a precarious profit for a permanent income. In cases of this kind, the merchant was benefited by securing a guarantee against bankruptcy and the organized consumers by securing the services of the necessary business talent to establish Equity in Distribution, by paying equal dividends out of the net income to all regular customers. As contracts for a lawful purpose were held sacred by the courts a very large number held that the contract between the customers and the manager secured greater advantages than the stock corporation in obtaining equality of dividends."