ing whatever but the
owner of fixed debts in gold."

In his work "The Bimetallic Question" Hon. Samuel Smith, M. P., presents
as an evidence of the hardships due to the increasing purchasing power of
money these facts: "The English landlords who borrowed L400,000,000 on
their property, agreeing to pay, let us say, L16,000,000 a year, interest
at 4 per cent., supposing that it represented one-quarter of their rents,
now find, owing to the fall of prices, that it represents one-third, or
even in some cases one-half of their rent.... The factory owner, the mine
owner, the ship owner, who thought it safe twenty years ago to borrow half
the value of his plant in order to find capital for his business, now
finds that the mortgagee is the virtual owner. Nearly all the profits go
to pay the mortgagee's claim, and in many cases he has foreclosed, and
sold out the unhappy borrower, ruined through no fault of his own, but
through the extraordinary sinking of prices. As a matter of fact, I
believe that if all the fixed capital engaged in trade in England could be
valued to-day at its real selling price, it would be found that it would
do little more than pay the mortgages and debts upon it. Trade is very
greatly and injuriously affected by sudden alterations in the standard of
value, especially when the alteration is, as now, towards increased
values. It arises in this way: trade is largely carried on by borrowed
capital, or, in other words, by the use of credit in some shape or other;
the vast banking deposits are mainly loaned to traders; a very great deal
of the invested capital of this country is lent upon mortgages upon
trading property such as ships, factories, and warehouses. A prudent
trader usually considers it safe to draw considerably beyond his floating
capital, and to borrow say 50 per cent. upon his plant or a fixed capital.
Now, the constant decline in prices within the last few years has
virtually swept away his own portion of the capital, and only left him
enough to pay the loans and mortgages. For instance, a ship or a factory
built at a cost of twenty thousand pounds, of which ten thousand were
borrowed, is now worth only twelve thousand pounds, or 40 per cent. less;
and so the mortgage represents five-sixths of the value instead of
one-half, the trader's interest having sunk to two thousand pounds in
place of ten thousand. Probably, if trade is unprofitable, he fails to pay
the interest and the mortgage is forecl