To the Editor of Liberty:(85 ¶ 1)

My rejoinder on your remarks on my last communication, in your issue of February 15, was unavoidably delayed.(85 ¶ 2)

Above all, I must admit an omission in my exposition, but, since it was on both sides of the question, the result remains unaffected. I had paid no attention to the labor involved in making loans. Including this admitted factor, my argument is this: The expenses of mutual banks may be divided into three categories,—i.e., risks, cost of making loans, and cost of making the tokens. These three items are represented in the interest payable by the patrons of such banks, and, while they determine the current rate of interest, those who lend money which they have acquired have to bear only two of these items, and will obtain interest composed of the three, and consequently receive pay for work they have not performed. And capital having the power of bringing an unearned income as long as money is thus blessed, I still hold that justice is not attained until the gross interest is reduced to the rate of risk and cost of making loans, the cost of making the tokens being defrayed by public contributions.(85 ¶ 3)

It cannot be denied that the burden of discount falls ultimately, not on the borrowers, but on the people; the trouble is that the people are compelled to pay more than this discount, and my desire is that they should cease to pay this excess which now falls into the hands of the owners of capital.(85 ¶ 4)

Should the question of free banking become a political issue, I should heartily coöperate with you in furthering the object. But this does not prevent me from advocating a government issue, provided the borrowers are charged no more than risk and cost of making the loans, as a preferable measure.(85 ¶ 5)

Yours truly,

Hugo Bilgram.

Philadelphia, March 31, 1890.