Saint Paul weekly Minnesotian. [volume] (Saint Paul, Minn.) 1858-1859, 1859-03-26
Of the Troy Daily Budget.
Letters from the west-.No.' II. 3..fIiei1
Rates OF Interest.s dT,t ort n,

- Rates OF Interest," NH OIL ~
It is well known to all who have given any
a'.enuon to the subject, that money, through
ouI TIE w estern States, has always c0mman-
ueu much higher rate of interest than in
any cther portion of the world. The causes
ol TINS remarkable fact have not been clearly
uiiuerscood. 1t has usually been attributed
" u'e iever OF Speculation" by those who p
never look beneath the surface of thinps-old
fogles who have lived all their lives IA slow
growing communities, safely declare that such 3
hagh rates OF interest are unnatnyal and that,
no business legitimately followed can actually
make such fearful dividends. These persons &,
may, IN their own neighborhoods, be, ,consid-
cred as men OF sound and reliable Judgment:
but it must be. remembered that thew are
speaking merely from their own limited expe.l.
rience. THEY have not been able to nav but "a
or per cent, and therefore rush to the
general conclusion that no one else can by,
any possibility pay a larger rate. This arg,i-
ment, finely sifted, is as irrational as it would
oe to declare, that because no Eastern State
or city has been known. to grow beyond
twenty per cent per annum, consequently no
western State or city can advance more rap-
idly. This would be absurd and fatty con.
tradicted by the whole history of w estern de-
velopment. High rates of interest are as nat
ural at the West as low rates are at the East.
These higher rates are in proportion to the
more rapid increase of population and aug
mentation of real wealth. They are not &C.
casioned SO much by the scarcity of money
as by the demand for its profitable. employ
ment, which at the West is always greater
than the supply. Making every allowance for
speculation, 1t must be evident to every think
ing person, that where the resources of a
country are being rapidly developed, the real
value OF property must be advancing in a ra-
ito corresponding with such increase. Ger.
tainly no one can deny that in State like
Minnesota, which has multiplied its population
twenty times within ten years, that the in
trinsic value OF real estate must have inn
menseiy advanced. This advance in some
cases has been beyond any conceivable rate
OF interest. In 1S49, St Paul contained a.
bout 2OO inhabitants. In 1859, it contains
nearly $4,000 The State, in the meantime.
has increased from 1000 to 100000. In St.
Paul the advance in the value of property has
kept pace with its marvellous development.
Real estate is no higher in proportion in 1889,
than it was in 1S49 :. 80 .'l . 5r:d 81.
There are ''corner lots" in st. Paul which
could have been purchased ten years ago for
$50, which are now worth from one to S.. 900.
In making this statement, am sure of keep.
ing strictly within the truth. As the greater
part of the site of the city was purchased of
the government in 1S4S at 81 ,25 per acre. the
lots on an average cost then but tuentu- fpe
cents each! One of these lots was recently
sold for ten thousand dollars! What rate of
interest is this? Suppose you had borrowed
money at that time at the rate of five per
cent. per month, to buy few of these lots,
do you think you would have been ruined by
the operation Such "ruin" methinks could
not reasonably be objected by the most SUI
old fogy that ever lived +! These
cases are extreme, but they serve correctly to
illustrate the incalculable growth, which has
sustained the high rates of interest at the
West. If the tide of emigration to the West
could be stayed, interest would Immediately
fall although money would be scarcer than
ever. 1t is labor which creates and sustains
capital. Labor at the West is like the wand
of a magician. 1t has @ithin few years ab-
so&utcfy created millions oe value 1t has en-
riched thousands. 1t has effected transfer.
nation in the condition of vast and unpop-
ulated region, scarcely less amazing, than the
famous efforts of the Genii. Land and labor
then are the solid base, by which the high
rates of interest at the West are sustained.
1t is manifest that energetic labor, expended
freely upon cheap but fertile land, will justify
the payment for few years of high rate of
interest. ....-
A man who buys farm in an eastern
State for fifty dollars an acre, can with diff
Guilty pay six per cent per annum for the
means to improve it. But in the West, how
very different is the case. Here as good land
can be bought for one and five dollars per
acre, can be obtained in any eastern state for
one or two hundred dollars per acre conse-
quently our farmers can easily afford to pay
even fabulous" rate Of interest so long as
their principal is doubling and quadrupling
the development of the West progresses, and
the balance real estate approaches to Just
equilibrium with the East, but for many years
capitalists may rely upon handsome COM
and good security for the use of idle
funds. Yours, &c. J.E.