Daily intelligencer. [volume] (Wheeling, Va. [W. Va.]) 1859-1865, 1860-03-20
Speech of Mr.. 1vm. j. Flagg.

Extract from the Speech Of Mr.. YIN: j.
F9agg, in The Ohio Legislature, on the LGrO
for permitting Interest 10 be Charged as
high as ten per cent. o" Special Contracts.
Thus we KAYE seen that all the cause
whish tends to raise the rate of interest, us
ordinarily laid down by political ecOno-
mists, exist here in marked degree. But
there remains a seventh cause which, so
far as l know, has not been considered in
this discussion in either house, neither
last year nor this; nor will you find 1t mem
toned in the books, for the reason that it
has never happened but twice since the
time of Christ.
a man who ten years ago, possessed
capital of ten thousand dollars, and in
vested it in real or personal property.
would to-day, other things being equal,
find that property increased in value at
least twenty per cent, and find himself
worth twelve thousands dollars, instead OF
ten, besides having received the income
meanwhile. He would also discover that
the cost of living had augmented ut least
in the same ratio, and SO, while being
uominalIy worth two thousand dollars
more than he WAS ten years ago, lie
would be really no richer than before =
nor any poorer. ButhNd the same person,
ten years ago, loaned his enthousand dol
he would to-day (the loan falling due and
being paid,) find himself the posscssor of
n ten thousand dollars, but not by any
means the ten thousand he loaned ten
years before, for it would purchase no
more than eight thousand would have then
purchased. So that while receiving nom-
inally ten per cent income he has really
been sinking each year, two per cent OF
his capital, and his capital has really
yielded him only eight per cent income, IN
stead of ten. If such a person were
resident of this State, his taxes would
have been nearly one per cent on his CAPT
tai more than the taxes of resident OF
New York State, and this would have re-
duced his net income to seven per cent, the
New York rate as fixed by law long be-
fore the cause am considering began to
operate.
Before the mines of California and Aus
tralia began to swell the sum total of the
money Of the commercial world, the coin
in nll parts of the world was estimn-
ted at FIVE thousand millions, which guam
.itv remained nearly stationary, since the
yearly product of the mines no more than
made good the wear and consumption OF
the precious metals. Since the opening of
the new discovered mines, however, the an
nual product has been over one hundred
the bulk of coin in the channels of trade,
and hus increased it full two per cent. per
nnnum. By a torA knotOn ldtg of commerce
this increase ofthe bulk of the money Of the,
,corLd has Increased at the same time and 10
the same erfenf, and ,rAiLc money has in
creased in amount t,cO per cent. ersTy gear,
prices Of every commodity hare also increased
t,ro per cent. every gear.
/ omit noticing other causes which also
tend to raise prices, as we'll MS those which
lower them, and omit nice calculations of
sums, because would simplify the state
mcut as much as can.
Iu consequence of the influx of gold
which followed the discovery of the rich
mines of Peru and Mexico, similar rise of
prices followed. The effect was so ohserv-
able in those days. that the Lord Treas
urer Burlcigh recommended to the Uni
versitv of Oxford, which was about to let
its lands on long leases, at fixed rent, TO
require oue-third of the rent to be paid
in wheat The consequence of this wise
advice being taken, was that, in the course
of the two following centuries, the money
part of the rent, which was ut first worth
twice as much as the wheat part, fell to be
worth only one half of what the wheat
part was worth; and the wheat part to be
worth twice as much rs the money part
be worth only one fourth of what it was
worth before, and wheat nominally rose in
value four hundred per cent:-but this
was only a nominal rise; it was money
that fell in value aud not wheat that rose.
This depreciation of money was just two
per cent year ION an average) during the
whole two hundred years, the same rate at
which estimate the depreciation now
going on. And feel sure l am within
bounds in this estimate, for the influx of
gold and silver, in the three centuries fol.
lowing the discovery of America, averaged
only sirfeen millions of dollars year,
while the present influx and that which for
centuries again we must expect, is one hun
dred millions of dollars at the very
least. Why then should not prices rise?
Now, let us practically apply these fig
urcs to an existing case. Ten years ago a
legacy, which will, for convenience,
state at ten thousand dollars, was left to a
widow by, a relative in Cincinnati. To re-
alize the money, real estate was sold,
which has since doubled in value. The