The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1869-08-14

portion 10 the Principal increased, but
each fractional part has Incf edsed Value.
il is proposed to show that there is a wide
difference between renting property and
lending money, and that the rent and mar
ket value Of property decreases in proper
market value Of money, and of the interest
upon it, increases in direct proportion to the
rise Of interest.
If the rent Of farm, store, or house rise
to double, the Ince Of the farm. store or
house is doubled. II the rent of the farm
before the rise be $500 over repairs, etc,
and money be at six per cent. interest, the
farm is worth S. 900. But if the rent rise
to 5000, the price of the farm will be in
creased to $4,000. Therefore, il the owner
invest the income or rent in other land bs-
fore the rise OF rent, be can buy as much
land with the $500, as he can buy after the
rise with $500. If the rent fall again to
$500, the price Of the farm will fall again
to s., GOO; but the $500 will buy twice as
much land as it would if the rent had been
maintained at 5000. Neither the rise nor
the fall Of the rent alters tho actual value
of the farm, for it's productiveness 10 neither
increased nor diminished by either. The
nutritive properties Of it's wheat and corn
cannot be altered BY the rise or fall Of its
rent. But the dollar received when the rent
is $500, is worth only one-half az much as
when the the rent is but $500 for when rents
are low, one dollar will buy as much land az
two will when rents are double, The intrin-
sic value of the property undergoes no ma
terisl change, but the standard charges BY
which it's market value is estimated. Now
note the different effects of the rise of the
rent on property, and the rise Of the inter
est on money. Let the rate of interest on
money rise from Elk to twelve per cent, and
the rent on property will inevitably fall in
ty will Of course fall in proportion to the
fall Of its rent. When the interest on mon
ey is doubled, the value Of every dollar re-
ceived as interest is doubled; for each dol
lar OF interest will buy double ths property
that it would before the rise. But when the
rent on property is doubled the dollar is
worth but half as much as it was before, for
il will not purchase more than half as much
property as it would before the rise OF rent.
Ii the rent on land rise TO double, the land
itself will sell for double its former Trice
therefore, the rent will not double tie prin-
cIpal Of land in any shorter time in conse-
queDce of the rise. But when interest on
money rises TO double, the Interest will
douhle the principal in half the time that il
would before the rise of interest. When
the rent on land rises, the rent continues to
hold The saWe relative value to.its princi
pal Of land that il did previous to the rise.
But when the interest on money rises to
double, the relative proportion Of the inter-
EFT TO the principal is doubled.
For example p. lendrstO Q. for a year
500, 900 at six per cent interest. The inter-
est amounts to 81 100 P. invests this in
come in a farm at the then market prIce OF
land. At the commencement of the follow
ing year, there is u scarcity Of money, and
P. relOans to Q the same $40, 900 &C twelve
per cent. interest. At the end Of the year,
Q. rays to p. as the interest on the $50 900,
s., 400, twice the sum that be paid Gne pre-
vious year. Scarcity Of money and high
rates Of interest invariably depreciste the
price Of property. Its price falls one half,
30 that each dollar of the 81, 400 received as
the interest on the money when interest Is
high, will purchase twice as much property
~ il would before the rise Of intel est.
Hence, il the interest at six per cent on
$40 900 will buy farm worth s 200, when
the interest on the $50 900 rises TO twelve
per cent E. to g, 40U.-and the price Of
the farm fails ohe-half, the - 400 will buy
four farms, all as good as The 6r-t bought at
$1,000. The income from the %, 900 will be
worth four times as mach as il was before the
rise of interest.
Making the calculation N dollars and
cents, we shall arrive at the same result.
The interest on $4,000 at sir per cent. is
ST 200. Loan the 81 200 at six FER cent
and it will accumulate in the ensuing year
$72. Now loan tie &20000 1t twelve per
cent. and we have 81 40U as its interest for
the year. Loan 81 400 at twelve per cent.
and it will accumulate in the ensuing year
S2oS, just four times $72. Thus the value
of the income at twelve per cent, 10 four
times greater than at six per cent. whether
it be invested in land, or whether il be re-
loaned on interest. With iaterest at twelve
per cent. per aunum the capt. sIist possesses
power to mOnopOlize property four times
greater than with interest at six per cent.
PER annum. The ceneralizing power of
money increases in geometrical proportion
to the rate Of interest. This il practical ~
well az a mathematical truth or law which
constantly operating TO centralize wealth
lin the hsuds Of few at the expense Of tie
producers.
TO BE CONTINUED.