The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1869-07-10
SECTION TX.
Effects Upon Producers "a High and Fjuet-
udttag Rates u Interest

The following illustration. based upon
land, Will show the effect Of high aDd vary
ing rates Of interest upon producers, and
the safety With which money could be loaned.
Il interest we're reduced 70 q Just and uni
form rate.
SUPPOSE w. owns thousand acres Of
land, which be has bought from the govern
ment, and upon which b Is paying the
taxes The land will produce no income,
unless be cUltIvates II himself, or sells or
rents it to others, who will cultivate il lie
sells the land in FIVE tracts, Of two hundred
acres each, az FIVE dollars per acre A., B.,
G., r., and f., are the purchasers, and
move upon and cultivate the land, ana paw
the taxes No other payment is 10 be made
f'r five years, at the expiration Of which
period, A., B., G., ID. and E., are to pay up
the interest on their respective tracts Of
land, and after that to paw their interest an
uually All the land sold is of nearly the
same quality. Each purchaser agrees to nav
thousand dollars, and gives bond aud
mortgage upon bis land to secure the pay
ment. w. takes Us bond and mortgage,
bearing TIVE per cent. interest BPS bearing
iour per cent. C.'s bearing eight per cent (;
DIS bearing sixteen per cent. and 4 3
bearing thirty-twO per cent. interest. At
the end Of five years AS bond and mort
gage will have drawn 500 BPS $500; C.'s
S4OO DPS $500; and E's 81 600 interest.
Yet ". sells The land 70 all at the same
price, aud all the difference IN the indebted
ness Of A. and +. Ia caused BY the difference
IN the rates Of interest that W charges
lcm. This difference MAKES E. Indebted
70 VI 81 500 more than A. All the debtors
must pay the interest With the products Of
their respective farms, and W. does none
OF the labor toward making The production.
Now let X sell the same land TO the par
ties on a credit Of one year, and charge
them six per cent. interest. Suppose money
70 be 30 scarce, that az the end of the year
they clear only the interest, and are com
PEELED to lose thc .r farms by foreclosure, or
else to borrow the money and paw off their
mortgages. A., B c., d. and E. borrow
on the best terms possible, on mortgage of
their farms aud stock A. pr0cures the
money at two per cent. interest b. al four
Ter cent. Q. at eight per cent ID. at six
teen per cent. AMI Z is compelled 90 paw
thlrty-tNo per cent. per annum, or two and
tive thIrcs per cent. month. The amounts
20 The same thing as II they had bought
'heIr farms Of W., agreeing TO paw him these
rates of interest. The uoney enables them
g keep possession ef their farms. From
he sales Of their products they must paw
the different debts and interest The rate OF
interest 10 each case decides what proper
ion Of the products shah go to pay for the
use Of the. farm. When the farmers borrow
tbe money to pay on their mortgag y, they
90 not keep the money. 1t continues to
circulate, rnd to decide what rents others
shall pay for he privilege Of keepin. .oe
use " property for given period.
But suppose the rate e interest TO be tx
cd at one per cent, and that MONEY could
always be obtained on the otrsr Of good Sc
eurity. Those who had money to lend would
ascertain whether .ae properly off-reu as
security would make the interest safe. Ii
g., the security would be deemed good.
WheL Interest Is liable to rise from six 10