New national era. [volume] (Washington, D.C.) 1870-1874, 1872-07-25

great extent the process of wiping out old
accounts and beginning anew. A few exam
pies will be sufficient to illustrate the great
power of interest.
A man buys a house for which he pays
sl0, 900. He leases it, and charges the
tenant seven per cent. upon its cost, clear
of insurance, taxes, and repairs. The rent
is payable quarterly. A rate of interest of
seven per cent. per annum, paid quarterly,
will accumulate a sum equal to the principal
leaned or invested in property in ten years.
In the first period of ten years, therefore,
his rents build him another as costlya house
as the first. In twenty years his rents build
three such houses; in thirty years seven
houses; in forty years fifteen houses in fifty
years thirty-one houses in sixty years six.
ty-three houses, and in seventy years one
hundred and twenty-seven houses. In sew.
enty years all these are built from the accu.
mulated rents of one house. These houses
are worth 81, 27O, 900, which sum has been
paid for seventy years. rents of one house
worth $4,000. If, instead of being in.
vested in the house and lot, the $4,000
were loaned on interest at seven per cent.
and the interest collected and reloaned quar-.
terly, the money would accumulate precisely
the same amount as the property.
Take another illustration of the power o.
interest. wOmechanics Just become ofage
arc good workmen and DESTROYS Of becoming
rich. Each is able to earn dollar day over
and above his expenses. Every six months
they invest the money thus earned at seven
per cent. interest, the interest payable hal
yearly. These men earn an average of a
dollar day besides their expenses 800 days
in each year, during forty years and four
months. Their age is then 81 years and
months. Each earn by labor $500 per yea,
for 40 years, or, for the whole period, $l2, l2(
together, s24, 200. But the interest on
their returns, loaned half yearly, for period
of 40 years and months, doubling at seven
per cent, paid and reinvested half yearly, in
40 years and 4months amount to $lO4, $50. 20
which added to the amount of s24, 200 earned
by their labor, makes the aggregate, $685..
5000. The interest on the sum s24 zoe
earned by their labor Is $1O4, $50. 7O-more
than four and quarter times greater thar
the amount they have earned by their labor
Suppose the two men to live twenty years
and two months longer, that is to the age o.
eighty-one years and six months. and con.
tinue to loan their money. During this pc.
Rod it would double twice, making the total
accumulation in sixty years and six months
s5l5, O02.s0. The two men do not labor
during the last twenty years and two months
and expend of their income for living during
that period, els, OO2.SO, leaving to their heirs
$500, 900. In forty years and four months
they earn by their labor s24, 200, and live
twenty years and two months on their money
without labor. Subtract the money earned
by labor, 1924 200, and the remainder accu
mulated by interest is $475,8 Now, not
one dollar of this s475, 800 is earned by the
labor of these men. 1t is the legal interest
upon s24, 200. These men live 1aboriously
and work for very moderate compensation
They take only the legal rate Of interest
Neither do they enter into any speculations