The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1872-02-26
BAGGiNG THEIR MILLIONS.

We gave some startling figures in our
last Fridays issue, showing how the COM
pound-interest swindle of 1871, literally
Jerks the money by the million out of the
pockets of the people of Virginia. We
gave computation, as exact as it is pos
sible for figures to make it, showing that
the bondholders take out of Virginia in the
next 81 years Qhe time the bonds have to
rum nearly $s0,000,0 900, in excess of
what they are legally entitled to receive
by the terms Of the original Indebtedness.
We made this statement on Friday, giving
the figures verifying it, and we challenge
the best arithmetician in the Stats to show
an error in our computation. They may
say in reply that the sum actually paid
in thirty-four years, as interest upon in
terest, is only gil 100000. But, if the
bondholders can take that sum, paid to
them in annual installments of 100000,
ss interest upon interest, and, by reinvest-
ing it from year to year, make it reach, by
its accumulations, nearly sS0,0OO,0O0 in
"a years, the State By lis Treasurer can
do the same. All that will be required
is, to take this interest which we propose
to pay upon interest, and at the end of
each six months for the next 81 years,
buy with it some first-class six per cent.
security, and place it to the credit Of
some State fund and then, with the ac-
foundations of this fund, buy other like
securities, placing them from time to
time to the credit of such fund. The pro-
cess is a simple ne, and can be done as
we'll by State treasurer as by Wall
street broker.
Now, it is an incontrovertible maxim in
political economy, that whatever may be
financially saved to state, is squandered,
if not saved. We would enlarge the max
i'm, and say, that whatever may be thus
saved, and is not saved, is crimdaally squan
dered, no matter who may be the financia
custodians of the States interest at the
time of the squandering. If it should b.
the immediate representatives of the peo
pie, in General Assembly convened,
would be all the more treacherous AM
criminal in them, since they are directl..
clothed with authority by the people, ant
can be held amenable to no one else
Every man sent to the Legislature by tn
people, is intended by them to be, in
sense by no means offensive, " watch
dog" at the door of the State treasury
The peoples money-chest is to be guarde
by them with Argus-eyed scrutiny. The.
are neiGher to get their own elbows into it
nor suffer others to get theirs in. Al
usury-dogs are to be kept at bay--a
Wall-street sleuth-hounds cudgeled off tn
track. This is the duty imposed by tn
people upon their legislative represents
tives.
But let us figure this compound-interes
feature of last years funding bill to stl
nicer point. We computed the interest o
Friday upon the basis of compromising
annually. As the payments are made,
is actually compounded every six months
Now the difference between compounds
annually and semi-annually is this +: Ii
terest compounded annually doubles onC
in II years, while that compounded sem
annually doubles within so much less tina
70 years as the ratio of 500, is to 50, 2S.SS
that is, by compromising the interest 9
800, semi-annually, for II years,
amounts to sl03,2S .ss, or 3,2S.SS mo
than by compromising it annually. 10 a
certain, then, how much is jerked out
the people in excess of the sum, given |
us as interest upon interest, computed a
nuslly, let us take this little fraction
Joker" and apply it to the test
some further figuring. If the exec
of the semi-annual method over t
annual be SO ,28.Ss on 500, in ~ year
on 81 900 for the same time it will be SO:
SIS; on $4,000, s32s.ss; on $4,000
s3,2SS.s0, and on 100000, $32 IS
This is as plain as that 2 and 2 make A.
then, the excess on 81 900, 900 be 1872 IS
the whole excess for the 81 years will be
many times 1872 1888 as there are milliC
running through each of the duodecupe:
"a years. But supposng the Wall-str
Shylocks to have graciously plastered
debt over another two years, in conside
ton of Virginia's Frustrated and ruined
dustries, we should then have had j
three duodecuples in which to compute
little item Of additional interest, accru
from semi-annual compromising of int
est upon interest, instead of an ann
s)mpounding. ...