The weekly democratic statesman. [volume] (Austin, Tex.) 1871-1883, 1873-06-12

Wo are always glad to help circulate IL
lnstrations of the rapidity with which
money at interest accumulates, for no busi-
ness fact more needs to be kept in mind.
The following, which we find in some Of
our exchanges, helps to set the matter in a
clear light and is therefore worthy Of a
place;
THE gradually increasing rate Of inter-
est should make people wary of borrowing
money for speculative purposes and espe-
cially of hiring it for the purchase of I'M
productive property, or in the expectation
of obtaining permanently high rents. 1t is
the high rate of interest which, every few
years, causes a general breakup of bust
ness when property and products fall in
prices. This also it is which causes wealth
gradually but steadily to concentrate into
the hands of comparatively a few persons
in the community. Take any series of ten,
twenty or thirty years OF more, and the
longer the series the more positive and con-
elusive becomes the fact, and il will be seen
that the most profitable business in all the
world is the lending Of money. The high
rate of money high rents, and high taxes,
must in the course of few years tend TO
such concentration of wealth rs cannot
fail to be injurious to society, and'will ul-
timatelys so stTaighten the debtor Glasses as
to necessitatc to very great extent the pro-
cess of wipiRg out old accounts and begin
ming anew. A few examples will be sufi-
cient to illustrate the great power Of inter
est
"a man buys house, for which he pays
$40, 600. He leases it and charges the ten
-. r
insurance. taxes and repairs The rent is
payable quarterly. A rate of interest of
seven per cent. per annum, paid quarterly.
will accumulate sum equal to the principal
loaned or invested in property in ten years
In the first period of ten years, therefore,
his rents build him anothera as costly house
as the first. In twenty years his rents build
him three such houses; in thirty years,
seven houses; in forty years, fifteen houses
in fifty years, thirty-one houses; in sixty
years, sixty-three houses, and in seventy
years, one hundred and twenty-seven
houses. In seventy years all these are built
from the accumulated rents of one house.
These houses are worth 81. 270, 600, which
sum has been paid for seventy years rent
of one house worth $40, O00 If, instead Of
being invested in the house and lot, the
$4,000 were loaned on interest at seven
per cent, and the interest collected and re-
loaned quarterly, the money would accu-
mulate precisely the same amount as the
property.
sTake another illustration Of the power
of interest. Two mechanics, just come of
age, are good workmen and dcsirOus Of be-
coming rich Each is able to earn dollar
dav over and above his expenses Every
six months they invest the money thus
earned, at seven per cent. interest, the I'M
terest payable half-yearly These men earn
an average Of a dollar day besides their
expenses, three hundred days in each gear.
during forty years and four months. Each
earns by labor 1900 per year fOf fort years
or for the whole period G12 lo0-o@t together
$24, 300 But the interest on their rctRSus.
loaned half-yearly, for q period Of forty
years and four months. doubling NJ seven
per cent, paid and re-investcd half
yearly. in ten years and four months
amounts to S104 $50 90; which. added
to the amount Of So, 200 earned Us
their labor, makes the aggregate 1928. 80 10.
The interest on the sum 81. 200 earned hg
their labor IS Slo4 $50 90-lnore than foul
and quarter times greater than the amouu;
they had earned By their labor. supposethf
two men 10 live twenty wears ard tive
months longeT-fbatis. 70 the ace 81 eighty.
one years and six monihs-and continue n
( loan their money. During this period Il
would double twice. maxine The total aeon.
mutation N sixty years and six month.
I $5lJ, 002 so. The two men so not iabal
/ during the last twenty years and tHf
months and expend IF their income Tor U.s.
ing during that period $l5, 002 so iearinril
their heirs 800. 600 IN forty wears nnf
] four months they earn By their labor q. go
and i've twenty years and two months with
out labor. Subtract the money carved b,
labor, $24 200, and the remainder acennn
loted by interest, IS 4l15 500. Noa. 10
one dollar 81 this Sf55 500 med bY tx
labor ~ these men. II S the legal inferes
upon 81 200 These men live ldtolIarsl
and work Tor avery moderate colapcnsaticn
They take only the legal rait 81 infer
Neither 10 thcv enter into any -pffla
tons.
'The amount to which nations. 1anici
flaiities and corporations. rs aeH g. indi
riduals. arc indebted. : = sabiect 81 gen
eral complaint. We see here the canse.
IS the accumulation 81 interest. u s ~
ACCUMULATION Of interest from which eithe
20 adequaie equivalent a ob,aineI or els
il IS Loss - unwise management. There j
6ue % TIE esieic q fhese men. from fh
small saVinrT ~ dollar q deg. sum b
$500 Co., II would take the labor of
single man. 069 Ecau - pay ttis pli1c
paA end y Wo1sa Require - ere delief ~
aag. fne constant tlI q more i611 ln'
lsrafea ani fEtfen nen io I1y tIe zral
interest 81 $50 From 4
~ might
i1Itf ana l lhl Hlsn