Ellsworth American. [volume] (Ellsworth, Me.) 1855-current, 1873-04-24
miscellaneous. g
The Power Of Interest.

We are always glad to help circu.
late illustrations of the rapidity with
which money ut interest accumnlates
ioI 40 Vasdsess JeIos Ss6rs heeds u 2se5Ss Be
kept in mind. The following, which
we find in some of our exchanges,
helps to set the matter in clear light,
and is therefore worthy Of a place
"The gradually increasing rate of
interest should make people wary of
borrowing money for speculative pur-
poses, and especially Of hiring it for
the purchase Of unproductive property,
or in the expectation of obtaining per-
manently high rents. 1t is the high
rate of interest which, every few years,
causes q general breakup OF business,
when property and products fall in
prices. This also it is which causes
wealth gradually but steadily TO con-
centrate into the hands Of compare
lively few persons in the community.
lake any series of ten, twenty or thir-
ty years or more, and the longer the
series the more positive and conclu-
sive becomes the fact, and it will be
seen that the most profitable business
In all the world is the lending Of
money. The high rate of money.
and high rents, and high taxes,
must in the course Of few years
tend TO such concentration of
wealth as cannot fail to be injurious to
society, and will ultimately so straigh-
ten the debtor classes as to meets ,i-
tate to very great extent the pro-
cess Of wiping out old accounts and
beginning anew. A few examples will
be sufficient to illustrate the great pow
er Of interest.
"A man buys a house. for which he
pays $4,000. He leases it and
charges the tenant seven per cent, up
on its cost, clear Of insurance, taxes
and repairs. The rent is paid quar-
terly, will accumulate q sum equal
to the principal loaned or invested in
property ten years, therefore, his rents
build him another as costly q house as
the first. In twenty years his rents
build him three such houses in thirty
years, seven houses in forty years, ff.
teen houses in fifty years, thirty-one
houses; in sixty years, sixty-three
houses; and in seventy years, one hun
dred and twenty seven houses. In
seventy years all these are built from
the accumulated rents OF one house.
These houses are worth $l,270, 900,
which sum has been paid for seventy
years rent Of one house worth SIC, ,OO0.
II, instead Of being invested in the
house and lot, the t10, 900 were loan
ed on interest ct seven per cent, and
the interest collected and reloaned
quarterly, the money would accamu-
late precisely the same amount as the
property. @aaoA h
''Take another illustration Of the
power Of interest. Two mechanics,
just come Of age, are good workmen
and desirous 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 halEysarly. These men earn
an average Of . dollar day beside
their expenses, three hundred days in
each year. during forty years and
four months Each earns BY labor
$500 per year for forty years, or for
the whole period $12,1O0-ort together,
S24,2 ,2OO.; But The interest on their re-
tnras, loaned half.yearly, for .. period
Of forty voara and (one, mOntha ro,,h