The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1876-02-26

4 Der cent, the cost Of capital would be
bui 81 $50 per mile. If to this be added
tn, amount for operating expenses, as IN
tn, former case, ($4,SOO,) it will give as
tn, total cost for interest on capital and
operating expenses S6,0s0, or but rs per
cent Of the cost, with money at 10 per
cent. Thus, it will be seen that with
tie interest on capital one third greater
tlan the average rate Of increase in the
nltional wealth, and the wages OF labor
tie same, transportation can be done FOR
tree fOurths OF the cost, with interest
10per cent.
EFFECTS on MANUFACTURING INTERESTS.
To illustrate this branch OF the SUB
Get I will suppose two enterprsing men,
amiliar with all the details and in all
aspects we'll qualified for the intelligent
management Of the business, to engage
i'm the manufacture of iron from1the.ore,
and that it will require Il capital OF $780,
1000, and that they own One-half or this
amount and borrow the other half at 10
per cent, principal and interest payable
at the end of twenty years, with interest
added to the principal yearly. l Will
further suppose that they make a net
profit Of 6 per cent. per annum, which
is double the average rate OF increase
in the national wealth, and that they
employ the profits in the extension OF
their works. This would make their
property worth S32O,62S at the end Of
! 81. Inn of hn
the capitalists $4,000, the amount Dor
rowed at 10 per cent, would amount to
1886 $3.50, leaving these business men in
dcbted to the mOney-lender tSl5,754, be-
ing equal to but five and twOthirds
months interest on his claim. 1t will thus
be seen that, after sinking their half OF
the capital employed in the enterprise
and losing all reward for the service OF
the best part Of their lives, except a mere
subsistence for the time being, these bust
ness men would be left penniless, and,
as society is now constituted, either
charged with incompetency or de-
nounced as swindlers, while the money
lender would, for the use Of One-half OF
the capital, without devOtlng any time
or attention to the business, reap all the
profits Of the enterprise and be regarded
as an honorable member of society, il
not as IL christian banker"
Now, had these enterprising business
men paid instead Of 10 per cent. for the
use of their borrowed capital, at which
it could be obtained under a Just none
tary system, the result would have been
as follows: The product Of the 100000
invested in the business would, as in the
former case. be S320,62S, while the capt
talist's $4,000, or half of the capital,
would amount to but SlO9,G02, leaving
/ the business men S2l1, 026 for their ser
vices and profits on half of the capital
| employed in the business. But it may be
/ objected that twenty years is too long
/ period, and to meet this objection | will
/ give the result at the end of ten years.
/ In This case the 100000 invested in the
! business for ten years would amount to
! Sl'9,Os5 and the capitalists $4,000, at 10
pr cent, would amount to Sl29,7l0
which, under foreclosure Of u mortgage
ur sale under trust deed, in mOneta-
" crisis such as we are now eXperien-
ling, and which is certain to occur under
/ like circumstances, would take the
whole property and turn the business
men out bankrupt. | have assumed that
the business men owned half the capital,
first, for the reason that One-half the
property or wealth OF the nation is
owned by Il small percentage of the
population, who loan their money or
rent their property to the industrial, en-
terprising classes, and, second, because
those who demand and receive s to 10
per cent. for lOanable capital require
security to double the amount loaned.
Now what is true in the cases given will
apply to our agricultural, mining, and
all other useful industries as we'll as to
our commercial interests.
INTEREST THE ROOT OF THE EVIL.
Ii might seem that l had elaborated
this subject of interest beyond proper
bounds, but l think the necessity for
presenting il in these various aspects
will be admitted when it is considered
| that but few, if any, even among those
whoare regarded rs authority on the sub
iect. seem 10 have clear, comprehension
of the power OF interest or of the rela-
tive effects OF the different rates in the
distribution of the products Of labor. l
ampersuaded that a careful examination
of this subject will convince any candid
mind that the eXorbtantly high rates
of interest on loanable capital. sane
toned and sustained by our present in
iquitous monetary laws, is the main,
and is of itself sufficient, cause for all
our industrial, commercial, and finan-
cial troubles, and is tending. inevitably