The Ocala banner. (Ocala, Marion County, Fla.) 1883-194?, 1891-03-13
Debt and interest.

fore Alliance men, it is the power of
interest, the rapidity with which it
grows and the Importance Of keeping out
Of its clutches, which can only be done
by keeping ont of debt. 1t is the high
rate of interest which. every few years,
causes a general breakup of business,
when property and products fall in
prices. This also ii is which causes
wealth gradually but steadily TO concen-
centrate into the hands of comparatively
a few persons in the community. Take
any series of ten, twenty or thirty years
or more, and the longer the series the
more positive and conclusive 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, high rents, and high taxes.
must in the course of few years tend
to such a concentration of wealth as
cannot fail to be injurious to society, and
will ultimately so straighten the debtor
classes as to necessitate to very great
extent the process of wiping out old ac-
counts and beginning anew. A few ex-
amples will be sufficient to illustrate the
great power Of interest.
A man buys a house, for which he
pays $4,000. 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 sent. per an
mum, paid quarterly, will accumulate a
sum equal to the principal loaned or in
vested in property in ten years, there
fore, his rents build him another 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, 270,0 900, which
sum has been paid for seventy years
rent Of one house worth $4,000. II, in
stead of being invested in the house and
lot, the $4,000 were loaned on interest
at seven per cent. and the interest col
lected and reloaned quarterly, the money
would accumulate precisely the same
amount as the property.
Take another illustration of the power
of interest. Two mechanics, just come
| of age, are good woTkmen and DESTROYS
1 Va DSCOUilLE LdCl 10 uCollOuO Vi
earning a dollar day over and above
his expenses Every six months they
| invest the money thus earned, at seven
per cent interest payable half-yearly.
These men earn and average a dol
lar a day beside their expenses, three
| hundred days in a year, during forty
years and four months. Each earns by
| labor $500 per year for forty years, or for
1 l,,~f, COZ OHn ps,k laa Int
est on their returns, loaned half-yearly,
for period of forty years and four
months, doubling at seven per cent,
paid and re-invested half-yearly, in ten
years and four months amounts to $l04,
5000; which added to the amount of
$24, 200 earned by their labor, makes the
aggregate $12S,750.70. The interest on
the sum Of $24,200 earned by their labor
is $104, 550.70-more than four and a
| quarter times greater than the amount
they had earned by their labor. Sup
pose the two men to live twenty years
and two months longer-that is to the
age of eighty.one years and six months
and continue to loan their money.
During this period it would double
| twice, making the total accumulation in
sixty years and six monthg $5l5, 002S0.
| The two men do not labor during the
last twenty years and two months, and
expend of their income for living du-
ring that period $l5,003.80, leaving to
their heirs 100000. In forty years and
four months they earned by their labor
S24 200 and live twenty years and two
months without labor. Subtract the
money earned by labor, $24 200, and re-
member, accumulated by interest, is
s475,S00. Now, not one dollar of this
$475, 800 is earned by the labor of these
men. 1t is the legal interest upon $24,.
200. These men live laboriously, and
work for very moderate compensation.
They take only the legal rate of inter
est. Neither do they enter into any
speculations.
The amount to which nations, mu-
nscipafftfcs and corporations, as we'll as
individuals, are Indebted, is a subject of
general complaint. We see here the
cause. 1t is the accumulation ofinterest.
from which either no adequate equiva-
lent is obtained. or else it is lost by I'M
wise management. There is due to the
estate of, these men, from the small saw
ings of dollar day, sum of 10000.
1t would take the labor of a single man
l,666 years to pay this principal, and it
would require, at one dollar per day, the
constant toll of more than one hundred
and sixteen men to pay the yearly in.
lerest, or $4,000. From generation to
generation, these men might continue to
pay the interest and still the burden be
undiminished, and yet, in the short
space of sixty years and six months, two
men, from the small saving of dollar =
day, aided by the power of interest, have
accumulated this amount.