The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1915-04-30

ing to lend to you and the other gen.
tlemen who have signed these con-
tracts9 Why, it gets it from you and
those same gentlemen, and from no
one else. Speaking to all of YOU col
lectively. it says, in effect, Gentle
men, this company has no money of
its own, but if you will pay your
money into its treasury, we will then
be glad to lend it back to you, if you
will give good security, on very favor
able terms, indeed"
If such a company ceased getting
new contracts, it could not lend you
your thousand dollars until you had
paid in a thousand. 1t has no other
source of income, and it can not
create something out OF nothing. 1t
it continues to get new contracts alter
yours. then it can take the money paid
in by those who precede you. In this
way your turn may come before you
have paid in quite the full amount of
which you expect to borrow. But
those who will follow will have to
wait longer on that account. II new
applicants should sign up rapidly and
IN large numbers, and began paying
their good money into the company,
the company may then be able to
give you your loan tolerably early. But
that only postpones the evil day.
Those who follow you in such num-
bers, will have to wait longer and
longer, unless the applicants should
continue increasing in a geometrical
ratio. But the longer this sort of
shing goes on the greater will be the
smash when it comes.
Unless you have been initiated into
the mysteries of geometrical progress
sion you may imagine that this sort
Of thing can go on indefinitely; but if
you will take your lead pencil and
igure awhile you will find that in or
der that you may get your loan within
year there must be about III times as
many applicants next year as there
we're this. In order that they may get
their loans within year, there must
be 10 times as many applicants the
following year as next year, and so
on indefinitely. Now, if there are 1000
applicants waiting for loans this year.
in 10 years there would have to be,
at this rate, 10000, 0OO, 00O, 10000 new
contracts in the tenth year. This is
nearly seven thousand times the pres
ent population of the earth.
But if you and all the applicants are
Wiling 10 wall llNC JSdlO AOl IVA
loans it would only take ,O24, 900 new
contracts in the tenth year to keep
the company going. By the thirteenth
wear there would have to be g.
10000 new applications. There are
about 100000 farms in the United
States. If there were several COM
panies like this operating on our farm
ers, you can see that the competition
among them would, by that time, be-
come what might be called severe.
But why mince matters? Everyone
who has ever studied the question
knows perfectly we'll that this sort of
business is foredoomed to failure.
There are only two possible condi-
tons under which it can possibly
last. and both these conditions assume
degree of foolishness on the part
| of the American farmer of which even
his worst enemy would not accuse
him. One is that he will be willing,
| in considerable numbers, to continue
paying his monthly installments into
the treasury of the company until he
has actually paid in as much as he ex-
poets to borrow back. A savings
bank would be better because it will
| allow him interest on what he pays in
and when he draws out what he has
paid in, he does not have to pay any
interest, not even per cent. The
other is that so many of those who
begin paying their monthly Install
ments will get tired of their bargain
and quit, as to enable the company
to take their money and make loans
to the few who stick to it. If 9 out
of every 10 who pay in money stop
before they get their loans, the com
pany may then make its loans within
a reasonable time to the troublesome
one who sticks to them. Under nc
other condition whatever can such
company last many years. One can
predict its failure with the same GER
tainty that one can predict the death
of human being. In neither case car
we predict the day and hour, but thai
the event itself will occur within q
namable period is absolutely certain
If. instead of paying $40 month in
to the treasury of one of those com
panies, one were to deposit $40 {
month in a savings bank, which woulc
allow him interest month by month or
all his deposits, the following table
shows what he would have to hi:
credit in a savings bank that allowed
him per cent; the second colun
shows what he would have to hi:
credit in a savings bank that allowed
him 4 per cent. 1t will be noticed
that in either case, he would have t
HE credit more than $500,