American Falls press. [volume] (American Falls, Idaho) 1907-1937, 1916-04-06

L we leave this fund untouched at
he end of the thirty-fourth year 1t
viii be 1928, 304, 500; the forty-fourth
rear s44S, 09S, 400; the fifty-eighth year
1899, 1S4, 304. At 8 per cen this would
give the state an annual income of
500. 951 ,05S, certainly enough to pay
LII our taxes and leave a surplus to
be added to the principal which would
continue to grow. and make Idaho
forever.
Is the accumulation of so vast
a capital from 0ur resources only
the product of a wild fancyi IL
you have doubts, put the problem
i'm your schools, take 1t to your
banker, or study the growth of
the Continental COmemrcial Ma
tiOnal bank of Chicago, the great
transportation companies, the life
insurance companies. or the STAN
dard Oil Company. They all
reached present proportions
through ~reinvested earnings.
Suppose we reach only One-half
this total. Or even a fourth of II,
in the time stated. ii we sell
2.500,OO0 acres at S15 per acre and
do not reinvest the EARNINGS our
maximum capital will be only
S37. 100000 and its earning power
only $2,250,000 a year and here il
stops forever. But ii we add in
terest to capital each year and
reinyest, ii doubles in less than
twelve years, and by frightening
the time a little. we a reach the
billion dollar mark, and far pass
IL. We IA conserve or we M
fritter away. But we cannot eat
our pudding and still have it.
Six per cent interest, compounded
annually, is equal to S.3S per cent pei
annum in twelve years, 1850 per cen.
per mum in "a years, 1911 per CEN
in SO years, 31.73 per cen in AS year.
$3.50 per cent in 60 years, S9.5S PEI
cent in ~ years, 1926 per cent il
"a years. and 273.64 per cent per an
mum in SO years. Begin with $40 ANT
figure 6 per CEN interest, compounded
annually, for SO years, and see wha
a surprising total it will reach.
The present method of handling
these funds is to leave the prin-
cipal intact, but turn the interest
into the school fund as rapidly as
il accumulates. The continuance
of this policy has some ardent adj
yOcates. To make a comparison
Of this system with the one l am
advocating, let us sell one acre
of land mt $40. The interest on
$40 mt 6 per cent Is go cents a year.
In So years the interest earnings
would be $3.50 which would be
expended as fast as earned. and
all we would have left would be
the original $40. This Is the pres
ent system.
Now take $40, place il at 6 per
cent interest, add the interest TO
the principal annually and relOan
and at the end of the n~inety-six
year period n has $3.50. The
interest on this at 6 per cent Is
Sl53.6O per year. or nearly three
times AS much as the total arm
ings of the other plan for SO years.
What is SO years in the life Of q
statel Shall we be penny wise
and pound foolish?
1t has been claimed that it wou
be impossible to loan $4,000 a ye;
even if the sales would reach tn.
figure. Those making this claim TO
get that only 10 per cent of the amou.
of sale is paid in cash.. and. min
tenths is loaned when the sale is mad
Instead of having to find an outl
for four and a half millions from ID
sale of 300, 900 acres, there would
only $450,0O0 to loan. Not more tn;
a month ago on a train running in
Twin Falls the representative of
Portland loan company made t
statement that his firm had loan