The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1932-04-09
Tin for North Dakota

IOl Avn D0AAONNS
At Baton Rouge, La, not SO long
ago, two citizens, j. D. Stotler and r
E. Collins by name, got into an ar
gunent as to whether the new state
capitol will last for 500 years. Louis
lana is right proud" Of her building
which, by the way, has been closely
studied by the North Dakota Capital
Commission. The discussion waxed
warm and the southern gentlemen
were unable to agree upon the lasting
qualities of the new state house.
AS a result of their failure, they
made a wager. The sum of ESQ was
bet and a lawyer was called in tc
make a contract. The contract sets
forth that the five dollars shall be de-
pisited in a local bank at compound
interest for the next five centuries
Heirs of the winners will receive the
accumulation in 2432.
It is estimated that in the five GEN.
turies, the five dollars will yield ST.
O84, sos ,OOO22.
M. E. Tracy writing in the New
York Telegram commenting on the
wager breaches the following economic
sermon:
This incident is worth more
than a passing thought. 1t re-
veals the basic fallacy Of our eco
uomic system. 1t is safe for cap
Ital to draw interest only as long
as those possessing it spend the
interest. Otherwise, capital soon
wrecks It's own opportunity.
II you told the average man
that five dollars could not be kept
at compound interest for five
centuries without becoming a
menace. he would laugh in your
face. He has been sold the idea
that investments. especially small
ones, can and should be made
safe forever. He thinks of de-
preston, failure and bankruptcy
as avoidable evils, yet they alone
have made it possible for us to
live with the theory of unspent
interest on unlimited wealth.
Our forefathers had little to
fear from the accumulation Of
wealth through interest because
as they said, it was only three
generations from shirtsleeves to
shirtsleeves.'
With the modern bank. trust
company and expert management,
we cannot depend on the factor
OF individual weakness for relief.
but the flaw is there and every
SO often there will be a break.
This depression is just warn
ing of how financial structure
based on the accumulation Of
wealth through interest will lib
crate itself.
To survive, capitalism must pro-
vide for constant dissipation Of
wealth. Periodic destruction is
the only alternative. Great in
terest- bearing fortunes cannot be
allowed to 60 on forever without
killing the goose that lays the
golden eggs.
Wealth Is dynamic. Its value
depends on movement. Movement
is impossible without continuous
redistribution. The idea that it
can be permitted to coagulate in
pools for any great length of time.
without becoming menace, is
contrary to plain arithmetic.
We fail to realize how heavily
We lean on failure. bankruptcy
and depression to clear the stage
every SO often, or what a jam we
would be in If they did not. We
have never honestly admitted the
reason for the ruin Of so many
business enterprises. or the fire.
quent slumps in trade.
We have a system by which a
million dollars could be made to
enslave the world within ten gen.
erations il 1t worked, but 1t does
not, and never will work for more
than a few years.
There Is little danger In the
amount Of wealth man can ac-
cumulate during his life. but there
is great danger in passing it ON
and allowing it to grow automatic
ally. There Is little danger in in
terest. providing it is spent by
those who receive it. but there is
great danger in allowing 1t to pile
up itself.
We must make ever sharper dis
tinction between earned and UNI
earned income. between created
and inherited wealth, II we would
he safe.
A Strange Comfort
It is interesting and vaguely com