Year: 1869




Estimate of q Just rate of Interest.


(coNTINUED.)


From what has been said Of unjust and
huctuating rates OF interest, IL must not be
inferred that money loaned should bear no
interest for the accumulative power Of
money is as essential 60 its existence as food
TO the support Of life. Without tins powsr
money would not represent production, and.
consequently, could not be made an eQuival-
ent in payment either for labor or prodcs.
tive property, aud therefore could not be
maintained ~ q medium OF exchange. we
are, then, seeking no extreme measures, but
that just rate Of interest which shall secure
to the whole people lhe greatest good. We
do not advocate the annihilatIon of interest,
but wes urge that the amount should not be
so great as 70 oppress the laborer whose toll
produces every necessary OF life, and even
the material for. the medium Of exchange.
The rate Of interest fixed upon money de-
termines what proportion or the value pro-
auced by labor shall be awarded to the oap-
itallst for the use OF his capital, and what
proportion the laborer shall receive for bis
toll in making the production. It is there
fore, important TO ascertain what per cen
tage the people Of nation can pay TO capital,
and still receive due reward for their labor.
To arrive az a Just conclusion. we must
form al estimate on q large scale, and for a
term of years. Take the following as such
an estimate: Suppose q country lay or our
coast equal In every respect 60 that OF the
United States, but in its primitive witness.
Allow those classes Of people whose labor
makes all improvements to have to have the
use Of the United States in their pfSeazA
condition, with their cities, railroads, canals
farms, goods, wares, and merchandise, bank,
State, and other stocks, money, etc., for the
term Of seventy years. At the close Of this
PERIOD, they are 70 return the property un-
injured by use, perishable articles replaced
BY new ones, and decayed buildings and ma
chinery repaired and renewed. And for the
use or rent OF all these, they are meanwh
to make in the adjoining new country every
improvement already in this; cities, rail
roads, canals, shipping. improve farms,
make money, stocks, etc., and render the
country in every respect equal 70 the United
States. AT the end Of seventy years they
must give up the United States, together
with the new country and all its improve
ments, aud this would aOnly be paying for
the use OF the property an interest bali year
ly, at the rate OK one per cent per annum.
We will repeat the length Of time in which
money doubles &C certain different rates OF
interest, the interest being paid and reloan-
ed hslf-yearly. At two per cent. per an
mum, it will doubly in about thirty 1--WE
years; at three per cent, In less than twenty
four years at six per cent, in little less
than twelve years and at seven per cent
in little more than ten ears. Ii the labsr-
ing classes can make al many Improvements
10 new country as nov exist in this, and
can afford to give the whole Involvement for
the use or rent OF this country for ten years,
seven per cent. would be q jast rate OF inter-
est. IL the people require twenty-three aud
half years 70 perform this labor, beside
making q comfortable provision for them
selves, three per cent. would be the just rate;
il thilsy-hve years, two per cent; and TX
sixty-nine and half years, sne per cent.
should be the rate.


Take the same estimate under a different
form. Suppose all species Of property in
the country to reueive fair valuation, and
its owners sells il on a credit Of hundred
years, the interest or rent TO be paid half
yearly, at the rate Of seven per cent. on the
amount Of valuation. At this rate, the pur-
chasers must pay every ten years TO the
sellers o value in interest equal in amount
60 The value Of the whole property Of the
nation. III, however, the property were
sold upon the same credit, bearing an inter-
est of one per cent, nearly seventy years
would elapss before the purchasers must pay
TO the sellsrs an amount in interest equal to
the value Of the principal.


IL the distinctions between the value Of
gold and Of paper disappear when both are
used as money, it follows that the value Of
gold and silver money cannot be regulated
by the quantity OF metal in each piece, any
more than the value Of paper money could Be
regulated by the quantity Of paper in each
bank-note. The power OF money over pro.
perty and labor is increased or diminished
just in proportion to its accumulative power,
hence the only possible way to afhK true
value to money, is to regulate right rate
per cent. interest for its use. A nation
should not allow any money TO circulate tnat
is not perfectly good, and at par, and also
a legal tender in payment for debts 10 every
part Of the country. Good money 10
representative of value, and must be per-
minenty secured BY property tnat posses
~ intrinsic value for If tbe property
wb;ob formed the basis for toe issue OF
the money. should cease to be valuable, the
money Of course would cease to represent
value. and would be worthless, except for
the actual value Of the material out Of which
il was made. Money to be good must also
production, hence il must ALWAYS
be susceptible Of being loaned for a rate
per cent. interest Now, as labor in any
useful occupation should be Justly compen-
sated, SO also the necessary labor to furnish
and Issue the IN Oney Of a nation should be
fairly remunerated; s.and the per centage
interest on the money furnished and loaned
By an Institution established By the Govern
ment for that purpose, should be equiValeut
to pay for the :material and labor employed
In producing and loaning il. Thus the bor-
roWers Of the money would pay the cost Of
the production and issue (see Part H., A
True MGnetdry SYSTEM, and this would form
the rate per cent. interest TO be charged by
any subsequent owners of the money when
they should reloan it. Money thus organ
lied would always pay for ito own support,
without aid from the Government.