Part 15 (1/2)

CHAPTER XXIX.

USURY CENTRALIZES WEALTH.

The dictum of Bacon that ”Usury gathers the wealth of the realm into few hands” is readily proven and fully verified in the experience of these times. The tendency to centralization under a system of usury or interest-taking is so strong, and the modern result so apparent that the statement only is necessary.

Usury not only enslaves the borrower and oppresses the poor who are innocent of all debt, but it also affects the rich by gathering the wealth of the wealthy into fewer and fewer hands. There is a centralizing draft that threatens and then finally absorbs the smaller fortunes into one colossal financial power. It is as futile to resist this as to resist fate. Wealth cannot be so fortified and guarded as to successfully resist the attack of superior wealth when the practice of usury is permitted. The smaller and weaker fortune, using the same weapon as the larger and stronger, must inevitably be defeated and overcome, and ultimately absorbed.

Rates of interest do not affect the ultimate result. Under a high rate the gathering is rapid, under a low rate the accretions are slower, but the gathering into few hands is none the less sure. Rates of interest only place the convergent center at a nearer or more remote period.

If any interest is right, compound interest is right. When simple interest is due and paid, it may be loaned to another party, and thus the usurer secures interest upon his interest, though not from the same debtor. When the interest is to be paid annually, it is to be a.s.sumed, if not paid, that the debtor takes it as a loan in addition to the face of the note of his obligation. This saves the care of receiving and re-loaning to another. The custom of usurers, however, is to renew the note, adding the interest to the face, if unpaid. The ma.s.s of bank paper is renewed each ninety days: Compounded four times a year, whether to the same or to another debtor, the result in accretion is the same.

Few realize the rapidity at which a loan increases, accelerating in geometrical progression as time pa.s.ses. Any loan will double itself at three per cent. in twenty-three and a half years; at seven per cent.

in ten and a fourth years, and at ten per cent. in seven and a third years. One dollar loaned for one hundred years, at three per cent., would amount to nineteen dollars; at seven per cent. one thousand dollars, and at ten per cent. thirteen thousand.

The island upon which New York stands was bought from the Indians for the value of twenty-four dollars by Peter Minuits in 1626. Yet, if the purchaser had put his twenty-four dollars at interest, where he could have added it to the princ.i.p.al at the rate of seven per cent., the acc.u.mulation would now exceed the total value of the entire city and county of New York.

M. Jennet quotes the elaborate calculation of an ingenious author to show that 100 francs ($20) acc.u.mulating at five per cent. compound interest for seven centuries, would be sufficient to buy the whole surface of the globe, both land and water, at the rate of 1,000,000 francs ($200,000) per hectare (nearly four square miles). From this we can gather that $20 at five per cent. compound interest for 700 years, would buy all the earth, mountains, and swamp lands, and water, at $80 per acre.

Another mathematical genius says, had one cent been loaned on the first day of January A.D. 1, interest being allowed at the rate of six per cent. compounded yearly, then 1895 years later--that is on January 1, 1895--the amount due would be $8,497,840,000,000,000,000,000,000, 000,000,000,000,000,000,000 (8,497,840,000 decillions). If it were desired to pay this in gold, 23.2 grains to the dollar, then taking spheres of pure gold the size of the earth, it would take 610,070,000,000,000,000 to pay for that cent. Placing these spheres in a straight row, their combined length would be 4,826,870,000,000,000,000 miles, a distance which it would take light (going at the rate of 186,330 miles per second) 820,890,000 years to travel.

The planets and stars of the entire solar and stellar universe, as seen by the great Lick telescope, if they were all in solid gold, would not nearly pay the amount. A single sphere to pay the whole amount, if placed with its centre at the sun, would have its surface extending 563,580,000 miles beyond the orbit of the planet Neptune, the farthest in our system.

It may be added that if the earth had contained a population of ten billions, each one making a million dollars a second, then to pay for that cent it would have required their combined earnings for 26,938,500,000,000,000,000,000 years.

Anyone can figure on this and see if it be correct.

Had Peter only thought to put one cent at interest, there would be no call now for Peter's pence.

With any accretion allowed, the concentration of wealth is irresistible. However small the amount of capital, if permitted to grow at any rate of increase it will ultimately absorb everything. Any finite quant.i.ty permitted any finite rate of increase, will, in finite time, gather all that is less than infinite.

The only difficulty in this accretion is to secure debtors that will not die. We inherit the property of our fathers, but fortunately we do not inherit their personal debts. This difficulty is being overcome by bonds of corporations and nations that live on, though the individuals composing them may, age after age, pa.s.s away. This makes the increase perpetual. Generations may come and go, but the concentration of wealth goes uninterruptedly on.

This is not visionary theory, but is shown in the practical results everywhere apparent.

The usurers of England, a little over two hundred years ago, secured a charter for a bank on the condition that they loan the crown or government 1,200,000 pounds sterling, about six million dollars.

This was a perpetual loan, never to be repaid, but annual interest at eight per cent. was to be paid by the government forever. This constant annual interest paid to this bank has made it such a financial power that it reaches and draws to itself of the resources of all lands. The aggregated wealth of the inst.i.tution, if the accretions were continuous, would now be $25,165,824,000,000. The wealth of the United Kingdom is estimated at fifty billions, and all Europe two hundred billions, the United States seventy billions, and the whole world's wealth at five hundred billions.

Were the accretions of the bank at eight per cent. undisturbed and unconsumed, it would now take fifty worlds as rich as ours to pay that debt. It is sometimes wondered how there can be such an acc.u.mulation of wealth in one inst.i.tution as to control the finances of the world.

It is often attributed to superior wisdom or some profound, occult manipulation. It is but the natural operation of the principle of interest--accretion from age to age.

The managers may be stupid dolts, only so they do not interfere with the usurious principle in its eternal pull on the resources of mankind.

The interest bearing debt of the United States, at this date, is about one thousand millions. This in one hundred years at six per cent.