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Show BOOST IN RATE OF INTEREST IS COSTING PEOPLE $500;000,000 BY ROBERT L. OWEN. U. S. Senator from Oklahoma, author of tho Federal Reserve Banking act, President of tho National Popular Government league. In my first article on Interest rates I called attention to the injurious effects ef-fects of the high rates of interest, charged by the New York stock exchange, ex-change, on the entire business of the country, from the fact that the exchange ex-change controlled so enormous a volume vol-ume of credits. This Increase was followed by the recent action of tho federal reserve board raising tho rate of interest to member banks from 4 to G per cpnt. The reserve bank increase opened the way for the 25,000 private and national na-tional banks in tho United States to raise their rate 2 per cent on all loans employed In the manufacturing, dis-j tributlng and retail business of the country. There are many billions of dollars of such loans outstanding. The action of tho board, therefore, is in effect an increase in-crease of 2 per cent on the total industrial in-dustrial and commercial loans of the nation. Which will in turn be extracted ex-tracted from the pockets of tho people in the prlco they pay for everything. lions, probably $500,000,000, necessary to repay such increased interest charges will be taken, but on top of that the multiplied manufacturers' and middleman's profit on these same Identical interest charges. The .people do not realize the extent ex-tent to which interest, particularly unearned un-earned Interest, adds to their burdens. Thero is an honest interest charge which measures actual service rendered. render-ed. There is another interest charge which means extortion by those who lend, because they take advantage of the acute necessities of those who must borrow. There are big "loan sharks" as well as little "loan sharks." From the days of Moses, who for-bado for-bado it, usury has been u menace to human society. It has done so much harm that every nation in tho world has fixed a rate beyond which interest inter-est Bhall not be charged. The power of compound interest to absorb wealth by mere accumulation ir absolutely incredible unless a mathematical math-ematical demonstration be made. For example, a one-cent loan made at the birth of Christ at 6 per cent compound interest, doubling every 11 years, would doublo 174 times, compounding com-pounding up to 1920. To pay that loan would require an amount of gold equal in volume to more than a billion times a billion worlds the size of this earth. It Is a sober mathematical fact; if you don't believe it, take a pencil and figure fig-ure it out. Napoleon, in considering facts of ttyis-'klmty exclaimed: "I w.onder that this monster, interest, has not destroyed de-stroyed mankind." But when excess interest charges and unearned commissions on loans 1 run into the hundreds of millions annually, an-nually, and these sums begin to compound com-pound annually, it is not difficult to understand why tho unearned interest and tho unearned profits of monopolies monopo-lies and of profiteering rapidly absorb the surplus wealth of the country and thus lead to one man having a thousand million dollars, and lead to another man, innocent of these artful processes, proc-esses, finding it impossible to feed his children, clothe his family, and shelter shel-ter the mother of his children from the winter's cold. The experience of the world shows that revolutions and the overthrow of governments have had their chief cause in this unjust and unequal accumulation accu-mulation of wealth, because, as a necessary corollary this wealth puts economic and political power in the hands of a few until the masses, unable un-able to endure longer, resort to violence vio-lence as a short cut to relief. This was what destroyed the Roman empire. This was the basis of the French revolution. From such causes sprang the world war of 1914. i From such causes there is spreading! I now throughout .the world an unrest that confessedly contains elements of; danger to tho stability of society and! government. |