THE UNEARNED INCREMENT.

Southland Times, Issue 3316, 5 February 1879, Page 2

THE UNEARNE D INCREMENT.

Editor TiMES,~What is the" Unearned Increment ?'" * Let lis' take' Mi* Stout's illustration: — "Supposing," be says, '" a man came to the colony and invested £1000 in the, way of mortgage;: the interest gradually becamie lower as the colony advance^ falling say ffronl;l2|-: to 8. per ;cent, so that ' the income . of ■ .the man who invested his , -§1000 , .in ;£his T\yas growing less,,, wbilst. the . property - ojf the man who bought a /,.jq.ua^ter-acre''7in',.- ; lnyer r . cargill had increased -largely^ although , he - bad done nothing: more than , be,>^vjEip had lent bis mortgage. ".That showed rthe.difference and was called • unearned" increrment:'" Now, Mr Stout . surely Jkn'o'ws that the interest on'the /mortgage is tinearned increment too, which an/individual . feees profitable to. pay for the -nseof .the capital, just as the stat'efsaWit profitable to part with its freehold ih land jfor the7pre r sent use, .of . money it could procure in ' rio other way. The only real difference then T is.in the profit . and loss account— in the profitableness or otherwise pf the'transaction. Let us compare' tlie two, . showing the amount ojf his £1000 in each way at ; the-end- of say 15- years' at 10' per cent, the mean of his supposed interest. 1 We find, oircSlculation, that £10007'at~10jper : cent.- for ,15j years,, payable yeari^ and the interest so paid invested each year'at]the same rate, amounts to £4177 ssj in lhe • mortgage way; - Again/, £1000/ in itown sections at say )£2o.^equal to. 50 sections at present Hvorth say £100 gives £5000, less tbe rates and incidental expenses of. ; party fenc:es,<&c. /The; difference; of -unearned increment is -not so >vei;y >greatieven in this fortunate -township. Had. he invested in many other, townships, such as Hokitika, Nelson, Queenstown, and /many . others, which 'promised even better* 1£ years ago,.:thef.- loss '.would;; haye/ been very great to. the investor in town sec-] ! tiohs. As a rule, it' has been; found, a/ Hertzog shows in America, that with interest- anything: like". 10 fper cent.'/ the. mortgage is the most profitable to* the. investor and- 'abnbst disastrous to the" bor-.. rower. But even admitting that a few do draw prizes in tbe colonial lottery of town sections of very considerable value, ;is that any loss to the community ?. Is any one the .poorer- .for. it ?. Instead of losing, jeyery one gain^y it ;^fqr if ,tbe fortunate individual fives ; amongst f us, be either spends jt. :^eel^ or, .lie. engages with fresh strength fin; some mew /enterprise: which gives life to trade - and industiy ; or at worst, if he .goes, to England, sure to vaunt, his fgood fortune, f and acts as an advertisement, in the shape of a huge, poster^ 'bloated thougfi f ; be -be, inducing thousands:-- to come here and -try tbeir luck. Gamblers vknow/jthej adyantage of letting some/ .witl*^ hot biir / politicians^ be; a^; J wise7in tlieir generation % (One has,^ really no patience . with soAarrow mind's, that find fault with the eccentric wheel because it is not circular, i^gnorantlof the function tbat it/per-, forms-— microscopic eyes that see only. the &bt /of -the : 7oy,' : aha /ignprant7bf what .animal it belongs to, condemn it because, frt; is-'nbtf like pur Own-^bilOsbpbers/wbo oji see no use in tbej^ettle or the thjstle--^ 'envious^ sbuliß 'who csan* see; no one' more fortunate^ thaniiemselves.-^Y^urs, ' &6.,7 ■- '7 : ff; 77 j-7777 ' A Thinking Man.