The Charlotte Democrat

Peter Cooper's Illustration.

Peter Cooper was one of the most successful, careful, and prudent business men of his time. He was strongly opposed to the methods of many merchants who launched out into extravagant enterprises on borrowed money, for which they paid exorbitant rate of interest.

The following anecdote illustrates this point very forcibly:

Once, while talking about a project with an acquaintance, the latter said he would have to borrow the money for six months, paying interest at the rate of three per cent. per month.

"Why do you borrow for so short a time?" Mr. Cooper asked.

"Because the brokers will not negotiate bills for longer."

"Well, if you wish," said Mr. Cooper, "I will discount your note at that rate for three years."

"Are you in earnest?" asked the would be borrower.

"Certainly, I am. I will discount your note for $10,000 for three years, at that rate. Will you do it?"

"Of course I will," said the merchant.

"Very well," said Mr. Cooper; "just sign this note for $10,000, payable in three years, and give your check for $800. and the transaction will be complete."

"But where is the money for me?" asked the astonished merchant,

"You don't get any money," was the reply. "Your interest for thirty-six months, at three per centum per month, amounts to 108 per centum, or $10,800. Therefore your check for $800 just makes us even."

The force of this practical illustration of the folly of paying such an exorbitant price for the use of money was such that the merchant determined never to borrow at such ruinous rates, and he frequently used to say that nothing could have so fully convinced him as this rather humorous proposal by Mr. Cooper.