JP Morgan – “What Is A Million Dollars, Anyway” (1913)

Dec 31, 2015 | Debt, Economic Collapse, Fiat Currency, Financial Literacy, Uncategorized

Morgan Money

WHAT DOES A MILLION DOLLARS MEAN, ANYWAY?

What is a million dollars, anyway? Here are the newspapers telling us about that Pujo Money Trust Investigation in Washington and talking about a million here and ten millions there and a hundred millions in another place, and they even get into the billions when they show by testimony that J. Pierpont Morgan controls 134 corporations having an aggregate capital of $25,335,000,000.

Get that $25,335,000,000? What do all these figures mean? Correspondent Gilson Gardner decided to find out if there was any way by which the human mind could be made to grasp such monster sums, so he went to see the Hon. O. P. Austin of the government’s bureau of statistics, who eats nothing but figures for breakfast, dinner and supper.

Austin put it this way: “The United States treasury experts will count 4,000 silver dollar pieces in an hour and keep it up all day long; but that is their limit. Working eight hours a day, then, an expert counter of coins will count 32,000 silver dollars a day, but how long will it take him at that rate to count a million dollars? Thirty-one days. “But that is only the beginning of the measurement of great figures, for if this same man were to go on counting silver dollars at the same rate of speed for 10 years he would find that he randomly counted 100,000,000 of them, and that to count a billion dollars would require 102 years of steady work at the rate of eight hours per day during every working day of the 102 years. That is the meaning of a billion in terms of counting silver dollars.

D’ye get that?

But the aggregate amount of money controlled by Mr. Morgan in his 134 corporations is not one billion, but’ twenty-five billion. So we will have to multiply Austin’s term of years by 25. So if Morgan began to count the money which he controls and could have a lease of life granted him for the purpose he would work on his job 2,550 years. But suppose it is considered not in terms of money controlled by Morgan, but in money actually is the amount at which he could “cash in” if he desired to convert his holdings into money. On the basis of the committee’s findings it is conservatively estimated that Morgan is worth a billion dollars.

To count this, as we have shown, would require 102 years. So Morgan has literally more dollars than he can count. But suppose we consider his wealth in terms of income instead of principal. Poor people count principal, but the rich are’ always considering wealth merely in terms of income. The income from a billion dollars at 5 per cent is $50,000,000 a year. This would amount to approximately $137,000 a day or about $5,725 per hour, waking or sleeping, or $95.42 a minute, or $1.59 every time the clock ticks, morning, noon and night.

Here’s another way. Let us consider how many families Morgan- could support. Suppose, to begin with, we take families living at the rate of $2,000 a year, which would give a family of five a decent house, clothes and education. With his income of fifty millions, it is easy to see that Morgan could furnish support for 25,000 families. This would be quite a fair-sized city. It would be a city of 125,000 people. Suppose Morgan devoted his principal to supporting families at $2,000 a year, he could support fora year 500,000 families, or a population of 2,500,000 persons. But the great majority of families in America, according to the census figures, have less than $800 a year income. But make it $800 and Morgan’s income would support 62,500 families, or 312,500 persons at this rate.

Let us look at it from another angle. The census figures show that the average annual value added to the raw material by every worker engaged in manufacturing in 1909 was 1,290. The average annual wage paid to these workers was $518. The difference is $772. How many workmen would Morgan need to produce his annual income of $50,000,000, if each worker produced for him an average annual value of $772? He would have 64,766 men laboring for him exclusively.

Article first appeared in The Day Book, February 01, 1913 (Here)

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