Lynchburg daily Virginian. [volume] (Lynchburg [Va.]) 1852-1861, 1854-09-07
Reneal OF the Usrrv Law

and said upon the subject, and ii is object to
collect and digest into small compass some of
the most important objections to such laws aud
lay them before our readers thai their attention
may be called to the subject. 1t is one which
deserves the attention both Of the public and the
Legislature, and has so been regarded by men
among US whose opinions entitled to weight
Mr. Patton and Mr. Robinson. who were en-
trusted by the Legislature with the work q revi-
sing our laws. a work which resulted in the pres
ent "oode of lsl9.r submitted to the Leg.la-
ture bill which approved in committee but
lost in the Legislature. That body preferred TO
retain substantially the old legislation u QUEEN
Anne's time. Tue bill of the reYsoYs made six
per cent the legal rate. which was to govern all
in which the parties bad not cont raeted for
different rate. and declared any contract for
higher rate than six per cent yoidas 70 iAe srees
ADORE sir per cent, ..unless the amount rate
Of interest be truly stated ia writing in ti,c
tract. and be not more than the rate Of dol
lars upon one hundred dollars Tor year: Ia which
case the interest 50 stated. shall be legal Iu
an elaborate note u their work, they discussed
the subject in some Of its aspects, and clearly
showed the advantages Of saeh law over the
present one. Instead Of making the security
void entirely. a, present, tha; the creditor
loses his whole debt, their proposed Law made il
va.d II The extent that j; WAS faT illegal interest
and tta forfeiture q double the debt. for taking
illegal interest. was eutinaiv 8ane away.
In tie note Abore referred To. the resisors a.
ter tracing the gradual abandonment # a.s So
ten 4 Csury Lave in EnglAad, proose1 - 70
siea tie leEIsgaison 4 the other >izses Il tie
rEson and sbew that tic Trin~ple q forfeiture
Il the whole debt for taking more than the legal
rass j. abandoned n all u them except New York.
Nep Jersey, North Carolina and Virginia and in
New lerk /; does not apply TO negotiable paper
N The bands 4 bonafd, holder This re-
riev. say the. OF the nature Il the legislation
elsewhere, has no tendency to make u saIs SIZED
viii tbs exi.;Il., aw Of Virginia concerning usu-
ry-4 - Past experience IN regard TO It's opera
tSons- and the best reflection which we have been
abb 10 give to the subject. have brought us 10
she conclusion that il ought To be inaternll,
changed" They thus e. on TO show, a. we did i
ia our former article, that the law not bene-
f, but al injury 10 the borrower, and has Gttle
other practical efec, than to increase the income
of those who habitually lend money at very high
rates" In showing that the law is notifications,
cannot do better than quote further from the
note of the reyisors. Speaking of " men whose
scruples are mol Sufficient TO prevent 0lcm from
violating tie law, provided they are well paid Ter
il" they Say
" They,too, have no difficulty in accomplishing |
the object Of obtaining excessive profits upon
money by Grading, without directly violating the
law. This result is produced with entire impu.
nifty by transactions which are deemed entirely .
legal and valid. Thu, bonds are constantly .
manufactured for sale wtlout any consideration,
aud sold, as means OF raising money, to babitu-
al money lenders who take care to know nothing
about the want of consideration, and no matter
what the discount, the assignee has the right to
recover the bond from the obgors. mike man
ner, it is decided, that although mnn holding
stock sell it at price greatly beyond it's market
value, and though he know that the purchaser
does not want il as investment but for the |
purpose of raising money on it, still it is a valid |
transaction, and not usurious, provided it was, on
the part of the debtor, real sale and not mere
shift to obtain more than legal interest" THE |
class of persons against whom the usurv law is
intended to operate, the professional money len
ders of course make themselves acquainted with !
these nice distinctions, and know how TO 20 a.
near possible TO the prohibition of the law
without mourning ne penalties, and thus have the
whole money market to themselves without the
C competition of those who have money la lend
b ut more cautious more unwilling To eyade
the law or violate its spirit" The State Itself
ID injured by it. 1t is well known that under the
present state of the Virginia law. much capital
as gone from this State TO be invested in New
FORK on bond and mortgage at per cent year.
And not unfrequeptly citizens of Virginia 20 10 !
y. York TO borrow money at per cent. There
il no consideration Of policy which can be pro-
uoted by occurring the people Of Virginia to
leave their own State and go to another to bor- |
row or lend money absve q per cent. If New |
ork be benefited by attracting capital within
her limits, Virginia is injured by all measures
which drive II from her borders" When we add
to all these weigbty considerations the fact, that
contracts for Userious loans are usually made in
the presence of none but the parties, and with
the most vigilant care to avoid leaving any ira
of the consideration Of the usurious security
in sight and that the debtor who pleads the
statute must prone the usury. il is apparent that
there is little chance for success in the object
these laws essay.
We have suggested, as another weighty obiec-
ton to Them that they tend to corrupt the public
morals. In all other cases, says Bentham, it is
the studied policy of the law TO discourage and
punish fraud and breach Of faith. The interests
of society require that when men have deliberate
ly made their bargains they should be constrain-
ed to stand to them. The Usury Laws reverse
this principle, and offer premium to falsebood