The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-02-21

For the redemption Of stock .sll, 500 IS
Tot rOr Iayipg Isssrry oeots: sySS "a "a
r rr t ths 0 W aV 90 20
For repayipe in the War Den.rtm.nt SSSs y
For repay ing in the Interior Depsrtment.... $40 so
Appropriation warrant Of the Interior Depart
r Az NV na 80 SO 30 30
Covering into treasury from mis-. Sources. 17S2 2S
The London Times of the I'd instant contains an
article Of very suggestive character, upon the sub
jet of ths precariousnes Of American securities By
reason Of the faint Of usury which may be supposed
to attach to them. This s, indeed, subject Of very
serious consideration to capitalists and it Is not
little surprising that tho absorbing thirst Of gain
should heretofore have operated to blind the eyes
Of the eager money breeder to danger so great and
imminent. The brilliant promise Of cent per cen.
shines before him with lustre 20 dazzling that he
does not see yawnir beneath him, at his very
feet, the fearful chasm, capable Of swallowing up
principal as well as interest, Of his fondy cherished
investments. By the laws Of several States Of our
Union, various penalties are affixed to usurous con-
tracts but none more severe and mercilsss than
those Of New York. Here, usury il made criminal
offence by statute, and the parties to usurous con-
tract are amenable to Indictment and punishment
as criminal offenders. Here, contract tainted with
usury in it's inception Is absolutely void into whose
hand soever it may subsequently pass. contract
made in New York, by which 1t Is agreed that any
greater sum than seven per cent per annum shall be
reserved or retained directly indirectly, for the
use Of money, has no legal vitality whatever. NJ
suit can be sustained upon In any court anywhere
because the contract controls It's construction and
the entire sum loaned principal as well % interest,"
is forever forfeited and lost.
Now, let rs, by way Of illustration, mako an in.
structive application Of this subject to the securi
tes, (for instancel OF the Illinois Central Railroad
and the New York and Erie Railroad Companies.
There com 2anies have entered into contracts
with various parties for the loaping Of moneys,
In pursuance Of which, and In consideration of the
loans made, they have executed and delivered their
bonds or Obligation payable at future day, with
interest at the rate OF seven per cent per annum,
Isyable semianLuslly, to the extent Of some forty
million Of dollars. These contracts are all made in
New York, dated in New York, and to DO executed
in New York. They are. therefore, governed by the
laws Of New York. In order to obtain nom the
capitalist the moneys required, these companies
have consented to o deduction, and in many in
stances to . very large deduction from the amount
Of the bond or obligation given. Indeed, upon the
for by the Illinois Central Railroad Company,
they boldly proposed, by publication in the
papers herewith the pains and penalties of the
usury statutes staring them in the face-to execute
and deliver their bonds or obligations, promising to
pay the sum Of 000 In six years, with interest at
tie rate Of seven per cent per annum, payable
semi annually, to each person who would loan
them 500. In other words, the agreement
was to pay, in addition to the lawful interest upon
the sum borroxed, the enormous sum Of 5000, 00O
and lawful interest upon that sum- oo for the use Of
600 for SIX years. npursuarce Of this agree
neLt, the bonds have been made and issued, 80 far
% loans have been made; and in pursuance Of like
agreements though perhaps not to the same ruin
ously usurious extent, the previous bonds Of the
company have been made and Issued. Now, these
bonds are all void utterly voii-without the
slightest legal validity whatever incapable Of being
enforced by suit in any court here or else where.
They are mere waste paper in the hands Of the
holders, however innocent they may BE- Of all know
ledge Of the usurous faint upon the contract at its
inception. So far % the slightest legal value Is con-
cerned, these faucie1 securities, heret ofore so
eagerly sought for and so fondy cherished, are no
more than 60 much blank paper. This may be .
startling proposition but II s nevertheless, strictly
and literally true-true in its whole length and
BREADTH without qualification or limitation. Il
not be denied, and it would be crmnally dishonest
% attempt to conceal 1t.
When We see railroad corporation indebted to
an amount exceeding twenty millions Of dollars
and this sum increasing each year by one million
four hundred tbousar dollars a. the mere accumu-
lation Of Understanding read not yet completed
land though completed, incapable Of paying even
the expenses Of its operation for years !, come,
owing to the stubborn fact that 1t traverses through
i.s whole extent, an uncultivated, uninhabited re
gior--having nothing save landed property
convertible into each, and not at any future
time, or under the most favorable circum-
star ces, capable Of being made to hquidate but
email portion of its liabilites-he must be wifnlly
blind who fails 70 discern for such q company the
lowering proximity Of the day Of trial and disaster
Of exhausted resources and shattered credit, of nom
pa, meLt, bankruptcy and reputation.
The legal effect Of luxurious faint upon the con.
tracts and obligations Of our corporations, We are
quite confident cannot be understood in Europe at
all. Indeed, even here they feem u be but par.
italy and impe, fectly recognized. II capitalists
abroad or at home are willing to lend their money
in reliance solely upon the honor Of the borrower
that It shall be returned to them, 30 be II;
but let them rot be defuded with the belief that
they possess legal obligations capable Of being
enforced in court Of justice. Simple justice, fair
dealing, and common honesty, require that thsy
sbould BE- made to understand the precise nature
Of the securities which they hold, so that when
they turn to ashes in their grasp, they may have