Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-21
TENNESSEE LEGISLATURE
sExAE.

Law.
The undersigned, minority Of the Committee on
Banking. 20 whom referred Senate bill No ii,
" To Repeal the Usury Laws" being unable TO
agree with the majority of said committee respect
fully herewith submit the reasons therefor:
Believing that the bill aims only to remove the
penalties for usury taken upon money loaned, aud
thus authorize rate of interest, not exceeding ten
per cent upon this class of conracts-whch rate Of
interest 10 Be established by the persons contract
ing at the time of loan, and which rate may at DIFF
ferent times and with different parties be either six,
seven eight nine OF ten per cent and, believing
further that the meaning and intent of said bill is
to conne the benefit of its provisions to the citizens
of the State in their private and individual capsei
" and not in their corporate capacities inasmuch
the undersigned cannot suppose for one moment that
it is seriously contemplated by any one TO confer
the power Of loaning money" upon the banks
iwho issue it, money" almost at their pleasure,
beyond the present rate Of interest; the undersigned
are forced to the conclusion that said bill is in viola
ton of the 9th Section Of the 18th Article Of the
Constitution. lst Because it leaves the rate Of in
for the of money to tie agreement Of par
ties, when the Constitution provides that, '' the
Legislature shall fx the rate of interest,"" and ID.
Because sal bill provides conventional rate of in
terest for one class OF contracts-that Of money
loaned-leaying out of view all other classes when
the Constitution expressly provides, " that the rate
lof interest so established shall be equal and uni
form throughout the Stste;" and Sd. Supporting
that the undersigned are in the belief that
the banks and their owners are excluded from the
operations of this BILL they submit that it is then
manifestly viOlative not only of said 9th Section
but also of the 9TH Section of said Article of said
Constitution. Most clearly the citizen of the State
whose capital is invested in corporations should have
the right TO it the of interest with
him whose capital is not thus invested.
But aside from this objection, the undersigned
are opposed to the policy Of said bill. Since it Is
admitted that money is the creature of Government,
and depends for its value the act of the sovereign
power, we hold it TO be high duty of the Legisa-
ture fix and establish the value of its use other
wise the possessor OF it, from its power, and the alb
soute necessity of its use, would be enabled to ap-
propriate at his will the labor of him who had it
not Money is unlike any species Of property.
Other property, to speak, is subject of consump
ton and wear, and is created by individual labor
and skill, whilst money for its use and pot0er is not
subject either consumption wear, and is as be-
fore stated the creature Of Government; again, in
the opinion of the undersigned, money is the repre-
sentative of labor and that truer definition of it
can be given; and it is therefore wrong TO confound
it with merchandise and make them convertible
terms-as has been said by political economist
q that the object of Government in creating money
was as currency for the convenience of ALL Whereas
the object of the product of indii ual industry is
The advantage of the individual alone. Money in
tendency is Commemorative and is rrnered by the
Gew whilst the products of individual industry
made by the many are Iii the very nature OF things
difusive-so that money being created for the CON
yenience of ALL and being found in the hands of the
few, the labor of the many is at the mercy OF the
few, if The sovereign power fails 10 see that a
power impaired 10 money for the general good is
not perverted 10 the injury of the public" a COM
bination of capitalists to produce demand could be
easily made high rates OF interest every one knows
would ensue. A similar result would follow con-
fractions upon the part of banks; who doubts with
the temptations before their owners that such would
be the policy of the banks. Ii money and merchan-
dlze be one and the same hing, as argue, why
not give to each the same power. Let Government
do this, but not until it has the same power such
paying the demands of the Law, is the argument
worth any consideration.
The experience of individuals and nations will
show that the payment OfIha rate of interest which
goes beyond the yield of the productive industry in
Oher words, the capital of the individual people,
is disastrous and runous tending ultimately to The
utter prostration Of the man and nation. Money Of
ITSELF does not reproduce but its accumulation, by
way of usance, is at the expense of labor, and its
increase in any given persons hands, Is but the ap
preparation of labor, derived independent of any
powers which attach to it. Il is not like the grain
of wheat or of corn, that of itself, being planted
and nurtured reproduce an hundred fold OF more,
without prejudice 10 others. The history of other
States show, that money loaned for money, adds
hing TO the wealth OF any country. moments
reflection will make this statement manifest since it
is the amount productive industry with any given
people, that makes them rich and prosperous. High
and constant interest paid by an individual for the
of money, will ultimately rob him of his inheri-
lance and leave him impoverished. And ' what is
true of individuals is alike true of nations. Inter
est in its progress of accumulation is not arrested
by foreign war or domestic strife. Famine, pesti-
ence, death, and the thousand accidents by food
nd fell ne a but
halts the onward growth of Interest which, with
noiseless step, by day and by night, moves on to
the consumption of that which il doth feed upon.
So unceasing and certain il this fact that the expe
rience of nearly all civilized countries has concur
red as measure of safety against it, in the policy
Of usury laws-and The average rate of interest has
been generally determined by the capacity OF pro-
duction in the real capital of such country. The
question then, aside from the constitutional one be-
fore the Senate, is whether the enterprise, &C., of
the people of Tennessee can afford TO pay, do pay,
beyond the present legal rate of interest. In
opinion they do not-and hence, we believe it TO be
The duty of the Legislature to abide by the law ss it
Is It is often urged in favor of conventional inter
est that 1t will draw money into our midst which
now seeks employment elsewhere. The question
whether this would be OF benefit to people is 10
be found in the solution of the one, have sta
ted now before the Senate, whether our farmers.
mechanics, tradesmen, &C., can afford to pay more
than six per If they cannot, then to put them
at the mercy of the money lender, is doing manifest
injustice. Let us look for one moment at the effect
of the passage of this bill upon the condition of
things with our people
Embarrassed by the suspension Of our banks, all
the avenues of trade closed, we find them, say for
all their manifold dealings involved in debt say for
ilustratiOn) one hundred millions Of dollars. Now
it will at once be admitted that each creditor know
ing that by collecting his demand he night turn the
same into demand drawing 10 per cent that be
would do so. prompt enforcement of debts under
this bill would most probably add four per cent. to
the actual Indebtedness of our people. Again we
are frequently net with the argument that the con-
tract Of him, who is of age and Of sound mind,
should be binding. This is specious. For various
persons of this class the law intervenes and wisely
is admitted. AS for instance, the contract OF
in duress, is never by any deemed binding
Now, look at the relative position of borrower and
lender OF money, without the inerposiliOn of usuTy
laws. The government has created money as a cur
rency for the convenience of both, has determined
the value of it, but has failed, when impartiug a
power 10 it, not possessed by merchandise, &C., to
Fix and establish the use thereof The lender knows
that by this act of the Government, the borrower
is under his CONTROL since his and his necessi-
ties cannot be otherwise supplied. The borrower
therefore is forced comply with the demand of the
lender-it is inevitable and certain and without
left save by Intervention of the sovereign power
Is not the duress here given, eficacous to
force compliance than that OF the prison! in our
opinion il would be so found
Such being the opinion of the undersigned, in re-
gard to the questions presented, in the consideration
of the BILL have felt 1t to be our duty to dissent
from the action Of the ma jOrity of the Committee
We beg leave TO repeat that money being the crea
ture OF Government for the convenience of ALL it is
the imperative duty of the Legislature to fix the
value of its use, that the public may be pre-
JUDGED thereby. W. E. TRAVIS.
W. C. WHITTHORNE.
SENATE-MoRNING SESSION.
TUESDAY, OcC Goth, 1857.
The Journal of yester lay was reed and the Senate
proceeded to meet the House in convention for the