Weekly American. [volume] (Washington, D.C.) 1858-1858, 1858-02-13

have not space nor strength to review and
refute even the prominent defects charged upon
the now Csde. Twill briefly refer to one which
has aroused the most opposition.
l refer to the question Of intsrsst Maledic-
tons have been heaped, without stint upon the
provision Of the new Code, which allows par
ties to contract for whatever rate Of interest
they please, and yet would not be surprised
to learn, II the Code shall not be adopted, that
4. the very men who declaim most loudly new
against this provision, in the end become the
!. most enthusiastic friends of the provision.
have but little to offer on the general question
\, Of the policy or impolicy Of laws against what
is called usury, except what has been hitherto
advanced BY others but may lay down two
olmaxims which it will not be denied constitute
the creed Of al prudent money lenders.
The first maxim Of such money lenders is, to
zee that their principle is safely invested.
The second maxim is to invest it sqtsly at
the highest rate of interest
ks Safety and profit arc their objects--but safe
ty is the ruling object
The safety Of investment consists in the re-
sponsibility on which their return rests and
\ upon the laws which enforce that response
blity. " Il Il S.s 81 ,s
~ The responsibility may be undoubted, but
what is It worth if the Law will not enforce ii,
II and the borrower will not voluntarily fulfil his
obligationss Nothing aye worse than nothing
n perhaps, for the lender is subjected under the
usury laws Of the district, to a fine Of three
times the amount loaned, fanny one chooses to
exact it
ll What is the actual practical effect Of the
money lenders inaxims under the present laws?
Why unquestionably this, as he is
obliged to abandon his maxim of safety /" if
he lends money at more than six per cent
where the laws forbid it, he must charge such a
rate over and beyond what would be the real
value Of his money, in his own estimate if safe
~ invested, to compensate for his risk In
} violating the lapi Suppose money to com
mand on good security, and under q law tole-
rating the contract twelve per cent? The
money lender would be content perfectly SC,
seeing that his security was ample and the
4 laws Of the place justified and would enforce
the contract
But let him know that if he contracted for
n more than six per cent he would forfeit three
times the amount Of his debt, and what would
be his demandf From twenty-five to fifty per
cent to cover his risk! Which of these two
systems is the better one for the money Dor.
rowerR Is it better for him to pay ten or twelve
per cent under q law tolerating il, or better to
pay to money lender premium Of fifteen to
forty per cent as an insurance against his own
rascalityf ~ vi
1t is well known that in nearly all the new
! States, the laws permit contracts to be made
y for interest At ten and twelve per cent 1t is
/ known too that State bonds and railroad bonds
are in market at such rates that any and all
\ capitalists can lawfully realise from twelve to
twenty per cent upon investments, and Of
course no man viii bring money here from
any other point and invest at six per cent, nor
will any prudent man violate the laws against
usury without charging an exhorbitant rate of
interest for his risk.
Under this state Of facts, is it not obvious,
that borrowers Of money would be vastly bene-
fitted by law, which would induce capitalists
to bring their money here for safe investmenta
Money is worth in the west from ten to twenty
per cent and can be safely invested there at
those rates Thousands Of capitalists at the
North would however prefer safe investment
here, at somewhat lower rates, and it is not to
be doubted, that under thelaw, as framed in the
new Code, an abundance Of capital to supply
the wants of the district, could be procured at
from eight to twelve per cent at once, nor can
there be any doubt that within two years,
money would be abundant here at seven or
eight per cent and perhaps at six per cent.
A few words more on this point, as con-
slider this change in the law the most impor-
tant one for the district that is proposed in the
new Code. a#s
am no alarmist but It is due to the people
Of the district that they should look forward
and provide If possible for the calamities which
seem to be in store for them
The banks of the district will not he rechar-
tered, but viii be coerced to wind up their af-
fairs. 1t is possible, but not probable, that
free banking system based upon United States
stocks or equivalent securities may be created
The chances are decidedly againstit An effort
is even being made TO annihilate the trade and
business Of the district by prohibiting the far
mers and planters Of the border counties of
Maryland and Virginia, who now trade with
Georgetown and Washington from bringing
their State bank notes (under.Jftty dollarsi
into the district TO exchange for goods |
In what dark corner Of demogoguism these
propositions were originally engendered, it were
useless to inquire. They have assumed the
shape of Resolutions introduced into the
honorable Senate ofthe United States from q
committeel
Suppose your present banks are denied a
continued existencef and suppose no banking
system TO be provided in its placer and sup.
pose virginia end Maryland bank notes un-
| der $50 to UG banished from amongst us
These are tho proportions Of a Ssndte's com
| mittss under the lead Of recognized cham
pion Of tho Administration II even the
two first propositions are carried out, in What
condition will your property owners who are