Saint Paul weekly Minnesotian. [volume] (Saint Paul, Minn.) 1858-1859, 1858-07-31
The Is per cent. Banking Interest De-
mands a Is per cent. Interest Law
Cnnara1lV.

manOS n d per CENT AntcTcSS A""
Generally.
The amended Banking Law, as we have
before announced, is through the Legislature;
and has become law.
Ii fues Is per centum as the limit Of interest
or discount arhich the Banks organized under
the kaw can exact from their customers.
The details of the bill are in such shape
that it is hoped ere long wholesome home
currsncy, of our own, will DO more to revive
times Immediately than all the speclous and
humbug Railroad schemes to fleece the peo-
pie by five million loans and other similar
expedients, can accomplish in the next two
years, if any good results happen from them
even at the end of that period.
But and there is always "but" some
how interposed to every good scheme-before
We can have banks we must have a usury
taw!
Let no one be startled at this proposition /;
nor think we are going into an argument to
overset Jeremy Ben'ham's theory of the
rishtfulness and expectancy of free trade in
money, as in other commodities.
We have our own notions upon this sub
jecr, which, however, are not pertinent to The
present condition of things, and we refrain
therefore from presenting them.
But the expediency of a usury ta0 at this
time rests simply upon peculiar condition
of things: upon the enpediency Of hacing
banks at all at this time.
1t is useless to think that men will go into
banking, if everybody else but them are
allowed by law to charge three and .fpe per-
cat. u mouth, while organized bankers forfeit
their banking privileges and render themselves
liable for misdemeanor, if they charge more
than u per cent year
If any capitalists do organize banks under
this law they cannot stand and will inevitably
break down before many months after their
institution, unless the curbstOne bankers
and brokers are likewise compelled to opcrat e
under similar legal provisions as to the amount
of interest they cancollect at law.
In fact, the rates Of interest must be as
free to the circulation banks as to other par
ties or else nc good can come to either
them or the people from their establishment.
There is to be sure one mode in whicn these
banks, even without uniform usury or inter
est law for all might exist. They could have
private brokers' establishment connected
with, though outside of their institution; and
they would evade the prohibition of charging
more than Is per cent. interest by allowing
their whole note circulation to be used by
their allied broker to loan ont at such interest
as he chose to exact, while the Bank itself
would never happen to be In finds to loan to
anybody at Is per cent. per annum! But is
this desirable condition of things?
II the Legislature does not pass law fix
ing the magimum of money contracts for
interest at Is per centum for ereryJody as well
as for the Banks, our Solons had better repeal
the Is per centum limit of interest imposed
on those institutions and let the whole thing
be open and free. As It stands now, and
without general ID per cent. interest law,
the provision will work as a pernicous evil
and the whole turn out most probably an i'm
potent farce.
Not that we are in favor, as the case
stands at present. of repeating the Is per
cent. clause in the Banking Law, provided we
can see general law passed.
For though there is much plausible theory
in favor Of no usury lars whGteosr--to which
theory we have always given our own adhe-
renee hcretofore-yet tn theory seems to
be contradicted by the practice of almost
all governments in the civilized world.
We remember that Wiscon in tried free
trade in money for two or three years, and
Tie experiment worked so badly that six or
seven years ago, when creating the present
excellent bank g system Of that State, the
legislature restricted the rate Of interest to
10 or II per cent. pr annum and it Should
is, that the last experiment of the two has
arorhed tie best for the peolle and tie State!
Thus, the argument often used here that a
limit iii morcy interest, will prccent capital
fom coming he,e, does not seem to have pro-
ven rue AS regards w sconsn. On the con-
trary. under their ten per cent. interest law
til" banking capita Of that State has increas-
ed in the seven years since its establishment
at the rate of q million q gear! We observe
in Madison paper the statement of the
Bank Comptroller Of the condition of the
banks Of Wisconsin on the 5th of July. 1t
shows them to lie in a healthy condition.
IT, aggregates of tile principal items are as
follows:
The total amount Of banking capital in the
The tota lnornt of circulating notes is.. PCS 9i9
TIE 30 At aoInt of specie on hand is. 50 800 40
The st ,cks deposited to secure the circulation
In dton, tie notes and bonds Of bank own.
required by law to be f-d, is 80. 5000 900
There 81 banks in the state which II commence
ed business since ,nuary 1, 1855 an commenced bu-
siness since July lst The latter three included
in this report
Now this is the operation and growth of
capital under a ten per cent interest law in
an adjoining State.
Certainly, there is nothing to discourage
Minnesota tying the same experiment by the
one tried alongside of us ; nor, as many think,
could there be better time than the present to
try it on here.
There is something also in the argument,
that sound eastern capitalists of the largest
means, who are the most careful of their
money and to whom the safety of investment
md the surety Of the prompt and regular
payment of interest rather than its excessive
amount, are the greatest inducements for their