Nashville patriot. [volume] (Nashville, Tenn.) 1858-1860, 1859-10-26
Tho Usury Laws.

conviction that such laws contribute to thu
general veal. Such obsolete notions weigh
with the mass of the people in the interior
with whom is instilled the stereotyped idea
that if all restraints were removed by law as
to the price of money, that lenders would
CHI arge as high prices as they pleased, and
borrowers would be compelled to submit to
all manner of eXtortion.
But that such theory should still find ad.
vocates among the public journals of a com
mercial city, is really extraordinary. We
find our neigbbor, the Tribune still adherinq
to this old theory one which 10 merchant OF
common sense, either borrower or lender in
our city will accede to. In recent editorial
that journal says:
"Will the thinking class bear in mind that
San francisco is now a city of seventy or
eighty thousand souls--concedng that those
who lend money on 1.-The most satisfactory
collateral at "a to 80 per cent. per annum
haze souls-that she has her full share of active
capital and several solid banking houses init
mately connected with ali the great bankers
of Europe and America. She has had ten
years OF legalized Jsury, and its upshot is
money loaned on ''the most satisfactory col
lateralr at "a to 80 per cent. Can it be ad-
visahle for US to try the experiment whereof
this is the resutP
Now it is conceded on all hands that money
is usually worth to q per cent. per month
in San Francisco 4; but we must bear in mind
the undisputable fact that high prices of
money invariably accompany high wages,
and vice uerSa.
Men of mind and others of muscle. can az
ford in San Francisco to pay two or three per
cent. per month for money, because tcages are
high AND PROFITS ARE LARGE. Their gold
flows from California, where money has been
tor ten years productive, to New York, where
it is yet more valuable it again flows from
New York to the marts OF Europe, where it is
still more appreciated. Again 1t flows from
Western Europe at the rate of one hundred or
one hundred and fifty millions annually to
China and India, where the '.dtmighfy dollar"
reaches its highest point, commercially.
The dollar in San Francisco will not buy
half day labor ( ON the working man. la
New York, wages are about one-half what
they are in California. Travel hence to the
manufacturing districts of England, France,
and Germany, we shall find that one dollar
will purchase TWO Days LABOR from the Ia
boring classes. In the cotton mills and
WOODEN mills, operatives can he had at 40 to
rs cents per day.
Go from those points to China and India
and we may purchase the labor of adults at
len or toelty cents per day. Is it at all surpris-
ing then that the gold # California pursues
its way, first TO New York, hence to Europe
it's highest value Then why attempt 10 rule
the value of money by law, and make him
who charges one per cent per month (as in
New York; liable TO alfelon's Imprisonment
and also forfeit his contract?
No man will pay higher rate for money
than he can afford, or if pcrchance he does
violate the laws of business and permit his
expenses to exceed his income, he will soon
discover it and alter his course. Our manu-
fac tnrs off. ri
pay eight, ten or twelve per cent. per annum
for loans. and make profit on it. In Cali
iOrnia double or treble this rate may be safe
ly paid. L-s
Every business man knows that the value
of money to him varies throughout the year
1t may be worth at one day, one-half per
cent. per month-at another one per cent,
and, at extraordinary periods; two or three
per cent. The law cannot regulate the de-
mand for and supply of capital. This de-
mand and supply have always depended, and
dl'cdys tciH depend upon circumstances entire
ly beyond the control, or even influence, of
the law.
The price of wages almost entirely regu-
lates the price OF money. Point out any
country or place where wages are low, and
we are sure to find interest low aud the dol
lar producing its largest results.
But independently of these considerations.
which every class OF people, merchants, man
ufacturers, laborers, lenders, will acknowl-
edge to have weight, it cannot be disputed
that any shackles upon money or currency
will inevitably lessen the channels OF opera
ton. The scrupulous and conscientious man
Will not loan his money at rate above the
law. and when circumstances arise which Gre
ate extra hazard in loaning a. e., when the
market rates is far above the legal.) he will
keep his money Idle in preference to obtain
ing an unlawful rate for its use by others.
The law OF insurance applied here. Would
we restrain the premium on marine or fire
risks. in order to protect the property holder?
Certainly not. Is not the premium regula-
ted by the hazard, in insurance as we'll as in
money? Lessen the number of lenders, or
lessen the amount OF lendable capital, by
specific law, and the remainder is of course
more highly apprc ciated. The mercantile
bill OF exchange or promissory note which to-
day is negotiable at seven per cent. per an
mum, may few days hence be north in the
market nothing under ten or fifteen per cent.
Circumstances vary iii each mans case, and
no law that ever was made, OR EVER WILL BE
MADE, can cffectually restrain the contrac Is
between men as to the rate of loans.
A recent writer, whose powers are fully
acknowledged by the literary world, handles
this subject in the right spirit, aud with a
just regard to the facts of history and to the
principles of political economy.
Mr.. Buckle in his History of Civiliza-
tion," work Of acknowledged ability and
originality, says, Up. POSI-:
1T would be easy Ia push the enquiry still
further, aud to show how Legislators. in every
attempt they have made To protect some par
ticular interests, and uphold some particular
principles, have not only failed, but have
brought about results Numerically opposite 10
those which they proposed. We have seen
that their laws in favor of industry have in
| jured industry; that their laws in favor Of
religion have increased hypocrisy; aud that
their laws 10 secure truth have increased
| PERJURY. Exactly In the same way, nearly
every country has taken steps to prevent
usury and keep down the interest of money
the invariable effect has been to increase
u~ury and raise the interest of money. Fol
since no prohibition. however stringent csr
| destroy the natural relation between demand
! and supply, il has followed that when som,
men want 20 borrow. and other men want &
! lend both parties are sure TO find means o
| evading law which iDierf,-res with theil
mutual rightsl IL the two parties were LET
/ TO adjust their own bargain, undsturbed, tn.
nsury would depend on the circumstances o
the loan, such a. the amount of security and
| tie chance al repayment. But this natura
arrangement has been complicated by tbs
| Interference of Government. A certain risl
being always incurred by those who disobe,
the law. the usnrer, very property. refuses q
lend his money unless he il also compensate
for the danger he l. in from the penalty hang
| Ing over bin. This compensation can onl,
b. made by the borrower. who is obliged q
pay what is in reality double interest, oos
interest for the natural risk on the loan. ans
another from hs ertra rssk from TIE loan. Such
then. L. the position In which every Enropeal
| legislature has placed ITSELF By enactment
! sgains, usury. 1t has increased what It wishes
to destroy; IL has passed laws which the I'm
| perslive necessities Of men compel them u
violate. while 20 wind up the whole. th'
that h. ca the very class Ia whose favor III
4 irgfslalors fntefft.rcv