The Jeffersonian Democrat. [volume] (Chardon, Ohio) 1854-1865, 1859-01-14
The Ten Per Cent Interest Law.

Tho bill to repeal tho ten per cent in
tcrcst law, and to establish uniform rate
Of interest at seven per cont, has beou do.
fcatcd in tho llouso. The vote stood, yeas
As, nays AZ. II will bo seen that tho bill
received majority of tho mn"'h"-- t'-~-S-',
but, failing TO receive majority of tho
members elect it was dufoated. Twelve
members arc named as absent or not voting
We arc glad to notice that our Representa-
tive voted in favor of the bill. Mcssrs. Allen
and Deming of Ashtabula, French of Lake,
Bell of Medina, Monroe OF Lorain, Fcrnald
of Eric, llowo and Townsend of TrumbulI,
Laughin of Portage, and Spcrry OF Sum
nit. voted tho same way.
Tho Ohio Stale Journal concludes an
aLIo article upon tho ton per cent. law, 10y
stating the following facts, as tho result OF
tho experience of largo majority Of tho
business men of tho Sta,o
/. There are fow Legitimate bueinoos pur.
suits in which capital can 10 employed 80
ls 10 enable tho borrower to pay ten per
cont for tho uso Of money and To leave him
a sufficient profit to compensate for his ;mn
skill, labor and tho risk incurred. Capital
gets more than its fair proportion, whlu in
dustry and enterprise aro compelled to put
up with tho pittanco that may bo left -
Therefore, for tho State to establish dGd en-.
courage so high ratio oi interests not only
assuming an unnecessary responsibility, but
it is doing injustice in shaping IFS legislation
so as to smooth tho way for tho easy suhju.
CATION of labor to capital.
.. Whch six per cont was the rulo and
ton per cont tho exception, under tho old
law, ton per cont is tho rno and six tho cr
ception under tho present law.
3. Tho tendency of tho ton per cent law
hns boon TO encourage tho withdrawal OF
capital from individual enterprises. for the
purpose of employing it in money leading.
Tho amount thus withdrawn from tho or
dlnary and legitimate channels of business.
to hu loaned to racklese operators aud 10
initiate unsafe spGculations, will more than
counierbalance the amount OF foreign capi.
tai which tho friends of tho law contend, has
been attracted hthor from other States, by
tho promise of a heavy rate of interest.
I. There arc three considerations which
cnter, or ought 10 enter, into every trans
action between tho borrower and the lender
Tho first is, safety of investment; tho soc,
ond,prcmptitudo of payment and the third
the rate per cent paid. Now tho tendency
of this ten per cent law operates injuriously
| to both parties, encouraging tho borrower Il
pay moro than no can afford to pay, and
! tempting tho lender to look more to the con,
| sideration of interest, than to the two more
/ important ones first named. Even with al
| his prudeCce,th tho latter cannot rely with tn,
] al . a a
| to pay principal, and tho interest thereon q
ten per cons: us upon anothcr,in in all respects
similarly si,natcd,-who pays only SIX PEI
cent. Other things being equal, ,thore woui,
be u running odds of four per cent. upol
| the amount involved in tho transaction, il
favor Of tho soyoncy and promptneGs of tn,
latter, over tho former,
1t would be far bettor, oven to abolish al
legal rates OF interest. than for the State t,
set up SO high u standard as ten per cent. -
The idcas of both borrowers and lenders nat
urally tend upward to this figure and niu
tcnths of tho credits on interest, now exist
ing between the business men aro weighe,
down with rental OF at loast four per ecu;
moro than they would be carry ing, had tn
ten per cent law mover been enacted. 81
long as government interferos at oil between
tho borrower and tho lender. it is its imper
ative duty to ix tho rate of interest so a
fairly to divide the profit arising from capi
tai employed IN business, between the capi
talst who simply furnishes the money, an
tho business operator, who furnishes hi
time. and experience or skill-who assume
tho responsibility OF pay mant 10 the forme
lin the majority of casos giving securit
therefor upon other property,and who take
all the hazards and risks Of the enterprise.