Belmont chronicle. [volume] (St. Clairsville, Ohio) 1855-1973, 1859-01-20
Speech Of the Hon Isaac Welsh


House bill No. 8: To estaNisA Q vniform
rate of interess at per ceat., and reYeat
the 10 per cent. ls,o. F%t Z
Mr.. SPEAKER: ! have listened to thedis-
cussion of the subject under consideration
with pleasure, and trust with profit. Tn at
all men could sgfse on question which
has been the subject of discuss ion, and disa.
greement, from almost the FIRST Introduction
of money, ss legalized circulating medium
into the world, could hardly be expected.
The bill. Under consideration, proposes to
establish a uniform rate of interest At seven
per cent, and to repeal the act Of March
IA, 1850, which authorizes rate BY con-
tract of ten per cent. No question, perhaps,
of more general Importance win engage the
attention Of this House. The money lender
and the money borrower, are alike interestsd;
all classes of our citizens are interested, yet
our people have no: indicated any unniAa-
kabIe desire, so far as am sdv;asd, q hsve
our present laws regulating interest essen
TALLY modified. Any increase in tbs ordi
nary rate of interest superinduced BY other
than strictly Legitimate and necessary COM
mercial causes, can hardly fail to be hurtful
to the best interests of the State at large
If the act sought to be repealed by this
bill. established a uniform rate at 10 per
cent, there could be no doubt but the in
terests Of the country would demand its re-
peal, for but few persons will contend that
the profits on the ordinary bus mess of the
country would justify the payment of so
high a rate. But when we reflect that the
Law does not establish rate so high in ordi-
nary times, nor yet limit it to so low one
in times of extraordinary financial pressure
and scarcity of money, the existence or re-
peal Of the 10 per cent. clause is not mat
ter of SO much importance, in my opinion,
as many gentlemen seem % attach to it.
We may enact laws nominally limiting the
rate of interest snd regulating usury, and
ws=ss=.zy repeal iegislssISe eSSctments on
the subject, but the laws of trade and of
commerce, founded as they are, in human
necessity, and being an important element
of our civilization, cannot be SO easily re-
pealed or essentially modified by legislative
enaetments.
The price paid for the use or hire OF
money IS what we denominate interest
The price paid for the use or hire of land,
wheat, cloth. cotton, or any other article, is
interest in precisely the same sense. Why
no. then enact laws to limit nd regulate
the price of the one as well as the other.
No good reason can well be assigned why;
Tor in this particular, at least, money and
merchandise in their uses are identical. In
another particular slight shade of differ
ence exists. Merchandise possesses an in
tr.nsic value; money the value impaired to
ityby law; money is thus by law made the
representative or ,nesssfs ss property, yet
perhaps no species Of property is more ua-
certain and fuctuating in its Offices and
capacities than money. To day so cents
may be the measure of value for bushei of
wheat, to morrow ST. and the next day ST.
90. In fact the law can inpart no regular
value to money except for the payment of
debts or the fulfilIment of contracts. For
these purposes i, is made a legal tender,
but for the general purposes of trade and
commerce, it is practically to all intents and
purposes, an article of merchandise and
subject to all the variations and fluctuations
Of any other commodity.
The worth of money is controlled by sup
ply and demand, precisely as -four, sugar or
ircn. When the supply of -four in marke,
is not equal to the demand, the price rises
but when the supply is greater than the de.
manG, flour alls; just so With money. When
the supply of money is greater shan the de-
mand for it. the price Of moLey for hire
falls, as well as its price for ordinary in
vestment; iaat is money bears a lees rela.
tive value to property than when it wal
scarce, and can be obtained on loan at the
lowest ate Of interest; for there are more
money lenders at such a lime than borro W
ers. But when money is scarce, when the
supply is not equal to the demand, its price
for loan or hire advances, its relative value
for ordinary investment increases, and con
sequentiy higher rate Of interes: is easily
obtained. may say lesitimately obtained
for it is in perfect harmony with the na,ura
and commercial laws Of supply and demand
A legislature can therefore no more FIX
just price for money than il can for mer
chandze.
The market price of both is controlled By
legitimate commercial causes, and the hold
er of money is as much entitled to the mar
ket price of his money as the merchant
to the market price of his goods or the far
mer to the market price of his e,nn. An,
enactment creating distinction betweel
these rights would be manifestly unjust, an
so inconvenient and oppressive to commun
ity that it would render the laws practical,
imperative and void. This is no prophecy
but simply the realization Of truth whic
} has been abundantly demonstrated by tn
f experience of nearly every State in the u
) ion. Take for example the history Of tn
r last fifteen or eighteen MONTHS money hi
ranged variously in the cities at from 4 pt
E cent. per annum ito I, =, 8 and per cent
: per month, and perhaps at no point has tn
= diversity Of price been greater than in Il
h city Of New York. where the rate Of intere
{ is fixed by law at per cent, and the mot
y rigorous penalty enacted for usury. In Of
y own State, similar state Of things has e!
G listed, and, at this very time, the rate of il
1t terest is quoted, on first class paper, in Ci
e cinnat, and at other important commerce
Z points in the State, at price higher tn,
that allowed by law.
The laws of trade. when founded upt
is the principles Of equity and impelled BY Il
, strong arm Of self-detense have proved, q
. fhpv ever ill nrnva TIM atP0nU fny ta0is |