The Evansville daily journal. [volume] (Evansville, Ia. [i.e. Ind.]) 1848-1862, 1859-01-14
our Interest Laws.

The following very sensible remarks upon
our usury laws are from the Boonville
(Warrick county, Democrat. We think we
see the traces of Judge Moore's pen in the
article:
1t is extremely singular, that, in this en-
lightened age of the world, we, the people of
the State of Indiana, have upon our Statute
books such laws as we have upon the sub
ject of interest. Our law, in the case of a
contract for over six per cent, prevents the
lender from recovering any interest what
ever, leaving him only his principal. In
addition to this it is made misdsmeanor
for any person to "directly or indirectly
bargain for receive or reserve, ON any con-
tract or agreement whatever, greater rate
of interest than is allowed by law, and
the penalty is fine of five times the inter-
est unlawfully bargained for, taken or re-
served. Now these laws can serve no good
purpose, and more than that, they do posi-
tive evil. The legislature has no more right
to make such laws than it has to prescribe
the price at which a farmer may rent his
land, or what he shall receive for the hire of
his horse. The principal is, in both in
stances, the same. A man accumulates his
money in the same way that he acquires
other property, and there is no better rea-
son in the legislature exercising such a pc
culiar control over property in the form of
money than ever property of other kinds.
The value of no commodity is fixed The
values of wheat, pork, corn, dry goods and
groceries change from year to year, and
their fluctuations are beyond the control of
all the legislative assemblies in the world,
and the value of MONEY is as variable if not
more so. The character of the borrower
for skill, industry, honesty, and knowledge
of business; the kind of business in which
he proposes to invest his money; his pecu-
MARY ability and numerous circumstances
are all to be taken into consideration by a
man before he lends his money, and intrusts
the care of it to other hands than his own
1t is plain that some mon cannot as easily
obtain money upon loan as others, and a
man who loaned equally readily toall would
soon cease loaning at all. Hence the folly
of law which requires that money should
be loaned at the same fixed rate of interest
whatever the circumstances the particular
case might be. Who does not see that if
the law is obeyed it would often, instead of
assisting the borrower, for whose benefit the
law is said to be made, deprive him of bor
rowing at all?
These nsary laws seem to be based upon
the principle that men who have more money
than they wish to employ in active business
will lend whether they gain anything by it
or not. This is not only an incorrect prin-
ciple, but very silly one for a legislative
assembly to act upon. If business is dull
and the profits of trade small, men with ex-
fro ha IN 1of Irx,xr
rate of interest on good security but when
business is active, and the profits of trade are
great, then capitalists, instead of loaning at
the low legal rate of interest, of loaning at
higher and incurring the penalties of the
law, will use their money themselves, and
those who are without capital are wholly
deprived of all opportunities of borrowing
at the very time that it would be most ben
eficial to them. So that instead of assisting
the borrower it oppresses him. If fixing
the rate of interest at q low amount is
protection to the borrower, why not enact
that thereafter interest upon the loan or
forbearance of money shall be at the rate of
one dollar on enc hundred dollars, instead of
six as it now is, or entirely abolish the prac-
tice Of taking interest altogether.
The effect of our usury laws is to benefit
nobody, to injure everybody, to drive out
money from our State to where its full
worth can be obtained These are facts and
SO plainly true that it is really astonishing
that they are allowed to remain upon our
statute books. We hope our legislature will
abolish them altogether this winter, and let
Indiana be the fifth State in the Union to
wholly cast aside these relics of super
stitious and ignorant age.