The Evansville daily journal. [volume] (Evansville, Ia. [i.e. Ind.]) 1848-1862, 1861-02-21
rhe Interest Question.


The subject of interest on money and in
debtedness was discussed in the House OF
Representatives on Tuesday forenoon. Sew
eral speeches were made, both for the pres
ent six per cent. law and for a proposition
to allow unlimited interest TO be charged.
Mr.. Branham, the able chairman of the
committee on ways and means, came for
ward with compromise proposition en-
bracing the provisions of the Pennsylvania
law, viz: doing away with all penalties
for ussry, allowing any per cent. over six to
be charged, but refusing the aid of the
courts in collecting more than six per
centum.
This sort of a law will probably prevail,
and it is the correct theory. In practice,
money ordinarily commands more than six
per cent, and in fact ten per cent. at least
is usually charged on loans and discounts.
The penalties for usury are very rarely en-
forced, and therefore are mockery. The
present law is habitually violated, and is
direct incentive to the violation of law
Money is in constant demand at rates of in
terest not less than ten per cent. At such
rates foreign capital will flow into the State;
at six per cent. it will not, but go elsewhere
to find more profitable investment
On the other hand, if the average in
crease of wealth in the whole country is
taken into consideration, it will be found
on the best authorities to range from three
to four per centum per annum. The legiti-
mate, ordinary, staple (if we may use the
term) occupations of life do not yield over
six per cent. average profits, one year with
another, if 80 much. No man can afford to
hRbitually borrow money, in any considera-
BILE quantity, to aid him in carrying on his
business, at higher rate of interest than
six per centum per annum.
Let us suppose a case: A skillful me-
chanic-a house builder for instances Of
fered large contract on favorable terms
but is without capital to buy materials, pay
hands, &c, to make commencement, and
can draw no money from his employer till
he has completed his job. He goes to a man
who has money and lays his case before
him. The capitalist lets him have the ne
cessary means, and the builder proceeds
with his contract. In year he finishes it
to his employers satisfaction, and gets his
pay After all the expenses are footed up,
Including in the list the contractors wages
at say ordinary journeymans rates, he
finds be has made clear profit of twelve per
cent. on the amount borrowed Ought this
aTk - - h. ~
of interest or ought it not TO be divided
between the man who furnished the capital
and the one who undertook the contract
assumed the responsibility, and lent thereto
the experience of years of hard labor p
Clearly and undeniably it ought to be divid-
ed Each party would thereby receive six
per centum profit.
Here is fair average case of Legitimate
enterprise and use, of spare capital, and each
party would receive profit proportional
to the service rendered
These considerations show that six pei
centum is all that money is worth in ordi-
nary transactions, in a country as long settled
as this. Hence the law ought not to lend
its aid il. the collection Of more than six
per centum per annum as interest.
There are cases where people will pay
ten, fifteen, twenty, even twenty-five per
cent, per annum, rather than suffer worse
sacrifices, or to make large specnations but
such instances are extraordinary. Still
any law forbidding such charges is not
worth the paper it is written on. Hence
the useIessness of usury laws.
The middle ground proposed by Mr. Bran
ham meets all the difficulties of the case as
near as human wisdom can meet them.