The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1866-11-21
Our Financial Condition.

Oar Financial Condition.
MEssRs. EDITORS: Our banks are
broken, our credit shaken, and our
means crippled. Capital is indis.
pensable to our resurrection, and it is
needed sooner and in larger sums
than the profits Of labor and of trade
will afford it. 1t is not here, and tho
difficulty of obtaining it elsewhere i
believed, by many. to be increased
by the stay law and the usury laws.
To the latter I will confne nv pre-
sent communication.
No satisfactory answer can be made
to the theoretical arguments of the
economists, who say that the plice of
money, like that of other commodi-
ties, will, in unrestricted freedom of
bargaining, be regulated by demand
and supply. Yet, no trial, hitherto
made, has proved that it would be
wise to enforce, by law, all the pro-
misses which unconscionablo usurers
might wiring from the hopeful and
needy.
Money differs somewhat from most
other commodities; it is kept without
expense or loss; the supply of it is
least when the demand for it is great
est; the need of it often comes sud
denly, and admits of no delay; in tile
absence Of public institutions, those
who have it are generally unknown.
In the delusions of hope, pressed by
want, the borrower has recourse to
the nearest sharing g-shop, and submits
to the terms imposed upon him.
In regular business, great gains can
pay high interest. In improvements.
large expenditures of money-princi-
paland Interestingly be compensated
by consequent increase Of price or OF
advantages. But it must be borne in
mind that regular dealers and the
makers Of permanent improvements
are not the only borrowers There
are the struggling debtors, un willing
to relax their grasp of their posses
sions. There are the victims Of mis-
fortune, promising to themselves
speedy restoration Of their prosperity.
And there are the eager spectators.
who think that they see the prospect
Of enormous profits, and are anxious
to clutch them, with money at any
prlce-wlth cost to those with whom
they deal, and, possibly, with discre-
dit to themselves and demorqlization
to the community. The premium
must be proportionate to the risk.
But where the security is ample, it
should not be charged with losses
which have been endured in other
cases. The law, whilst it removes all
obstacles in the way of worthy enter
prise, should not forget what may
befall the feeble and unwary.
Our present usury laws, restraining
only the conscientious few, help to
swell the increase of those whose
money breeds at the rate of five per
cent. month. But however it may
be In populous Holland, or in Eng
land, where the bank controls the
rate Of interest, one result Of a repeal
of usury laws is likely to be, in our
State, such as it has been in other
States-interest will never sink be-
low the highest point which the law
fixes in the absence of contract.
Fully persuaded, then, that the inter
ference of the Legislature with the
subject is demanded by tho present
condition Of the State, but desirous
to avert some OF the evils which I
think wonld come from sweeping
repeal, l respectfully submit for the
consideration of those who will pass
upon this important matter, the fol-
lowing lorojet for an Act:
Sec. L. Upon the loan of money or
other commodity, for term not ex
ceeding one year, interest may be re-
served or be made payable at the rate
fixed by the contract of the parties:
Prociaed, That if the ali of the law
should be required to enforce the
contract, and the rate fixed should be
above twenty per centum per annum,
calculation of interest shall be made
in the courts at twenty per centum
for the term Of the loan.
(One gear, because bus: ess men
rarely require q longer tell The
borrower, who has promised more
than he can make, should be called
to his senses before his ruin is com
plete. 1'ce1alyper cent, because only
a manufacturer, who has the aid of