Staunton spectator. [volume] (Staunton, Va.) 1849-1896, 1867-01-22
From the Richmond Wing.
Notes on Virginia Usury Laws.
NO /,

The singularly long and universal prevalence
OF usury laws-restralnts upon exactlng interest
among so many different nations in so many
different ages is a most striking fact OF political
economy 1t proves that the occasion therefor
arises from no local or temporary circumstances,
but must exist in the very constitution OF things,
In the peculiar characteristics OF money. In It's
exciting stimulus on the avarice OF man, and his
innate proneness in its pursuit to prey upon
the necessities of his fellow-man.
The characteristic conservatism OF Virginia
well hestitates at repudiating rashly such long
concurring experience of mankind; regarding
the wise warning of Lord Bacon mot to try
experiments in State until the necessity be
shown, and the utility be evident. In the
present critical condition and sore distress OF
Virginia. an experiment which would prove
to be blunder would be a cruel crime.
The sudden close of the war, at once bereft
have any people so long used to money been as
suddenly left so utterly destitute of it. None
of her citizens are now capitalists, but all are
borrowers, more or less so her legislation as to
money" must be cautiously regardant of this
painful fact. The entire acquiesence in the
stay-law shows that her people are generally and
helplessly in debt The recent further stay OF
interest after a gears notice to prepare for ats
payment, proues that this Legislature believes
| NeT cULZcuS CNftHOC pay eCeH CH6 tOW lnteFcSf
| of sac per cent on their indebtedness.
| Then, to repeal the usury laws, with a view
| to increase the rate of interest above six per
| cent, would crush out the last hope of the al
| ready despairing debtor class of Virginia Az
| ariclous creditors, encouraged and sanctioned by
such legislation, would Individually demand of
debtors to pay up the whole debt FORTS re invest
ment at the Increased value of money! or at
the least, to renew their contract for just SO
much higher interest as the distress of debtors
Will force them toagree upon money, forsooth,
being, it is said, like other property, worth
such interest as man, su j,vis, will consent ~
to give. All over our suffering land the thumb
screws would creak remorselessly when thus
oiled by enlightened legislation. The debtors
OF Virginia, now solemnly decided to be unable
to pay their debts, Or even six per cent. there
on, must to meet the higher rate invoked,
| mortgage land and home and muscle itself for
the remainder OF life.
The stay law, then, would interpose against
rapacity but a cob-web barrier. At most, it is
necessarily only temporary protection, the
Constitution unquestlonably denying it any
thing like permanency. But the lure of I'M
limited rates of interest would secure such
combinations and pressure of capital against the
stay law that 1t must inevitably be swept away
In Virginia, as it has been wherever tested in
other States. 1t is said, with too much of
reason, that money can drive six horse coach
| through any law. -
Nor IS it a certain consequence of the repeal
OF the usury law that foreign capital will flow
into Virginia in her present situation. That
capital is now In the commercial cities of the
East, making its profit in being frequently turn
ed over; and in the Western States, reaping
high interest for its use in specializing in rich
lands and In town lots of rapidly growing cities.
In Virginia, loans cannot be repaid ION call, !"
to be turned over And her policy of stay
laws, and especially her uncertain and helpless
political situation, will efectually prevent the
influx Of capital
The economical situation in Virginia is not
such by nature, even in ''easy times, still less
now, as to justify borrowing at high interest
Experience demonstrates that the agriculturist
never could, In Virginia, operate proftably on
capital borrowed as low as at six per cent. in
terest. Still less can he hope to do SO in the
present paralysis OF labor, and universal loss OF
stock, fencing and farming implements The
Virginia manufacturer and mechanic who Dor
rowed his capital at six per cent. in good times,
failed in the contest with his Northern COM
petltOr The many attempts in the past to
develope and manufacture the rich ores of Vir-
ginia, when the capital cost but six per cent
and labor was abundant, have been long Illus
trated by the melancholy ruins of furnaces and
foundrles as ghastly mementoes. Even the
merchant OF Virginia, who has to borrow his
capital at high interest and superadd his profit
must soon find that his customers cannot pay
his prices; while the ready access in Virginia
to Northern merchants, who pay no such inter-
est on their capital, will soon overcome him by
competition. The only business q which
can nope to flourish will be that of such curb
stone brokers" as succeed in forming partner
ships with Northern capitalists to batten upon
the hard necessities OF our citizens, and per-
chance some lucky spectators; but brokerage
or speculation is not the standard business"
of Virginia.
If business in Virginia could really afford to
pay high interest for it's borrowed capital, the
shrewd capitalists would soon discover the fact,
and bring their capital, to realize for themselves
both the high interest and the extra profit. The
low rate OF interest prevailing has no logical
effect whatever to prevent capital from invest
ing directly in Virginia natural resources. But
if foreign capital comes, it will not be on person
al or collateral security, because such cannot
now be given in Virginia. It can be only on
mortgage of Virginia lands. The South being
moneyless, the owner Of that capital resides In
the North, and the capital returns there, bear
ing back its Accommodations of interest at high
rates; and the almost inevitable result will be
to transfer the mortgaged lands from the Vir-
ginlan to Northern owner. Eventually our
old Virginia homes under such policy, will
pass hopelessiy away, into the hands Of North
ern money-shavers FIRGINIUS.