Litchfield enquirer., 1869-07-01
THE UsURY LAWS-MR. PRATTS
 SPEECH. +'eF'' v

I
 laws, delivered in the House of Represen-
 tatives, Thursday. is from the report of
 the Hartford Iimes:d aso zs ga. < MT. Pratt, of Norwich, read from an old l colonial law, which he had obtained from Hoadley, the State librarian, which fixed the rates of days labor, the highest rate being god a day for moving and the law also fixed the rate of profit which Q man
 might make on sale of groceries or any l goods-eyen specifying that they should
 be bought. by the dealer, for cash in Bos-
 ton. and that he should not make more
 than two cents pound on any article.-
 These absurd restrictions were of course ;! evaded, and one by one they dropped of
 the statute book. The only one left is this
 preposterous law to regulate the market
 price of money. It cannot be done. It
 never has been done. It is evaded even
 by the banks. and by your good moral church members here in this city--they pay the regular per cent on 8 note, and also the additional price of exchange on New York or by some other hocus-pocus the additional rate is obtained. It is said,
 on the other side of this question, that to fix the rate at z per cent. would raise the rates of interest say it would tend to
 lower the rate. I believe the experience
 of Connecticut will not be different from
 that of other States, or other countries. In
 the time of Henry VIII. the legal rate in England was l4 per cent. It was gradually
 reduced, during the next two centuries. to five per cent. In 1789 liberty was given
 the bank of England, the great bank of
 discount, to take wh at rate it saw fit. At
 once the benefit was seen in the great de- crease in the nnmber of failnres, and great
 CT security in business circles. The bank
 could discount all the paper offering and
 excessive offerings were prevented by raising
 or lowering the rate at pleasure. It has so continued--and the effect is universally
 beneficial It has reduced the rate on
 mortgages to three and ono half and four
 per cent. Capital was so plenty in 1863 and 1864 that it was impossible to employ
 1t at six per cent there were abundant
 offers to loan money on bond and mort
 gages. at five per cent, and the mortga-
 gees would pay the taxes. The rate subss. quently advanced to and 81f it was not
 affected by the statute laW, (which forbids
 these rates) but these changes were
 wrought by the universal law of demand and supply. Mir. P. went on to show that the law is standing reproach to the legis-
 tation of the State. He referred to the
 speech yesterday by. Mr. Clapp. of Wind |gsor. and referred to him as representing Q large class, who seemed to suppose that the lenders are all z Shylocks," i" with knife in hand ready to cut of the pound of l flesh Now, who is the largest borrower {?
 It is the United States government l- the greatest power of us all--the power whose hand is over all of us- ha is the greatest violator of these 7 usury laws. Who is the next greatest
 borrower? The State of Connecticutl The State paid all through the rebellion, eight
 to ten per cent! Who are the next greatest borrowers? They are your great railroad
 corporations. They are the next greatest
 borrowers-and if there is in Connecticut
 a 'power behind the throne," it is the rail. roads. Such are the borrowers. And who are your lenders? your heartless ''Shy- locks?' They are your well-to-do-f farmers,
 mechanics and operatives who have money
 in the bank. Have they not right to get all they can? MT. F. referred to 8 case in l the county where he comes from, where, l for six months loan of twenty five dollars 6
 man got five dollars bonus. Was he Shy lock? If the gentleman from Windsor were to seek to borrow money at per cent, he would search till he was grey unless we repeal this absurd law on usury, and in that event capital would flow in and l be plentier in the State. But the class I have named are your "Shylocks "--the re- nlorseless class whose inhumanity has been painted in such vivid colors before this ! House. Twill here say that oppose any l fixed legal rate of interest, and hence I op-
 pose the bill of the gentleman from Suf- l field, which fixes the rate at seven per cent 1 and the taxes--and the courts would prob.
 ably decide suits on that basis. We want
 no fixed rate of interest. believe that I the general rate in this State is less than
 seven per cent. There is a natural rate of
 interest. It is regulated by ssthe law of
 supply and demand-just as the price of
 coal and flour is regulated. This natural 1 law is illustrated every day in the tele. graphic financial reports of our Hartford
 newspapers-the reports from Wall Street
 Mir. F. said he spoke partly on account of
 the chairman of the finance committee
 (Mr. Walkley) who is absent an account of l 1ndisposition; and he proceeded to vindi-
 cate the character of the witnesses who tes-
 tified before the committee. If you knew
 the truth about the business of your hnan. cial companies, you would be astonished. Hartford recieves, as financial centre, tweu- | ty millions annually, by these large insti. tutions; and of this twenty millions, fully fifteen millions is not used here, but 1t goes abroad for investment. It is not used to develop our interests, but is loaned up on good security, in neighboring States. On our right is New York; on the north is Massachusetts, and on our left is Rhode Island-neither of them having any re- strictions upon money. Our insurance companies would prefer to loan their mon- ey here at home; but they cannot do it as things are. You have chartered railroads and all along the route of the valley road and the Connections Western there is va. ter power waiting for the touch of capital to develop it. You let these railroad com
 panies issue bonds at per cent, and put them in the market: because you wish to develop the interests of the State. g You
 have done this, but you must take q fur ther step. Our State is rich in every nat
 ural advantage. Oar valleys are fill of water power, waiting but the touch of cap- ital to convert all these valleys into teena- ing hives of industry and sourcesof wealth. Will you let. this capital come? or will yon
 by blind and selfish policy, continue to drive it away? Mir. F. concluded as fol. lows: l have advocated the abolition of this usury law in previous sessions of the legislature. The argument was unsuccess- ful then. p It may be unsuccessful now. It will notsbe unsuccessful forever. This re- a1. ~.G