Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1869-10-30
CONVENTIONAL INTEREST.
Reasons why Money should be Lett
TO Regulate its Own Rate of In-

tereSt.
To the Editors of the Union and American:
Whatever arguments may have been
heretofore used against the passage of con-
yentional interest law, we hold that the
results of the late war have SO completely
revolutionized our financial system as to
demand the immediate enactment of such
law in each of the Southern States, and
particularly Tennessee. In 1860 the banking
capital of this State was not less than
thirteen to fifteen millions of dollars. Our
banks then were banks of issue, having the
right, either under the Law or by common
consent of the people, to issue three dollars
of paper money for every dollar of coin in
their vaults This gave us near forty
millions of currency to remove the pro-
ducts of our soil, and carry on our
this, we had from three to five
millions of metallic circulation Then it
required but forty to fifty dollars to move
a bale of cotton, seventy-ive to one hun
| bred dollars to move a hogshead of tobacco,
and four to five dollars to move barrel Of
| -four. Our bacon required but one-half to
move it that it does now. How stands the
| case with us in 1863? The banking CAPT
tai of the entire State is less than three
| millions of dollars, while the circulation Of
our banks does not exceed one million eight
hundred thousand dollars, many of the banks
having no circulation, and none more than
| 80 per cent of their capital. The metallic
circulation has entirely disappeared In
| the face of this immense reduction in our
currency, we find the trade of the State
largely increased and the values of pro-
| ducts enhanced to such an extent as to re-
| uuire fully double the money to move them
| that it formerly did Having no banks of
issue, and being deprived by the National
Bank law, of the power to confer the priv
lege to banking corporations we formerly
| did, to manufacture currency for us, it now
| behooves US to resort to the most practical
means we can adopt to supply the defci-
ency. This we think can best be accom-
| plished by the adoption of a conven-
tional rate Of interest, and thereby
allow the price of money to regu-
late itself Under the present law Of
six per cent. We are driving what little cur
rency we have into bonds and such other
securities as viii pay greater rate Of IN
terest than our laws allow, thereby Grip
ping our industrial pursuits and entailing
losses of millions upon our people. For
| example, one hundred bales of cotton are
bought by a shipper in Nashville. Our
financial institutions cannot give time, for
they have no money. A sight draft for
| three-fourths of its value Is drawn, and 1t
must be sold on arrival TO meet this de-
mand, whether the market suits or not. In
nine cases ont of ten, it Is sacrificed,
whereas, if the shipper could have drawn
time bill, he could have dictated
the time of sale, taken advantage
of the market and saved to himself and
thereby to the State, the amount lost on
sight transaction. If the shipper had
been fortunate enough to borrow the
money of his correspondent the in
terest would have been paid to
the merchant, and consequently
lost to us. How can we expect, as bus1
ness men, to borrow money at SIX per
cent, when the United States is borrowing
money at a greater rate of interest than we
are allowed by law to pay, and furnishing
a non-taxable security which can be con-
verified into money any hour of the day
The shavers will all be against this law, Tor
it will deprive them of their clandestlne
| style of doing business, and lessen their
enormous rates of interest. Let our mort
gage laws be changed; let us have
a conventional rate of interest let us
rather invite than drive capital from us,
and times will soon be better here, an I'm,
petus will be given to business, vitality Will
be infused into every department OF life,
and that condition of prosperity which We
are so zealously laboring for, and which We
so much desire, will be happily realized.
NI*+&*t