Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1871-11-01


check overtradings and correct disordered
exchanges. 1t is, therefore, insisted that
the sacrifice of the natural right Of the
great body of the community to make
their own contracts, is met by no compen-
sating advantage TO the few who may 50
much more readily exhaust their resources
by other means, even if the laws could &C
complish the results intended; but they do
not.
UsURY LAWS RAISE THE RATE ON INTER
4 EST.
Usury laws are intended to keep down
the rate of interest, but they keep it up.
They heap Goals Of fire, so to speak, on the
head of the needy borrower. How is this
done? All the capital owned by those who
think they are not fairly paid by the lawful
rate, who cannot or will not invest it except
on loan, and who will not violate laval
capital so owned--is transferred to States
where ten per cent, is allowed. Ii is known
fact that large sums-probably several mil
hons-have been removed from Tennessee
TO other States; on this ground the loaned
fund is thus reduced in a moment and the
competition amongstlender narroweddOwn
the borrower is at the mercy of fewer men
with less capital. The loaned fund which
remains, is loaned in violation of law.
When lenders get outside of her boundar-
les of law, there is no rule to guide their
consciences. No limit to their minds TO
the proper extent of their eXactiOns, they
feel lawless because they think that the law
itself is contrary to the natural rights of
themselves and those subjected TO the over
ruling necessities Oftraffic. Those of them
therefore, that are not well grounded in the
principles of morality and justice, by long
defiance of public opinion or by concealed
course of action, are in danger of becoming
pirates and smugglers in feeling and char
acter. This is one of the worst effects of
these pernicious laws. When money is
loaned in violation of law by the purchase
of a note or otherwise, the lender takes into
consideration the danger of losing the eX-
cess, the danger of prosecutions, costs,
fines, lawyer fees, loss of time, etc.
/ The sum necessary to cover these
| risks will be the insurance paid
by the borrower; the lender will
also be Unidentified in majority of instan
ees for the danger of exposure. If the
Legislature now in session were to determine
that the usury laws should be enforced as
other laws are enforced, so as to make the
cases of disobedience to this law exception
al only, and should declare that the lender
of money at a greater interest than six per
cent. should forfeit the principal, a still
greater portion of the lOanable capital would
be removed from the State. Some would
be boarded, some wasted in eXtravagant
living some invested in property or improve
ments unsuited to the interest or capacity
of the owner, and, consequently, lost to the
aggregate wealth of the community. The
rate of interest would rise, and debtors and
business men be oppressed. 1t is con-
fidently asserted that the usury laws
diminish circulating capital, paralyze
trade, and Cypress debtors. This is
| the settled result of experience, not alone
at this time here in Tennessee, but of all
ages and of all countries where commerce
has existed and the constituted authorities
have attempted to impose legal restriction
on the value of money. -
Mr.. Say, writing in France in the last
century SAYS "The severer the penalties
inflicted on a violation of usury laws, and
/ the more rigid, their exaction, the higher
/ the rate Of interest is sure to rise; for the
| greater the risk, the greater the premium of
! insurance does it require to tempt the len
! der" McCulloch writing in England, in
| 1896, saws: "The usury laws generate the
very mischief they are intended tosuppress;
1 far from diminishing usurious transactions,
! they multiply them two fold and aggravate
/ all the evils they were designed to mitigate.
The rate of interest is in-
/ variably increased as the laws intended to
! reduce it become more severe, and dimin-
/ ished as they are relaxed" If it were ne
! cessary, extracts from other standard au-
thorities might be multiplied.
! These authors speak the voice of history.
! At Athens interest for money loaned on
! landed security varied from twelve to eigh-
/ teen per cent, whilst that loaned on ships
at sea was thirty per cent. and upwards /;
this was because both principal and interest
| were endangered by pirates, who then in
/ tested the Mediterranean Sea.
| At Rome, during the times of the Repub-
lie, the rate Of interest was enormously
high. This was because the patrician
creditors We're constantly in danger of losing
the whose amount loaned, by the number
and power of their plebian debtors.
For 1900 years, from the Christian era,
interest had no defenders. (See Kelly.)
During the whole of the middle ages it was
regarded as infamous, and abandoned to the
Jews. (See Say, 299.) In France the
punishment was Punishment for the first of,
Tense, and death for the second; though
such punishments did not put a stop to
loans The Jews unidentified themselves
for the dangers they encountered by the eX-
action of sixty and eighty per cent interest.
The early English writers bear testimony
to the adherence with which it was
regarded in England from the times
Of Alfred, and the severity with
which it was punished. No terms of OPP
probrium were too great for the guilty
wretches who had dared to diSobey the eX-
press command of God, and 10 subvert the
laws of nature by making that fruitful
which was intended not to be fruitful The
offense of usury was regarded as second
only to murder, and punished with forfeiture
of goods and chattels and disinherisOn OF
the heir. The moneylending Jew, losing
perhaps an eye in England, his ears il
France. and hand severed from his arm il
some other kingdom, UNIDENTIFIED himself
for robbery, Imprisonment and mutilation
by extorting forty, sixty and one hundred
per cent from necessitous borrowers. The
Law of Moses, forbiddjhg the exaction o
interest. had been superseded by the law o
the Talmnd. --.
In 1906 Bonaparte assembled the Jew
in grand Sanhedrin at Paris. In reply L
his interrogatory ON the subject of usury
they said: "The Mosaic institute forbid
unlawful interest. The Talmud allows in
d terest to be taken from brethren anC
strangers. 1t forbids usury." But tn,
Chris ian, rupudiating the law as laid dow
in Luke and Matthew, (see Bacon A. B.
: and protesting to judge the Jews by Jewisl
= law, inflicted the most inhuman punish
ments on them in almost every country il
2 Europe. 'When," saws AIillman's History
, ''the hard earnings of the past life of a Jev
: were swept from him by violence, he REIN
: bursed himself by slow but perpetual repri
e sails, and took refuge in fraud from violenc
and injustice. lie argued not unfairly tia
1 the more precaIious, the greater ought to b
f his gains. 1t was war of ferocious an
D unchristian passions against industry, pa
{ tience and avarice.' The denunciations i
r the church in the twelfth and thirteent