Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1871-11-17

Wee0py below a sensible article from
the Fayetteville Observer on the ten per
cent. interest law. 1t ought not to be re-
pealed by the present Legislature. A gen.
tleman of this city informs us that he has
personal knowledge of several hundreds Of
thousands Of dollars that have been brought
into Nashville alone, from Ohio and else
where, during the last year, becauseit could
be used at ten per cent, and it has greatly
benefited some Of the material interests of
our State. Do not repeal it now; it has
not yet been in operation two years and has
not had fair trial; wait until 1t proves a
failure. The continual changing of such
laws operates very iniuriously, prevents
immigration, and gives an idea of insta-
bility to our State that is very damaging to
us abroad. The Observer says:
"The Legislature, as we mentioned last
week, shows disposition to regale the peo-
pie of Tennessee with the regular biennial
agitation of the interest question, but not
in the direction that will commend it TO
the approval of thinking men. The bill
that has been introduced restricts legal in
terest to six per cent, and, of course,
makes all transactions over that figure usu-
rious. Reasoning men have come to know
that the rate of interest is nothing more
than the nett profit upon capital, and that
money is as much distinctive article of
merchandise, trade and bargain, and of
sale and exchange, as dry goods and
groceries. Nevertheless, some of our
legislators continue to act as
if they still believed in the alb
surdities of Aristotle, who argued that as
money did not produce money, no return
could be equitably claimed by the lender.
When the rate fixed by law is less than the
market or customary rates, you drive the
money from your midst, and force an in
vestment in government bonds, or lenders
and borrowers are obliged to resort to cir
cuitous devices to evade the law, and as
these are always attended with more or
less trouble and risk the rate of interest is
proportionately enhanced. But apart from
the rights or the absurdities in the matter
logically and commercially considered
there is weightier argument to the law
giver; one preached from the bench, at the
bar, and from the jury-box. 1t is that
whenever a law is nullified by practical and
and universal consent, it is useless, and
should be repealed. Now, there never was
any regard paid to the usury laws in Ten
nessee. II was unlawful, under the old Or
der Of things, to take more than six per
cent. for loan, or for any transaction
wherein one man advanced capital under
the promise of receiving back his advance
with an addition of more than the six per
centage. Unlawful! Ask the clerks of the
Circuit Courts how many persons were ever
mulcted in damages under the law. Now
and then, but very rarely, some man would
forfeit his word and sink his character by
pleading usury; but he was always after
ward looked upon with distrust by the COM
munity, his course was condemned, and
public opinion scOwled upon him. Yet the
judges charged against it in every county in
the State; and no doubt many of them, soon
after, were themselves guilty of the same
offense. The foremen of the various grand
juries heard it and rubbed their hands COM
placently, while they thought of their last
discount at ten per cent. All franks, all con-
ditions, and all occupations in society COM
mitted the ofense from day to day. Why?
is the temptation to profit so great, or the
community so rotten in principle? Not at
all. Business men found, by the light OF
their own common sense, that money is a
mere chattel-a matter of merchandise-to
be bought, sold, exchanged, and transported
according to demand, and with afuctuating
price. What does the statement weekly
made, "the money market is easy" or ''it
is tight" mean? Simply that money is SO
much in demand, or the supply so limited
that people ask and pay more than legal
interest on a loan, or that they ask or pay
just legal rate, or trifie over. If the rate
of interest in Tennessee is reduced, as pro-
posed in the Legislature, to six per cent. the
law will be disregarded, or money will flow
from us to seek investments in States where
the rule is more liberal and inviting" I