The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1873-12-01
Interest for Money.

Interest for Money.
committee Of the New York Chamber
oe Commerce has lust made report 10 'h"'
hodv recommending that the banks OF NC"
York shall be authorized to aool'
form, rate Of discount Vi. C., a UNIFORM i"''
\, ,,o-ss, for the loan Of money. we 'piei
,b,t this proposition is intended TO so'''.e III
rou. York a power resembling that OF the
Rank of England to raise and lower tue '"',
ri discount according 10 the condition u '"'
money market .,oro
Il we are correct. W. HAY 81, t"'' '",'
,,n eor;o,,s difficulties in the WAY OF 'his
m,rnos.. First. The people Oh 'he o"'o''
would be preiudccd against accofui's "
~. Work or the New York banks Inns
,,vor: and. second, the multiplicity On
Ranks IN New York could not give to their
action the dignity and force that Is lmpar'eo
hy the Bank of England. Wcdoubt "hether
il would be possible to give to the dlct'm OF
the New York banks the moral force tha' Is
Unmarried 20 decision of the Bank OF Eng
land. The recent panic has cXpo=eu '"e
weakness of several of them, ana, iui'nci
more. has developed uncommon ioose"'>> IL
tho management of business. resulting III
heavy de(alcations in several Instances ~
j. not possible for community o' o""N'
tainted in this manner to command tllal IT,
.nect in the nation which is necessary III
awarding the proposed power OF regulating
the interest on loans.
Tbctrue policy fort regulating OF inter-
ct upon loans is for Congress I" lay GOWN
in the law what shall be the charge by the
national banks for the use OF money. That
will at once put an end to all State laws on
the subject of interest. But Congress should
provide in its law that higher rates Of inter.
est might be charged and paid where the
parties agreed upon higher rates. Fiat
would end all contest upon tn" subject.
A fixed rate is necessary in all cases where
money is in the hands CT tducalies ana
where no rate has been agreed upon. But
as money in all enlightened commerce IS put
the gains Of enterprise and Industry, II
should he as much entitled. TO what it i
worth in the market as gains held III any
other form-in land, in corn, i'll houses, OF
in turnipS Or sugar.
If Congress will 10 this, all will be right
10 our opinion no nlan can well conduct
successful business who borrows money nj
more than six per cent. But unquestlona
bly, there are periods When money, from lis
scarcity, is worth more, and when those who
hold It ought TO get more. The f1our-dealcl
gets higher price for his flour when IL l.
scarce, and so ought the moncy-lcnder oge'
better interest when money is scarce.
The merchant, however, can afford TO pay
increased interest for the use OF money al
such exceptional periods. But they ought
to be only exceptional; and it is to the in
tcrcSt of both bankers or capitalists and Dor
rowers of money that the interest upon the
usage of money should be reduced rs soon
as possible to a healthy rate; for both thrive
better under that rate than they do under
higher rates. Business is crippled - un'
reasonable interest, and that fact i followed
by the deduction that the perilS of loans are
increased-so that the higher rate of interest
does not in the long run pay>o well as a rea-
sonabe rate and the solvency ii cherishes.
But we do hope Congress will put an end
to the varying rates of interest among the
States, and the disturbances they occasion in
the national commerce, by fixing i uniform
rate in the way we describe. 1t will do 4
world OF good. AT present the rates vary
from six to ten per cent. The bare statement
Of the fact is sufficient. IL is mcnstrous that
in confederacy whose Interstate commerce
is SO active this contrast should exist.