The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1873-03-08
The Interest Bill.

When the General Assembly shall have
succeeded in framing law which will keep
interest down to six per cent. per annum ii
can at once proceed to enact one which will,
by dammiuS them, put an end to all the
streams of water in the State. For it were
Just us feasible aud just us easy to do the lat
ter Us TO do the former. Men who observe
the laws Of Nature hold that q dam across /,
stream, however high, only causes the water
to rise SO much the higher and to overflow
the dam in spite of all human contrivanccs to
prevent that result. Men who observe the
laws Of trade hold that a uSury law, however
stringent, only causes interest to rise so much
the higher and to overflow the law in spite of
all human contrivanccS to prevent this
result.
The Financial Chronicle has questioned
the President Of the Boston Board of Trade
concerning the effect of the repeal of the
usury laws In Massachusetts, in which State
they have been long enough wiped off the
statute books for the effect to be apparent.
The following are his replies:
81. Was your law of March 6, 1867, as
popular among borrowers rs among
lenders?
"Reply: Probably it was not popular
with borrowers on mortgage who obtained
money at per cent. and with many igno-
rant persons who supposed it possible to
make money cheap by legislation; but l
think the great body of intelligent mer-
chants, and those borrowers especially who
were shut out from six per cent. loans,
heartily approve Of it.
"2. Has that law worked any hardship or
oppression to the borrowing class
Reply: am not aware that ii has done
so. On the contrary, think it has essen-
TALLY benefited large class OF borrowers by
enabling them to compete with the favored
class, who formerly monopolized the six per
cent. loans at the banks and elsewhere, as
we'll as by increasing the amount of available
capital in the market.
80. Did the rates of interest show any
general disposition to rise Immediately after
the passage Of the law?
"Reply: do not think they did, and for
long time after the passage Of the law l
think its effect was hardly to be noticed. But
its ultimate effect has been to substitute |
seven per cent. for six in mortgages and
bank loans.
a, Ii SO, have the free movements of sup
ply and demand counteracted that temporary
rise and developed subsequent decline!
"Reply: With the exception of the above
named advance from six to seven per cent,
which think was gradual, there has been,
in my opinion, neither advance nor reaction,
but a constant tendency in the direction of
ease and steadineSs.
"5. Are your present rates, on the ave-
rage, higher or lower than before the anti-re-
striction legislation Of 1867?
Reply: 1t is my impression that rates
now vary less than formerly that changes
are more gradual and less extreme in their
character; and that rates are on the average
rather lower than higher, allowing, however,
for exceptional circumstances.
"6. Is there rs much tendency to spas
modie changes in the rate Of interest rs for.
merlyf ~
Reply: think spasmodic changes Of the
rate or interest have been absolutely un-
known since the passage of the law.
I. What has been the general operation
of the new law rs affecting the facilities Of
mercantile business and the rates OF discount
during the years 1s6S-lS73?
Reply: The effect of the law appears TO
me to have been in every way satisfactory
NO much so that the advocates of an irredecm.
able paper currency have thought it neces.
Ito ascrt6e the improvement to that par.
sieufar cause. think the full benefit of the
abolition OF usnry laws will not appear until
ouY currency Is restored to, sound basis.
But even with our present experience, !
believe it would be utterly Impossible ever
to restore the usury laws In Massachusetts.