Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1873-02-17
The Interest Question.

in the House of Delegates, in opposition TO the
bill fixing the rate of interest at per cent, and
in advocacy of Mr. Daniels amendment, max
ing discrimination 10 favor of commercial
paper. MIR. Neale said:
Mr. Speaker-I should not trcspa>S upon the
valuable time of this House, were l not cOn-
vipced, that the subject under consideration.
has not been exceeded In Importance by any
that has engaged our attention since we first
assembled. For great mauy years Legislative
bodies have discussed this very question, nanle-
| ": Whether it is wise to enact stringent
usury laws or not In former days, it was gen
erally believed, that the interest upon money
| should be fixed by law, and that If the legal
rate were exceeded, there should bc u forfeiture
upon the part OF the lender; but as countries
have gained business acumen, experience mas
produced wisdom, and ii has been demousIrat-
ed that money, like any other commodity, should
not be bampered by fixed rate, but should be
the subject of agreement between the borrower
and the lender; and We accordingly hind that
usury laws of late years, have, to very great
extent, fallen into dlsrcpute.
The Convention which met here in 1861, re-
clgnIzlng III partial degree, TINS 'act' oecarco
that contracts could be made between parties,
|
per cent. might be taken. 1t is now proposed
by the Committee on Courts of Justice to sub
stitute for that portion of the Constitution Il
provision which declares that the legal rate OF
interest shall be per cent, and If rhc euder
takes more, that there shall be u forfeiture
UPON his part Of the interest cannot, for one,
MIR, Speaker, vote for this bill, as au rigua
proposition, although | may be forced to DO So
~ choice between evils The main feature
in the Constitution of 1867, which rccommend-
ed itself to my mind, was this provision, which
allowed interest to be received at as high rate
as twelve per cent Before the Constitution
went into effect, there was in this State bat
limited amount Of capital; not sufficient sup
Div to meet the demand, aud all branches ut
business were consequently cramped. Money
could be had, but at such rates, that meu, who
were doing business with moderate profit
could not afford to borrow. Money when Dor
rowed, was at from ~ 70 "a per ct. per annum.
The Constitution was adopted, AMI men OF
capital at the North who had confidence Ill the
people of Virginia, sent their money here 10
be loaned out. The consequence has been that
we have had an abundance OF money III Virginia
for the past two years, and good paper has been
discounted ut rates running from u to III per
ct. All branches Of industry have been benc-
|
turer has been enabled to enlarge his produc
tive capacity, to give longer credit to his Gus
toners, and thus compete with manufacturers
in Northern States; the farmer has been en-
abled to receive larger advanccmcnts upon his
copsignments, and the merchant has, by lii
creased bank accommodation, been enabled to
make these advances. There has been, there
fore, a general prosperity in business circles ul
late, and We were slowly, but surely, building
IN the waste places which war had made, Still
the people of Virginia-hc agricultural por-
ton of it-suem not to have realized that there
has been change in the aspect Of affairs since
the breaking out of the war. Accustomed t.
pay only 6 per Ct for money before the war; i'll
doctriuated with the idea that to charge more
was usury, and productive of the most banclul
results they have been clamorlng Tor rc.urn
to the old law, and this bill will carry out their
wishes am reminded by the uupopularity of
the - per ct clause 10 the Constitution OF Il
portion OF Roman History, by which we, As Il
! legislative body, should take warning. As the
people Of Rome increased in power, the magis-
| trates sought to insnuate themselves in their
favor, by enactiug such laws as were most
agreeable to them They retrcnched capital
they first lowered and at length prohibited in.
terest; in fine, the abolition Of debts was con
tended for whenever tribune was disposed to
render himself popular. The continual changes
nutural;scd usury at Rome, for the creditor
seeing the people their debtor, their legislator,
and their Judge had no longer any confidence
in their agreements; the people, like debtor
who has lost his credit, could only tempt them
to lend by paying an eror'itant interest," Tins
was the reason that all honest means OF Dor
rowing and lending we're abolished at Rome,
and that the most monstrous usury established
itself in that city, Notwithstanding the strict
prohibition and severity Of law. The evil Was
consequence of the severity of the laws against
usury Laws excessively good arc the source
of excessive evil, says distinguished author,
and agree with him. The borrower found
himself under necessity OF paying, not only for
the interest Of the money, but tor the danger
the creditor underwent OF suffering the penalty
of the law This, sir, [ am persuaded will be
the effect of the passage of the present bill, and
the enactment Of these usury laws.
This bill will drive from the State large
portion of the capital from the North that is
now here Capitalists will take their moncy,and
20 into other States, where there are no usury
laws and invest it, receiving larger profit
than they could here, or they will put it in rail
road or government bonds, which will pay them
from to 10 per cent per annum punctuajly.
The capital controlled by parties in this State is
not sufficient to supply the demand, and if We
drive off foreign capital, business will proper
tiouatcly languish, Other countries and States
have tried this experiment. I'D by them we
should be warned. Commencing with the
ancicnts we find the laws Of Mahomet pro-
hibited loans at interest, and " hat was
the the consequence iu the Mussulman do
minions2 Money was lent at interest, but
the lender must be unidentified for the use
of this capital, and moreover for the risk incur
red in the evasion of the law, and usury
prevailed to an alarming extent. 1t was the
same 10 Christian countries SO long as loans at
interest were regulated by law. The necessity
of borrowing enforced the liberation of the
practice of lending upon few, and such was
the humiliation, oppression and cxtortion, to
which, on one pretcxt or another, they were
| exposed on this score. that nothing but very
heavy rate of interest could indemnity them
for their repeated losses and notifications.
Coming down to our own times the usury
l II a