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

there? The legal rate of Interest is ! per CT,
and there are stringent uSury laws, which nave
been on the statute books since 1887. Gov.
Dix has had the sagacity and the bolduess to
advocate, in his first message to the Leglsla-
ture, L repeal Of these laws, ard why because
they are dead letter upon the Statut books.
Although the legal rate is per cent, a leading
New lurk financial paper, commenting upon
the message of Gov. Dix, says: For the SIX
weeks preceding January lst, the average rate
in Wall street on loans with approved coilate-
raj securities, was % per cent per annum.
The scrupulous part of the money lenders
there never accept over per cent, gold, but
their money is taken by those who defy the
penalties of the law, and by them lent at such
enormous rates as pay them for the risk taken.
With the usury law repealed, vast amount or
capital now taken at per cent by the ohy-
.ckS 10 lend again at luxurious rates, would
compete in the loan market for employment
with other funds, and the rate would be kept
down We should never see such rates as !,
/, and of l per cent per day, equivalent to
Is, 80, and 1875 per cent per aunum. lnStead
rates in times when the money market was
very active would rise by the half or one per
cent per annum, possibly, but seldom, rs high
as Is per cent per annum.
Lie StIlC VI VI dSSdClluSCllCS lOt q kOus tlllS
had rigid usury laws. Six years ago, however,
impressed with the teachings Of every political
ECONOMIST that has written, and yielding
to the demand OF the agricultural no less than
the commercial classes an act was passed by
that Stale fixing the rate of interest at six per
cent, except in cases where it was otherwise
agreed upon, thus leaving every one at liberty
to make their own bargains, aud not man in
the State would now go back to the old law.
| Rhode Island has dUue the same, so has Con
nccticut, and other New England States are
preparing To follow their example. And why =?
Because they have observed how beneficial to
all interests the change has been. Interest IS
| not hlg her than it was; 1t Is lower; the money
market is not SO Liable to strlngcncles small
| lenders and small borrowers meet on easier
tarluS, and all things bear the stamp OF i'm
| prOyelrcnt So in Canada before the usury
law was repealed, the farmers throughout the
| Dominion opposed its repeal. as those in this
State now do, they fearing exorbitant charges
| II legal RESTRICTIONS were removed. These Caua-
da farmers We're actually paying prior to the
| abolition Of the law an average ct - per cent
per aunum, ard since the relcal OF the usury
law i'll Cauala, the average rate there Oh good
mortgages has rarely exceeded per cent.
| And what will be the effect il this till is
passed in our own State? Take my city for
I'examp pie; our Two banks in Alexandria, which
are DOW dlscouutng Tor their customers III
town and country tao, Ut the tate Of /! and 9
per cent, openly and squarcly, will have to re-
sort To SlnIiar devices It's in Baltimore, to get
the fair value Of their mouey. Opportunities
| are not SO tacilc with US is in the large cities,
such rs Baltimore. and our banks may have TO
resort 10 tina. crIy, and transfer their capital,
| IN t.,rr th,,u,rh fam, tn pn,t,. f,tr
turn TO their stock holders III dividends. Our
country friends may then ask IN vain ut the
| banks for discounts, Tor tInugh they may bc
willing to pay per cent, the law iurJids
the banks to take such rate, and they
my prefer getting 10 to II per cent III
Baltimore 10 Eulnng il out hcic sui j2ct 10 the
legal penalties. The banks in the interior, as
We know here, never dlscjun! ut L less rate than
. PER cent, some may take more; # restricted
to u per Ccut. their customers will hopccssly
ask Tor discount ut That rate, to make purchase
III cattle, whya! or other agricultural products.
Who in that case will be the sufferers? I'm
uucstionaby the farming interest, for if money
be scarce or dear. the value OF their products
must be deprecated.
There is probably not one member Of the
Legislature, certainly not one lawyer WHO does
moi know, that in "Yood old times, 50 called,
and even now that 1t is perfectly legitimate To
buy bonds, notes, or Other personal obligations
at not only 10 or II per cent. discount, but at
amy other rate which the couScirncc Of the
lender may permit him tn take, or the ncctSsi-
ties oil the owner Of the l,ond, may cooy"i him
to accept.
No bank in this Commonwealth can do bust
ucss ut the rate Of one per cent TOR 6O days; the
taxes imposed upon capital i'll banks are heavy,
third Of the profits, when the taxes ui the
United Statues, State and municipal are added
together
| know there exists in this body prejudice
against banks. | have heard it said, that these
corporations were Specializing upon the mis-
fortunes OF a people, filing there Own pockets
by extracting the last penney out OF their i'm
povcrished ucighbors. think the prejudice a
Very un ust aud groundle one. | do not be-
lieve that the banks Of this State have mani
tested any greedy spirit in the loaning Of
money although our constitution warranted
the banks III charging II per cent, few, if any
Of them have done so. On the contrary the
prevailing rate has been from seven and half
- ten per ccut.
1t VIII not necessarily follow that because
there would be no usury laws here that the
banks would make more money which 50 many
gentlemen seem to dread, than il the rate be
fixed at six per cent, for it will be found, if
reference Is made to the report of the National
banks throughout the country, that the
earnings of the National banks, IN Massachu-
sets, where there exists no usury laws. have
been less than the earnings Of National banks in
some Of the Southern and Middle States where
the rate is fixed at per cent; thus plainly
showing that if Il bauk is disposed to do so it
can readily cvadc the law, usury prohibitions
to the contrary, Notwithstanding, aud if the
object Of this BILL as avowed b. some, is to
lessen the earnings of National banks, it will
prove imperative should the banks take the
trouble to cva.lc it. But the great danger is,
that the banks, will not bother themselves to
get around our law, but will send their capital
to other States, where it can be more prJlitubIy
invested, without fear Of legal penalties.
l. cln but regard the enactment Of this
uSuly law, then as great hardshlpt0 both the
business man proper, and to the borrower
OF money for personal purposes, and a. an