National Republican. (Washington City (D.C.)) 1872-1888, 1874-10-21
FREE TRADE IN koHEE.

The question of ''usury'' is one of para
mount interest in this country, about
which there are various opinions. While
it is popular among borrowers to denounce
lenders as "Shylocks" when pay day
comes and they have not prepared them
selves to meet their engagements, it is mo-
ticeable that they are proverbially careless
as to the rates which they engage to pay
when they desire to make the loan.
Many are of the opinion that no arbi-
tEary nate of interest should be fixed by
law. They assert that trade in money
should be as free as that in produce and
merchandise, and that the rate of hire
should be regulated wholly by supply and
demand, except where the use Of money
arises from accident by the decease Of its
owners, and then that its value should be
determined by courts and juries upon evil
dence, as is the case with other property.
There is great force in the arguments ad-
duced to enforce this view. Perhaps there
is no other commodity Cf we may call It
such) which iuctuates more regularly than
the precious metals or the circulating
medium. Consequently arbitrary, fixed
rates for its use are unjust The holders
of these articles are entitled TO the ad-
vance in their value created by an in
creased demand at certain seasons of the
year by the movement of crops or at pc
RODS Of speculstions and overtEading Just
as much as the holders Of breadstufs and
provisions have the right to the higher
prices which those articles command in
time Of scarcity.
This view being correct, 'usury" laws
should be abolished. There can be no
doubt that their effect is greatly demorsliz-
ing and their tendency is to make money
more scarce in times of stringency. Many
capitalists utterly refuse to lend at usurious
rates, because of the attendant risk. They
viii not lend at legal rates, because they
are considered too low. By keeping their
funds locked up they force collapse which
throws large quantities of property on the
market at ruinOus rates. Then this boarded
money comes out to purchase the property
of banIrupts. If we had free trade in
money, these bankruptcies would be
avoided by the loaning of money at its real
value upon safe security. The increased
rates Of interest would check speculations
before they could reach the hazardous
points which result in general disaster.
Governments ignore fixed legal rates in
placing their loans by selling them at what
ever they will command in the markets Of
the world. individuals avoid the usury
laws by the sale Of notes at discount from
their face. When money is high they sell
at greater discount then when it is low.
The credit of the Government and indi-
vidual is determined by the relative prices
which their notes command. 1t is idle to
say that money should be risked at the
same rate upon doubtful security as upon
one above reproach or question. If name
is in good repute for prompt payment it is
cashed at g low rate; but if it nearly always
goes to protest or demands renewal after
renewal, and finally pays only at the end of
legal proceedings, it is cashed with the
greatest difficulty, if at all, and then at
tremendous shave So with nations and
States and corporations who let their inter-
est payments 80 by default and finally re-
pudiate portion Of the principal When
they next go into the market for loan they
meet with g cold reception and a danand
for higher rates Of interest
Capitalists do not like to loan money, no
matter how good the security, to parties
who win compel themto realize their money
out of such security. The prompt meeting
Of engagements in accordance with their
spirit and tenor is the suresi basis of q sound
credit at the lowest rates of interest. The
conversion Of securities is alwaysa slow and
tedious process. To be obliged to 20 through
it discomposes all the plans which the lender
may have laid for a reinvestment Of his
money, and causes much vexation and anx-
iety, for which he has no taste. Free-trade
in money would obviate nearly all these
difficulties and prevent untold quantities Of
litigation.