The daily gazette., 1874-12-26
The New York lTsury Laws, and
How Ia Improve Them.

'i"h VIZ COMMERCIAL stlu iliailclul chronicle
The New York usury Laws. and
| He" Ia Improve Them.
The New York Court of Appeals
has just decided an important.c case un7
der the usnry laws. The last amend
ment to these laws, passed four years
ago, was commonly supposed to have
repealed the heavier penalties against
usury so far rs the State banks are
concerned. This statute, chapter 1853
Laws of 1870, enacted that the State
banks should be on an equality with
the National banks in regard to usury
penalties. At that time it was gcner-
ally believed that the National banks
were not amenable to the State usury
laws; but this opinion, two years la
ter, was set aside by the New York
Court of Appeals, which decided TINT
in this State the National banks are
controlled by the usury laws of the
State. inasmuch as the usury provi
sions of the National currency act can
only be recognized by the courts in
the States where there is no statute
against usury. In conformity with
that decision National Bank of
Whitehall as. Lamb, so N. Y, 95) the
ISoult VI 1DDCuib uQW
that State banks also cannot claim to
be exempted from the heavier penal
ties against usury.
No question could have arisen on
this point had not the law of 1870, in
State bank takes usurious interest, it
lshall forfeit that interest. The case is
that of the Farmers Bank of Fayette-
| uil1o no Moplr Haln af ~
The opinion of the Court was deliver
ed by Chief Justice Church, and was
concurred in by three other Judges
!. | Allen, Folger and Rapallo. A dis
senting opinion was read by Judge
johnson, with whom Judges Grover
and Andrews concurrcd. This deci-
lion has attracted considerable atten-
. lion, and will probably help to give
an impulse to the efforts which arc
making to remove some of the anoma-
lies that disfigurc this part of our jul
ridical system.
With the opinions of our State
: Legislature, therefore, the opponents
, of the usury laws may be expected to
, commence; their annual campaign
/ against these penal statutes. AT the
/ close of the session last year the best
: bill which has ever been proposed fol
6 this purpose, was defeated at the very
h moment when its success seemed MS
, lsured, and the blame of the failure is
, generally ascribed to Mr. A. b. Corn
@ lell. AS Speaker of the House he Ger
tainly gave some occasion for the
. charge; but well-informed persons say
i that in what he did the Speaker was
l. merely carrying out the policy dccid
II ed on by others who feared that thu
}. usury repeal would ALLEVIATE votes il
r the rural districts. For ourselves WI
: doubted the validity of such reasoning
r and subsequent developments hav
ltended to confirm our opinion. TIL
Il fact is that with the growth of intel
lligence and development of capital
n the great laws of economic science
-iare better understood among us
j. Hence usury agitation has risen out o
" the turbid atmosphere of party pol
% tics, and is claiming more decided
I every year place among the vita
y louestions of industrial and nationa
: growth, which all parties alike shoul
d combine to solve.
II We understand that this year tw
q rival propositions for reforming til
usury laws are suggested for legi:
- lative action. 1t continues the e>
q isting rate of seven per cent. as the Il
n gal interest where no contract is made
ii but it gives to every citizen the righ
u now forbidden to the masses of ou
8. lcitizens-but monopoliZed by fe'
a. -lprivileged people.-to stipulate b
special contract, oral or written, IL
l. the payment of any higher rate OF IL
IL tercst without restriction The adv
- Gates of this measure claim that
--awould beapproved by majority
IT, the rural members, if an uubiasse
to vote could be taken upon it, Certain
D. ly it would command the support
their more intelligent constituent
Moreover, this law would at ont
1plaee our usury legislation on IL
highest level yet reached by the mo
advanced nations in this department
commercial jurisprudence
l. The other. proposed measure is q
le vocated by those who think that be
% Irowers need some protection fro
" kalsury laws, but that our present Ia
m fis so severe-as to defeat it's own Ial
= Ipose The latter part of their org
ID ment is undoubtedly true. They pr
l. tposed accordingly to do away wit
!. q the criminal part of the usury pena
\ ties. Since the act of 10th Ma,
|
r. of 81 900 and six months Srnprisol
8. ment The penalty of imprasonmel
a. is one which we believe is not bl.tache
v to usury i'll Gny other nation in II
y world. Even in Mahomm edan coul
d tries, where usury is forbidden Wnd
!, religious sanctions, the civil law II
\ stopped short of Imprisonment. II
m Koran declares that, while "Alha
,e hath permitted selling he hath TO
er hidden ursury, and whoever return
As eth to ursury, even they shall b
es companions of Gehenna. They sha
continue therein forever. Allah hat
taken away his blessing from usury.
In France the habitude dusure-th
invcterate habit OF eXa citing exorb
tant rates for money, is punished as
- misdeameanor, but the offence is Wis
ted with light penalties. In no con
mercial country of modern times e,