Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-01-10
SHALL A NAN DRAW INTEREST ON
HIS OWN SEEALINGS?

HIS OWN STEALINGS?
4 low rate of interest is generally
regarded as most desirable; and it is
always one of the concomitants of a
healthy prosperity. Hence govern
u.ents have IN all countries and ages
undertaken to regulate the trade IN
money and enforce low rates cf inter-
est by usurious legislation. Whether
IN so doing, they mistooka consequence
of prosperity for its cause-that is to
say, whether low interest is the result of
accumulated weather. IS theactvec cause
attracting and producing accumulated
wealth-is question on which many
still argue. OF late yeas, however,
since steam on land and sea have brok
en- the barriers between the nations,
the old Chinese system Of protection"
has been yielding to free trade with its
natural laws of demand and supply,
and the tendency of the times favors
free trade in money as well as every
thing else. The argument is, that the
man who Is competent TO buy or sell
crop Of wheat, is competent to know
the value Of the money received for the
wheat, and can place his own price on
the producing valueof that money in the
shape Of interest. The drover who
contracts for a car load Of mules on
his own Judgment, without government
Interference, ought to have equal liberty
Of Judgment as to how much or how
little interest he can afford to pay for
the use OF the $1,000 with which he
buys the mules Practically, no usury
law has ever been fully enforced, be-
cause the notes of insolvent and
shaky individuals ike the bonds OF
bankrupt governments, viii necessarily
depreciate, to the doubling or TRIPPING
of their nominal interest.
This question Of interest IS at the
bottom Of the railroad problem.
When the House Committee on Rail
roads and Canals frame a bill to forbid
any road charging more than ':fair
and reasonable rates, it must seek
some principle or standard
by which to decide |
what IS a fair and reasonable rate.
That standard can be nothing else than
the rate Of interest that shall be allow
ed on railway investments In making |
the law practical, Congress would have !
to decide that six per cent or ten per |
cent, or some other rate is all that shall |
be allowed Such law enacted by |
Congress would have to apply Impair
tally to all the Is in the country, |
or at least 20 all the through lines of |
Interstate communication. But, judi
cious men build railroads where they |
are needed and hence are profitable; |
while injudicious men ike Jay Cooke, |
build roads tothe Aurora Borealis which |
can never be made profitable. Is the |
latter entitled 70 rs much per cent on
his fool Investment as the former: |
Again, the iudicious man builds a road |
for cash. and runs it economically, |
without any Jim Fisk opera houses.
Shall this man reap no re-
ward for his economy? And |
shall the iniudicious man who doubles
or quadruples the cost Of his road by |
hypothecating bonds all the way down
to zero, draw the same amount of inter-
est on the money he has unwisely sunk,
as the man who builds for cash? And
shall the a1Tant swindler who know
ingly doubles the cost Of his road by |
Credit Mobilier contriyances, be allowed !
to draw interest on his own stealings? |
Evidently there Will be some trouble to
preserve the equities IN deciding on
4" fair and reasonable rates" 20 be ap-
piled to railroads indiscriminately. The
whole railroad question turns on this
matter of interest on money. The !
bondholders Of the East demand their
interest, and the grain eating tariffs of
which the Western farmers complain
are the consequence. The bondholders
are drawing interest on money squan-
dered and on money stolen, as well as
the money that actually built the roads.
1t is the collection of this interest
on wasted capital that enhances
freight tariffs beyond endurance and
reason. The bondholders have invested
their money foolishly, and the farmers
say the bondholders should suffer the
consequences. That IS commercial jus
tice. 1t is not Just that the bondhold-
ers should shift the consequences on
the shoulders of the farmers, merely
because the latter need the roads and l