Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1875-02-13

Reports from the judiciary COMMITTEES
OF the house were submitted yesterday
says the Nashville Union and ADleTicdI
of Thursday, on the proposition to re-
| peal the conventional interest law. Tht
report of the majority, consisting o
Judge Gardenhire, the chairman, anC
Messrs. East, Gibson, Hesd, Gates
Neal, LedgerwOod aud Cole, is % fol.
lows:
THE MAJORITY REPORT.
| The judiciary committee, to whom was re-
ferrsd house bill No. 5, to be entitled an act
10 regulate the rate of interest, and 10 repeal
chapter sixty nine of the acts of lS69-70 passed
| February %, 1876" have, according to order,
| had the same under consideration, and in.
struct me to report back the same, with the
recommendation that the bill pass, when
amended as follows, to-wit: That the law take
effect from and after the first day OF July,
1870. 1t was thought by your committee that
by that time the public generally may learn
It's provisions and govern themselves accord
ingly. If 1t takes effect from and after its pas
sage, parties, without being aware of II, may
become guilty of uSury. Your committee
state also, that house bills No. 46, No. Is, No.
5S, and house bill No. s, also house bill No. 81,
on the subject of the rate of interest, have
also been considered by the committee, and
they recommend the rejection OF all the
latter. The bill they recommend embraces
the conclusions of a majority of the
committee. 1t is believed to be bad policy to
allow q higher rate of interest than other
forms of capital will command under exist
ing circumstances. Ten per cent. is IL ore
than can probably be realized on an invest
ment in land. If ten per cent. can be real
lied for the loan of money, OF course such
money will seek the most profitable invest
ment. 1t is believed that If the price of
money is reduced below, or to point equal to,
the profits and land, then money will be as
apt to be vested in lands as IN loans. II this
is true, then, as the price of money increases
the price of land decreases, and cOnUerSo. If
money vested in lands yields as much or more
than the interest on loans, there will be mere
purchasers, and the greater the number OF
buyers the greater will be the price of lands.
1t is admitted that the fixing of the price of
money is contrary to political philosophy.
But it results from another violation of ele-
If a privileged few only are allowed to fur
nish currency, such monopolists can easily
combine and produce scarcity of money.
They and their friends then buy the
staples OF the country at ruinousy low
price. When their purchases are made, infia-
lion builds up large fortunes at the expense of
the producers of values. 1t is believed the
true policy is to let every man or company
engaged in banking who has the capital and
credit If more currency is then needed by
the community, private enterpI iSe Will fur
nish 1t, precisely as more corn and wheat is
produced when there is a great demand for it.
But, if a certain class by law monopolze the
production of wheat and corn, they would not
be likely to increase the quantity on account
of the demand. They would probably charge
an enormous price for what they saw proper
to produce, and realize as mucn for q small
quantity as for any increase in the bulk.
What a community needs most private enter
prise will always supply. mpetition, too,
will soon supply the article at a reasonable
price, whether 1t be sugar, salt, rice or money.
II every man of credit, means and integrity
was free to engage in banking, money would
be furnished al & reasonable price, and we
would need no uSury laws TO fix the price.
When every man ts free TO produce meat and
flour, we need no law TO fix the prices of
meat and flour. Buff government chooses
TO confer on a favored few the right to pro-
duce meat and flour, the necessity OF fixing
toll
What the community most want they will
bid high for, and competition will soon reduce
prices to the level of fair profit. Money as no
exception to this aphorism. Government
ought not to assume the guardianship of any
class of its children. 1t ought TO give them
complete protection: let no one modest them
or make them afraid; give them a speedy
remedy for the enforcement of their onJractS,
and let each work ont his own prosperity and
happiness. Let there be no mOnopOlies, even
of money, but il monopolies must give us a
currency, the price must necessarily be fixed.
1t is proper to state that the committee simp-
ly recommended the passage of the bill as
hereinbefOre stated. The reasoning is that of
the chairman. f. l.. GARDENHIRE,
Chairman judiciary Committee Of the
House.
MINORITY NEPORT NUMBER ONE.
The undersigned members of the judiciary
committee, differing from the.majortty of said
committee in their recommendation for the
passage of house bill number five, beg leave
to submit this minority report: The bill re-
ferred to proposes the repeal of what is known
as the conventional interest law, which al
lows parties to contract for any rate of inter-
est not exceeding ten per centum. We hardly
need, in this place, to trace the history of IN
terest laws, or enter upon any review of
usury, or the need Of, or the efficacy in any
statutory restriction upon the use OF money,
or the price for the hire thereof. Suffice IL to
say that the idea and the practice of govern
mental control OF money bargains had their
origin in q barbarous age, and with a people
illiterate and savage, forty centuries ago, in
the darkest ages OF the human mind, That,
while 1t is pretended to Justify this
control on. the authority of the Mosaic
code-Deut. xiii, l9-"ThOu shalt not
lend on USuTy to thy brother" yet those
who thus appeal TO religious superstition,
forget that IGSuTy, as there used, meant any
gain or profit for the use OF money, as well as
that this Introduction applied only as between
members of the Jewish church, and that they
were allowed carte blanche as to the rates of
interest exacted from the GENTLE world.
While again this entire restriction is mpltedly
repealed in the later code, by the great Moses,
in Mathew XIV, q: "Thou oughGeSt, there
fore, to have put my money to the eX-
changers, and then, at my coming, l should
the language of David Hume, one of the
ableSt of political economists as well as of
historians, we would submit that sit is need
less to observe how unreasonable and iniqui-
tous are these laws, how impossible TO be exc
cuted, and how hurtful to trade if they could
ever take place." But the bill in question
does not set up new rules as to uSUTy; IL only
lessons the legal interest rate, by prohibiting
parties from bargaining for ten per ceDtum,
and limiting them to six per cent. We be-
lieVe that, under the workings of the conyen-
tional interest act, of the twenty-third of Feb
ru8ry, 1870, the interest rate in Tennessee has
declined from twelve and one-half per
cent. to ten per cent, as is evidenced by trade
statistics; and tnat the moneyed capital in the
State, since the passage OF said act has in
creased more tnan two and one-half IQilltOnS
of dollars; and, as the Sc propositions are true;
we submit, as a necessary inference or con-
clusion therefrom, that the repeal of said act
will drive from the State the greater portion
nf ofh oil Nuif hlEinnE--
and will increase the interest rate again to
twelve and one-half per cent, or more. such
result as this wou dgreatly impair business,
interfere with contemplated enterprises and
proposed contracts, and in every way affect
the material interests OF our State most detri-
mentally. The proposition that the an. UeTSdL
law OF supply aud demand regulates and con-
trolls the market price of money, and rides
above all statutory rules regarding ii, is of
worldwide recognition, and needs no demon
stration from your committee. In all other
matters the people of Tennessee are left free,
each TO act and contract for himself. AN
other commodities, values and representa-
tives of values are allowed by our laws to find
their own level-to bring their own price
Why the need or where the benefit in this at
tempted restriction as TO money? In cOnclu-
sion we recommend for our guidance the
adoption Of the following proposition, which
Mr.. Jeremy Bentham says he had been ac-
customed 10 lay down to himself, viz:
THAT no man OF ripe years and OF sound
mind, acting freely, and with his eyes open,
ought to be hindered, with a view to his ad-
vantage, from making such bargain, in the
way OF obtaining money as he thinks fit; nor
what is a necessary consequence anybody
hindered from supplying MIN upon any
terms he thinks proper to accede to-"
Entertaining these Views,your committee do
recommend that said bill be rejected, and the
law be as declared by said act OF twenty-third
of February, 1870 believing that the greater
freedom allowed TO these money contracts
hereunder is :Or the best interests of our
State.
Respectfully submitted.
HOLMES CUMMINS,
JOHN VI LEA,
LUKE W. FINLAY,
GEORGE b. PETERS, JR.
MINORITY REPORT NUMBER TWO.
Mr., Cooper, also a member of the judiciary
committee, presented a report, in which he
states that he is opposed TO repeating the law