Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1875-02-12
THE RAfE OF



the House Jhdfe1asy Committee.
Tbs reports f86 he House Judiciary
COMMITTEES, 9heh appeared in the UNION
AND AMERICAN Of Yesterday. elected a
good deal Of comment in financial and BUSH
ness circles. We present in full this morn
ing the views submitted in the House by
Representative Wise A. CCOpe&o f Gibson:
As a member of the judiciary Commit
tee, am unable to adopt fully the views
of either Of the reports, majority or minor
ity, relative to the present rate Of conven-
tiOnal interest. am not for the repeal Of
the law allowing as much as ten per een.Um
to the creditor for the use Of money. But,
while this is so, / did not sign the minority
report submitted. The reason cid not
is, that the doctrine laid down in it is
broader than 1 endorse. Hume and Ben
than are quoted apprOyingly, to show how
unreasonable and hurtfUl it is to trade to
interfere with the rate Of interest to be re-
ceived. Well, if it be necessary TO Offset
such authority, with other authority equal
ly worthy l refer to Montesquieu and
Adam Smith. The Scripture evidently is
m~isapplied.
My opposition TO the repeal of the law
in question chiefly arises because Of the
crisis nov upon us. The o question
is a peculiar one, and [ believe it is wise
for the State to fix a rate of interest over
which the lender cannot charge. Observa-
ton teaches us that large numbers give
more for the use Of money than they can
make Of profit. This number would be
greatly increased if the interest brakes
were turned of Besides, it would some
what interfere with the equilibrium Of
prosperous society. For If It paid better
to lend money, and remain idle, than to in
vest in the industrial and m~anUfactus
| ring enterprises Of the day. these large
pOssessOTs Of money would almost eXclU-
| siyely lend money. If the rate Of interest
is too high BY law, u falsely educates the
public mind. Too many suppose that, be
cause the State allows a certain per centum
10 be received, that, therefore, they can
make that amount Of profit on the use Of
money, and that money is worth that
much. So, by false education, we fall
upon fictitious values, and strut round in
s Its only to fall.
In times fully prosperous. | would sup
pose that ten per eentnm per annum would
be too high an interest. If prosperous, the
rate could be changed without producing a
shock; but, as facts exist at present, to
turn about on this question, and say no
more than six per centum shall be received,
in my judgment, will be to deal a danger
Gus blow upon the business relations ofthe
people. We are a debtor people. The
mass of the people have nothing to their
credit and I'VE debts. Now, the rate Of
interest is a compound question. 1t is in
huenced by the proportion between Dor
rowers and lenders, that is, supply and
demand. 1t is also Influenced by how
much can be made by its use; and, Knight
add, the character Of the taker for ability
and integrity is not without influence.
The further position is taken, that should
the conventional interest law be repealed,
owing 20 the absence Of general
prosperity and that greatly longer line
Of borrowers over lenders, it would become
the cause Of very general pressure. At
present the demand for money is so great IN
this State, that should six cents be the in
terest fixed by law, it will increase the in
tereSt over what il is now. Suppose Il
were made usury to take any interest, how
would this operate? It would cause the
lender to require more interest decidedly
than now. The borrower would have 70
nav a proper interest, and insure, besides,
i the leuQtE dGllaoL Llc perm VI uoulgs ~
now if a rate Of interest be established,
that is less than the value Of the use
of money, the result will be that the Dor
rowing class will be injured by having to
paw a reasonable rate al such a crisis and
also pay the lender for his risk Of violating
usury laws. Should Q proper interest be
allowed, the likelihood Of such oppression
is not near so great.
At present, l think, 10 make ten per
centum the maximum for money is right.
What is the value Of money to our people
now? This can be answered by stating
that its use possesses great value in enabling
them to pay the most pressing indebted
ness with cash rather thai in personal pro
perry and land at a sacrifice. Il is a privi-
IeCe to be allowed to give ten per cent for
money to pay a pressing debt, instead Of
having 70 submit to the sale Of property at
the necessary sacrifice, say, forty per cen
I tum.
In conclusion, 1 cannot believe but that
the repeal as sought, would cause some
money to be withdrawn now here, and also
other money to be sent beyond the State
All this considered, l think the repeal Of
this law at this time, bodies increased trOu-
BILE to the mass Of the people. Respectfully
submitted. WISE A. COOPER.