Keowee courier. [volume] (Pickens Court House, S.C.) 1849-current, 1877-06-14
From tho Enterprise and Mountainoer.
USURY LAWS.
TBY REQUEsT.]


MIR. EDlToR: Is the proposed rc-enact-
tneut of usury laws, at this time, wise?
Will it likely prove beneficial to the ngri-
bultufal, mechanical or mercantile interests
bf the StateY To answer these questions
we should consider the causes affecting the
rate of interest; the theoretical views held
by the ablcst statesmen aud political ccono-
lnists; and, historically, the practical effect
of usury laws as thoy have been tried 10
different countries.
In all countries, the laboring classes, the
masses, have moro or less prejudice against
capitalists. They imagine that whatever
the capitalist has accumulated is so much
withdrawn FROM the poorer aud laboriug
blasscs. Of course, this view was never
advocated by any intelligent writer; md
very little thought will show its absurdity;
yet it is prevalent, because people will not
think. The ancient strife between the
Plebiaas aud Patricians Of Romc is still
carried on between tho employees and tho
capitalists of our own and of other coun-,
tries. Popular efforts arc made to coutrol
the natural laws of trade by restrictive
Legislation. Nearly all civilized countries
have at one poriod or another, enacted usury
laws; and hence it is popularity supposed
that they must have proved beneficial 10
tho masses; though moralists have vigorously
oontended that they are IN Infringement Of
natural rights. 1t is held that one has the
same natural right to tho free use of his
money as Of his houses, ships, merchandise,
or of any products Of industry. Why urc
>not the rcuts of houses and ships fixed by
law, without any Difference to the natural
law of supply aud demand; or to the extent
Of the risks, or to the character Of the lessee.
aud his ability to restore the property and
to pay the rcntY Why shall the merchant
bo permitted TO charge double profit on
his goods when lie sells on time? Why
shall not tho manufacture Uf fertilizers DO
prohibited under severe penalties, from
charging over certain fixed rate of profit
on what is 80 essential to our agricultural
interesta? In other words, why should not
all natural laws of trade be set aside, and
tho whole thing be regulated and restricted
by legislation?
Let any ono answer these questions, ard
then say why money, as the representative
Of capital, should not also be subject to
the same natural law Of demand aud supply?
But people win give littlo heed to natural
right. provided money is mado cheap and
abundant. Thu all important question is
docs Legislation accomplish the end contcm.
plated? Now, the almost uniform Testimony
Of eminent statesmen, Of political ccono-
mists, and of impartial history, is that it
Aceomplishes just the opposite effect.
The natural causes regulating tho rate of
interest, arc (1) tho productivcncss Of
capital; l2) the stability of the government;
the security aud protection afforded to in
vestments; and tho facilities of enforcing
contracts and collecting dcbta; (3) tho
character Of tho borrower, tho risk ii tho
business in which the money is to DO in
vested, and the consequent probability that
the principal and interest will be returned
dGoofding to the contract. It is manifest
that part Of the interest charged is of tho
nature Of insurance, and is intended to
Indemnity against possible loss; just as q
merchant now selling goods on IL months
6redt must charge more than 70 per cent.
Advanoe.to cover risks. How absurd then
chat there should be any fixed rate of finter-
Dat irrespective Of all regard to, risk and
SeoaYssY
Agsih jtia evidcbt that wlatcvcr renders
ihvGstmcnts insecure. currency huctuating
10 value, the collection of debts uncertain,
tedious and expensive, must add also to the
ihntranco part Of Interest, und mako tho
Yate high to cover risks, and possible cx-
pensss.
Finally, othor things being equal, tho
rate will vary difettiy as the productivcness
Of capital; and high rat6 Of interest,
when brought about from this tauso, Is
indicative Of d high degree of prosperity id
q country. For this reason tho rate in tho
United States is Higher than in Great
BritaiiT.' 'ii g.
Now what iG tho natural and tho incyita--
Bic effoot Of Restrictive legislation
Writers on political economy orc agreed
that all suoh laws are ovaded and arc inclli-..
Gient, and 10 most caees actually enhance
the rate Of interest. Many instances aro
ditcd 10 the historyof France, Great Britain
and the United States in which this effect
was strikingly manifest Such laws, of
dourso, make u.urious loans hazardous,
ibterposo obstacles ia tho way of collecting
tho Interest, anaa stillhigher rate is charged
as insItaRce against the, risk. Tho com
mittee of the British House Of Commons
On the asury laws reported 10 1918, ."That
- is tho opinion Of this committoe that tho
laws restraining the rato Of interest have