Keowee courier. [volume] (Pickens Court House, S.C.) 1849-current, 1877-06-14

the effect of imposing maximum on such
rate; aud, of lato years, from tho cpnstant
excess Of tho market rate above the rate
limited by law, they have added to the OK
pense incurred by borrowers, have subjected
borrowers to enormous charges, or forced
them to mako very disad vansag goous sales of
their estates"
These usury laws wero repealed in 1889,
aud the market rate has been ut about 4
per cent. since.
"Thus," says Say, tho great political
economist of Franco, "the practice of usury
has been uniformly revived, whenever it has
been attempted to limit the rate of interest,
or to abolish it altogether. The sevcrer the
penalties, and the more rigid their exaction,
the higher tho interest on money was sure
to rise, US might naturally have boen expected
lit is needless" says McCulooh, in his
Commercial Dictionary, "to waste the
renders time by entering into any length
ened argument to show the inexpedionoy
and mischicvous effect of such interferenccs.
This has been doue over and over again
1t is plainly no more desirable to limit the
rate of interest, than the rate of insurance,
it wcrc desirable, it cannot be accomplished. =.
Tho real effect of such legislative enactment
is to increase, not to diminish, the ratc of
interest" ut els Singular" he continues,
"that on enactment which contradicts tho
most obvious principles, aud has been re-
pcatcdly condemned by committees of the
Legislature should be allowed to preserve a
pluco in the statute book"
Holland has no usury laws and for a
century the rate has varied from 2 to 81
per cent per annum, whilst in England
and France, under usury laws, it has ranged
from to II per cent.
But historical Instances Of the enactment
or OF the repeal of usury laws do not
furnish adequate data for determining tho
effect Of such laws, unless wo take into
account all tho causes that may at the tune
have been operating to enhance or dcpress
the market rate. These changes 10 the laws
arc usually made during grcut fluctuations
in the barometer Of trade. Indicating that a.
financial tempest is about to burst upon the
country. or whilst in the midst of the
'crisis." Thus in the reign of Edward
the VI (l552) the taking Of any interest
whatever wos prohibited "as vice most
odious and dctestabe" and n "damnab ble
crime, forbidden by the law of God" Yet
undct this law, the market rate wus Ia per
cent. This act was subsequently, repealed
and successive cnuctments fixed the legal
rate at 10, 8 and s per cent. "All these
statutory limitations" says Adam Smith,
(Wcalth of Nations,) "sccm to have been
made with great propriety. They seem to
hov 20 koc
the market rate of interest" They did
not, therefore, in this case, contribute, as
they otherwise would have doue, to Gu
hance the rate.
In ancient Greece there was no law limit
ing interest, and the rate was often 4C to SO
per cent. on bottomry, whilst in safer invest.
mcnts it was only IL per cent Had the
same security and the same facilitics for
collecting debts prevailed in ancient Greece
ond Rome, as are now found in the United
States aud 10 Great Britain, their rates of
interest might have been as low. 10 Cali
fornia from 1850 to 1856, .,noney was
abundant, but the interest on it ranged
from l8 to "a and 36 per cent. But, then,
everything was high; rage for speculation
prevailed, enormous profits were realized on
capital, aud no penalties could have kept
down, or ought to have kept down, tho rate
of interest.
What ore tho causes that havo brought
about the cxtravagantly high ratio of inter
cat in South Caroline? They are manifestly,
tho unsettled condition of the government,
high taxation, difficulty and great delay 10
enforcing contracts, bankrupt laws, and
general distrust. Capitalists have been
ready TO lend money in New York at 4 to
to per cent, who could not be tempted to
loan il 10 South Carolina at l8 per cent
Would-a limitation of 7 per cent. have in
ducoa them to send their capital South?
Money was actually bringing 18 to "a per
cent.'in 1856 when our usury laws were
repealed, and since then it has rangelfrom
10 to IL. Let tho rate be governed by
natural laws, and 90 soon ss confidence is
fully restored, Northern capital will flow
in, the rate will decline until ID IS measured
by tho productivcuess of capital in our
State. Limit it to per cent. and money
cannot be borrowed at all, except in viola
ton of law. 1t will be Invested in NOR
chandise to be sold on credit nt on advance
Of 20 to 40 per cent. to cover greater risks.
We mcy as well legislate that water shall
run up hill, and erect dams to stop it's
natural course, as to logislato against the
natural laws of tyado.
COMMON SENSE!
IS. 1t is proper to stato tha. tho
Paragraph referringto historical instances,
was writtcn after roadiug iH'tho E"terptise
and Mountaimeer Of last week tho argu-:
mcnt of Senator Gary, which is perhaps as
strong defense as could woll be given Of
SO weak doctrine: e. s.