The Columbian. [volume] (Bloomsburg, Pa.) 1866-1910, 1877-02-09
The ttsury Law.

son, from the Committee on Banks, entitled
IAN Act Fixing the Rate of Interest and
Prohibiting the taking of Usury."
Section provides that the lawful rate Of
interest for the loan or use of, or forbearance
to demand money, in all cases where no ex-
press contract shall have been made for a
less rate, shall be six per centum per annum;
second, when rate Of interest for the loan
or use of or forbearance to demand money
exceeding that established by law shall
hereafter be reserved or contracted for, d.
rectly or indirectly this shall be deemed and
adjudged forfeiture of the entire amount
Of the principle and interest of the debt, or
a sum loaned, as the case may be and third,
II any person or persons, or any corpora
tions, shall take, receive or reserve, directly
or indirectly, rate of interest for the loan
or use OF or forbearance to demand money
exceeding that established by law, the per-
son or persons by whom it has been paid, or
his or their legal representatives, may reco-
yer back in an action of assumpst, or on
the case commenced in the Court of Common
Pleas OF the proper county, the amount of
the principle and interest paid from the per-
son or corporation taking, receiving or re-
serving the same, providing such action is
commenced within two years from the time
OF such taking, reserving or receiving. Sec
tion repeals all acts and parts Of acts in
consistent herewith.
We have so often borne testimony against
the fallacy, we might almost say the wicked
ness, of what are termed the Usury Laws,
that we now feel shame for cur State that a
man of intelligence can be found in our
Legislature to offer such bill as the above.
The prominent reasons given by the advo-
Gates Of Usury Laws are that money is cre-
ated by legislation, deriving its intrinsic
value from that source. Upon this they urge
the right and the duty of Government to de-
termne peremptorily the limit which the
people, even after money has gone rightfully
into their own hands, shall charge one an
other for using it. Their second point is,
that borrowers need and ask for the restrict
i've Usury Laws to shield them from the ex-
tortion of lenders. In reply we would say,
even if Government had the right, which is
denied by the more intelligent in such mat
ters, to establish such limit, all know it is
an utter mpossibility The bill under con.
sideration fixes a rate, and imposes a severe
penalty for going above that rate, and it is
sought to be justified on the plea that, as
debt can only be paid in money, the value
of money should be fixed by law, otherwise
the debtor is left at the mercy of the creditor.
Another defence of the arbitrary assump-
tion to limit the price of money, and to stig-
matize greater price than that fixed by the
wisdom of legislation us crime, is the pro-
lection of the borrower. There is no in
stance on record in proof of any such allega-
ton. Political economists of almost every
school now set it down as an automatic
truth that rates of interest cannot be fixed
or lin tied by law, and business men have
quite generally given it as the result Of their
experience for years that the attempt to leg
islate upon this matter, so far as it has any
effect, works to the injury of the borrower.
But there has seemed to be certain consti-
tutional inability among our legislators to
comprehend the simple propositions on which
these views of both theoretical and practical
reasoners are based. The plea is sometimes
urged by the advocates of usury laws that
their repeal would be in favor of bankers
and brokers. 1t would be more correct to
say that the abrogation of usury laws would
inure the to benefit of borrowers large pro-
portion of whom now pay usury, with an ad-
ditional percentage as an insurance for the
lender, while many who would gladly bor-
row on the security of real estate find them
selves unable to compete with the attractions
of United STATES gold-bearing bonds. Why,
the Bank of England raises and lowers its
rates at pleasure. The fact that the average
rate Of interest in England, with free mar
ket for money, is only about half what it is
here, is conclusive against the doctrine and
policy of the penalties of usury to effect
like result. In this country, in those States
in which the restrictions on loans have been
removed, a distinguished jurist, who is per-
fectly familiar with the whole subject, says
lie never knew an act of legislation which
has SO completely justified the predictions Of
its friends and refuted those of its opponents
as the repeal of the Usury flaws. He adds,
"Not only has the monetary effect been all
that could be expected, but the moral effect
on money transactions has been excellent.
The secret, falsifed transactions, and the
large fees of the nominal parties and go.be-
tweens have disappeared, and the strain
taken off the consciences of jurors, parties
and witnesses and bank officers, and the
borrowers and lenders meet face to face, and
the market rates are steady governing all
transactions, and money brings its natural
rates" This is the condition of things we
need in this State, and tor that reason thou.
sands of merchants of this city Of the bor-
rowing class would gladly see total repeal
of all the penalties against usury. 1t is
hoped that Representative Jackson will give
his subject wider inquiry, aud that our peo-
pie will take little trouble to inform him
of what is really desired in the premises
Public Led1er