The Grange advance. [volume] (Red Wing, Minn.) 1873-1877, 1877-08-01

Of more than twelve per cent. interest.
If the capitalist is willing to lend his
money at this rate and pay four per
cent. taxes on his mortgages, it fol-
lows that he is content to make but
eight per cent. net profit by usury,
does it not? Well, if he is satisfied
with this percentage under the exist
lsting circumstances, is it not presu-
mable that he would willingly loan
his money Tor eight per cent. if there
were no tax on his mortgages? As
rule, it is true that he will take all
the law will allow him, but competi-
ton has good deal to do with what
he can get, and low rates of interest
are uniformly due to the supply Of
and demand for money, rather than
to usury laws. 1.-THE supply Of mon
ey exceeds the demand, and if the
facilities for collecting such debts are
ready and easy, the interest rate
must depreciate. But if the supply
and demand are equal, or if the lat
tor is excessive, the percentage must
appreciate. Of course, every burthen
imposed upon the lender, whether it
be in the shape of taxes on mortga-
ges, or in such legislation as renders
the collection Of mortgage debts diff
ticult, only tends to increase the rates
Of interest obtainable.
For several years past the tenden-
cy Of legislation in.the western States
has been prejudicial to capital The
object of the laws has seemed to be
protect the debtors. The conse-
quence is that an excessively high
rate Of interest has been obtained
from western borrowers. Associa-
tons of professional money lenders
are organized throughout eastern
States; these borrow from capitalists,
frequently at six or seven per cent,
becoming personally responsible, and
loan the same money on western
mortgages at twelve per cent, or
even more. Many of these loan
brokers have become excessively
wealthy through the profits arising
from their business. Now, had it
not been for our prejudicial legisla-
ton, the capitalists would have, in
many instances, negotiated these
loans personally, or through agents
paid from one half to one per cent,
and the western borrowers would
have retained the excessive per cent
age which has gone to enrich the
loan associations. This mortgage
taxation law is only another hind
rance to obtaining money at low rates,
and, therefore, only an additional
burthen laid upon the shoulders OF
borrowers.
The Argus writer denies our asser-
tons that mortgages are not proper
ty," that "they do not like railroad
bank, or manufacturing companies
stock, represent Values" and he
proves it untrue by this singular rea-
soning:
Railroad and bank stock are valuable only to
| the extent of the securities upon which they
are based. Hence if the property of the rail-
road be destroyed, its cars, buildings and
rolling stock burned the tracks torn up, &C.,
the stock becomes worthless. The same princi-
pie applies to bank stock which is only vauas
BILE to the extent Of its security.
Why this proves our assertion, not
his! The stocks named are Certih-
Gates of ownership Of the property
they specify, and if that property is
destroyed they are worthless. Our
nGghbor may have a deed for a
house, and if the house burns down,
will he pray tell us how much his
deed is worth? His printing Office
may be destroyed, and, unless it is
insured, his title to it would be Of no
value, because the property would
have ceased to exist. Not SO with a
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