River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1877-07-26
REDUCTION OF INTEREST RATES.
Businss- aud Jeopsrdizins Csit'tsi.

The Prevailing High Hates prot rating
In the st. Paul Chamber of Commerce
ON the End inst. Hon. Vim L. Banning
offered the following resolution, which
he intended calling up at some future
| time:
Resolved, That in the opinion of this
| Chamber the interest demanded for the
use of money in this section Of the West
is far in excess of its value for legitimate
| business purposes; and further, that the
interest If both lender and borrower
would b. best promoted and protected by
such reduction OF this rate as would more
justly correspond with the profits of bus
mess and the financial condition of the
country.
On the 10th, the resolution was taken
up when Mr.. Banning said substantially
that in urging the passage of this resolu
| ton he would attempt no more than to
| present some of the striking reasons why,
in his judgment, it should receive the
emphatic assent of the Chamber. The
financial depression and business paraly-
sis that now pervaded the entire country
challenges the thoughtful consideration
of all. Whatever of practical wisdom can
be invoked, alld whatever wise and just
measures can be inaugurated to change
and improve this cohditon surely is a
part of individual duty and the emphatic
business of bodies such as this.
1t is estimated--and think the esti-
mate is lo&-that the shrinkage in values
throughout the country in the last four
years is at least eight thousand millions
of dollars. United States bonds. State
bones, loans upon real estate, and certain
other classes of property where the
amount loaned is but a small percentage
Of the value of the property, have not par
taken of this general depreciation. The
money thus employed is not less than
three thousand millions of dollars, so that
/ the eight thousand millions of deprecia-
| ton has fallen on lands, houses stores,
manufactures, manufactured goods, and
like products of the industries of the
country.
! But mark in addition TO, and more
than this, the purchasing power of the
| interest produced by this three thousand
millions of dollars has been quite doub.
/ led, so that one dollar thus produced is
worth two dollars by comparison, for it
will buy as much rs two dollars would
| four years ago. To illustrate. A. Dor
rows of b. 81 900 at ten per cent per an
mum, on his farm, house or store, fully
worth at the time $4,000, but as time
moves on, values are changed, the prop
erty is reduced to $1,000, and the mort
| gage absorbs the entire property. This
case fully illustrates the general relation
| ship between the creditor and the debtor
| classes of the country, and urges the
/ II VI. lSk.
capitol and property as shall more evenly
and fairly divide and protect the rights
and interests of each.
Rightly understood, money can only he
understood to be property-different in
! its form, tbs true-peculiar in its uses,
| better adapted than most other forms of
property for rapid use, exchange and dis
| tribution, but still it is only property.
/ A. buys my farm, house, store or goods
with his money, or buy his money with
my farm house, store or goods, and there
| is no wisdom or fairness in the policy
that works out depreciation in the value
of one class of this property and doubles
| the value of the other class.
/ do not wish, however, to be misunder-
stood in this. / do not believe that this
unfair discrepancy can be best corrected
by usury laws, penalties or harsh legisla-
ton in any form. The true remedy is, l
| think, in general agreement and under
standing-of what most thoughtful and
/ fair men are now ready to admit-that
| these high and oppressive rates of interest
will in the end be destructive both to the
| borrower and lender.
Why, is it not plain to all, that should
/ fbo ~ Of ord
| to prevail in this section-or any other
section of the country-the effect will be
that the creditor, class will absorb all the
profits of business, the value of all kinds
of property, and produce consequences
alike fatal to both borrower and lender2
The property and business of the country
will be absorbed, and fall into hands in
capable of handling it, and the business
and productive industries of the country
will be fatally damaged. The remedy for
our troubles in the West, will, l think
be found in such material reduction in
the rate of interest by our banking in
situations and capitalists generally, as
will leave margin of profit to the farm
er, merchant or manufacturer. This will
foster, and as / think only this will
rightly foster and sustain the class
of men and industries that after all are
the real security for the capital invested
in the enterprises and property of the
country.
Of course / recognize that among our
bankers. capitalists and money lenders,
will be found as high toned, enterprising,
and liberal gentlemen as may be found in
any other pursuit or business, and can
not doubt but that the experience of such
as these already admonishes them that
their ultimate safety, and the safety
the capital they have in charge, will be
best promoted and secured by such ma
terial reduction of the rate of interest as
will build up the solid industries of the
State.
OF another class of dealers in money
have this to say, and only this. refer to
the sharpers who follow in the track of
the grasshoppers, or others unfortunately
like these poor settlers, to whom money is
doled at rate only measured by the
dire necessities of the victims. OF such
men l have this to say, that would
put a why of scorpions in the hands of
every honest man to lash such scoundrels
naked through the world"
But again, it seems to me that the high
rates for money here are becoming ex-
ceptional as TO the general rates of the
country. Money is freely loaned in the
East and portions of the West at from to
per cent. per annum. Capitalists there
have already conceded that such rate is
all that business will bear, and to charge
more is to PROSTATE business and jeopar-
die capital. There surely can be no
good reason why the same wise and safe
policy should not be adopted here. Should
this be done am confident it would be
long step in the revival of business the
right adjustment of the question and for
the general good of all classes.
Sorting Bees.