The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1878-04-17

The legislature of Kentucky has fixed the
legal rate of interest at per cent. Any rate
above per cent. is usury. Formerly the
Law of Kentucky permitted parties to stipu-
late for 10 per cent interest; then the rate
was reduced to per cent, and now it has
reached per cent, and fears are ENTERTAINED
that Kentucky will suffer thereby. The
Courier Journal says:
A mortgage carries on its face the contract
for interest, and necessitates combining the
contract within the limits of the letter OF the
law. If money can not be had at six per cent.
those who get IL on securities not subjected 10
public inspection Will have to inject barge
share of personal honor into their credit And
those who loan and borrow money IN TINS
way will do so In violation OF law aud the
amount OF such transactions Ill measure the
hold the law has on the intelligence, the re-
spect and the necessities OF the public. III
money can not be had freely and openly at
six per cent. the legislature has done incalcu-
liable mischief to the very class 1t proposed 10
benefit Experience alone can measure the
extent of the mischief. If the effect prove to
be as bad as is now anticlpa by many per-
sons the future at least may be benented Dy
development may be given TO the crude
thought that has heretofore controlled legis-
lation on this subject.
The advanced idea with regard to money
and interest is to permit the contracting par
ties to make their own bargains, but 1t is
fact Notwithstanding that lenders always
have the advantage, since the necessity to
loan is never as pressing as the necessity to
borrow. Nevertheless the very fact of citi-
zenship with its dignity and responsibilities
would seem sufficient to warrant the ability
to make a contract in money as in anything
else, and it has been difficult for great
many people to discover why statutes should
regulate the price of money any more than
the price of pork or merchandise generally,
real estate or bank stocks, and the Courier
Journal upon this point remarks:
1t has been noted by one of the ablest writers
on the subject that person of sane mind, and
of the age at which persons are legally compe-
tent to conduct their own concerns, must oe
presumed To be sufficient guardian OF his
pecuniary interests; and If he may sell an eS-
tate, or grant a release, or assign away all his
property, without control from the law, 1T
seems very unnecessary that the only bargain
which he can not make without the tntermed-
ding of government should be loan OF
money. The usury laws assume that the bOr-
rover is always at the mercy of the lender;
but in every community there is competition
among lenders, ana II one man can not ooIIoW
money at the rate paid by others ii must be
that he can not give such n, good seenrity, ana ma
risk OF his insolvency.
The indications are that the question of
interest is likely to come before the legisla-
lures of the various states, and evidently
the tendency is to restrict lenders in
their contracts for interest. The probabili-
ties are, however, that by hook or by crook
borrowers will be compelled to pay higher
rates than the laws determine, or go without
money. AS a general thing usuary laws are
dead letters upon the statute books, and the
man who contracts to pay rate above that
fixed by law pledges his honor and when
he goes back on that he might as well give
up business and pass to the rear as a dis
graced individual