The new dominion. [volume] (Morgantown, W. Va.) 1876-1904, 1879-02-08

more properly inform YOU, we here
give you copy Of sections 5l97 and
5l9S of the National Banking law:
Section 5l97-Any association
may take, receive, reserve and charge
ON any loan or discount made, or mp
on any note, bill of exchange, or
other evidences OF debt, interest Mt
the rate allowed by the laws of the
State, Territory, or district where the
bank is located, and no more, except
that where by the laws OF any State
u different rate is limited for banks
Of issue organized under State laws,
the rate SO limited shall be allowed
for associations organized or existing
in any such State under this title.
When 40 rate is fixed by the laws Of
the State, or Territory, or District.
the bank may take, receive, reserve
or charge rate not exceeding seven
per centum, and such interest may
he taken in advance, reckoning the
days for which the note bill, or other
evidence Of debt has to run. And
the purchase, discount, or sale of n
bona-lide bill of exchange, payable
at another place than the place of
such purchase, discount or sale, at
more than the current rate of eS-
change for sight.drafts, in addition
to the interest, shall not be consil-
cred rs taking or receiving greater
rate Of interest.
Section 5f9S---The taking, rccev-
ing, lesewing. or charging Il rate of
interest greater than is allowed by
the preceding section, when knowing
ly done, shall be deemed a forfeiture
of the entire interest which the
note. bill, or other evidence of debt
carrier with it, or which has been
agreed to be paid thereon. In case
the greater rate of interest has been
paid, the person by whom it has
been paid, or his legal representa-
tives, may recover back, in an action
in the nature of an action Of debt,
twice the amount Of the interest thus
paid from the association taking or
receiving the same, provided such
action Is commenced within two
wears from the time line usurious
transaction occurred.
BY section 5l97 you will notice
that National Banks are only allow
ed to charge the legal interest of the
State, and no more, as the State has
fixed the legal rate at 6 per cent. and
when National Bank charges 8 per
cent, it is clearly violation Of the
National Banking Law.
Section 5l9S will inform YOU rs to
the penalty for so doing. LIST. Where
the borrower claims it, the Bank for
feits all the interest on the note and
the previous renewels. I'd. Where
the note has been paid with the lille
gal interest, the borrower can recoy-
er twice the amount of all interest
paid, provided he brings suit to re-
cover it within two years from the
date the usury occurs.
As to the difference between n
State and National Bank, and why
National Bank is more restricted
than a State Bank, is, no doubt, ow-
ing to the extra privileges and advan-
tages conferred upon it. For IN
stance take the National Bank at
this place. 1t has Il capital Of
$4,000, upon which they pay no
tax, as 1T is invested in Government
bonds, not subject to taxation, yet
the Bank receives from the Govern
ment $1,000 per year interest on those
Bonds, and in addition has circnlat-
ing notes to the amount of $4,000,
upon which they pay ! per cent tax,
but which they loan at 8 per cent BY
this you will see their profits stand
thus:
Capital in U. S. Bonds, $4,000,
interest, $4,000 Circulating notes,
$4,000 Loaned at 8 per cent,
1920. Less one per cent taxes,
Af.l 49, te,