New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-07-12

me Legal k1IL if IN LLNEcL.
EFFECTS OF THE LAW RECENTLY PASSED.
Az ANALYSIS OF The STATUTE By O. II. Palmer
SOME RESULTS nor INTENDED By TIE LEGIsLA-
TUaE-A SUGGESTION THAT ALL UsJRT LAWS
MAY POSSIBLY BE ADVOCATED.
Much public interest IJs been shown IN the dis
cussion # the effects OF the act adopted by The Leg
i,ature tus year reducing tie legal rate OF interest.
An opinion prepared by %. IT, Palmer for the Mutual
Life Insurance Company, which has never baeupu5-
lish-d anal. z-s the provisions Of rhe statute and
aims to show that Will not affect business trans
actions nearly as much generally thought 1t
disclose the fact also tHat the section AZ regard 10
penalties may uo, have the results which the Legs-
latare intended, and the startling suggestion is
made that this legislation may have practically all
rggatel all the usury lawtby removing the penal
ties. The opinion OF Mr.. Potter is as follows;
4. =. WINSTON. esq, Pres,de,t &c.
DEAR SIR: Your inquiry u rrFpect % me new 6 per
CO.. %. ,-'' ,'N L+. H ''' $500 ' ,A' o. . .
Uai!y can make contract 10 loan none, at per
cent i'm hi. state which wiz extend beyond The ii ot
The al ja. passed amends section title chapter 4.
part ,i lne Rs s,d statutes emitted Of 5Ae interest
Oh money provides to interest UPON
tine loan OF tofDearace or any money gopc or tln-s
that rate for gretf or less sun or 4Jr louser or
s-orter une :" ia. rs provisions are ~ ths -iis
f6 upon elcO for - u1on 600. 40 thea coutnu-s with
"a : e. =
a. % any way affect any contract or bstiou mace
ac, provides that ali acts OF parts OF acts inconsistent
with tuc PROVISIONS or tIs act are hereby ie'rhicI
liz Ist day of January, 1850"
Inc o1, DOUBT upon tue question arises from the pc
cul.al pl;.s .o- thU clause embodied IN the
l.s section. Instead OF using the words ordinarily em
pOvcd such clauses 'ue ore THIS act snail Rake II GU
a. S so + A., D5- lin 81 can .clatrl mai any cart
% flHl IfH d. FH. . ~ q n
clause was wholly unnecessary, anu might property ht
regarded suIpls-ee. Ihc repeating clause III the
act does Hoi besu to operate 'ItI tue - "a J4
u, ~ ,-'i Of money -r1ap m fu iorce ana ~
change aulII Lii time .. ieas..
Nv couc.l,Ial j, tn.o loans any rate may be made
i $50, precisely toe same ~ guOugn amended act
not been passed .hd Thai 5urA con facos "" bt
same rulo Will Apply loans made on property ID Other
states Ia az. meantime. lou ank,
Sec0Ed-N neither there any method ~ which money
ca loaned by Tie coupany Al any uEHer g'oe oil IN
teI-,t contracts MAGE u lAi5 9.Att IIe 'es uIllJ
bouds ana NOR cages on property ID AZ zen.
3taesi IL Iot lAt tAe COMPANY can mahe Ioals Oh
properly aJ-cea. o.ates on contracts Ha-o ia tAl'
State - any hizhtl Ettt ol interest IMAM H' ~ '
T4Syd-WhdJ penalties, II any, exist for the VIOLATION
OF new law IIls Is very d-nlcUiI qIr',1oA -
answer. 30 penalties are imposed III LIE amended Ac
ac author oi the aeI probably intended not affect
tie prov Of utle 3, euutlcd "Oi the interest
OF money IA any other " 81 Than 20 cnage the rae %
irt.r.s. rom 10 per GsI provided IN section ],
-uppOs!ng ali Ot.ler sections Of tue llIt
remain in tut force anu efrc'. Bug very serious
question arises whether the reusl.es IMPOSED DS Ll7
I'e of me amended a. 4 Z NJ tue rae OF nteres,
al per cent It's well Jird rule Of aW 1lat p"nA
stalites DE strlctJ construed Iae5 arc no.
~ h., extended even b. equii able cgustructlUu5 IL
,,ia;y rig ish he pIoIIbtous anu penals.r, are
aga usl The Jakac rrseryln- ot ngner rae OF lh
Ieggst tuan Z per cent Ihers b" no PEOhlDt4on Vi
penalty IN original &c. against the taxing ~ Ie-
ceivlug any rate o. lnIcr,st, except III Excess
oil Z per cont; aud do nor believe 'LJ-e
p,nafles can DC enforced uae.s AZ any rae,
= higher rate Ot hSrrrsS ui@h per oons ~
t1e aIneuded section into the act destitute u any
penalty Tor is o'a~A, cannot Dc 49, 80 4''0'
4 penalty provided AGAINST lAe I-A4-- "a r. r. .,r
under me Original think, therefore, ina h't'I
'Lt ,u .,.r'.t I,nf evre.ogg upr cent would NOT be
u,urlous extent OF WORKING FORFEITURE OF 'Ao
l0an or sLbecung The person receiving ~ 70 pu-i'A
e -.cti1 = o. tae original act, which follows see,
uon amenGed. IL PROVIDES tnat 40 Pot 'Ol e'e., si
ta-e Or receive any -I,as,4 SUI -a - i what
OF any money Ian l' 4oo'e - ,n two *.
prrss,Ous aic equivalent 4hat srcsoh Io'""In' .'
changed, ana j. iisL,.I VI INC @Clos - a. .S nv
I'm ,, 60 read No. me coustrucon would b. the sane
m, 1 ,,ib.-.'ispr .eci0rs where tho words q" .an
nan Is above prescribed" than ia pr srIlDel ~
the 5aid rue occur tnsy r. % De construed though
tAe equivalent preston .n PEE cent Aad Doah .s'u
instead. No one tHlui can teau these SUBS lel. 80
tons ana equivalent without coming 20
tne conclusion plea usurg could not 90 sus
tanned rte OK interest taken OK resnIFeu VA"
IAN not prepared To say that the adoption OF ihe
aHedeI section nas IDroEaied al Ihe Gsufy laws -
Inc question TREE from douD- AIlcF Inc u. VI
JANUARY 1880. Tie legal rlIe of interest IA ms ST.
cent when no rafe OF interest," u oVotg
Ged Iu the clear that greater sum cJul
b. cxarted or TrcOyeIedj bat II IS not clear th-
III higher rate than 7 per cent, even hhoutIi
Be specified, that tie contract could ne Lh1ie VIZ
ON the ground oi uslry. The tmD-ff-aautht SIons 80
IN ne oul-sJu By l. 4saJurc OF attaching any pro-
,ItltIus o. penalties 80 tAt law changing ihc ray, o
Interest to g per cent In connection win '.o
adoption tAe amended stclou hAihE tir i't ga mo-
r.f AM ..s paris OF s inc Aeia-rAl WIN tAr ".
weir rcDraied anu the question is, whether theI ~
auvtllna lea ia 81 the Revised Statu,er' chl-
49,. o. ne interest Oi money, except thr pofIs'H
sreou l. lst adopted. By section i. article - 81 "a
amended st4io ClnslltriiOut "a Is ptoFidod mae -
aeI small be plssrd wuch shall provide that ANY tAlst
Ing Law or auy par thereof su-l DC made OF dceih,u
mar. of sad urt, OF mich s4l enact mat alJ cA-'lH-
ig or ufv par thereof 6Aai. be applcablr, cArcP ny
l.ertius % M such ACT" l. D. true thc Legislature u
uo 4ffeup. by ruac make the subsequent SOC
fious IN IlTle applicable 10 the act p4fscd "nu ~ -
ce tblr under th- prDvislgu OF the cOusuiut0h lH'y
sad no uower 10 80 make 10 applicable sGOrt OF re-
.u.aturDt whole Lldo Al NOuld acoi 10 tYly"'
those --clouR cannot Do ihhe apPAoa'
by in - LEGATION. Respectfully, etc. - q, go,
III Inn. 1874