Mexico weekly ledger., 1879-01-30
communicated
The Four Per Cents.

The Four Per Cents.
The very large amounts of these
stocks daily subscribed for in this
country and the foreign negotiation
of them reported confirm the prevail
ing sentiment that the legal rate of
interest in this State ought to be low
cred.
1t ought to be remembered how
ever, that these four per cent. bonds
offer some great inducements to
money lenders at home and abroad.
To foreigners four per cent. is not a
bad rate and to Americans exemp-
ton from taxation places them on
par with ordinary six per cents. They
can also be realized at any moment.
The National banks too are COM
pelled to re-invest their called six
per cent. bonds to provide security
for their circulation. The banks are
making all the domestic subscriptions
and as a farther inducement are not
only allowed commissions, but enjoy
the privilege of earning double in
terest for 80 days. Indeed we should
not be surprised in the least if it is
shortly reported that the First Ma
tionaI bank of New York has realized
another million of dollars out Of its
own and the subscription of the
foreign syndicate to these bonds.
Such contracts the result in part at
least of s:ss2ritism ought not to mis-
lead anys.bto think that money is
| abundant. The same National banks
charge as much for loans of their
notes to their customers as ever.
Money even with guilt-edge security
commands old rates. We may, as
some think, have entered upon the
road that leads to the confidence ana
prosperity, but the Canaan thac CONS
up in the imagination of many is VET
afar off and can be approached only
/, by slow marches. Had we reached
and captured it the demand for low
interest would not be so loud.
Flo doubt our interest laws like all
other statutes need looking after.
They contemplate six per cent. where
no contract to pay specific interest is
entered into. 1t is proposed to re-
duce this to five per cent. but it ought
to be abolish ed. There ought not to
be legal provisions for collecting in
terest where it is not promised. Any
thing short of dong away with that
will not put the community on the
old common law basis.
The safe rule for interest is pre-
vailing rates of profits. When large
returns can be realized from invest
ments, the use of the means of max
ing them is, and ought to be worth
more than when business gains arc
small. While the rate of interest ougk'
to fiuctuate like the profits of trade.
it ought to be always the index ano
never the regulator of the condition
of prosperity. 1t amost invariably
becomes the latter however, where
usuary laws are strictly enforced
Fortunately for counties where they
exist, this is rarely done. There Is
almost always some way Of avoiding
them left open.
A writer in the st. Louis Repub
lican says, if the Legislature shoult
reduce the rate of interest to sever
per cent. as suggested by the Cover
nor, it would be less than the rate
fixed by any State in the Union, un-
less it be Pennsylvania, which is the
lowest, the maximum rate there be.
ing seven per cent. Three of the
other states have eight per cent.
eleven states have ten per cent, fouz
have twelve per cent. and ell the re
mainder allow any rate to be collect
ed that may be agreed upon between
the parties.
1t is a question well worthy of be-
ing duly considered whether money
is so much more abundant and value
less in Missouri tEan in other states
as to make it practicable and wise tt
reduce the rate of interest in it to less
than that of her sister commonwealth,
i y