Morning journal and courier., 1882-07-12
Too Low Interest.
From the Bridgeport Standard.

Some years ago when the money lenders were moving to make it legal to grind any amount of interest out of those who were so unfortunate as to borrow money, we opposed their schemes on the ground that six per cent was all that borrowers could afford to pay and that the law ought to protect them against the rapacity of those Shylocks who would take four times that amount out of the necessities of the borrowers. Now we think the boot is on the other leg and that the lenders are getting the worst of it. For some of them we do not care. in fact we wish the old usurers compelled to pay men for borrowing their money, but for oth . CTS word can be said. When the credit of the United States government enabled it to borrow money first at five per cent. and then at lower rates down to three and half per cent. that fact affected the rates of interest between man and man till loans at low rates became very common, many cities and States being able to place four per cent. bonds at handsome premium, the proceeds going to take up high interest bearing bonds. The interest paid by savings banks generally fell to four or five per cent, and in fact he is lucky man who is able to loan money now on good security at six per cent Now the government pro- poses to issue two hundred million dollars worth of bonds at two per cent. If this loan succeeds 1t will have 8 tendency to lower interest to still greater degree, and although LnlS LOW interest IS good TOT tue borrower, yet it is not fair to the lender. There are thousands of people left with small sums of money, just enough to live on at six per cent :, who find themselves greatly cramped at four per cent. This reduced interest also works badly in many cases of trust funds. Take, for instance, the Peabody fund for popular education in the South, which at first paid six per cent, while now, if we mistake not, it is largely if not wholly invested in four per cent. United States bonds, which reduces the sum devoted to education just one-thrd, and retards progress to that extent The same misfortune has befallen colleges, hospitals and other public and charitable institutions to similar extent, by having what they supposed to be fixed incomes reduced and thus being crippled in their power for good. We know person who in his youth fixed upon thirty thousand dollars as the extent of his desire for wealth. but who found when that sum was accumulated, the price of living had so increased that he must have fifty thousand dollars, but now with fifty thousand dollars in hand the rate of interest has diminish d so greatly that he must have seventy five thousand dollars before he can retire from work and labor. We believe in giving and receiving fair price for everything and no more, consequently we don't favor the idea of having the laws so that usurers can saf. ly cut the life out of q man by exorbitant demands for interest, nor on the other hand do we wish to see interest cut down below what we deem to be fair rate which is, in our judg- meEt, six per cent We of glad to have the government borrow at the lowest
 possible rate. but do not wish to see too low rates prevail in the community.