The Pulaski citizen. [volume] (Pulaski, Tenn.) 1866-current, 1885-02-19
Conventional Rate Of Interest.
southern Standard.

/
conventional rate of interest, not to
exceed ten per cent. The friends
of a contract rate believe it is abso-
lutely essential to develop the re-
sources of the state; that cur inter
est laws should be such as to invite
rather than drive away capital.
Men engaged in trade often find it
difficult TO obtain the use of money
at home because the rate of interest
is higher in other states. II it is of
real advantage to the development
of the resources of the state tc, have
larger amount of money in circu-
lation it would be well for us to
study the question and shape our
interest laws so as to bring about
the desired object.
The time has been when a major
itv of the farmers of Tennessee
we're borrowers, and as such, OPP
posed to a conventional rate; but
now that they are becoming more
and more prosperous every year,
and most of them have little sur
plus to lend, they. would probably
not object to lending their monsy at
even higher rate than per cent.
if legitimate, and it should become
worth more than six. When money
becomes worth more than six per
cent. the borrower directly or indi-
rectly often pays more, though it
may not be so expressed in the face
OF the note. Money is a commodi-
ty and like everything else, huctu-
ates in value. When corn, ordinar
lily worth so cents per bushel, in
consequence of increased demand
becomes worth rs cents, no one de
nies the right of the owner to sell
his corn for rs cents. Supply and
demand govern the price of articles
of commerce and it does seem that
the same law or principle should
govern money. Six per cent is well
enough for the legal rate, and
should be recognized as such except
by mutual agreement.
The rate of interest is different in
nearly all the states. 1t is q mat
ter for each state to settle for itself.
That our readers may know the
rate Of other states, we copy the
following from Mr.. Goodwin's ad-
dress before the Cotton Exchange
of Memphis. In his address he
gives the following interesting sta
tistical information. He says:
s1In our endeay0r to secure actual
facts we have examined with great
care the census report up to 1880,
and as far as possible viewed the
question under consideration from
the standpoint of farmer, because
his occupation and its results is
truthfully said to be the foundation
of all prosperity. If, therefore, this
proposed amendment is TO benefit
the agricultural interests of the
state, it is the duty of every citizen,
whether engaged directly or indi-
rectly in that pursuit or not, to ad
vocate the passage of this bill by
the present legislature.
Twelve of the forty-seVen states
and territories of this Union have
no limit to the rate of interest
charged where contract is made.
In the absence of a contract Of
course the law fixes rate. Eleven
states have 8 contract rate not to
exceed ten per cent, five states not
to exceed twelve per cent, one not
to exceed eighteen per cent, eight
not to exceed eight per cent, one
not to exceed seven per cent. Nine
states only adhere to the old six
per cent. rate. All the cotton states
except Tennessee have a cOnyen-
tional rate of interest, and are all
benefited by Its operation. The
best index to the prosperity OF the
farmer is the value OF his lands. If
the conditions are such that his
business is profitable his lands in
crease in value, but if not profitable
they decrease. Now, let as test
this by known results, in states
having different interest laws. Mas;
sachusetts and California have each
what is known as free contract in
terest laws, that is, no limit. These
states are widely separate and to-
tally different in climatic conditions
and natural advantages. Massa-
chusetts has not only rocky, poor
soil, but is locked up six or seven
months during the year by snow
and ice, which necessitates great
outlay on farmers for both man and
beast; yet her farm lands have in
creased during the ten years, from
1870 to 1880, 81, ,28 per acre through
out the state, and her bank capital
is 500, ,46 to each individual in the
state. California has the great dis
advantage of the wet and dry sea
son. Six months, from April to
November, not a drop of rain falls
to moisten the parched earth. Yet
with liberal interest laws, abun-
dance of capital, they have SO far
overcome this seeming defect in ma
ture as to increase the value of
farm lands for the time named
above So, ,43 per acre average for the
state, and have banking capital Of
$5S,45 per capita.
Tennessee, located between these
two extreme states, with mild eli
mate, fine soils; rains and dews to
moisten it without irrigation, tim
Der in abundance, health excellent,
water good and plentiful; with all
these splendid advantages farm
lands declined $I,12 per acre
throughout the state from 1870 to
1880, and her banking capital is, we
are almost ashamed to write it,
$500 to each individual in the
state.
We will compare Connecticut
with Massachusetts,, lying side by
side, with apparently identical ad-
vantages naturally, but Connecticut
has the ironclad SIX per cent. Her
farm lands have declined in value
during the term named for the 9TH
er states $500 per acre throughout
the state, while Massachusetts lands
as stated above have increased 81, % |
during the same period under the
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