The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1888-08-08

I,t.t.
ONO, D percen contraCi per cent
Oregon, per cent, contract unlimited
pennsylvania per cent; excess iorieis only
Rhode Island, por cent contract unlimited
sonlh 'aro:ina, percent contract 10 per cent
Tennessee, per cent
Texas, per cent Ic0itrocl y per cent
ltnh, 10 per cenIgcontmct unlimited.
Vermont per cent; eEccs forfeited
Virginia, per cent; excess allowed.
contmct. d ~
West Virginia, 9 per cent, usury ioriets excess,
Wisconsin, per cent; contract 10 per cent
wyoming, u per cent contract Indefinite.
Ihe entire dominion OF canada, per cent legal
rate any rate by contraGt excepting Nova Gotta.
1t will thus be seen that out Of forty-six
States and Territories of the Union,
twcnty-iour have the legal rate Of interest
at per cent, and Of these twelve allow
contracts TO be made for 10 per cent. or
more, while only eight absolutely prohibit
an excess. Tennessee is among the last
number, but stands out with this destruc-
tive and unreasonable feature that all &c
counts and causes OF action not founded
upon writing by the dcicndcnt, signed,
do not bear interest unless the court or
jury see lit TO allow it, With this eXcep.
ton, Tennessee has placed her interest
laws upon the same footing rs such States
as New York, New Jersey, Pennsylvania,
Vermont and New Hampshire. Now,
these are very old and settled
States. They are the chief marts
and commercial centcr5 OF the Union, and
have large quantities Of money on hand
derived from estates Of Inheritance and
the purposes Of commerce. They occupy
exceptional positions, and can therefore
attempt TO regulate the interest. So well
is this fact recognized that notwithstand-
ing their age and influence the bordering
States OF Connecticut, Massachusetts, and
Rhode Island allow contracts to be made
upon such rates OF interest rs the parties
may SEQ III to contract. This is signiii-
can't TACT and displays wise statesman
ship. New York, from its commercial i'm
portance, naturally brings money within
It's borders. The opportunities for favor
able AID safe Investments are manifold
The disposition Of securities can be easily
made.
Connecticut Is also n wealthy State.
Still, in order to obtain capital, her people
are compelled 10 enlarge the rate OF inter
est. There can be but one reason for this
cause.-the more difficult converiibility OF
the security, not by reason Of the laws, but
It's value in the open market. When now
YOU come TO consider the middle and west
crn states, the rate OF interest increases in
proportion as the distance increases from
the ccnlrrs Of commerce, until We find the
interest laws oil Wyoming fixed ut - per
cent. Tho response 10 the demand OF
commerce * almost uniform, and, when
these are exceptions, il will be found in
the agricultural States These States are
invariably the last 10 yield, and conse-
qucntly their prosperity Is not proportion
ate TO the sister States. In the southern
states Tennessee is the only State having
n u per cent interest law, aud IL is suffer
ing from a lack Oh capital moro than any
ol the other States This il clearly shown
IN the city OF Memphis, where the banks,
although organized and stamped with gov
crnmcntal apppbalion for the benefits
Of trade, are enabled TO obtain
rom mcrchants .npOn money employed
Immediately ia their business, n
uniform disc~intof \ per cent. aud at
times 50 scarce 10 the supply. cvena higher
rate. 10 oppressive is the operation OF tho
law, that while Memphis with n popula.
ton Of $1,000 has only banking capital
OF 1000 600, tho.city OF New Haven has
moro than four times that amount, al
though her population is not ~ large, The
comparison does not end here. Mississippi
is an agricultural State, aud has what
IL usually known rs non-commer-
cill laws. However, her rate Of
Interest is nSelt d at 10 per cent.
In consequence sha has had within recent
years large influx OF foreign capital, aud
Tor an agricultural State her progress IL
phenomenal. Factories are springing up.
hundreds OF miles OF railroads are being
built, the Mississippi bottom. containing
over $4,000 OF acres OF land which could
have been purchased five years ago at -
cents per acre ~ wild lands are now being
opened Tor cultivation with startling
vim and command price ranging from
$40 10 500 per acre, aud homo
capital Is freed for other uses. IA
beneficial has been the result that |
know OF instances where merchants
Of Gwcnyillc, have been able 10 obtain
iiom residents Of Mississippi large amounts
OF money NJ q low rate Of Interest aud upon
long periods Of timc. In Tennessee. how.
ever, money can be very rarely borrowed
upon real cstatc-irus deeds taken repre-.
sent, ~ rule, only the balance Of the
purchase money-and the time allowed on
loans rarely exceeds four months. II il,
therefore, plain that under such circum.
stances no enterprise requiring time ior
development can DO undertaken.
II must also DO remembered that the
allowance OF high rate OF interest does no,
imply the charge Of high rates OF interest.
! have understood that money can be- Dor.
rowcl ~ cheap In Massachusetts, rs ia New
York, and sometimes at a lower rate.
Money requires and cXncts freedom. II
must not bc impcdcd or hampcrcd. Once
secure It's confidence by wise and iudicious
Laws, and competition. operating under the
same principles ~ other functions oi trade,
will reduce the rate to the normal standard
Of the commercial ccnton. Free il from
the elements OF risk and insecurity. Il will
seek a common level. England has no
fixed rate of interest, and yet money can
easily bo obtained at aud per cont. per
anuum.
Very slight notifications nccd TO be
made In the laws Of Tennessee for the en-
iorccmcnt Of collections aud rendering the
securities quickly available for use, such
~ the infliciion Of penalties for delay. In
the main, the cause has bccu mon with
the delay Of the courts than the laws.
The docket OF tho supreme court Is now
clear aud remedies can be- cxpcditiously
enforced.
Upon the whole n wise policy dictates
q change Of our interest law. Tho consti.
tuition allows the passage OF law fixing
the rate ut 10 porSeni. The chambers OF
commerce should ufiiatc the question.
They can be- iniluelflAl in controlling pub.
lir opinion. 1heytuh alone effect lelisla.