The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1889-02-12
CONVENTIONAL INTEREST.

Its Effect Upon the Borrowing Classes
What a Mississippi Farmer Has to Say.
An APPEAL reporter happened to be
present last week during discussion Of
conventional interest and foreign capital
between Memphis merchant and wide
awake Mississippi planter, at one of the
leading hotels. The Mississippian re-
marked:
81 see that your people in this State arc
beginning TO realize the benefits to be de.
rived from an abundance OF money. Ger
tainly you have never had an abundance,
because whenever ! come TO Memphis
hear IL upon all Sides money is so scarce.
why don't your farmers take hold OF this
question: FROM our experience in Mis-.
sissippi should say that they ought to be
greatly interested in any scheme that
looks TO bringing foreign capital in COM
petition with your local capital. In our
state the rate Of interest allowed by law
has induced an immense inflow OF
money, of which many farmers have
availed themselves for the purpose
OF becoming independent OF their
commission merchants. Take my own
experience ~ an illustration. I used
to come to Memphis or 10 New Orleans
when | needed money for my farming
operations. ! would 20 10 the merchant
and state my wants. lie would say, with
n SIGH, We'll, money is very scarce here,
bul | suppose We will have 10 accommO-
date YOU; but you must pay Us 10 per cent.
and agree 10 buy all your supplies from rs
and 10 ship all your cotton 10 us for sale"
| could get no money from any other peO-
pie aud was compelled losuhmit To these
terms. The result was that | not only paid
the merchant hls interest, aud thus aided
him TO violate the law, but | also paid he
big profits which lac put upon his goods.
because lac was risking me. Besides,
paid him all sorts OF charges for selling
my crop. When ] came 30 figure nc the
cost Of this accommodation / found that
IN addition 10 To per cent. interest, | had
paid in the increased cost OF my goods %
10 30 per cent more, besides the charges
for selling. This practice kept me In debt
year after year, aud | got no better very
fast, until made up my mind 10 borrow
what | needed from the new lenders which
were then coming 10 Mississippi. ! did ~.
| paid of my debt 10 my merchant
aud went into the market with my cash
aud bought my supplies where ! found
them cheapest, aud mere than all, con.
trollcd my own crop, sold Il where liked,
frequently at home, and thus saved the
usual charges which were otherwise una
yuidablc.'
GLOW 10 you get along with your mort
gags p suid the merchant.
1--WE have no trouble about that. The
money IL borrowed ON long time, five or
ten ycars say. We have the privilege II
reducing the loan by inslallmcnts. We
pay the interest semi.annually, aud arc
working out easily. The saving Of the
immense cost Of buying goods on credit
and handling crops, form our sinking
fund, which enables NJ TO get along with
out Inconvenience, and eventually 10 pay
! oil the debt"
"liut them" suggested the merchant,
chow ID YOU find foreclosures Are not
these foreign capitalists acquiring your
farms In this wayY'
II am informed tha., ~ a rule, the fore
closures In Mississippi will not average
one half OF per cent Of the loans. Tie
reason h. plain. The lender selects his
customers from among the thrifty class,
and people oi good Judgment THIS class
| will never borrow money unless they can
see that they can do 10 and make profit.
The result b that failures among them are
/ Of tile TuTpEt occurrence.