St. Paul daily globe., 1889-02-11
CLARK's INTEREST BILL
Defended by One Who Censures
Ire 70


To the Senators and Members of the
House of Representatives of the State
of Minnesota in Legislature Assembled
Greeting: Your constituents, the peO-
pie of the state of Minnesota, in COM
mite of the whole, having under con-
sideratiOn your action on Senator
Clark's bill Senate File No. 50 to re-
duce the maximum legal rate.of inter-
est from 10 per cent to per cent, which
was indefinitely postponed i'll the SEN
ate, after carefully considering all the
arguments for and against the said bill,
do almost unanimously {bankers and
nuney loaners only voting in the mega
tive} report that your action was not in
the interest of or in accordance with the
wishes of 80 out of every 100 of the peo-
pie whose interests you were sent to
the legislature to represent, and would
therefore recommend that the said bill,
or some other bill embodying the gen
eral principles of that measure, be
again brought before your honorable
body, and we emphatically recommend
that said bill do pass 1
In the opinion of q very large major.
ity of your constituents the arguments
which were used so effectively against
the said bill, resulting in its indefinite
postponement, were chestnutS which
only need to be opened to convince any
reasonable man that they are stale and
worm eaten. We propose to open few
of these, and would ask our honorable
senators and representatives to examine
them carefully.
First-ln regard to the objection made
by some of the senators that the penal
ties are excessive. as no person will be-
come subject to the penalties unless
they attempt to violate or eyade the
law, and as all of our bankers and
money loaners belong to the eminently
respectable class. no right-minded per-
son would even suspect them OF any
such intention, therefore, the matter of
penalties can be of no real Importance.
In any event, the question of penalties
has nothing to do with the principle of
the bill, and if the penalties ale eXces-
Sive, this can be easily cured by an
amendment, and does not furnish any
valid excuse for voting against the bill.
Secondly-The argument which has
been used most effectively against. the
bill is the old stock argument which
has been used in the legislatures of
every Western state and was the prin-
cipaI argument used in our legislature
against the bill to reduce the maximum
legal rate Of interest to 10 per cent
number of years agO-thatreducing the
rate of interest will drive capital out of
the country and prevent money from
being brought or sent here for invest
ment in loans. This argument has
been so often refuted by the subse-
quent logic of events in every Western
state where the rate of interest has
been reduced by law that we can only
conclude that this "back number is
really advanced as all excuse rather
than as reason for voting against the
measure. While there are hundreds of
millions of dollars invested in this
country at less than per cent max
imum limit of per cent can not and
will not keep away capital from this
state. Money, like most other things,
is of no value unless il is used, and we
will guarantee that it will not as rule
be buried while it can be invested at
per cent.
1t is well understood by capitalists
that high rates of interest mean great
risks, and conservative capital rarely
seeks investment where high rates of i'll
terest prevail, and ii it does it is almost
always through middlemen bankers
and money brokers' who borrow at low
interest and loan at high rates; and our
banking and money-loaning senators
are afraid of the competition of real
capital which is willing to accept the
low rates of interest which are alone
consistent with perfect security. High
rates of interest tend directly to depre-
ciate securities, as no farmer or busi-
ness man can pay these rates and make
money; the value of the property or
business declines proportionateiy as its
producing capacity is hampered by high
rates of interest, high freights- or any
other of the numerous evils which fet-
ter the commercial and producing in
terests of this country.
Low rates of interest stimulate legit-
innate business, encourage enterprise,
give employment to labor, and finally
create demand for money; while high
rates make business Improbable. dis
courage enterprise, turn honest labor
erS into dangerous l0afers, and finally
depreciate property and commercial
values to an extent that makes even
money lOaning unsafe.
But it seems impossible to make a
true descendant of Shylock comprehend
what has become maxim in all other
kinds of business-that nimble six
pence is just as valuable as slow shll-
ling. They still insist on the amount
nominated in the bond. We are willing
ing for some Legislative Portia who will
insist that they get no drop of Christian
blood.
You were sent TO the legislature to
represent the interests of the people,
and not in the interest of the class who
are best able to take care of themselves.
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