Wichita eagle., 1889-01-01
UsURY Law A RELIC OF BARBARIsl
The Legislature Ought to Repeal it.

| sion In the EAGLE and have read uE
from Bentham. John Calvin, David
| Wells and r. II. Dana, late of the Mas
sachusetts legislature, Aristotle and OF
course from the Bible, that fountalnhead
of what is vaguely called usury. Like
every subject of general application and
long and constant use it is most inter
esting. The history and philosophy of il
is a complete mirror of the ignorance
and prejudices of not only the masses.
| but of great thinkers, seemingly igno-
rant on that subject only. l will here
| briefly refer to the opinions of Bentham
as best suited to our case, reserving my
observations for the conclusion.
| 1t is very likely that the letters of Jer-
envy Bentham on usury contain the true
and enlightened principles bearing upon
that subject. He says-17S7-
Among the various species or mod
ifications of liberty, OF which, on
different occasions we have heard SO
much, do not recollect ever seeing any
thing vet offered in behalf Of the liberty
of making ones own terms in money
bargains. From so general and univer-
sal neglect it is an old notion of mine
that this weak and unassuming species
of liberty has been suffering much in
justice" Bentham is right; and these
hundred and one years since, i'll this
boosted land of education and liberty,
the laws of some states make the man
exercising that liberty forfeit his princi-
pal, interest and the cost of court. This,
TOO, in face of the example set by other
states in abolishing all penalty for usury
and thus proving that it is only relic of
barbarism and intense religious ignor-
ance and bigotry: having no place for
recognition in enlightened legislation
and commercial usage.
Beltham says further: mo man of
ripe years and of sound mind, acting
freely, and with his eyes open, ought to
be hindered, with a view to his advan-
tage, from making such bargain; in the
way of making money, as he thinks fit;
nor anybody hindered from supplying
him, upon any terms he thinks proper to
accede to-" Could anything be more
justly and simply stated? This is the
right kind of free trade principles for us
in Kansas or for any people who are
civilized.
The same author says: eff the last
quoted proposition We're to be received
generally. it would level at one stroke
all the barriers which law, either statute
or common, have in their united wisdom
set up against the crying sin of usury.'
Fourteen states of the uion have proven
the truth of the above by abolishing
usury laws; and it is not pretended that
the people labor under disadvantage
therefrom. In sixteen more the penalty
is the forfeiture of the excess of the legal
rate or all interest; in either case it is an
arbitrary robbery of the lender and an
injury to the borrower under the forms
of law. A proposition so foreign to the
many that the law is generally a dead
letter. In the states of New York, Vir-
ginia, Oregon and the territory of Idaho
the laws on usury are barbarous in the
extreme when seriously considered, and
contemplate in point of execution.
1t is pertinent here to say that the
principles in the above were written by
Bentham to Adam Smith. refuting the
theory of the latter that the projectors of
schemes and inventions should be re-
strained by wholesome laws. Smith
contended that such would through ex-
cessive but unwarranted confidence
in their schemes be induced
to offer very high rates of
interest and obtain money, waste and
destroy it to the general public detri-
ment, keeping a great deal of capital
from the use of the sober people" 1t is
pleasant to know, and much to Smiths
credit, that Bentham convinced him
that free agency would enable capital to
much better flow to legitimate localities
and enterprises than when restrained.
Had such laws as Smith first proposed
prevailed and been supported by public
opinion in Kansas and the west generally
it is highly probable that the bright
galaxy of great commonwealth so rapid
" called into existence by schemers,
inventors and a comparatively untram-
meled credit, would yet be bowling
wilderness. Hence it follows that Kan
sas has only to establish a reasonable
legal rate where none is contracted for
by the parties; repeal all usury laws, and
do everything just and possible to facih
tate the prompt payment of borrowed
money through the courts. | take it
that the result would be that lenders,
who nearly always want their money
only, would quickly foresee that so far
as the power of the state was concerned
it would be eXerted upon principles
of prompt justice and enlightened
policy to both parties. Then If bad
seasons or other causes had interviewed
to prevent payments, seeing that time
and the always hopeful promises of the
future only interviewed, they could and
would quickly come, in a large majority
of cases, to much better Accommodations
with their debtors than the state could
enforce. In cases of frauds, errors of
valuation and incompetency the security
would quickly be disencumbered and
available. In such cases as the latter if
depression followed there would be bet
ter grounds for quicker restoration of
confidence. But long drawn out pro-
crastination in legal collections would,
probably, in our case, kill the credit of
the state indefinitely.
If legislation OF restrictive character
is considered, some method ought to be
devised to force the loaning business
through the local banks, as more re-
sponsible channels than many Of those
now in use. so valuations would be more
uniform and greater care and integrity
prevail. 1t might be shaped so there
would be a greater aggregation OF
cheaper capital in our banks by cutting
off the expense of the local and inter
mediary agents. 4 bank in Boston pays
4 per cent at home: it loans to an agent,
virtually, in Wichita for 6 and he loans
to farmer for 8, 8 or even Is. | want
the state, if it can, to save the excess
over or s per cent to the borrower with
better security to the lender. and
strengthen our credit and lower the
interest by looking justly after the inter
ests of the lender
lay down this apparently reasonable
proposition: The people of Kansas