St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1889-03-09
USURY REFORM.

Ii is a very dull session OF the leglS-
lature when usury bill is not pressed
upon the attention of that body. This
legislature is no exception to the rule,
and consequently good deal of time
has been devoted to a discussion of the
threadbare subject.
One misfortune connected with these
discussions is that more or less acrimony
is engendered, and the question rarely
receives the dispasSlonate consideration
it merits. The two classes particularly
interested in this subject, the lenders
and the borrowers. seem to distrust
each ether, and instead of coming to-
gether in that mutual confidence which
should exist between them, each is suS-
picious that the other is seeking ali M
due advantage. This is not the spirit
that should govern discussion of the
question. There are too many interests
TO be affected by changes iii our uSury
laws to make it ia any sense a partisan
question, or one to be disposed of with
out full inquiry into all its possible re-
suits.
The bill now before the Legislature,
and which has already passed the lower
branch, is not the Pandora's box that
some of its opponents represent it to
be, and yet is measure Of such QueS-
tionable utility that our lawmakers
should go slow in making the changes
proposed by this bill. The mere fact of
reducing the maximum rate of interest
from 10 to per cent is of itself an i'll
consequential feature of the bill so far
as it affects the relations between the
banks and their customers. or between
reputable money-lenders and borrowers
who have credit. Eight per cent is the
average rate of discount at the banks
now, and but few persons who
have occasion TO borrow money
in business way are compelled
to pay higher rate OF interest. The
curbStOne bankers, the paper shay
erS, and those who make 1t business
to drive hard bargains with persons who
are forced by their necessities to pay
the maximum rate are about the only
ones who avail themselves of the 10 per
cent clause in the existing law. If they
stopped there, and accepted the 10 per
cent interest as the limit of their rapac-
ity, there would be no special occasion
to complain of the hardship of the law.
But it is their system Of eyading the
law by compromising interest, and
though the device of charges and COM
missions swelling the interest UP to out
rageous proportions. that a public senti-
ment has been worked up in opposition
to the existing law. Like all senti-
ments that are created by the force of
outrages committed, there is in this
usury reform movement a degreee of
radicalism that is more menacing to the
general welfare than the original
wrong.
The GLOBE will heartily indorse any
legislation directed against the money
lenders who practice the Shylock meth
DDS, or that will stop the Illicit traffic in
money pursued by disreputable loan
offices. But we do not think it neces-
sary, in order to accomplish this praise
worthy object, to make such radical
changes in our uSury laws as are pro-
posed by pending legislation. There is
no reason to complain OF the existing
law, providing it were rigidly enforced.
uC SneCt VI TIC passage VI OUCH Il law, Ot
the bill now before the legislature, would
be prejudicial to all our financial inter-
ests, in that it would impress capitalists
with the idea that our Minnesota peo-
pie were illiberal in their treatment of
money-lenders. Ii we were SO situated
that orr home capital was ample for all
our demands, and we wished to keep
out foreign capital, then this proposed
legislation would be just the thing.
But inasmuch as we are not so situated,
and the further development of our
state can only be effected by an influx
Of capital from other sections, then it
occurs to us that all legislation Of the
character now proposed is scarcely
short of suicidal. 1t is always a good
rule to let well enough alone. We are
getting along admirably under the exist
Ing usury law, and there is always a risk
in swapping horses when crossing a
stream.