The Worthington advance. [volume] (Worthington, Minn.) 1874-1908, 1891-04-02

laws, now in these cases We find that men
loan at from two to five times the legal rate,
Notwithstanding the law declares that the
paper snail be absolutely void, if more than
the legal rate is agreed to he paid. We sec
that usury laws had nothing whatever to do
Win making the low rates in the former
cases. and now we see that they are utterly
poweriess to prevent extortionate rates in
this class of cases. Of what earthly good are
they, then? None whatever. OF what harm
are thoy2 A vast deal. Does anyb body be-
ileve that any man could get from two to five
per cent q month for money in this state If
We had no usury law? 1t would be impossi.
Dlek Let Us see how this is. The law pro-
niDlts that more than ten per cent be taken
on any kind of loans. But no man can posi-
DAy AFFORD to make small loans at ten per cent
On such hazardous security as chattel mort.
cages, where the losses must be great under
the most careful management. But most
men will not engage in an unlawful business
50 they will not touch this class of loans.
There are always few men in every commit.
nifty, who will do an illegal business if it can
be made profitable. Being few. they will
nave but little competition in the business,
ana therefore. can practically charge what
they please. As any unlawful business must
De more or less risky, and subject to vexa-
t'ous lawsuits, with all their attendant costs
and annOyances. these men must charge
enough to cover. all these things And thus
does our usury law plumber and rob the poor
est, most necess.tous and helpless class of
borrowers. 1t absolutely prevents them
from dealing with just and reasonable men
VINO will not do an illegal business and turns
them over to be plundered and robbed by
mon who have no regard or respect for the
law.
But II it is true that usury law can and
does leduce the rate of interest, why fix it at
eight per cent? Why not make it three per
cent: Men loan on first class securities at
three per cent. and why not make them loan
on 1arms, lots and personal property, at the
same rate, II u usury law Can fix the rate2
II IS very grieVOus injustice to our people
to make them pay eight, when it is just as
easy to make the law read three per cent.
ARGUMENTS IN FAVOR OF UsURY LAWS AN
swERED.
very old argument is that money lenders
are avaric. GUS, and take advantage of the
necess ties of the borrowers.
No one has ever yet undertaken to prove
that people who lend money arc filled with
more greed than other mOrtals, while the
class of people who lend on mortgages in the
West. can hardly be suspected Of being worse
than others in this respect. who are these
people? They are GENERALLY widows who
have collected life insurance pol ces on the
lives of their deceased husbands; guardians
who have moneys belonging to their wards;
trustees of all kinds, who have trust funds in
their hands; preachers. teachers and other
salaried people, who have saved something
out of their salar es. Rich men very rarely
indeed loan on western mortgages.
Energetic business men. in the prime of
their strength, never loan their money: they
use it themselves. And should these people
be denounced as sharks, harpes and plumber
ers because they thus accommodate others.
and enable these others to carry on Their bus
mess enterprises. and give employment to
multitudes OF people? The young. the mex.
perienced and the aged could not carry on
these great enterprises, but they can loan
the money to the strong. and the able ones,
and still get an income themselves.
AS to lenders taking advantage Of the me-
cessities OF borrowers, it is difficult to see
wnere they have more opportunity to do 80
than have the men in other vOcations.
There are thousands upon thousands in
this country, who have not sufficient cloth
ing. and suffer their whole lives from aches
and rhcums caused by a want of sufficient
warm clothing. Why should not the law fix
a price beyond which sheep rasers and cloth
iers should not take advantage Of the neces.
sites of these people? ANY more reason that
the man who has money instead of wool
should be compelled to rel eve tho necessi-
ties Of these people at a pr.ce fixed by law,
than that the owners OF wool and cloth should
be compelled to do 80? Not BIT.
thousands upon thousands of people live,
or rot, IN damp cellars or novels, scarcely fit
for the hahitations of beasts. Why should not
the owners of houses aud lands be com.
PEELED to furnish them with decent homes, at
price fixed by law and beyond which they
shall not be allowed to take advantage of the
necessities of these people?
FORMER USURY LAWS DID NOT RUIN THE
STATE.
But, say Others we were told when the rate
was reduced from twelve to ten per cent it
would drive out money and bring disaster to
the st"te. To this it is answered, that no rea-
sonabe man every claimed the present usury
law would bring ruin and disaster. Indeed it
would be a bold assertion to say that any
usury law or tax law would ruin the state
They may indeed ruin some peopE', and
would seriously impair our fnanc al cond-
ton, and prevent the progress of the state
but could hardly ruin it.
But let US always bear In mind that the
question is not whether these laws will ruin
the state. but whether they will injure the
state by driving capital out, increasing the
average rate of interest paid, and by de-
creaSing the amount of money in the state.
and thereby decreasing the value of our prop
ertv. Surely this would be injury enough to
warn Legislators aga INST such legislation And
ought to be a sufficient answer to the man
who tells you that the former usury law did
not ruin the state
PROPOSED LEGISLATION
But whatever the effect of former legisla-
ton on this subject may have been, no man
can doubt that the bills now before the leg1s-
lature proposing to reduce the contract rate
to eight per cent. and to tax the mortgages of
nOn-re>idents the same rate that other prop
erty in the state is taxed. would beyond any
possible doubt, prevent eastern money coming
into this state, except on the large loans in
the cities. And those who have the other
classes of loans here now would most surely
withdraw them at the very earliest possible
moment The taxes proposed would rarely
fall below two per cent. per annum. which
would reduce the net interest to the lender
to six per cent. out of which he would have
to pay commissions to his agents. Does any
sane man doubt that this would prevent any
more such loans being made here, and that
existing mortgages would be demanded as
fast as they become due? Let US say If we will,
that we don't want any more eastern money
here, and that we are anxious to have them
take out what they have here. but 10 not let
us deceive ourselves by Imagining that we
can get more money if these bills became
laws. or that we can retain what We already
have here. J. w. p.