The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1891-04-02

laws, now In these cases we find that men
loan at from two to Ave times the legal rate,
Notwithstanding the law declares that the
paper shall be absolutely void, if more than
the legal rate Is agreed to he paid. We see
that usury laws had nothing whatever to do
with making the low rates in the former
cases, and now we see that they are utterly
powerless to prevent extortionate rates in
this class of cases. OF what earthly good are
they, then? None, whatever OF what harm
are they? A vast deal. Does any body be-
ieve that any man could get from TWO to five
per cent a month for money in this state il
we had no usury law? 1t would be impossi
bic. Let us see how this is. The law pro-
hibits that more than ten per cent be taken
on any kind of loans. But no man can posi-
bly, 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
SO they will not touch this class of loans.
There are always few men in every commu-
nifty, who will do an illegal business if it can
be made profitable. Being few. they will
have but little competition in the business,
and therefore, can practically charge what
they please. AS any unlawful business must
be more or less risky, and subject to vexa-
tious lawsuits, with all their attendant costs
enough to cover all these things And thus
does our usury law plunder and rob the poor
est, most necessitous and helpless class of
borrowers. 1t absolutely prevents them
from dealing with just and reasonable men
who will not do an illegal business, and turns
them over to be plundered and robbed by
men who have no regard or respect for the
law.
But if it is true that usury law can and
does reduce 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 farms, lots and personal property, at the
same rate, If usury law can fix the rate?
1t IS d 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.
A very old argument is that money lenders
are avaric GUS, and take advantage of the
necessities of the borrowers.
No one has ever yet undertaken to prove
that people who lend money are filed 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 Dolces 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, harpies and plumber
ers, because they thus accommodate others,
md hoe tEnr to fhn' - H,1S-
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
their money to the strong, and the able ones,
and still get an income themselves.
AS to lenders taking advantage of the ne
cessities of borrowers, it is difficult to see
where they have more opportunity to do so
than have the men in other vocat:ons.
There are thousands upon thousands in
this country, who have not sufficient cloth
ing. and suffer their whole lives from aches
and rheums, caused by a want of sufficient
warm cIoth ng. Why should not the law fix
price beyond which sheep raisers and cloth
ierS should not take advantage of the neces-
the man who has money instead of wool
should be compelled to rel eve the necessi-
ties o. these PEOPLE a. prce fixed by law,
than that the owners OF wool and cloth should
be compelled to do so? Not a b t.
Thousands upon thousands of people live,
or rot, in damp cellars or novels. scarcely fit
for the habitations of beasts. Why should not
the owners OF houses and 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 reduce l from twelve to ten per cent, it
would drive ont money and bring isaster to
the state. To this it is answered. that no rea-
sOnalslc man every claimed tn" present uSury
law would bring ruiR 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 run some peOp,, and
would seriously impair our tinanc. al condi-
ton, and prevent the progress of the state,
but could hardy 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 dr.vin~ capital out, increasing the
average rate of interest paid, and by de-
crrasiny tue amount of none; in the state.
and thereby decreasing the value of our prop
ertv. Surely this would he 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 legis-
laturc proposing TO reduce the contract rate
to eight per cent. and TO tax the mortgages Of
nOn-res identS the same rate that other prop
erty n the state is taxed, would beyond any
possible doubt, prevent eastern money coming
into this state except on the large loans in
the cites. And those who have the other
classes of leans 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, VIII CHI
would reduce the net interest to the lender
to six per cent. ont of which he would have
to pay commissions to his agents. Does any
SINE 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 thev have here, but do not let
Us dece We 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.