The midland journal. (Rising Sun, Md.) 1885-1947, 1891-06-12
Interest and Usury.

The legislature of Michigan has been
wrestling with this old serpent's tooth
to industry and the Detroit Tribune, one
of the capitalistic class papers in ami
madverting the action of the "Patrons
of Industry an organization"-it claims
possessing singular talent for bragg
ing forth from the musty sepulchres OF
the past legislative ideas which have
often been tried and always found
wanting.' After administering this
rebuke to the Patrons, and enumerat-
ing the efforts in this direction which
had been made by the ancients. all
resulting in failure, the Tribune con-
tinues.
However, neither the fiat of the law
giver, the moralizing of the church the
power of kings, nor the statutes OF
legislatures. has had the slightest effect
upon the rate of interest, unless to in
crease it and add to its uncertainty.
Money is always worth what the
borro wer is willing or able to pay, and
it is never worth more than the current
profits of business ventures in which
money can be used to advantage. The
rate of interest is fixed by the natural
laws of trade, of demand and supply,
and of the productivity of industry.
Legislative enactment may disturb the
operation of these natural laws, but
cannot supersede them. If money is
worth IL per cent. in the market, and
there is demand for it, no human
power can prevent the payment of that
rate of interest, an Patron of Industry
legislature should ever attempt it.''
If this assumption of Unnatural law's''
control of money was true it would
settle the case in favor of the Tribune
and all that class of reasoners. Bat the
assertions set down for facts are not
facts. Money is not always worth
what the borrower is able or willing to
pay. And the borrower does not pay
according to his willingness or ability,
but he pays no compulsion. The loan-
er on account of special legislation
against him and in favor of the loaner
pays because he must, and very often
much more than the money is worth
to him. The volume of money has
been fixed by special enactments which
favor the holders of money and the
supply being thus limited the demand
is made greater than the supply, which
supply has always been in the hands OF
a few persons who have made use of it
to squeeze industry by the operation of
usury. Competition and not law will
regulate and control the rate of interest
and that competition must come from
the government. The plan has never
been advanced till these much despised
Patrons have suggested it. And like
the hand writing on the wall at Bel
shazzar's feast, the suggestions of the
former class frighten the usurers. They
know, while mere enactments will
avail nothing towards fixing rates oil
interest while control OF the volume oil
money is left entirely in the hands OF
the individual loaner, that if the state
becomes the loaner as well as the maker
of money the individual will be power.
less to fix the rates of usury and defy
law. While law can be evaded COM
petition cannot. If the government
loans money directly to the people who
are engaged in the production of wealth
taking the saleable products oftheir in.
dustry as security Exactly the security
the usurer takes then the private loan
ers whether banks or individuals will
be compelled to loan at the same rate OF
interest. This is the only interest law
that will reach the cause in regulating
the rate to be paid for money, and
when the government becomes a
money loaner at one or two per cent
all private Ioaners will have to come
down to there rates.
The farce of passing laws to regulate
rates of interest has had its day and the
men on the farm are about to cut the
gordon knot by placing the govern
ment in the field as loauer of money
against the usurer. Their property is
and always has been the pledge given
the private money ioaner as security,
and they are now declaring that this
security if safe for the indiyidaal is safe
for the government. This reasoning
is unanswered and unanswerab!e, and
tie more the laboring public discuss it
the more convinced the people will
become ofthe soundness ofthe principle
Improved land and the products of
labor are the securities on which money
is every where loaned and if the govern
ment controlled loans it would be in a
condition to control the volume of cir
culation, and prevent any wildcat
speculation or undue initiation of the
currency. This new system of finance
proposed by the farmers is being studied
by all classes, and the more it is ex
amined the stronger hold it takes upon
the minds of the masses. The Insurer
class Is opposed to it, but they fail to
make decent argument against it.
When the people make their govern
ment their banker, the power of money
to Cypress will have come to an end,
cash will take the place of credit and
industry will be speedily relieved from
the mill stone of debt that is now