St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-02-07
UTILITY OF USURY LAWS.

If eXpediency is made the guide,
probably it will be admitted that money
brokers ought to be allowed to take
their commissions. If they are not,
they will not act as money brokers any
more, and the profession will cease to
exist. These gentlemen will not work
for glory. If they want to do that, they
would prefer to eonine themselves to
the debates at the chamber of COM
merce. 1t will be rather bad for them
if their business is made criminal Of
Tense, but it will be a good deal worse
for some other people. Nobody need
hire a money broker if he can get his
money i'll any other way. Some people
of influence and with personal connec-
lions can do this, but most people cam
not. To have to pay brokers' COM
missions or go without money may be
frightful alternatives. But it would be
infinitely more frightful to good many
of ussif there were no alternative
at all to going without money alto
gether, no matter how much we need it.
1t is the same way with this question
of interest. 1t will do no particular
harm to reduce the legal rate to six, or
even five per cent. There is some
advantage in having the law, because it
accustoms men to measure the value of
money at this rate, and insensibly has
its influence in keeping down the con
tract price asked for it. But there is no
sense in saying that no more than eight
per cent shall ever be paid for the use
of money. Why should this figure be
adopted as the limit rather than any
other? If the legislature can accom-
plish anything by putting its veto on a
higher rate than four per cent, why
does it not go further, and put its veto
on any higher rate than four per cent,
OF three per cent, or two per cent, or
even one per cent? The answer to this
probably is that these figures are too
low to be fair or practicable. But this
only suggests the further question,
has the legislature any supernatural
source of information from which it has
learned that eight per cent is fair.
practicable maximum? With what
Egeria have our Numas been COM
muning?
The contract price of money had bet
ter be left to take care of itself. Illegal
limitation of it either can be or cannot
be enforced. If it cannot be it had bet
ter not be on the statute books, because
uncomfortable laws bring the state into
contempt, lower the standards of bust
ness honor, and equip the tricky and
dishonest with fuel for their arsons. If
it can be, it will prevent people in Min
! nesota from borrowing money when the
| current rates elsewhere are higher than
the legal limit here. A few weeks ago
there were any number of men who
were willing to pay 25 and even so per
cent for money; and that, too, Oh good
security. For some Of them money at
any price meant a fortune, and for
| others it meant salvation from ruin. Of
course. in point of fact, barricade of
usury laws nine miles thick would not
have prevented them from getting what
| they needed at what was asked for it.
BIT suppose that they were prevented
by some statute. 1t might not have
been so bad for those who were kept
from great wealth, but nobody can
argue that a myriad of business failures
would have been good for the state.