The Worthington advance. [volume] (Worthington, Minn.) 1874-1908, 1891-03-26
INTEREST LEGISLATION.

INTEREST LEGISLATION.
A very notable reaction has taken
place against the movement to enact
extreme usury legislation. New states
need money and the older States have
money to lend. The law should put
no embarrassments in the way of the
one or the other, any more than it
should between the buyers and sellers
of wheat or of dry goods. The law
should undertake no more than to see
that the borrowers and lenders deal
fairly with each other.
The farther We get away from the
simple rule of treating parties negotia-
ting for the use of money as we do par
ties negotiating for the rent of a house,
or the sale of cargo of wheat, the
worse We are off:
a merchant brings stock of goods
into one of our towns. He inquiries
Tor store room for his goods, and me-
gotiates for the use of one. There are
no laws forbidding a landlord to ask
him more than a certain sun per year
Tor It's use. The owner of the proper.
ty may be exOrbitant in his demands
He may ask price for the use of his
property that would ruin the merchant
should he agree to pay it. But the law
comes not to his relief. The most ex-
treme performer" does not propose TO
dx by statnte law either a minimum
or maximum rent charge for houses of
certain size or value. It leaves the
whole question to the law of demand
aud supply and the judgment of the
parties. of the one us to the rent he
can afford to pay and the other of " hat
be can afford to take. The law treats
landlord and tenant as it does the
buyer and seller o. wheat-free to
make any contract they may agree
upon, only Interfering in case of fraud
or deception by one or other of the
contracting parties.
A capitalist proposes to rent the use,
not of u building. but Of an amount of
money equal to the cost of one, to
party in need of it to carry on a busi-
ness. They meet to agree upon terms,
and find themselves confronted by a
statute, which prescrbes a maximum
limit, as to rent, beyond which tie
lender may not charge, nor the bor-
rover agree to pay. They are met
with An interference in their mutual
negotiations encountered in no other
honorable transactions. Who would
advocate the con6Scation of mans
building, town lot, or farm, because
he had bound Il tenant to pay il sum
AS rent beyond price fixed by statute?
Tenants are rs likely to suffer from
high rents as borrowers are from high
rates of interest. If statutes must
be made to protect borrowers, why
not also to protect tenants?
The merchant who has stock of
goods to sell will quit the town where
rents are exorbitant and go to one
where they are more reasonable. Ex-
actly in the same way the lender of
money, when he finds his capital in
peril, through hostile legislation, will
lend his money in States that pnt 10
impediments in his way. No statute
can compel him to lend money where
lie does not want to lend. or on terms
unsatisfactory to him. lie takes his
money, as the farmer does his wheat,
to the market where he can sell its use
to his own greatest advantage. When
lenders vacate the market because of
statutory obstructions. who is the suf.
ferer2 Not the lender, for he pockets
his money and finds customers else
where. 1t will be the man who wants
to bOrrow-who must borrow, perhaps,
or lose what he already has. The free
er the market, the more capital is Of
fered. Competition reduces the price
of money, as of any other commodity.
Drive out competition and the bor-
rover is altogether at the mercy of the
local lender.
Laws there are to regulate prices
of money, as of other commodities
but legislatures do not enact them.
Xerxes put chains on the Hellespont,
but its waves were mightier than
the monarch's limitations. Statutes
attempting to control legal tender, re-
sumption, and interest question may
not do harm. may not seem abortive or
ridiculous, when the conditions Of fl
nance and trade are conformable to
them, but when statutes contradict
the laws of trade, they must find them
selves oVerborne.
We suggest to our lawmakers not to
put on too many fetters on the freedom
of commerce. Because men NAV paw
too much in rents, as modern philos-
opher says they do, it would hardly be
good policy to compel the landlord to
accept rent fixed by law. B ,oause
men suffer through hinjudieiou borrow
ing and high interest paying, would
hardly justify taking away the liberty
accorded to other trades than that in
money. It is safe to presume that
borrowers and lenders of money have
the same judgment in adjusting terms
and prices as when buying and selling
Lands. or farm produce. 1t may be
hard on the poor of the cities when
wheat is dear, but it would hardly be
good policy to say by law that the sell
ler OF wheat should ask or receive
more than a dollar bushel for it. It
would not make bread any cheaper if
such an expedient were resorted to.
Gen. A. B. Nettleton, assistant Sec
retary Of the Treasury, has issued a
circular saying that the Federal Gov
ernment never issues license to allow
the retail of Intoxicating liquors. 1t