Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1892-02-14
THE INTEREST LAW.
To the Gaze


Every one knows what the interest law
was prior to the legislation of 1891, viz,
the rate per cent fixed by law where the
contract failed to specify Ia rate was per
cent, but as high as - per cent was al
lowed if the contract so recited. If
greater than II per cent was agreed upon or
charged, this was defined to be usury and
worked a forfeiture of the interest only.
The acts of 1891, chapter 6S, page 81,
changed the minimum.legal rate from S per
cent to 6 per cent. While this act is silent
as to 4 maximum rate the constitution, as
amended on August II, 1891 fixed the max
imum rate to be charged at 10 per cent If
agreed on by the parties to the contract, if
no rate was agreed upon the law fixes the
rate at 6 per cent, and by this
amendment, it was also provided that the
first legislature after the adoption of the
same, should provide appropriate pains and
penalties against usury. But the Twenty
second legislature, in its eagerness to pass
extreme penalties against usury, provided
the following penalty, chapter IS, page 20:
THAT if any person shall for himself or
as the agent of another, either directly or
indirectly, loan any money, and directly or
Indirectly charge or receive greater rate
of interest thereon than u per cent per
annum he shall be deemed guilty of usury.
and upon conviction thereof shall be fined
in any sum not less than one-thIrd nor more
than the whole amount Of the money so
loaned"
No further testimony than this absurd
and paternal piece of legislation would be
necessary to convince the thousands of
citizens of other state, whom we are
inviting to make their homes within our
borders, that the tendency of our legisla-
ton instead of promoting the happiness
and general welfare of the greatest number
was to anarchy pure and simple.
Instead of filing our jails with criminals
I, \
it not be wiser TO enlarge the jurisdiction
of our probate court and by sweeping act
have a public guardian appointed whose
sole duty it would be to fix his seal of ap-
prevail to every contract made by one citi-
zen with another, and that no contract
however trivial, unless approved by this
functionary, would be valid and binding on
either party therefor We would then at
one step reach the goal that our present
legislators have striven so hard to attain by
indirect methods.
The doings of the Twenty-second legisla-
ture are now a matter of history. The
universal verdict of the conservative ele-
ment of our own citizens, and mankind in
general outside of the state who are inter-
ested in our progress and welfare, is now
that the state of Texas would have been in
far better condition had the Twenty
legislature never convened.
Out of about forty-eight states and terri
them all in the severity of the penalty for
usury. Idaho, New Mexico aud New York
coming next with fine or Imprisonment or
both. It is true while in Texas we have
no direct Imprisonment, yet should the fine
imposed be not directly forthcoming i'm
prisonment would be resorted to to enforce
its collection, which l shall hereafter show
might, under certain circumstances, be-
come severer than any state or territory in
the Union.
The following states and territories,
with very slight notifications, forfeit only
the interest as penalty for usury: Ala
bama, District of Columbia, Illinois. Indi-
interest and small part of principle in
Minnesota, Mississippi, missouri, Ne
braska, New Jersey. North Carolina, South
Carolina, South Dakota, Tennessee, West
Virginia. Wisconsin, Vermont and Vir-
ginia. In the following states there is no
achuSetts which assesses q pen
atty only on sums loaned under
$1,000; Arizona, California, Connecticut,
Colorado, Florida, Nevada, Rhode Island,
Washington and Wyoming. In the follow
ing three states the penalty for usury is al
most as bad as Texas, viz, Arkansas, Della
ware and Oregon, which forfeits both prin-
cipal and interest One advantage that the
person guilty of violating usury laws in
these states has over one found guilty under
our laws. There he loses his money, but
he don't have to go to jail, while here,
if unable to pay the fine, he does,
and if the courts in these three
states adopt the rule laid down in Texas
hereinafter referred to, the practical result
is that there is'no negotiable paper in these
three states, for whenever it becomes nee
essary to inquire into the antecedents of
promissory note or . bill of exchange, then |
its negotiability is gone, SO far as the COM
mercial world is concerned.
While New York, Idaho and New Mexico |
impose fine or Imprisonment, or both, yet |
so far as my Investigations have led me, the |
highest fine imposed is $780, while in Texas |
it will be observed, the fine may be equal |
to the whole sum loaned, and in addition 70 |
this the law forfeits the interest which, |
with the fine imposed. is equivalent 10 a |
forfeiture of the entire sum loaned, and IA |
addition to this payment Of the costs of the
criminal action.
Next to those states wherein any rate Of |
interest may be charged, the three follow |
ing are lightest In their usury penalty, to |
wit: Georgia. Kentucky aad Michigan, |
wherein only the excess charged above the !
legal rate is subject TO forfeiture.
Nor Is this all ;-suppose the oHeRisr9a