St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-03-21
THE UsURY QUESTION
Intelligently Discussed by a Bor-
rover.

To the 1itor of the Globe.
L have been interested and instructed
by your recent editorials on the interest
question. and l hope they will have the
etfectot aiding the members of the SEM
ate in their further discussion of the
subject Tuesday afternoon.
The fact which you cite that large
sums have been loaned, and are now
offering in st. Paul ana Minneapolis at
) and per cent. is the best possible
evidence that there is nothing in our
present laws 10 jeopardize the interests
OF lenders in this state, and this is pre-
ciSely the condition which 1t is
. to the best interests of all the
borrowing classes to have preserved.
Under existing statutes, lenders are in
no danger of having their principal and
interest forfeited by the acts of their
agents, but if the maximum rate, in
Guiding commission and other expenses
which can be lawfully charged without
incuIr ring the penalty for uSury,iS fixed,
as is proposed by some of the pending
bills, at per cent per annum, the mar
gin. of difference between the lawful
rate and the rate expressed in the mort
gage note is SO small and the danger
line is so near that prudent men will not
take the chances of possible violation
of the law by their agents, and will send
their money elsewhere.
lapprehend that there is not man.
or an angel even, anywhere III Mime
sofa whom Mr. Eaton or Mr.. Lommen,
who | understand want the maximum
rate fixed at s per cent, would trust to
lend their money under such statute,
supposing they were residents of the
etfete East and money lenders there.
The rate Of interest on money is de-
termined by the character of the secur-
ity and the absence of menaclng laws.
st. Paul and Minneapolis have ex-
perienced q lowering of the rate during
the last four years of 2 per cent. This
has taken place, not because of law
forbidding higher or fixing maxi
mum rate, but because there is no NELL
ace or danger in the present law and
because of the competition, and the de-
slrabe conditions as to security the
law existing here has produced
The same thing is trueof the southern
part of the state. where the security is
stable.
The rate Of interest has steadily de-
clined there, and from the same causes
which have lowered it in the cities.
Rates will follow the same law in the
newer portions of the state as it devel-
ops and becomes prosperous.
A bill fixing the maximum rate mex
Orably at per cent will affect the west
ern and northern sections, where the
minimum rate of interest is now much
higher, much more seriously than the
cities and the older settled districts.
Very little money can be had now at
less than s per cent and commission
on mortgages in the more sparsely set
tied localities, and it is idle to suppose,
either that lenders can be compelled by
statute to accept a rate fixed thereby, or
that they will not gather up their funds
and depart to other localities if they are
threatened with confiScatiOn.
did not intend to go into Che merits
of the question at all, but only to en-
phasize this one thought, that it is
most inopportune time to press any
PROPOSE ton in the legislature to disturb
the interest law. ta
We are confronted, not with theory,
but with an actual financial condition
in the country, which ought to give
pause to all projects that are likely In
the slightest degree to make money
scarcer in this commonwealth. No one
need to be told that money is sensitive
and close, that times are hard,- that
we need now, as much as at any time i'll
our history, all the outside capital we
now command or can invite hither, and
that legislation on the interest question
at this session is most untimely, and
would be attended with most unfortu-
nate results.
1t is worthy of note that while it Is
almost impossible at present to get ac-
commodations at the banks on account
of the prevailing uncertainties, money
for mortgages is still plentiful, and will
be likely to so continue ii nothing is
done to disturb the confidence of those
who control it. "a BORROWER.
March 90 1898