The record-union., 1893-02-17
BILL DEFYING EXPERIENCE
AND REASON.

O'osNO' Nh0 AcalIy increasing tne Ie6 LOT
the service of money, making capital
wary of our market, lessening invest
ment and creating steadily stringent
money market condition. We invite
legislators who wish to do justice, to con-
slider some everlasting principles under
lying opposition to usury laws.
When men talk of regulating the value
of money by laws they talk nonsense, for
the value is the purchasing power money
has, and this never was and never can be
regulated by law.
But the high or low value of money
depends on distinct set of causes from
those determining the rate of interest.
The lender is entitled to privilege of SELL
ing his service, and the borrower the
privilege Of knowing the value of the use
of that service to him.
The borrower knows, it must be as
sumed, the use to which the money is
to be put, and what it is worth to him.
To forbid him his right in this respect, is
to interfere with his liberty of action and
the right to avail of the law of supply
and demand that prevails in money serv-
ice as in all other service.
If the lender could compel one to take
his money, says Professor Newcombe.
the eminent political economist, it would
be a wholly different case. AS matter
of fact lending is the sequence of asking.
The law must assume that the borrower
does not ask except he believes the serv-
the lender demands for its use and some
thing more.
A rate of interest is not the property of
money, but depends upon the advant-
age capital gives its owner in production,
for, as Newcombe puts it, capital is a
labor-saving agent; with the aid of
labor it returns the user reward greater
in value in the future than that of the
capital and labor combined.
He who lends money enables the
borrower to devote his labor and skill to
his future good by meeting needs now,
and thus enables the latter to produce
more. Interest is the excess of increase.
paid on account of the opportunity to
anticipate future results, and in this an
ticipation there should be perfect free
dom.
We assert this truth and defiantly
court contradiction-all human expert
ence, all sound principle settles it, that
usury laws punish not money lenders
but the poor man, the borrower, the en-
ployer of labor, the user of that best capt.
tai, combined money and labor.
Whoever advances a usury law under
the plea that he is legislating for the poor
man, is either demagogue or unfamiliar
with the economic and unvarying laws
which govern money use and the reward
of labor.
No Government in later days ever has
attempted to establish usury laws to APP
ply to itself; why? Because all Govern
ments know that they must borrow as
they can.
If usury laws are good for citizens,
why not for Governments? Yet in no
organic law was there ever a clause for
bidding the Government to borrow with
service restraint when its need required
it to borrow.
Competition in money is governed by
laws as is competition in commerce,
which are incapable of control by legisla-
ton without creating stringency in the
lending market, and keeping outside
capital out of it, thus giving to local capt.
tai the power to exact its own harsh terms.
The time was when the public senti-
ment was opposed to any reward what
ever to money for its use by loan. But,
says Professor Cooley. a very eminent
authority, the opinion for years has been
forming upon directly opposed lines, and
in favor of giving perfect freedom to con-
tract for the service of money as freely as
for the service of any other property.
One effect of usury laws in the present
must be to drive capital more and more
to investment in securities not taxable, or
that are not easily reached by assessors,
or that are so ENJOYABLE as to be evasiye,
and this works an immediate injury upon
the property of the poor man, which can
not take wings.
WhoeVer has examiued faithfully into
the question, has discovered that no
usury law ever helped borrower; on the
contrary they have all invariably visited
upon HIM greater hardships.
Adam Smith, the author of 1.-THE
Wealth of Nations" once held for such
laws, believing they were protection to
the poor; but every man well informed
knows that that great mind became con-
WINGED of its error by Bentham's book
on usury, and Smith acknowledged it
freely, fully, as every genuine lover of
truth always does, when convinced of
error.
Usury laws Cypress the poor, we have
said, because they reduce liberty; they
also drive the coward money capital
out; they leave to such as dares to re-
main, or cannot flee, monopoly. They
encourage cheating and evasion of law;
they raise the rate of interest by reason
of the increased risk enforced by the
penal clause of the usury law.