The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-09-15
September 10, 1897
THE CRY OF THE USURER.

THE CRY OF THE USURER.
The following has been given place in
some of our exchanges:
"AFRAID TO LEND MONEY IN
NORTH CAROLINA.
Raleigh Letter.
''There is quite sharp hit at the
North Carolina Supreme Court in a
letter from large building and
loan company, which says that
money is not being lent in this State
now; that companies would be glad
to lend it, but that the Supreme
Court is so bitterly hostile to all
foreign corporations that business is
being withdrawn as rapidly as loans
can be called in. Regret is express
ed for this, and the letter goes on to
say that North Carolina is looked
upon as State where very favor
able loans could be made, provided
the Supreme Court of the State re-
garded contracts as binding upon
borrowers.
This is the hungry cry of the wolf
who would get in the sheep pen. We
heard the same old chestnut, in that or
similar form, when the restoration of
the old six per cent. interest law was dis
cussed. The same howl went up when
the six per cent. law was enacted. There
are always immense amounts of money,
somewhere, which its benevolent hold
ers are anxious and yearning to send here
if only our people would be sufficiently
graceful. If the rate was raised to s
per cent. or 10 per cent. tomorrow we
would have just the same money loaned
here, as now, only the people would pay
ene-fourth to one-half more interest for
the use of it. In fact, safe, prudent
men are afraid to loan at such high
rates, knowing that few honest industries
can pay more than six per cent. Indeed
Raleigh City per cents. and North
Carolina State per cent. bonds are
above par considerably.
As to Building and Loan Asso-
Citations, as long as they re-
strict themselves to six per cent, like
everybody else, there is no law to inter-
fere with them. But, when abandoning
their legitimate functions, they turn
themselves into Shaving shops and
practice nsury sometimes as high as 20
per cent, by the device of calling part
OF their interest fines, premiums, penal
ties and the like the courts 'look
through all DISCUSSES to the real nature
and truth Of the transaction" They
will not let the law against usury be
violated by such subterfuge. This is no
new decision. 1t was re-affirmed and
clearly stated in the well-known case Of
Mills VS.. Building and Loan Associa-
tion over twenty years ago as N. G. 1922
and the courts of this State have uni
formly followed that case, without devil
alton since. "A late case of Importance
was Maroney's case, written by Judge
Burwell DIG N. G. SS2) in which that
learned Judge, who for years had been
counsel for such associations, re-stated
the law so clearly that it could not be
misunderstood. The courts of Tennes-
see and Kentucky and some other States
have recently by their decisions broken
up several nests Of shylocks which were
masquerading under the title Of Build
ing and Loan Associations, but were
really usury shops. No genuine building
and loan association needs to charge
more than the regular rate of interest
allowed other people. The States OF
New York, Pennsylvania, New Jersey
Delaware, Maryland and Virginia limit
interest to six per cent. and money has
not been driven out OF them thereby mo-
has it been here. In fact, the bulk O.
the money loaned in North Carolina ha
always been held by residents thereof
The nameless apologist for privileg
to squeeze higher interest out of on
people has begun too soon. He has hi
parallel, however, in those who depre
cate any reduction of railroad charge
because, as is alleged in the same q
anonymous way, some enormous amour
Of money somewhere, or somewhere els'
is anxious to come in here to build an
quantity Of roads if there was no fea
we would cut down the rates. The mt
3 tive is the same, that the capital no.
here flor which the apologist writes
whether in money or invested in raj
roads may exact 20 per cent. annual.
on the assertion that if this is meekl
submitted to, oceans of money" will 70
in on us. The only parallel to such arg
ment is the ruse of the rustic who tic
: a bundle Of hay on pole and dangling
ahead OF his mule enticed him to pu
the loaded cart more rapidly.