The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1897-03-19
THE STATE. AND INTEREST.

PaternallSm IN q government
tends to make Nweaklings of its
citizens. Protection is the pur-
pose of good government, but
this means protection against the
wrongful acts of others. No
safe government can undertake
to make amends to its citizens
for, their own folly, Incidence Or
ignorapce, ~
It IS often difficult to deter
mine where wise protection ends
and paternalism begins. The
question of state interference in
the matter of interest rates for
the use of money is a case in
point. Of course, no one dis
putes the right of the state to
fix the rate of interest where
there is no expressed agreement,
but when the government under
takes to limit the rate of interest
at which parties may agree to
loan or borrow money, the opin-
ions of statesmen differ. Much
may be said On both sides.
Gov. Daniel w. Jones, (dem-
ocrat of Arkansas, sets forth in
his message to the legislature the
best reasons that can be advanced,
probably, ON behalf of state I'M
reference. He says:
81 recommend that an amend
ment be submitted to the peo
pie providing that no contract
for a greater rate of interest than
E per centuIn per annum, made
after the adoption of this amend
ment, shall be enforced by any
court in this state, and that this
shall apply to all contracts
thereafter made in this state, re-
gardless of the place of payment,
and that all laws of the state
upon the subject of usury shall
thereafter be without force Or ef-
feet.
"Our state is eminently an ag-
ricultural one. The farmer is
our principal wealth-producer.
Upon his prosperity depends
that of the state. Our legisla-
ton should be. directed and
shaped in his interest, and no
law of the state should be con-
tinued in force when found to be
detrimental to him. Like other
business men, he must some
times borrow money to carry on
his operations, and he should
not be required to pay a rate of
interest which leaves no margin
for profit to himself. No agri-
cultural industry can afford to
pay more than 8 per cent. for the
use of money. In fact, that is
the limit Of. the value of money
for any legitimate business in
our state, Aadae greater rate
ought to be allowed to be con-
tracted for. The borrower be-
ing thus protected, the lender
should have equal protection.
He ought, in all equity and good
conscience, to have the protec-
ton of the laws to recover back
his money with interest not: ex-
ceeding this lawful rate. Usury
laws, such as we have, whereby
the leiidef loses not only: his i'll
terest, but1this money also, are
unjust and unreasonable. More.
over, rthey inxite, perjury and are
demoralizing, and corrupting in
their Tendency. The very fact
of their existence renders it diff
cult to lower the rate of interest,
because of the extra hazard in
CURED in lending money.
"There are honest men who
do not agree with me, but they
will be found chiefly among the
money-lenders. They can, how
ever, take care of themselves,
having the means to do so. But
legislation of this character is in
tended to protect those whose
necessities require the borrowing
of money for the purposes OF
carrying: on legitimate business
pursuits, and who are, on that
account, subjected to the cupid
ity of avarice. The money
lender is useful citizen, but he
adds nothing to the material
wealth of the country. He
ought to be content with a rea-
sonable accretion to his surplus
in the way of interest, especially
when the laws are such as to
make that certain to him. But
a money-borrower in an agricul-
tural country like ours is a
wealth-producer, and he should
be the favored one of the law, at
least to the extent of being pro-
tected against having to pay un-
reasonable interest upon the mon.
ey he must borrow to produce
that wealth. =. > -
sInstead of driving money
out of the state, as some may
contend, 1 believe it will have
the opposite effect. But wheth-
er the one or the other effect is
produced, I am quite certain
fl,ot - ;e ,,ot &o The ;,Ia%ee@ ~