The commercial. (Union City, Tenn.) 190?-193?, 1921-02-18
Legal Rate of Interest.

The Commercial has no battle to
against another Nor is it subsidized
or handicapped by its patrons or ad-
vertisers in the expressions appear
ing in these columns. We applaud
Governor Taylor in the work he is
doing to prevent the wholesale waste
of public funds in legislation or in
the executive functions of State gov
eminent. We do not agree with him,
however, in the veto of the eight-per-
cent contract interest rate bill. 1t
is our opinion that great many peo-
pie have very narrow idea of usury.
Usury, it seems, is applied only to
the lending of money. You can sell
your neighbor a horse, mule or COW
for any price he may be willing to
pay, but you must not collect more
than six per cent for the money you
loan him. Now, if you understand
the book of books to mean that you
are expected to be honest only in
the use of money, or that usury can
exist only in lending money you have
a very peculiar conception of Gods
law. A man can violate the laws Of
God by cheating his neighbor wheth-
er the commodity used is money or
any other medium of exchange, mer-
chandise, stock or whatsoever. Mon
ey is not the only basis of value
But back to the practical applica-
ton of this law. The banks have
had to borrow money at eight per
cent. We presume the Governor has
no objection to that, but they must
not loan it for more than six. That
sounds like the demagogue bidding
for applause. One class of people
has just as much claim to equality
before the law as any other class. 1t
is rather spurious argument to make
that the eight-per-cent interest law
will force the borrower to pay ten
per cent, because forsooth he paid
eight when the interest law was six
per cent. The money advanced as
interest on a note is not limited to
two per cent or any other specified
amount of interest. This advance is
strictly a violation of the interest
law and does not figure at all in a
legal rate of interest whatever the
amount of such advance interest may
be. So this argument is specious.
1.-THE farmers and the young strug
Cling home builders" as the Govern
or fondly calls them, are not forced
to borrow at all from the banks or
insurance companies. They have
the Federal Land Banks to protect |
them, and if the Federal Government
is not able to protect them, how Is
the State to do it?
Whenever the Federal Government
becomes bankrupt the State will be
paralyzed. The farmer who has the
proper collateral can borrow money
at six per cent or less from the Fed
eral Land Bank, and those farmers
who have no collateral or good secu-
rity cannot borrow the money at all.
except from such person as may be
a special friend. In a case Of this
kind he could do the same whatever
I, TIT 1ax &c OF a
rate of interest. This however has
nothing to do with the legal rate of
interest
This legal rate of interest matter
has become a political factor used in
/ large measure to becloud the think
ng man and to arouse public sympa
hy and applause.
The more we think about the ex-
change of commodities and the condi-
ions of trade during reconstruction,
he more we are inclined to think
hat our friend, Lowe Shearon. is
hiding key as the basis of equal
ty for all branches of trade before
he law, and that every branch OF
commerce or trade should be amena-
lie to law, one with just as much
egal restrictions and limitations as
he other.
So, in his preface, he sets out to
Jay, as we reproduced last week,
hat
Managers of industrial enter
rises should state in advance a rate
# compensation with which they
will content themselves just as do !
he bondholders, who name an inter {
st rate, the preferred stockholders,
Who name a dividend rate. and the {
Employees, who name a wage rate" l
To us the proposition is absurd
hat the profits of one or more voca- {
ions should be unlimited, while q
ONE particular vocation, like the '
honey lender, is limited to the very
mallest living rate. There seems to '
e a prejudice against the money t
ender that makes him an easy prey '
n e t.