Brownsville herald. [volume] (Brownsville, Tex.) 1910-current, 1929-01-27

This is the seventeenth of a Sc
ries of stories prepared By the Ma
tional Association Of Real Estate
Boards TO be published weekly in
this newspaper for the information
of its readers on real estate mat
ters.
High interest rates "doth dull and
damp all Industries, improvements,
and new inventions, where money
would be stirring il il were not for
this slug" said Francis Bacon, emil
nent eSsayist, writing on this subject
back in 1925.
1T often happens that u family
is severely handicapped in the home
owning transaction because 1T has
to pay excessive charges for borrow
ing On a second mortgage or because
such funds are not available or can
be had only at prohibitive rates"
says Herbert Hoover, president-elect
Of the United States, writing on this
subject in the year 1923.
Archaic usury legislation keeps
money from the second mortgage
field, makes interest rates high be-
cause IL ~ hard to get, and keeps
AtAAAN EGQKA1 AI0AA Jill wv 4 ~
says the National Association OF
Real Estate Boards in its seventeenth
article on subjects Of interest to
property n
The association quotes on this sub
iect the notable Mr.. Bacon who wrote
an essay on usury during the time OF
Shakespeare, Samuel Reep, Ph. ID. Of
Minneapolis, former chairman Of the
associations mortgage and finance
division, General Nathan William
MacChesney, its general counsel and
Louis J. Estey Of Cleveland, Ohio,
former president Of the Ohio Mort
gage Bankers association.
Ancient Practice
Usury is an ancient practice. IL is
mentioned in the Bible and appears
in the laws Of Greece and Rome, says
Mr.. Estey. Usury legislation dates
back to the primitive tribal society,
says Mr.. Reep. In these ancient times
capital was not required for produc-
tion purposes and borrowing was re-
garded as an evil practice except for
extreme necessity. Usury and inter
est under these regimes were synony-
nous. for it was a part Of the moral
and religious law - well - the stat
utory law that the taking OF an In
terest at all was usurious. As cap
italistic society grew and money was
used for production IS well as con-
sumption purposes, the use Of money
became profitable. The opportunity
TO borrow money stimulated manu-
facture and trade. Gradually certain
church fathers shifted their position
regarding usury and took interest fol
the use OF money.
Later interest came to signify law
full profit and usury unlawful profit
as demanded from the borrower by
| the lender for the use Of borrowed
funds.
To-day in many states in this coun
try the law seeks TO abolish usury b.
making X unlawful! TO take more thar
a specified amount in interest FOL
lending money, Eut these laws, drawn
10 protect borrowers, have not kept
pace with the times says Genera
MacChesney. "The rates are too Low
to attract adequate second mortgage
money without which thousands anC
/ thousands Of people cannot under
take home ownership. Such people
require funds TO bridge the gap be
tween the first mortgage. the fund
they have. and the cost OF the home
OF course. es everyone knows, sec
ond mortgages are made but not NIL
ways at rates within the law and thu
steps taken TO get around the law arr
cften costly. with the bill passed OF
TO the home wner And many pros
p~ective home owners will not %
cannot shoulder this burden
Loans Have Credit Value
All borrowed money has u credi
value. that IS TO ssy. q value for thl
use Of H. This value depends on TIL
security behind ii when lent. and TN
risk involved in making loans Sec
and mortgages and land contract
have their credit worth. points on
Mr. Eeep, and very slight reflection
l will convince anyone that such crsdi