Year: 1868

The Law of Interest.


During the quite spirited debate in til
House at its late session, on the bill allowin
unlimited rate of interest, when the rat
was stipulated by written contract, Mr.. Groy
er of Wells made brief and, TO our mind, mos
instructive speech, against the provisions Q
the bill and we have succeeded in obtainin
an abstract of his remarks, believing the De
rusal thereof will be interesting to tn
readers of the FREEMAN as the speech wa
acceptable to the members of the House


Mr. Grover said The first thing to con
slider in q discussion Of the merits of an
Dill IS, whether there is any wrong that re
quires 4 remedy, any defect in law tha
needs to be supplied.


There is, perhaps, one wrong that might b.
remedIed by q change in our law relating {,
the rate of interest. BY our law only 81,
per cent. can be lawfully claimed. while ir
New York seven per cent. is allowed, and BY
she government seven and THREE fen!hs.


IL Is obvious that the tendency of this DIFF
ference of rates is to drive capital from Yer
mont, and to a constant violation of ou1
State law on the subject, which is TO be re-
grettcd. To obviatc this difficulty-to remedy
{ wrong-I am in favor of change of rate
from six to seven and three tenths per cent
and this, not because | think six per cent
900 low, but for the sake Of uniformity oil
rates, which ! think will prove decided ad-
vantage.


am, Mr.. Speaker, opposed to the passage
Of this bill it now is, for the reason that
ii leaves the rate unlimited, and open to any
contract which the parties may make. for
any rate however high.


Ii claimed by the friends of this bill,
that there should be no limit 20 the rate OF
interest fixed by law, for the reason that
money is property-subJect TO the same laws
of commerce and trade as other property
that the law of demand and supply applies
10 money as to other property-that a per-
fecIly free circulation of money Is essential
TO cOmmerce-and that. as fixed rates restrict
The circulation of money, and therefore tend
70 limit the extension and usefulness of our
commerce, it is as unjust to dictate the
price of money as the price of any kind of
property, and that it tends TO a violation OF
law


Now, in answer TO all this, have to say,
that the history of the world, which IL
but the " philosophy of human experience, y
teaches US that there should be a limit to
the rate of interest. From the law of Moses
TO the law of Vermont, the testimony has
been concurrent and consistent, in favor of a





whose books all the boys in the Law read-the
Jews could take usury from the stranger,
only because the stranger was the race which
the Jews were to destroy, and usury was an
Efficient means to that end. This testimony
Of experience 20 a fixed rate is entitled to
weight, and all the more from the fact. that
she proposed change is experiment and,
on principle, open 70 doubt.


Now, money is not property like other
property. 1t is simply measure of value,
a means of exchange, like railroad or
canal. As q medium Of exchange it has
value, but It's value is limited to its useful
ness for that purpose and as only limited
amount Is needed and can be used for that
purpose, it is necessarily q monopoly, and it
is all the more so for the reason, that it is an
absolute business necessity.


The poor man and the rich alike must
have 1t it forms the basis Of every CONNER
Col and business enterprise, however large
or small.


ne law Of demand and supply does not
apply to money, as TO other property; its
worth OF price is regulated simply by the
amount of profit which can be derived from
On Investment Of II.


Money being monopoly, from the neccs-
stiles of trade and the law OF profit which
regulate its value means Of exchange,
1t is obvious that we must have limit to
bDe rate, ana Sucn one az Will enable IL 10
be employed in small business enterprises, if
we would encourage this beginning and
growth.


The ever present necessity of money,
together with that selfishness which avarice
always dictates, the ever existing necessities
OF the poor man, and small commercial and
mechanical enterprises, together with the
fact, that money unless limited will central
ize where large profits can be had, convince
me, Mr.. Speaker, that reasonable uniform
rate should be established as a certain means
0f creating that distribution of capital
money-which underlies all our business
prosperity Let men pay what they please
Tor money Let them be governed by the
law OF profit which settles what they can af-
ford to pay. Let no penalties be fixed to
restrict the freedom of exchange. On the
other hand, let not the rate be matter of
contract which the law viii enforce no matter
what il be; but let Us seek that conservative,
middle ground ; let us adhere to the old and
tried against the new and untried. and fix q
rate beyond which the law will not go, to
enforce any purpose spirit of oppression.
Let the poor man who has been unfortunate,
let the farmer and business man whose profit,
arc small, have the protection of fixed rates
ground upon which he can stand, as against
larger and more profitable interest, and that
exactIng selhshness, which knows no limit
short OF ruin, and heeds no restraint but the
i0'o.