Year: 1877

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UNITY, MINNESOTA, '']l'.' TIL
REDUCTION OF INTEREST RATES.


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In the St. Paul Chamber Of Commerce
on the End inst, Hon. VIM L. Banning
offered the following resolution, which
he intended calling up at. some future
time: :.


Resolped, That in the opinion of this
Chamber the interest demanded for the
use of money in this sectionsof the West
is far in excess of its value for, legitimate
business purposes; and further, that the
interest OF both lender and borrower
would be best promoted and protected by
such reduction of this rate as would more
justly correspond with the profits of bus
iness and the financial condition of the
country. %~x


On the 10th, the resolution was taken
up when Mr.. Banning said substantially
that in urging the passage of this resolu-
ton he would attempt no more than to
present some of the striking reasons why,
in his judgment, it should receive the
emphatic assent Of the Chamber. The
financial depression and business paraly-
sis that now pervaded the entire country
challenges the thoughtful consideration
of all. Whatever Of practical wisdom can
be invoked, and whatever wise and Just
measures can be inaugurated to change
and improve this condition surely is a
part of individual duty and the emphatic
business of bodies such as this.


It is estimated-and I think the esti-
mate is low-that the shrinkagc in values
throughout the country in the last four
years is at least eight thousand millions
of dollars. United States bonds, State
bones, loans upon real estate, and certain
other classes Of property where the
amount loaned is but small percentage
Of the value Of the property, have not par
taken Of this general depreciation. The
money thus employed is not less than
three thousand millions of dollars, so that
the eight thousand millions of deprecia-
tion has fallen on lands, houses $. ,res,
manufactures, manufactured goods, and
like products of the industries of the
country.


But mark in addition to, and more
than this, the purchasing power Of the
interest produced by this three thousand
millions of dollars has been quite doub-
led, so that one dollar thus produced is
worth two dollars by comparison, for it
will buy as much as two dollars would
four years ago. To illustrate. A. bor-
rows Of B. 81 1000 at ten per cent per an
mum, on his farm, house or store, fully
worth at the time $4,000, but as time
moves on, values are changed, the prop
erty is reduced to $1,000, and the mort
gage absorbs the entire property. This
case fully illustrates the general relation
ship between the creditor and the debtor
classes of the country, and urges the
necessity of such adjustment between
capitol and property as shall more evenly
and fairly divide and protect the rights
and interests of each.


Rightly understood, money can only be
understood to be property-diferent in
its form, it's true-pcculiar in its uses,
better adapted than most other forms of
property for rapid use, exchange and dis
tribution,' but still it is only property.
A. buys my farm, house, store Or goods
with his money, or l buy his money with
my farm house, store or goods, and there
is no wisdom or fairness in the policy
that works out a depreciation in the value
Of one class of this property and doubles
the value of the other class.


I do not wish, however, to he misunder-
stood in this. l do not believe that this
unfair discrepancy can be best corrected
by usury laws, penalties or harsh legisla-
ton in any form. The true remedy is, I
think, in general agreement and iunder
standing what most thoughtful and
fair men are now ready to admit-that
these high and oppressive rates of interest
will in the end be destructive both to the
borrower and lender.


Why, is it not plain to all, that should
the rate of 10 and 10 per cent continue
to prevail in this section-or any other
section of the country-thc effect will be
that the creditor, class will absorb all the
profits of business, the value of all kinds
of property, and produce consequences
alike fatal to both borrower and lender?
The property and business of the country
will be absorbed, and fall into hands in
capable of handling it, and the business
and productive industries of the country
will be fatally damaged. The remedy for
our troubles in the West, will, I think,
be found in such material reduction in
the rate Of interest by our banking in
stitutions and capitalists generally, as
will leave margin of profit to the farm
er, merchant or manufacturer. This will
foster, and as I think only this will
rightly foster and sustain the class
of men and industries that after all are
the real security for the capital invested
in the enterprises and property Of the
country.


Of course recognize that among our
bankers, capitalists and money lenders,
will he found as high toned, enterprising,
and liberal gentlemen as may be found in
any other pursuit or business, and I can
not doubt but that the experience of such
as these already admonishes them that
their ultimate safety, and the safety
the capital they have in charge, will be
best promoted and secured by such ma
terial reduction of the rate of interest as
will build up the solid industries of the
State.


Of another class of dealers in money
have this to say, and only this. refer to
the sharpers who follow in the track of
the grasshoppers, or others unfortunately
like these poor settlers, to whom money is
doled at rate only measured by the
dire necessities of the victims. Of such
men I have this to say, that II would
put whip OF scorpions in the hands Of
every honest man fn lash such sc0undrels