Year: 1879

THE NEW LEGAL RATE OF INTEREST coaIMENc-


ING WITH TIE NEW YEAR-A LAWYERS


OPINION OF THE LAw-QUEsTIoNs IN DIS


PUTE REGARDING 1T.


The act passed by the last Legislature making six
per cent per annum the legal interest in this State
takes effect the 1st prox. Its object is the pre-
vention of usurious equivalent being exactea for
the temporary use Of money. and accordingly il is
viewed from different standpoints by business men
generally For tho purpose OF ascertainng the feel
ing with which the act is regarded among the legal
profession Of this city. HEnALp reporter called at
the law Offices of Mr.. John B. Hsskin on Saturday
and asked him his opinion Of the new law. Mr.. Has
kin promptly answered. 'Pm for free trade in
money. as am FOR free trade in pork aud potatoes


"But what about the contracts entered into
after the first of january" queried the writer.


"My opinion is,' said Nj. Haskin, '.that all
contracts made after the first of January are con-
trolled by the statute fixing the rate of interest at
six per cent and old contracts to be continued
in like manner controlled, although in the latter
tho question has been differently answered in
different States; the great bulk of tho States hold
that the contract upon maturity. IL not fulfilled. is
broken. and the action is in the nature of action
for damages, which would be controlled by the
statute The question in brief Is this Where the
contract provides any rate of interest, what is the
rate Of interest from maturity Of the obligation? Is
it thes contract rate or the statutory rate?
The opinion Of tho Attorney General to
the effect that the rate of interest seven
per cent after the 1st Of January is not believed to
be sound by many Of the judges. and the business
opinion among lawyers in this city who have con-
sidered the subject is that the statutory provision
fixing the rate of interest at per will be
i,,f I,o-


EFFECT MORTGAGES.


"How will the law affect mortgages now paying,
say seven per cent interest?"


"Old seven per cent mortgages, acc ording to the
Attorney General, will continue to pay seven per
cent until the principal becomes and payable &C.
cording to tho terms Of the mortgage; although
upon this question there is great diversity Of opin
ion among eminent judges and lawyers. In the
Fourth Judicial Department Of this State it has
lately been decided that under the contract the rate
Of interest until the security was merged in
judgment; and until tho Court OF Appeals settle this
by u case, which should be promptly made and adjud-
icated early in January. 1t will continue to be
mooted question"


"what is the statutory definition OF usuryP'


'Usury, by State law, is the taking and giving Of
over per cent tho holding that to con-
stitute usury. there must be mutuality of thought
and action-that is to say the giving and taking
with the intent to avoid the stante Where that in
tent clearly exists usury annihiates the contract
and renders the party loaning his money remedess
in the premises because the usury makes the
absolutely void There is no rate OF interest fixed
by the federal laws and the United States Court
ognzes and Is bound by the provisions of the sew
eIal State laws on this subject. There is no law
which has produced moro perjury, induced more
fraud, generated crime and caused moro
deceit and misery than the statute against
usury. It is so old that the wheels OF progress
should have blotted it out century ago. In the
fima n fha W W ai in rvicax
nized. usury laws might have been proper; but with
our advancement in commerce, in mercantile pur-
suits and i'll the building up OF republican form of
government, restraint upon the and selling of
money other merchandise is used and sold has, III
my Judgment, produced deeterious results. My idea


is might and should fix the legal rate of in.
in all where its amounts not otherwise
agreed upon in writing between the parties. This is
| the case in California and in many Of the Western
| States. Hence We find in some OF our States the
fixed at six. eight and ten per cent per annum;
but the progressive tendency OF some OF tie Western
States is to leave the purchasing hiring the OF
| money subject Of commerce between the parties
| who may negotiate the transaction. II the opinion
| of the attorney and counsel for the Mutual Life
Insurance Company Is correct that all penalties for
usury under the ~, new s statute =. are abolished.
to properly amend the statute Of the last session
leave the usury laws virtually abolished in this
State, and freedom to trado i'll money trade in
| any other article of merchandise"


| QUESTION OF PENALTIES.


docs the statute. tnen provide no penalty to in
| sure Its enforcementY'


''It has been so held by the counsel for the cor.
poration have just named. but the intent Of the
Legislature. which must always be considered
construction OF all statutes was, in my opinion to
attach the old penalties of our usury laws"
''Do you think there will be much changing of
| loans to make the six per cent law available?"
s'The success of Secretary Sherman in funding
over s7O0O 600 of six per cent gold bearing
bonds ut four per cent within the past year. and
| pethorc character of our money market through
the country have satisfied the loaners of money
in obtaining six per cent, the now legal rate, and
even less rate when the loans have been large in
amount. Therefore there will not be any marked
changes in calling in outstanding loans and rein
vestments."


what effect will the new law have on the money
marketY


"Not any; the extraordinary amount of our ex.
ports 900 in Of those of two three
years since. has brought to our treasury from
abroad such large su IS or money seeking invest
ments here, that business has revived, and stocks
generally, railroad and others, have greatly
excite the fears of many solid capitalists
these stocks will tumble again within the three
mani