Year: 1876

usury law which so long stood as dead let
ter upon our statute books naturally attracts
unusual interest in business circles if not gen.
eral surprise. There has been no general
complaint respecting the existing law which
authorized free trade in money the same as
in any other commodity. If such was the
case, the Legislature on the first day of its
session would have been deluged with petit
tions. The business men and the borrowers
generally cannot, therefore, realize that they
are suffering injury to the extent ofhundreds
of thousands of dollars annually as vividly as
does Mr.. Pike. Is there not then, possible
ground for apprehension that Mr.. Pike, al
though very intelligent man, is in error
about this matter as he will now probably ad-
NIT that he was when he advocated the pay
ment of our national bonds in greenbacks?


When Mr.. Pike makes his promised speech,
we shall know who are the sufferers. Doubt
less thousands who now think they are in
the full enjoyment of their rights will then
know for the first time that they are being
oppressed by the money lenders and will be
properly angry about it. They should be.
Had some other gentleman than Mr.. Pike
presented this bill, it might have been said
that it was done to make political capital
that it was the trick of demagogue who is
attempting to bring himself and his party in
to popular favor by making specious argu-
ments which he himself knew to be absurd
No one will suspect Mr.. Pike of such a mo-
tive and consequently the question should be
discussed upon its merits.


In the course of the pending discussion of


Mr.. P'ke's bill, it will doubtless be assumed
that free trade in money works hardships to
those who live upon salaries or wages or de-
rive their living from small farms and limited
in6ustries-in short upon that part of our
people who are in limited circumstances
which embraces large majority of our pop
ulation. Years since this might have been
true; but to-day these classes are largely
lenders. An examination of the depositors
of our savings banks will disclose the fact
that the classes referred to lend millions more
than they borrow. Consequently there need
be no expenditure of sympathy upon this
portion of our people; and the demagogue
who attempts to play the part OF the poor
peoples friend and champion by advocating
the adoption of Mr.. Pixies relic of the past
will receive the sneers and jeers he richly
merits.


Maine has not enjoyed free trade in money
so long time bu. that we can remember the
workings of the usury law, if workings it had
at ALL Let us give single instance One of
the best towns in Maine had to borrow mon
ey to meet its war expenditures, There was
no question about the security, but money as
a commodity was worth eight per cent. The
town borrowed $4,000 of one man. When
the note was made the interest was fixed at
the rate OF six per cent. per annum, but $100,
the difference between six and eight per cent,
was paid IN adoance by the borrower to the
lender. This note was renewed with the
same transaction every year until the repeal
of the usury law when the rate of interest
was stated in the note and paid at the end of
the year. In this case the borrower lost six
dollars year (the interest of the 800 of
interest paid in advance) because of the ex-
istance of law which in fifty years will be
as much matter of ridicule as those edicts of
the dark ages fixing the price of wheat and
other necessaries of life. The lender, how
ever, was benefited by the law. If this is
the practical working of the law where the
security of the borrower was ample and
where the lender only demanded a rate of in
terest that his money would bring throughout
the country, what must be the effect of the old
law upon that large class of men who are
compelled to borrow money upon doubtful
security in order to tide over difficult places
when forced TO 60 to the conscienceless mon
ey-lenders that were to be found twenty years
ago in every villagep Did they let money for
six per cent ? Perhaps so on the face of the
transaction; but thousands of unfortunate
borrowers know that they have paid those
village Shylocks twice and oftener three
times six per cent. 1t is natural result that
those who take the risk of violating the law
to make money rarely have scruples. Once
outside of the law, once assuming the risk,
their only aim is to get the greatest recon-
pense for the danger they have assumed.
The borrower must insure the lender against
danger from violation of law.


Another result of the usury laws was to
make money scarce and thus enhance the
price to the borrower. One class of money
lenders who would not violate the law sent
their money to localities where higher rates
of interest prevailed. Another class who
would not let their money at six per cent.
invested in government bonds or railroad
securities. In both these ways a large
amount ofmoney - sent away, by which it
was rendered scarUo and left the market to
a third class who had no scruples about the
violation of formal law which prohibited
transactions in which they could see no moral
wrong. The result was that during the last
i've years the old usury law was upon the
statute book, higher rate of interest was
paid than has obtained since its repeal.


But take another view. In this city il
October 1873, one of our most reliable busi-
ness concerns was compelled in the height of
the panic to offer between fifteen and twenty
per cent. for money to meet its obligations.
was giving way. There appeared
to be no foundation IFS staDdip0 do