Rensselaer Union, Volume 6, Number 22, Rensselaer, Jasper County, 19 February 1874 — Uniform Usury Laws. [ARTICLE]

Uniform Usury Laws.

The resolutions offered in the North Carolina Legislature for “a law by Congress fixing a uniform rate of interest throughout the country, with such a penalty as will insure observance of the law,” indicate, on the part of jthe gentleman proposing them, such a lack of acquaintance wi th the facts relating to interest, that it is simple charity to avoid mentioning his name. He appears to bo unaware that the laws now limit the rates to be charged for loans. But, if he knows this, he would seem noF •to know that these laws have very little effect; and even if the banks obeyed them, it would not follow that money could be uniformly obtained within the limit, for there is nothing to prevent the bank funds being loaned to some broker at legal rates, while he will reloan them at such rates as he can get. Again, there is nothing to prevent a bank’s loaning to officers and directors of other banks at legal rates, while the officers or directors

of the first bank receive corresponding accommodations in return; and each man thus accommodated can, in turn, lend the funds at market rates. The heavier the penalty, too, the less likely the law is to be obeyed; and no penalty whatsoever will secure obedience to such an oppressive and improper law. The practical effect of such a restriction on the banks is simply to give immense advantages .by law to those who happen to be directors or officers, to enable the shrewder jind more influential of them to monopolize the profats which justly belong to the stockholders of the banks, and to make money .less easy to obtain, thus forcing up the price, f The truth is that the price of the nse of money is determined, like the price of everything else, by the ratio of supply to demand; and every law which operates to make the supply less, or harder to obtain, raises the price. A man who is in need of money for a short .time to meet hiß engagements —failure to meet which might involve loss of the savings of his whole life-—will have money for the necessities of the hour, no matter what the price he has to pay for its use. On the other hand, if some want to borrow his savings, he may not care to loan at all; but a -man who needs the money badly will, rather than not have it, offer him Buch terms as will induce him to lend. Now, if the law forbids this,' it works injury not to the lender but to the borrower, who is driven l)y such prohibitions, if they have any effect, into the hands of the ‘fßharkl” who lend at great risks. Men who have pioney to invest are not commonly obliged to lend it out at interest at all unless they choose to do bo. — i They can buy public stocks, shares

in railroads, insurance, or manufacturing corporations; they can themselvesgo into business partnerships, or can undertake speculations, in either of which, If their opportunities and sagacity are good, thrfjy can for a time realize more than the legal rate of interest. The real need is that lending at interest be easier and safer; and this is not assisted, but retarded, by the existence of laws that-make men less willing to lend.— M. T. Grocers Price Current.