Mr. CUSHING. I had no allusion to the
gentleman.
Mr. CHAMBERS. The argument of the gen-
tleman is that if we limit the rate of interest
on money loaned to six per cent., the availa-
ble funds of our State will be transferred to
the use of the people of New York. The next
argument, to enforce it, is that the banks in
our State are making such an inordinate profit
that if you allow them to charge to the borrower
from their banks, the taxes due upon the
amount, they will make an enormous and
most outrageous profit. How these things can
be dovetailed together, I do not know.
Mr. CUSHING, I said under the operation
of your proposition.
Mr. CHAMBERS. The gentleman seems to
have forgotten altogether that at present your
lenders of money can charge the taxation.—
The code says that the proposition to increase
the rate of interest seems to overlook this pro-
vision. The simple purpose I have is to have
it noticed, that it may be decided by the pro-
visions of this constitution. The additional
clause I propose is no new law; it is the law
now. I say further, that it is not only the
law, but that it is the practice. Money lend-
ers now exact from those that borrow a stipu-
lation to pay the taxes. I have acted as agent
for several individuals in the city of Balti-
more, and they have forwarded printed mort-
gages; and I have not seen the first one yet
that did not contain this provision.
Mr. SANDS. It is universal.
Mr. CUSHING. That refers to a small part
of the money loaned in the State—the money
loaned on mortgages.
Mr. CHAMBERS. I care not whether it is
large or small, I say it is the law and the
practice, whether large or small, that privi-
lege is now reserved to the lender of the money.
I do not use such harsh terms as the gentle
man—"nonsense, " &c.; but I say that any
prudent man, no matter what the rate of in-
terest may be, will take care to secure himself
a certain sum; and the only mode is to guard
against his being made to pay taxes out of his
six per cent. Six per cent. is the value of mo-
ney. We can go to the bank, and deposit it,
and can receive there six per cent., and they
pay the taxes. The taxes, as I said yesterday,
amount to about one per cent.
I will not dwell upon the remarks of the
gentleman about money lenders. I have been
selling out my stock, and have found it neces-
sary to take care of what I have. I have not
denounced money lenders, all of them, as
sharpers, sharks, Shylocks, and all that sort
of thing. Those remarks of the gentleman
cannot apply to me. They belong, as I say
further on. But I do say this, that where
persons adopt that profession or occupation
of shaving paper and loaning money as abus-
iness or trade, those men become presently, by
habitual indulgence in large extensions of their
conscience, if I may go term it, a very elastic |
material sometimes, beginning with seven,
eight, and nine per cent., and finding the receipts
very pleasant, unable to be satisfied with less
than twenty-five or thirty-three and one-third
per cent. I defy the gentleman to name a
man who has been ten or fifteen years in the
business, habitually lending money, who is
satisfied with less than twenty-five percent, on
good bond and mortgage.
It is that class of people that we are to guard
against. It is to that class of people that young
men go, when they come into their estates,
to get money in advance, speculating upon fu-
ture imaginary profits, it is to that class of
people that these young men go, to persons
extortionate in their demands.
The argument that the gentleman urges up-
on us strongly is that if you make the bor-
rower pay the taxes, the banks will make in-
ordinate profits. If that is the case, six per
cent. is enough, and we ought not. to give
seven. The law now authorizes that, and 1
presume there is no intention to change the
law. Why then increase by one per cent. the
enormous profits of the banks? I have been
a director in some one or another of the baulks
in Baltimore for the last five and twenty years,
and though I have as little knowledge of their
actual operations as anybody else, I believe
they never have adopted the practice of exaact-
ing more than the legal rate of interest, it is
not to the banks that this particularly refers.
It is to gentlemen who have some surplus
money, and in the present condition of the
country being utterly at a loss where to place
it, have loaned it out to agricultural men at a
legal rate of interest, requiring the payment
by the borrower of the taxes that may become
due on it, so that they may know exactly what
their income is—a clear six per cent.
With regard to the agricultural matter, the
gentleman has misunderstood me, I do not
mean to say that agriculturists were those
who took advantage of the wants of others
and victimized them. I mean to say that they
cannot afford to pay more than six per cent,
That is the idea I have of the agricultural in-
terest. When a farmer borrows money and
pays six per cent. interest, and pays the taxes
on the loan, I say that is about as much as he
can expect to realize out of the amount be bor-
rows. The agricultural interest of the coun-
try is not receiving as much as six or seven
per cent. profit out of the capital which they
have invested.
My proposition is first that six per cent. is
the value of money. There are some facts
known to us by which it can be estimated.—
Take the bonds of the Baltimore and Ohio
railroad, the Northern Central railroad, or any
other perfectly well secured bond in the State.
A Baltimore and Ohio railroad bond, for one
hundred dollars, will yield its owner six per
cent. From that six per' cent. he has to pay
the State twenty-five cents on one hundred
dollars capital. He has to pay the county |
