State are therefore placed at a disadvantage
compared with the banks of New York. I
would be willing on that account to support
a proposition to allow a rate of interest not
greater than seven and three-tenths per cent.
That does not raise the rate of interest abso-
lutely to seven per cent.
The difficulty in regard to the proposition
of my colleague (Mr. Daniel,) raising the
rate of interest to seven per cent. is that it
will have the effect of raising the rate of dis-
count to seven per cent. everywhere through-
out the State—unless the state of affairs
should be such that money should fall to five
or six per cent. Everybody would put the
rate of seven per cent. in their contracts, and
it would actually raise the rate of interest
from six to seven per cent. But if you mere-
ly provide that not more than seven and
three-tenths per cent. may be taken, it will
not have that effect.
I do not wish to enter into a full discussion
of this question. I will merely say that the
reason why I do not believe that the report of
this committee is founded upon a true basis is
this; it absolutely destroys the permanent
fixed value of money for a long period of
time. Contracts for a long period of time
will be made by people at the existing rate
of interest. Now money is not worth more
than six per cent. as a general thing, though
for a short period of time it is sometimes
worth more than that. But men will not
lend for six per cent. for one or two years, if
they can get seven or more, because that rate
is not worth the trouble of turning over their
money. Nor will they lend at six per cent.
if the borrower is in such circumstances as
to make it any risk to lend him money,
There is no usury under the law in buying a
promissory note in the market at ten cents on
the dollar, if the notes is not worth more
than that. There is no usury law or any-
thing else which prevents a man from selling
his paper at what he can get.
Mr. DANIEL. Accommodation notes, just
made for the purpose of being sold for what
they will bring ?
Mr. STIRLING. Certainly; he can put his
own notes on the market. But as said be-
fore, there is a practical difficulty, in conse-
quence of this offer of the government to pay
seven and three-tenths per cent. for money,
which I think justifies the. proposition of the
gentleman from Allegany (Mr. Thruston,) to
allow persons under private contract to ask
and receive that rate, if the parties to the
contract agree to it. There is no reason why
the people should not be allowed to borrower
lend at the same rate which the government
is willing to pay.
Mr. DANIEL. I will ask the gentleman a
question for information. Does he consider
that, under the proposition of the gentleman
from Allegany (Mr. Thruston,) if a man |
charges more than that rate, it absolutely
vitiates the contract?
Mr. STIRLING. No, sir; I do not under-
stand that that is the effect of the proposition.
1 understand that that matter is left precisely
as the code leaves it now. The truth is that,
except so far as I should like to see the propo-
sition of the gentleman from Kent (Mr. Cham-
bers) carried, settling this doubt about the
question of taxes, I do not see what is the use
of putting this in the constitution at all, if
the convention is not disposed to make any
change in the rate of interest. The act of
assembly fixes the rate of interest at six per
cent. By virtue of an act of the assembly
banks are authorized to take interest in ad-
vance; and the court of appeals has decided
that the code is not in conflict with this pro-
vision of the constitution, and having deci-
ded that, I do not see the necessity of having
anything in the constitution except for the
purpose of settling the question met: by the
proposition of the gentleman from Kent. 1
think it is utterly useless to adopt this report.
In fact I may say that I know it is not going
to be adopted, and therefore I think we better
come to some practical conclusion upon the
subject, and vote upon it. I do not think
this report will get a corporal's guard in its
support in this house, and there is no use in
going into the general subject of finance,
when we have every reason to believe that
the report will not be adopted.
Mr. ECKER moved to lay the whole subject
on the table; but at the request of several
members withdrew the motion.
Mr. ABBOTT. When the question is taken,
I hope the subject will be divided. Let us
first decide whether we will have six or seven
per cent.
Mr. MILLER. I know that the convention
is weary of this debate, and I propose to de-
tain them but a few moments in reply to
some remarks of gentlemen upon the other
side. I allude more particularly to the re-
marks of the gentleman from Washington
county (Mr Negley.)
The question involved in this part of the«
report allowing persons to contract for what-
ever rate of interest they please, is simply a
question .as to whether or not we will any
longer have any usury laws in Maryland. It
is said that the State of Maryland is in that
respect bebind the civilized and commercial
world; that England, France, and all those
countries have got rid of these usury laws
long since. That is an argument which if
established,, would be of great force in this
convention; for if we are in that position we
should step forward into the broad sunlight
of progress,
But what is the fact in regard to this ques-
tion? Civilized, commercial and enlightened
England this day has upon her statute book a
law forfeiting absolutely the entire contract,
all the money loaned, besides imposing a pen- |
