the legislature shall provide, by law, all necessary
forfeitures and penalties against
usury."
Mr. BELT. I had the misfortune to be ab-
sent from the house when the original report
for which I was in a measure responsible, as
chairman of the committee, was taken up ;
and I regretted on my' return to find that the
section we unanimously reported as embody-
ing the views of the eptire committee was
stricken out and superseded by the action of
the convention by a very decided vote by the
adoption of the section in the present consti-
tution. The report of that committee was
on my part the result of a very earnest con-
viction entertained all my life that there is no
more false system on the face of the earth than
that which continues in force those laws which
are known as usury laws. it is not my inten-
tion in any manner to debate this question as
fully as I would like to have done in the early
part of the session.
The original clause in the constitution was
that now before us. The committee appointed
to consider the subject soon found that there
was not the slightest difference of opinion
among them as to the principle on which
their report should be based; and by general
consent the consideration of the subject was
postponed until alter the greater reports bad
been made to the convention. When we did
meet I had prepared a report. It is no viola-
tion of the confidence of the committee for me
now to state, since it has been rejected, that it
was drawn up almost in the words of the
British statute upon the subject. It is within
the knowledge of most gentlemen present that
what are known as usury laws were abolished
in England in 1854, ten years ago. For the
information of the house, and to show the
foundation of the original report submitted
by the committee I will read the act which
passed the British Parliament on August 10th,
1854, and which will be found in the public
general statutes, 17 and 18 Victoria:
"CAP. XC.—An act to repeal the laws re-
lating to usury and to the enrolment of an-
nuities :
Whereas, It is expedient to repeal the laws
at present in force relating to usury: Be it
enacted by the Queen's most excellent Majes-
ty, by and with the consent and advice of the
Lords spiritual and temporal, and Com-
mons, in this present Parliament assembled,
and by the authority of the same, as follows ;
I. The several acts and parts of acts made
in the parliaments of England and Scotland,
Great Britain and Ireland, mentioned in the
schedule hereto, and all existing laws against
usury, shall be repealed.
II. Provided always, that nothing berein
contained shall prejudice or affect the rights
or remedies of any person, or diminish or
alter the liabilities of any person, in respect
of any act done previously to the passing of
this act, |
III. When interest is now payable upon
any contract expressed or implied, for pay-
ment of the legal or current rate of interest, or
whereupon any debt or sum of money inter-
est is now payable by any rule of law, the
.same rate of interest shall be recoverable as if
this act bad not been passed.
IV. Provided always, that nothing herein
contained shall extend, or be construed to re-
peal or affect any statute relating to pawn-
brokers; but that all laws touching and con-
cerning pawnbrokers shall remain in full force
and effect to all intents and purposes whatso-
ever as if this act had not been passed."
The first report we considered in commit-
ice established the principle of the abolition
of the usury laws with these several qualifica-
tions contained in the British statute, except
that in relation to pawnbrokers—the last.
1 suggested that we should include insurance
brokers as well as pawnbrokers. On con-
sidering the subject, we came to the conclusion
that as these provisions of the British
statute more particularly pertained to the legislative
functions of the government than to
the framing of our organic law, we would
embody in our report merely the principle
we bad agreed upon; and so our report was
made in these words :
Section —. The legal rate of interest in this
State shall he six per centum per annum, except
in cases where a different rate may be agreed
upon between contracting parties; and in all
cases of private contract, the rate of interest
agreed on, or contracted for, shall be recov-
erable; and the general assembly shall pass
all laws that may be necessary to carry this
section into effect.
I have the honor now to propose, the house
having very decidedly passed their censure
upon the report as submitted, a section in lieu
of that reported by the committee. Finding
that we cannot probably carry the principle
of leaving interest absolutely free, which is
my own preference, which is the doctrine 1
have ever held and believed to be the enlight-
ened doctrine of modern times, of political
economists, and of commercial men, I am
willing to take the best we can get, advanc-
ing towards that principle.
in explanation of the substitute I propose
to offer, I will say that the highest rate of in-
terest that is allowed in any of the States
anywhere in the Union, is ten per cent. In
Maryland it is six percent, and in New York
it is seven. The result is that several of the
surrounding States and more particularly
New York, the commercial and monetary
centre, having a rate of interest a little high-
er than ours, capital is carried out of Mary-
land on the least financial pressure, for in-
vestment in New York, or in other States.
Comparatively few of the States have a rate
as low as six per cent. The substitute is in-
tended too preserve tire legal rate of interest at
six per cent., so that where there is no con- |
