COMMERCE. 335 



The display looks very serious. There was a regular de- 

 crease from 1855, when the great failures began, down to 

 1859, and then the increase began again. The amount of 

 assets is proportionably smaller for 1860 than at any previous 

 time, but in fact the assets are almost invariably nominal, con- 

 sisting of bad debts that never can be collected, and property 

 estimated at cost, but worthless in the market. It is rarely 

 that a man declares himself insolvent so long as he has prop- 

 erty wliich he can turn into money. Our insolvent law is 

 very liberal to debtors, and no doubt that contributes, with 

 the very speculative temper of our population, the facility for 

 getting credit, and the unsteady course of our trade, to make 

 our insolvent lists so large. 



§ 240. Interest of Money. — Again, in the matter of the in- 

 terest of money, California occupies a peculiar position. The 

 current rates are higher here than in any other Christian land. 

 The common rate on long terms and the best security is one 

 and a half per cent, per month, for interest is always calcu- 

 lated by the month. On short loans, or with security in the 

 least doubtful, the interest is from two to two and a half per 

 cent, per month. The laws place no more restriction upon con- 

 tracts for interest than for any other commercial contracts. 

 The man who promises to pay interest must do so at his 

 own risk ; for the law will not assist in any plans to violate 

 his bargain. The high interest of money is owing in part to 

 the unsettled character of the people, many of whom have no 

 permanent abode, and wish to have their money so that they 

 can get it at any time. The fluctuations of the market present 

 numerous speculations to merchants. The titles to real estate 

 are, in many cases, questionable, and the capitalist may not 

 like to buy, and will demand a high rate of interest if he must 

 take a mortgage on a doubtful title. Capital always makes an 

 extra charge for running a risk. It is a general rule that in- 

 terest will be high where wages are high. There are then 

 many people who can afford to pay interest, and many people 

 who will wish to obtain those comforts and luxuries only to 



