THE USURY LAWS. 11 



upon the community if the usury laws were repealed. These per- 

 sons might easily obtain complete control over the banks. They 

 might easily so arrange matters as to allow very little money to be 

 loaned by the banks to any but themselves, and thus they would 

 obtain the power over the money market which a monopoly always 

 gives to those who wield It— that is, they would be able to ask and 

 to obtain pretty much what interest they pleased for their money. 

 Then there would be no remedy; the indignation of the community 

 would be of no avail. What good would it do you to be indig- 

 nant? You would go indignantly, and pay exorbitant interest, 

 because you would be hard pushed for money. You would get no 

 money at the bank, because it would be all taken up by the heavy 

 capitalists who control those institutions, or by their friends. 

 These would all get money at 6 per cent interest or less, and they 

 would get from you precisely that interest which your necessities 

 might enable them to exact. The usury laws furnish you with 

 some remedy for these evils; for, under those laws, the power of 

 demanding and obtaining illegal interest will be possible only 

 so long as public opinion sees fit to sanction evasions of the statute. 

 As long as the weight of the system is not intolerable to the com- 

 munity, every thing will move quietly; but as soon as the burden of 

 illegal interest becomes intolerable, the laws will be put in force in 

 obedience to the demand of the public, and the evil will be abated 

 to a certain extent. We confess that it is hard for the borrower 

 to be obliged to pay the broker, to pay also for the wear and tear of 

 the lender's conscience, but we think it would be worse for him if a 

 few lenders should obtain a monopoly of the market. And when 

 the usury laws are repealed, what earthly power will exist capable 

 of preventing them from exercising this monopoly? But liere an in- 

 teresting question presents itself: '"What is the limit of the power 

 of the lender over the borrower? 



ACTUAL VALUE AND LEGAL VALUE. 



Let us first explain thedifference between legal value and actual 

 value.* It is evident, that, if every bank-bill in the country should 

 suddenly be destroyed, no actual value would be destroyed, except 

 perhaps to the extent of the value of so much waste paper. The 

 holders of the bills would lose their money, but the banks would 

 gain the same amount, because thoy would no longer be liable to be 

 called upon to reuccMn their bills in specie. Legal value is the legal 

 claim which one man has upon property in the hands of another. 

 No matter how much legal value you destroy, you cannot by that 

 process banish a single dollar's worth of actual value, though you 

 may do a great injustice to individuals. lUit if you destroy the sil- 

 ver dollars in the banks, you indict a great loss on the community 

 for an importation of specie would have to be made to meet the exi 



J » 



*The reader is requested to notice this distliictioii between actual and 

 legal value, as we shall have occasion to refer to it again. 



