The High Cost of Borrowing in Territorial Olympia
An indignant citizen writes to the editor to protest the predatory lending practices bankrupting the territory's early settlers.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
EDITOR STANDARD: I understand there is a bill before the Legislature designed to establish a usury law. I have not learned its provisions, but I think a law restricting the rate of interest within just limits is urgently called for. The present rates of interest exacted are, in my judgment, far greater than in justice should be asked, or by any honest business can be paid. Many of our first settlers have been rendered bankrupt by paying it, and some of our best citizens are struggling with despairing energy to pay the interest upon a principal utterly beyond a reasonable hope of liquidation.
Some say, 'money is worth what it will bring,' and such men need not have hired the money. But in what sense is money worth what it will bring? Is it worth it because a few individuals have money and they have an understanding, tacit or expressed, that they will charge a certain per cent? By this rule, money, it is said, has been worth six per cent a month. But we need only to look around us to see that the laboring men of the country, the class who must sustain and build up our Territory, cannot pay a higher interest than is customary in the Atlantic States. And if they are imprudent enough to attempt it, they ought to have law or a guardian to prevent them. The true remedy for hard times is hard work. Some merchants say they can afford to pay the interest of the country. But how? Of course by charging it to their customers, so most of it must in that case be paid by the labor of the country.
“Many of our first settlers have been rendered bankrupt by paying it, and some of our best citizens are struggling with despairing energy to pay the interest upon a principal utterly beyond a reasonable hope of liquidation.”
This 1861 letter highlights that the struggle over predatory lending and the financial squeeze on working people is as old as the territory itself. Much like today's concerns over high-interest debt and the displacement of residents, the author argues that unchecked capital accumulation comes at the direct expense of the community's stability.
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