INTEREST ON SCHOOL FUND
Mr. Antrim's bill [H. R. 16] to regulate the interest on the school fund was reported back from the Committee on County and Township Business, with the recommendation that the bill be amended by striking out six and inserting seven, making the interest 7 per cent. instead of 6, as provided in the bill, and that when so amended the bill do pass. The report of the Committee was concurred in, and the question recurring on the adoption of the amendment-
Mr. WILSON, of Marion, understood that about 95 per cent. of the school fund had been loaned at the present rate-8 per cent. He was creditably informed by persons of financial foresight that there would be no difficulty in loaning this fund for the next two years at the present rate of interest-8 per cent.
Mr. GORDON could see no reason why the interest should be reduced below 8 per cent. We should look to the interest of the school fund and not to the interest of persons who desired to borrow this money. He believed with the gentleman from Marion [Mr. Wilson] that there would be an appreciation instead of a deprecation of the desire for school fund in the next two years, He had been informed that there had been a decrease in the length of the school terms in this State, and if this bill should prevail there would of necessity be further decrease in the length of the school terms. He could see no reason why we should strike off one-fourth of the interest of the school fund.
Mr. MOODY did not propose to enter into a discussion with gentlemen on this floor as to whether all the school fund in the State can or can not be loaded at the present rate of interest. He did not think that extortion was right, nor that, if every dollar of the school fund of the State could be loaned at 10 per cent. to the already burdened taxpayers of our State who hold this money, that it would be just for us to compel them to do so. On an examination of the records in the Recorder's office of the State the gentleman will find that this large and magnificent fund is loaned to small land owners of moderate means, who of all men should be protected from usury and extortion. These funds are loaned in small amounts ranging from $300 to $600. Every man making a loan of this fund must pay the interest in advance, pay for an abstract of title costing him from $3 to $5 pay for a mortgage and the recording thereof, which amounts in the aggregate to about $6 or $8. We do not think it right to say that corporations and individuals may contract for and receive the highest rate of interest their money will command, but we have made the legal rate 6 per cent., why then should we say this fund shall not be loaned for less than 8 per cent? He thought the fund should be loaned at 6 per cent.
Mr. SMITH stated that he could commence where the gentleman from DeKalb [Mr. Moody] left off. He then read from a report which he had in his possession showing the amount of school page: 150[View Page 150] fund in each County, and also the amount loaned. The report showed that a very large per cent. of the school fund of each County was loaned at the present rate of 8 per cent. He stated that the testimony went to show that many Counties could loan twice the amount which they have at the present rate, and some claim that they could loan twice the amount at 10 per cent. He was not in favor of reducing the rate of interest while the money could be loaned at 8 per cent.
Mr. HEFFREN favored a 6 per cent. rate, but if the House will not agree to that he would favor a 7 per cent. rate. He moved that the amendment be laid on the table.
The motion was agreed to-yeas, 62; nays, 14.
Mr. HANSON made an ineffectual motion-yeas, 29; nays, 42-to indefinitely postpone the further consideration of the bill.
The bill passed to the second reading.
