se the chattels involved are a less
certain means of payment than landed estate. Loans secured upon
unproductive lands, whether in prospective farms or city lots, are made at
high rates, not only because these lands fail to furnish in themselves the
means of interest payment, but because they represent the speculative
energy of their owners with unmeasured risk. All these variations and
fluctuations are found in every community, and grow out of the natural
wants of borrowers and the natural feelings of lenders. Custom may have
something to do with rates in special cases, as it has to do with wages
and retail prices, but in the range of frequent dealing between borrowers
and lenders rates follow the higgling of the market as truly as prices of
commodities.

_Usury laws._--It has been the custom for ages to distinguish between
interest and usury, interest being supposed to be a fair payment for use
of borrowed wealth and usury a larger payment in the distress of a
borrower. Usury once meant only use, the equivalent of interest, but since
it was once prohibited by law in England, the name is now attached to what
is still prohibited by law, an interest above a definite rate prescribed
by statute. The object of such legal restrictions is evidently protection
of the borrower against extortion. Yet it is practically proved by
experience of the world that such restrictions operate against the
borrower by limiting lenders in open market and sometimes closing the
market entirely. The would-be borrower, under adverse conditions in the
market, is obliged to find in some byway a lender whose scruples against
infringement upon the law may be overcome by extra payment. Under such
circumstances there is no market rate, and borrowers bind themselves in
numerous ways to special payments not in direct conflict with the letter
of the law. Evasions of restrictions under such circumstances are
inevitable. A farmer buys a hundred-dollar horse, giving a note, payable
in one year without interest, for $120; or he sells his note to a neighbor
at what he will give; or he goes to a broker and pays him a commission for
securing a loan at the legal rate of interest. Even at a bank, prohibited
by law from taking more than the legal discount on the pain of losing its
charter, a borrower may give his note for $500, tacitly agreeing to leave
on deposit a fifth of the sum, thus paying interest on $500 for the use of
$400.

All these forms of evasion are