Invitation to Capital.

January 31, 1870


The economy of Virginia is going to become one of the most vibrant in the country.


The new Constitution of Virginia offers a strong inducement to capital to seek investment here. It authorizes "any rate of interest not exceeding twelve per cent per annum which may be agreed upon by the "parties and be specified in the bond, note, "or other writing evidencing the debt." In the absence, however, of such agreement, the rate of interest is fixed at six per cent. No other State Constitution authorizes so great an interest upon money as twelve per cent. Louisiana is next highest, and her limit is ten per cent. It happens fortunately for us that our merchants and citizens generally are now permitted by law to borrow at any rate up to that. Situated as they are they cannot make headway without money, and the premium upon it as shown in the transactions in the controlling markets in this country would place it beyond our roach at the old rate of 6 per cent. Indeed that limit has been practically dead ever since the war. Yet the transactions at higher rates have been, according to the letter, illicit, and the rate charged was ordinarily increased by a sort of conventional rule that added insurance against risk of the plea of usury! The old law did more. It drove from the community of money-lenders men who were too conscientious to lend at usurious rates, and who, being unable to eliminate their means from the influence of prevailing circumstances, were obliged to invest in speculation of some sort rather than lend, for they could not afford to lend at six per cent. Now, then, when money may be loaned legally at the rates that prevail in the money-centres, we may confidently expect that capitalists will send in their means to be employed here, and at the same time much of our own capital that has been locked up for the reason stated will now be let loose. There are men who have fine property that cannot be sold now save at a great sacrifice. They are active and enterprising, and would borrow money at high rates, giving mortgages upon their property. Loans of this kind would be entirely safe, and should be agreeable to capitalists. At the same time in the hands of the right men-and we believe there is a vast community of such men in Virginia-money borrowed in this way may be used successfully, securing individual thrift and contributing to the general prosperity. The liberal feature in our Constitution on this subject should most assuredly introduce a large aggregate capital into Virginia.
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Charles Simmonds




“Invitation to Capital.,” Reconstructing Virginia, accessed December 12, 2018,