The Charlotte News

Wednesday, March 27, 1940

FIVE EDITORIALS

Site Ed. Note: Corrections: Bertrand Russell lectured Harvard University, 1914. Also, the correct spelling is cubolo, not cubulo, though neither is in Oxford's. Sorry for the errors.

And, we agree with the advice of the head of the Humane Association offered Lester Barlow: testing bombs on goats is a bad idea. Of course, testing them in the Nevada desert, on Bikini, and in the atmosphere weren't such hot ones either.

And as to the piece by Billopp: bus stop, bus goes, they stay, love grows, under their umbrella...

As to Christenberry leading the Deputy in "Hamlet", it appears in our estimation as much the case of the piper leading the gomerel fife.

"Usury" spells out the conundrum often associated with such laws seeking to prohibit the age-old practice of exacting a pound of flesh. The exceptions often, for all practical purposes, erode the rule. Be careful what you sign. North Carolina, for instance, has, as of 1999, put some teeth in its mortgage lending usury statutes. That was done to combat a higher than normal rate of foreclosures in the state in recent years, having made the state unusually attractive to questionable lending practices. Now, to pass muster, a home mortgage refinancing an old loan must provide the borrower a "reasonable, tangible net benefit" over the old loan being refinanced. That means that you weigh the new loan's attributes against the old and if, on balance, the old loan was better, you have a case. If so, then the loan is deemed by state law usurious and a corrupt trade practice and the mortgage lender may be sued under these statutes. If the absence of the tangible net benefit is proved, then the borrower has a choice of remedies, either forgiveness of the interest on the debt up to the point of judgment or treble the actual damage to the borrower caused by the new loan. If you think you have such a loan, and it is less than three years since you got into it, we recommend that see your attorney.

What is a "reasonable, tangible net benefit"? If, for instance, you have a better interest rate than the old loan, then obviously there is a benefit and likely an appropriate loan, depending on the other factors of the new loan versus the old one. If the interest rate is substantially greater, then you may have a case, depending on other factors. If you received a substantial amount of cash out on the new loan, then, even with a higher interest rate, you may have received the requisite tangible, net benefit by way of the cash. If you received no cash out, however, then it becomes highly questionable. Even if payments are initially lower overall because of sweeping previously unsecured debt under the umbrella of your home mortgage, if it is an adjustable rate loan with a start rate substantially higher than your old mortgage and one which may substantially increase with time, you may not have received the requisite net benefit. One would need factor in the amount necessary to pay off the new loan as amortized over time versus the payoff of the old loans as amortized to their maturity dates. In such cases, the question of whether there was a reasonable tangible, net benefit is ultimately to be answered by the trier of fact in court. And, we stress, we are speaking here of specific statutory rights in North Carolina. Other states' laws may or may not afford similar statutory rights and remedies. Again, if you think you may have such a problematic loan under North Carolina law anyway, we suggest that, rather than play Hamlet and somewhere down the line lose your home in foreclosure, you see your attorney.

As to any loan which permits 42% per annum interest, as allowed under the South Carolina law in question below, we recommend never, ever entering into such as that lest you quickly regret it. Even the 21% interest payable on some credit cards is outrageous and the cause for a lot of borrowing headaches and bankruptcies. One must ask one's self whether a big screen high-definition television or the like today is really worth those complexities and problems tomorrow.

Since Last March 26 No Fatal Accident On Airlines

Here's a statistic that, in recognition of the accomplishment behind it, truly deserves a hand:

Good luck must be given a share of the credit for this achievement, but other factors responsible for it are tangible as well as altogether praiseworthy. The unrelenting caution of the lines themselves, their continued research and investment in up-to-date equipment with safety as their primary objective; the creation and the functioning of the Civil Aeronautics Authority, which took over and revitalized the old inept Bureau of Air Commerce of Uncle Danny Roper's Department of Commerce, as well as the Bureau of Air Mail of the Interstate Commerce Commission.

In fine, this remarkable record of safety was the result of full and hearty cooperation between Government and Business which might, were one minded to moralize about it, be used to point out an object lesson. In any case, it points to an accomplishment of the first magnitude.

Some Remarks On An Odd Case In Police Court

The kindest view of the matter seems to be that Deputy Sheriff Martin is down with the Hamlet complex--can't make up his mind. Nobody, however, can well suspect Judge Howard, County Recorder, of that.

Saturday evening at 6:45 o'clock, Deputy Martin arrested a man named Christenberry for driving drunk, after seeing him drive into a ditch eight miles out on a belt road--according to his testimony in court. But then he did a strange thing. He ordered Christenberry to drive on ahead of him along the crowded road. Later he picked up a friend, had him get into the car with Christenberry, but allowed the latter to continue to drive through swarming Graham Street and across town to the County Jail. At least once, according to the testimony, he fell several blocks behind the Christenberry car.

Obviously, it adds up to one of two things: (1) Deputy Martin was exceedingly careless of the public safety, or (2) the arrested man was not drunk at all. Judge Howard, indeed, concluded that he was drunk and convicted him out of hand. Moreover, we have a notion that substantial justice may have been done. Nevertheless, it is plain that in order to convict, the judge had to ignore the basic postulate of the law that a man is presumed to be innocent until proved guilty beyond reasonable doubt. For it is logically impossible to convict a man of driving drunk on the word of an officer who just adjudged him competent to conduct a "deadly weapon" through crowded streets.

It's A Hard Word But A Profitable Business

South Carolina law fixes the legal rate of interest at not more than 7% per annum (6% on contracts). Charges beyond these rates constitute usury, which is a hard word.

Yet the South Carolina Legislature even now is debating, quite as though there were no usury law, a bill to limit interest rates on small loans to 3 1/2% a month, or 42% a year. The purpose of the bill, and we may assume its honesty, is not to enable loan sharks to gouge the people but actually to reduce the cost of small loans and to save impecunious borrowers from having to pay rates that run up to two or three times the proposed 3 1/2% per month.

This, in a convenient nutshell, is just about the history of usury in this absurd world. Moral forces (either government or religion) decide righteously to proscribe charging of more than a moderate interest, upon pain of something or other. The more or less respectable money-lenders, unwilling to risk a run-in with the law or public opinion, and unable to make a commensurate profit, withdraw from the business. The evil having been curbed, everybody relaxes.

But after awhile, less scrupulous persons, finding the enforcement of the law agreeably lax, spring up in their places and charge all the traffic will bear plus a little more because of the surreptitious nature of their occupation.

Whereupon the moral forces awaken to what's going on and to the knowledge that the Philistine boys have got a good thing, so they amend and recodify their principles, allow themselves a fancy (but withal a somewhat lesser) rate, and go back into the usury business secure in the confidence that they are only thinking of the best interests of the common people.

Council Had Best Reconsider The Whole Gas-Truck Case

Either gasoline tank trucks are too dangerous to be permitted the use of city streets, in which assumption the danger is a frightful one, or they are not. And if they are not, well and good. They should be permitted to traverse any streets they please, just as the rest of us.

But if they do constitute a public menace, and the City Council's disquietude over its first refusal to pass a regulatory ordinance would indicate that the Council feared as much, then to limit through trucks to certain streets is only to compound the danger to the residents and property-owners and users of those streets. To let trucks making a local delivery use any old streets is to ignore the hazard which has just been indicated by the proposed regulation of through trucks.

Matter of fact, if the traffic is hazardous to a degree, it should not be permitted within the city at all. Through trucks should be compelled to detour this jurisdiction, and local deliveries should be made first to tanks in some isolated place outside the city, whence gasoline can be distributed in smaller quantities.

Nobody, of course, with the possible exception of the railroads (who haven't had anything to do with this ordinance), wants to cause the gasoline hauler trouble just for the fun of it. But either there is a hazard in the movement of these trucks over city streets or there is not. That's the Council's duty to establish by competent authority.

Tarheelia Vows To Keep The Slate Clean Next Time

The sad fact was never very widely publicized, for obvious reasons, but at one time the state of North Carolina contained more defaulting units of government than any other except Florida. That was back in 1933, when times were harder than we like to remember.

There were 82 North Carolina counties out of 100 in default on the principal or interest (or both) of their bonded indebtedness, and 152 cities and towns. The bill for all those schools and county roads and granite courthouses had come due and couldn't be paid.

Since that time, the Local Government Commission has done a magnificent, though distasteful, job of refunding debts, getting bondholders to take new securities, sometimes at a heavy discount, so that today the number of counties in default has been decreased from 62 to nine, and the number of cities and towns from 152 to 35. Nor is that all.

The State, not to be caught short again, has adopted for its own government and all subordinate governments the constitutional limitation that no unit may issue bonds in any year for more than two-thirds of its debt retirement in the previous year, except by vote of the people. And the people, it may be asserted, have learned their lesson.