USURY:
OR
INTEREST, PREMIUM AND DISCOUNT.
A LECTURE
DELIVERED
BEFORE THE STUDENTS
OF
CRITTENDEN’S
Philadelphia Commercial College,
BY
S. H. CRITTENDEN,
Attorney at Law,
CONSULTING ACCOUNTANT AND PRINCIPAL.
PHILADELPHIA:
RINGWALT & BROWN, STEAM-POWER BOOK AND
JOB PRINTERS,
Nos. 111 & 113 SOUTH FOURTH STREET.
1863.
USURY:
OR
Interest, Premium and Discount.
A LECTURE[A]
DELIVERED BEFORE THE STUDENTS OF
CRITTENDEN’S PHILADELPHIA COMMERCIAL COLLEGE,
BY
S. H. CRITTENDEN, Attorney at Law,
PRINCIPAL.
Our subject to-day is Usury.
We will first speak of this subject in its direct relation toBook-Keeping. That is, as to its treatment under differentforms, on the Ledger, since this is in reality the phase in whichit is of most importance for us to consider it. Afterwards wewill glance at the matter in the view of utility, economy andlegality.
The ledger titles which embrace this subject, are Interest,Discount and Premium. These are all often, and indeedgenerally, embodied in one account, headed Interest, yet theyare radically different divisions of the account, both intheir nature and manner of computation; although all tendingto one point, when placed upon the merchant’s books, viz: toadd to his total gains or losses.
[2]McCullock’s Commercial Dictionary has the following definitionsof Interest and Discount:
“Interest, is the sum paid by the borrower of a sum ofmoney, or of any sort of valuable produce, to the lender, for itsuse.”
“Discount, is an allowance made on account of an immediateadvance of a sum of money, not due till some future period.”
Premium, according to Webster’s Dictionary, is “a bounty,or something offered or given for the loan of money, usually asum beyond the interest.”
These definitions, though not full, will yet serve as a foundationon which to construct an explanation that may make theseterms more easy of comprehension. You perceive that in orderto apply the definition of Interest, which I have quoted, wemust look upon every person who is indebted to another, as aborrower; that is, as having in his possession, certain propertywhich belongs of right to that other person; and for retainingthe use of which he must pay him an equivalent. If youconsider in this light all transactions in which Interest isdemanded and paid, this portion of the subject will perhaps besufficiently plain without additional comment.
It is in relation to the second division of the account thatmost confusion usually arises. There are not less than threedistinct transactions, which are all included in the usuallanguage of business men, under the single term Discount.They are:
1st. When a deduction is made for payment of a note oraccount before due; 2d. When a per centage is t