IV. The Money Lender
"I keep some money loaned at ten per cent."
LINCOLN TO MARIA L. BULLOCK, January 3, 1859
LINCOLN'S "Address to the People of Sangamon County," in which he announced his candidacy for the legislature in 1832, contains this biting paragraph on usury:
It appears that the practice of loaning money at exorbitant rates of interest has already been opened as a field for discussion. . . . It seems as though we are never to have an end to this baneful and corroding system, acting almost as prejudicially to the general interests of the community as a direct tax of several thousand dollars annually laid on each county for the benefit of a few indi|viduals only, unless there be a law made fixing the limits of usury. A law for this purpose, I am of opinion, may be made without materially injuring any class of people.
Between this lecture on usury and Lincoln's later practice of lending money at ten per cent, some writers have professed to see the difference between preachment and performance. They have pointed out that in 1832, when Lincoln had neither money nor property, he condemned high rates of interest, but that after he himself became a money lender, he was willing enough to accept an exorbitant return upon his money.
Comment of this kind ignores the fact that in 1832 ten per cent per annum would have been a very modest rate of interest. Thus, in 1831, Denton Offut, Lincoln's employer at New Salem, was compelled to pay sixty per cent on a loan of $110 borrowed for sixty days.1 Even Page 72 thirty years later, loans at twelve and fifteen per cent were common. In 1861 William G. Greene, then the leading citizen of Menard County, was paying fifteen per cent interest on borrowed money. So was Richard Yates, Governor of Illinois.2 The ten per cent per annum which Lincoln collected was the legal rate, and a fair one considering the demand for money in a region not yet fully developed.
Lincoln made his first investment loans soon after his return from Congress. His first two loans were to Nathaniel Hay and his father John Hay, who operated a brick yard in Springfield. John Hay, then in his seventy-fifth year, was a distinguished figure—a heavy, powerful man with long white hair—and one of Springfield's leading citizens. Among his seven sons were Charles, a Warsaw, Illinois, physician whose son John was to be one of Lincoln's Civil War secretaries, and Milton, who had studied law in the office of Stuart & Lincoln. Milton later became a partner and son-in-law of Stephen T. Logan.
Lincoln had handled cases for the Hays from the beginning of his law practice. In November, 1839, Lincoln had sued Thomas Laswell in the Sangamon County Circuit Court for failure to deliver cord wood to Hay's brickyard in accordance with an agreement made the preceding year. Another suit was brought on Hay's behalf against Mock & Laswell to recover a stud horse and bridle. There were several other cases during the forties, and fees for some of these were unpaid when Nathaniel Hay gave Lincoln his note on April 9, 1849.
Hay borrowed $200 from Lincoln. Seven years later Lincoln wrote out an explanation for Hay's administrator which not only constitutes a full explanation of the transaction, but also throws interesting light on the business methods of the time.
In April 1849 I loaned Nathaniel Hay two hundred dollars, for which I took his note at six per cent for first six months and ten per cent afterwards. At the time, he owed me some trifle for fees. Afterwards from time to time I had bricks of him, and once he paid me ten dollars in money. In January or Febru|ary 1855 we made a turn by which he paid the First Presbyterian Church twelve Page 73 or fourteen dollars for me. On the 2nd of March 1855, we had a settlement including all these things; and as the old note was already nearly covered with former settlements and credits, he took it up, and gave me the note and due-bill herewith filed, the note being for the original principal loaned, and the due-bill for a ballance of interest due. After this, in June 1855, he furnished me bricks for the foundation of a fence, amounting to fifteen or sixteen dollars, which I have always considered as having substantially paid the due-bill. In August 1855 he furnished me bricks for the pit of a privy, for which he or his estate is entitled to a credit on the note. The exact amount of this last lot of bricks, I never knew; but I suppose the administrator can find it on Mr. Hay's books.
The note and due-bill referred to are in Lincoln's handwriting, though signed by Hay.
Springfield, March 2, 1855
On the ninth day of April next I promise to pay A. Lincoln two hundred dollars, with ten per cent interest after due until paid, for value received.
Springfield, March 2, 1855.
Due A. Lincoln sixteen dollars and eighty cents for value received.
Joshua F. Amos, brother-in-law of Hay and administrator of his estate, paid Lincoln $225 on May 16, 1857, in settlement of the loan and interest. Lincoln deposited $200 of the money, the same day, to his account in the Springfield Marine and Fire Insurance Co.3
One month after the loan to Nathaniel, Lincoln loaned his father, John Hay, $500 and took as security a mortgage on 160 acres of farm land about two miles south of Springfield. The mortgage note was dated May 7, 1849, and like the other obligation to Lincoln, was to draw six per cent until due, and ten per cent thereafter. Hay repaid the loan two and a half years later, and Lincoln wrote on the margin of the mortgage record in the office of the county recorder: "This mortgage is satisfied in full this 6th day of December, 1851. A. Lincoln."4
Page 74Lincoln's third loan was to Daniel E. Ruckel, a Springfield cabinet maker from whom he occasionally bought furniture for his home. On August 15, 1851, he took Ruckel's note for $300, bearing interest at ten per cent from December 25, 1851, until paid. Interest was due annually, and the principal on December 25, 1854, or earlier upon default of in|terest. To secure this debt Daniel and Catherine Ruckel gave Lincoln a mortgage on four lots in Allen's Addition, in the northern part of Springfield, and also assigned to Lincoln whatever interest they might have to a part of Lot eight in Block ten, Old Town Plat, located on the northwest corner of Fifth and Washington streets.5
Two years later Lincoln made this notation on the margin of the mortgage record: "In consideration of Daniel E. Ruckel having per|fected the title to the other parcel of ground included in this mortgage [the property at Fifth and Washington streets] I do hereby release from said mortgage the lots therein described as Lots Nine, ten, eleven, and twelve, in Block Three, in Allen's addition to Springfield. Witness my hand and seal this 7th day of July, 1853. A. Lincoln." These lots faced east on Seventh Street, extending south from Edwards Street to the middle of the block.
Daniel E. Ruckel died April 9, 1854, leaving a widow and four minor children. Lincoln's loan was unpaid. A memorandum of Sep|tember 28, 1857, stated that he had received $300 in full of "a note and mortgage I held of the late Daniel E. Ruckel." Interest on the loan "due from last Christmas" was to be paid by R. H. Beach, administrator of Daniel Ruckel's estate.
On the same day Lincoln lent Jacob Ruckel, a younger brother and Daniel's business partner, $500, taking a mortgage to the four lots on Seventh Street which Jacob had acquired from his brother's estate.6 Lincoln endorsed payment of the first year's interest on November 27, 1858, on the face of the mortgage. He collected two more interest pay|ments Page [unnumbered]
Lincoln's next loan was made on November 28, 1851, to Thomas Cantrall, a prosperous farmer who resided eight miles northwest of Springfield. On that date Cantrall gave Lincoln his note for $600, pay|able in two years, at ten per cent. To secure it, Lincoln took a mortgage on eighty acres of farm land which Cantrall owned.8 A year later Can|trall and his wife gave Lincoln a new note for $660, and executed a mortgage on 160 acres in Menard County, Illinois, six miles northeast of Athens. Lincoln released the first mortgage on the same day the new mortgage was made, November 29, 1852. The new mortgage was satis|fied on October 29, 1858, payment being made to Lincoln a few months after Thomas' death, by his brother Charles S. Cantrall.9
The history of Lincoln's next investment loan must be pieced to|gether from scattered memoranda. On January 15, 1853, he sent or gave the following communication to Ninian W. Edwards, Springfield storekeeper and his own brother-in-law: "Please pay N. W. Edwards & Co., eighty dollars, which will be in full of interest on your note till 1st May 1853." Assuming that the due date of Edwards' note was January 15, and that it drew the customary interest of ten per cent, the principal amount must have been $2,750. Lincoln was then trading with N. W. Edwards & Co., and the $80.00 interest payment was probably credited to his account. Then, and for many years afterwards, accounts were settled in January of each year.
A further record of this loan is found in Lincoln's memorandum of notes which he left with Robert Irwin in February, 1861. There he listed: "Two notes of N. W. Edwards, together amounting to fifteen Page 76 hundred and eighty seven dollars and ninety cents, interest at ten per cent due from Jan. 16, 1861," and "Two notes of Smith, Edwards & Co., for aggregate ballance [sic] of one thousand dollars and interest at ten per cent from Jan. 16, 1861."10
N. W. Edwards & Co., of which Edwards and J. Taylor Smith were the partners, became Smith, Edwards & Co. in 1857. Edwards had ap|parently paid $150 by February, 1861, and given two individual and two firm notes for the remainder.
Another of Lincoln's borrowers was Samuel Sidener, a Springfield blacksmith. The fact is established by a foreclosure suit which Lincoln and Robert Irwin brought against Sidener on November 21, 1854. On that day Sidener defaulted, and the court decreed that the property described in the mortgage—the east half of Lot four in Block one, Old Town Plat, Springfield11—be sold to satisfy unpaid principal and in|terest to the amount of $594.80.
If we assume that $500 represented principal and $94.80 accrued interest from the time the note was given, and if we also assume that the rate was ten per cent per annum, then Lincoln lent Sidener the money on or about January 1, 1853. The foreclosed property was sold by Antrim Campbell, master in chancery, on February 5, 1855. Lincoln bid it in for $628.50, a sum which included the debt and $33.70 court costs.12
Lincoln assigned the certificate of purchase to Isaac Lindsay, on January 22, 1857, taking another mortgage on the property. Five months earlier—August 28, 1855—he had lent Lindsay $600, secured by a mortgage on the east half of the north forty-three feet of Lot four in Block one of the Old Town Plat. Lindsay, a bricklayer by trade, was assessor and collector for Springfield in 1856—1857, and afterward, for eight years, a clerk in the office of the Circuit Clerk of Sangamon County.
Page 77The Lindsay loan ran until June 1, 1864, when Robert Irwin, Lin|coln's Springfield agent, received the principal amount. In 1866, Justice David Davis, administrator of Lincoln's estate, wrote on the margin of the recorded mortgage: "From evidence furnished me I am satisfied that this mortgage was paid in full before Mr. Lincoln's death, and I hereby release the same."13
Lincoln's loans were made to men with the exception of two small loans to Ritta Angelica da Silva, described in the records as "a Portu|guese woman." On August 11, 1854, she gave Lincoln her promissory note for $125 with interest at ten per cent, payable annually, the prin|cipal to be paid four years after date. To secure the loan she executed a mortgage on Lot five in Block six, in Welles and Peck's Addition to Springfield. This forty foot lot, on the south side of Miller Street be|tween Ninth and Tenth streets, was in the neighborhood occupied by the Protestant Portuguese who settled in Springfield in 1849. Six months later, on February 20, 1855, she borrowed $125 on the same terms as the first loan, executing a second mortgage to the same prop|erty. Lincoln released the first mortgage on November 26, 1858, and the second on June 9, 1860.14
Lincoln's next loan was made on May 23, 1858 to William Cline, one of the early settlers on Fancy Creek in Sangamon County, eight miles northwest of Springfield. Cline gave his note for $750 and a mortgage on ninety-five acres near his home. The note bore interest at ten per cent and was due in one year. Interest was fifteen months in arrears when Lincoln left for Washington in 1861, but Irwin collected the principal and interest, releasing the mortgage on June 13, 1863.15
The largest sum of money which Lincoln ever received at one time was $4,800, his fee in the Illinois Central charter case. This sum he re|ceived on August 12, 1857. After dividing it with Herndon he added $100 to his share and bought a draft, in the amount of $2,500, on H. Page 78 A. Tucker & Co., Chicago. In early September he took the draft to Chi|cago where, throughout the month, he was engaged in the "Effie Afton" case, involving a bridge across the Mississippi River at Rock Island, Illi|nois. While in Chicago Lincoln lent the $2,500 to Norman B. Judd, attorney for the Rock Island Railroad and his associate in this trial.
Judd, with others, was interested in real estate in Council Bluffs, Iowa. There, on July 11, 1857, he had purchased 160 acres along the right of way of the Mississippi & Missouri Railroad, in addition to prop|erty within the city. The purchase was a speculation, made in the ex|pectation that the Union Pacific would be built, and that land values would increase manyfold. Judd had written to Lyman Trumbull, United States Senator from Illinois, on June 7, 1856: "I and my friends are deeply interested in the Iowa land bill personally and pecuniarily and in the success of the Pacific Rail Road Bill."16
The loan to Judd was made on or about September 1, 1857, doubt|less by pre-arrangement. Interest—at ten per cent—accumulated until September 1, 1859, when Judd gave Lincoln a new note for $3,000 at ten per cent, due in five years. Lincoln visited Council Bluffs in August, 1859, to look over the land owned by Judd, either for the purpose of speculating himself, or to determine how much of the property should be included in a mortgage to guarantee the loan. Speculation was per|haps the reason, for Lincoln could have learned the value of the prop|erty from his friend Thomas Officer of the banking house of Officer & Pusey in Council Bluffs. Officer had been a resident of Springfield prior to his removal to Council Bluffs.
On the visit to Council Bluffs, Lincoln was accompanied by Ozias M. Hatch, Secretary of State of Illinois. From the advice of Hatch and of Officer & Pusey, and from his own observation, Lincoln decided not to speculate. Judd renewed the loan on September 1, 1859, but not until November 10, 1859, did he give Lincoln a quitclaim deed, which, though absolute in its terms, was to operate as a mortgage to seventeen Page 79 lots in Riddle's subdivision of Council Bluffs, and to ten acres along the right of way of the Mississippi & Missouri Railroad. Lincoln sent the deed to Officer & Pusey, who had it recorded on February 14, 1860.
Judd repaid the loan after it had run eight years, the principal and interest then amounting to $5,400. Quitclaim deeds to the Council Bluffs property were signed by Mary Lincoln on August 10, 1867, and ten days later by Robert T. Lincoln. On February 8, 1868, Morris P. Brewer, commissioner, executed a conveyance from Thomas (Tad) Lincoln to Judd.17
When Lincoln went to Washington in 1861, he left three notes with Robert Irwin hitherto unmentioned. The principal amounts totalled $1,900, and all bore interest at ten per cent. It is impossible to tell now when the notes were made, or in what amounts. Lincoln noted that the balance due on the largest note was $1,000, which indicates that origi|nally the obligation was a larger sum. Interest was paid until March 18, 1861.
The makers of this note were three brothers named Van Deren and their brother-in-law, Lewis Johnson. Archibald J. Van Deren went to Colorado in the gold rush of 1859. There he soon became Grand Master of the Grand Lodge of Free Masons and in 1863 a member of the legis|lature. Cyrus W. Van Deren was State Senator from Sangamon County in the Illinois legislature from 1856-60. John M. Van Deren, a younger brother, was a farmer in Curran Township, eight miles southwest of Springfield. Johnson was one of the owners of Everybody's Mill in Springfield. The principal of the Van Deren note was paid in install|ments, the last payment of principal and interest being made on March 21, 1863.
The next largest note Lincoln described in the Irwin memorandum as "One note of John Cook, for seven hundred and fifty dollars, interest Page [unnumbered]
The third note listed in Lincoln's memorandum was that of J. K. and Thomas Lewis for $150. The interest was due from April 22, 1860. J. K. Lewis probably was one of the nine brothers of Thomas, a leading businessman and banker of Springfield. The balance of the Lewis note, with interest, was paid on March 12, 1864.
Lincoln made two small loans while he was President, the first to Thomas Stackpole for $380 on November 8, 1861.18 Stackpole was em|ployed as a watchman at the White House at $50 a month from April, 1861, to December, 1864. He served as steward at a salary of $100 a month from December, 1864 to the end of Lincoln's administration. The second loan was to M. B. Church, for $260 on November 5, 1864. The term was for five months. Church was a law student in the Lincoln & Herndon office in 1860. He entered the Union Army.19 Wounded in service, he drifted to Washington. Neither the Stackpole nor the Church note was ever paid. At Mrs. Lincoln's request, the administrator of the President's estate did not try to collect these White House loans.20
Thus, in fifteen years, Lincoln made seventeen loans totalling more than $12,000. When he left Springfield for Washington in 1861, he had $9,337.90 invested in interest-bearing notes and mortgages. By that time he had collected more than $2,000 in interest, an average of al|most $200 a year. The lending of money was not a rapid road to wealth, but it accorded far better with Lincoln's cautious temperament than the speculation in which he might have engaged.