Though logically it is usurious to deduct in advance the highest legal rate of interest as a discount from the nominal amount lent,74 since the actual sum lent is less than the face of the obligation, and interest is charged on the latter amount, custom has validated the practice at least on loans for short periods in most jurisdictions.75 In some States statutes limit to one year the term for which interest may be taken in advance; 76 but a few cases support the right of the creditor to take a portion of the interest on long-term obligations in advance and contract for the remainder in the future.77 Custom and convenience have similarly prevailed over strict logic in the generally accepted rule that it is not usurious to calculate interest in accordance with the usual practice on the assumption that there are only 360 days in a year, though the rate is the highest legally permissible,78 Also, though usury statutes

58 Fed. 613 (Ga.); Ginn v. New England Mortgage, etc., Co., 92 Ala. 135, 8 So. 388; Vahlberg v. Keaton, 51 Ark. 534, 11 S. W. 878, 4 L. R. A. 462, 14 Am. St. Rep. 73; Merck v. American Ac. Co., 79 Ga. 213, 7 S. E. 265; Telford v. Garrels, 132 111. 550, 24 N. E. 573; Baldwin v. Doying, 114 N. Y. 452, 21 N. E. 1007; Savings L. & T. Co. v. Yokley, 174 N. C. 573, 94 S. E. 102; Hudmon v. Foster (Tex. Civ. App.), 210 S. W. 262; and see cases in note 71.

70a Infra, Sec. 1697.

71 Williams v. Flowers, 90 Ala. 136, 7 So. 439, 24 Am. St. Rep. 772; Athens Nat. Bank v. Danforth, 80 Ga. 55, 7 S. E. 546; Dorsey v. Wolff, 142 111. 589, 32 N. E. 495, 18 L. R. A. 428, 34 Am. St. Rep. 99; Churchman v. Martin, 54 Ind. 380; Gate City Nat. Bank v. Strother (Mo. App.), 196 S. W. 447; Gaar v. Louisville Banking Co., 11 Bush (Ky.), 180, 21 Am. Rep. 209; Duluth, etc., Co. v. Klovdahl, 55 Minn. 341, 56 N. W. 1119; Bank of Commerce v. Fuqua, 11 Mont. 285, 28 Pac. 291, 14 L. R. A. 588, 28 Am. St. 461; National Bank v. Thompson, 90 Neb. 223, 133 N. W. 199.

72 Buckingham v. McLean, 13 How. 151, 14 L. Ed. 91; Riley v. din, 82 Ga. 312, 9 S. E. 1095; Smith v.Cham-pion, 102 Ga. 92, 29 S. E. 160; Tipton v. Ellsworth, 18 Ida. 207, 109 Pac. 134; Griffin v. Marine Co., 52 111. 130; Churchman v. Martin, 54 Ind. 380; Merchants' Bank v. Sassee, 33 Mo. 350; Merritt v. Benton, 10 Wend. 116; International Bank v. Bradley, 19 N. Y. 245; Stuart v. Tenison Bros. Saddlery Co., 21 Tex. Civ. App. 530, 53 S. W. 83.

73 Wood v. Cuthbertaon, 3 Dak. 328, 21 N. W. 3; State Bank v. Ensminger, 7 Blackf. 105; Cornell v. Barnes, 26 Wis. 473.

74 It was so held in early cases- Barnes v. Worledge, Noy, 41, a. c. Cro. Jac. 25, Yelv. 30, Moor, 644, 1 Bulstr. 17; Bank of Utica v. Wager, 2 Cow. 712.

75 Marsh v. Martindale, 3 B. & P. 154; Fowler v. Equitable Trust Co., 141 U. S. 384, 12 S. Ct. 1, 35 L. Ed. 786; Bank of Newport v. Cook, 60. Ark. 288, 30 S. W. 35, 29 L. R. A. 761, 46 Am. St. Rep. 171; First Nat. Bunk of Helena v. Waddell, 74 Ark. 2414 85 S. W. 417; McCall v. Herring, 1 16 Ga.

235, 42 S. E. 468; National Life Ins. Co. v. Donovan, 238 111. 283, 87 N. E. 356; English v. Smock, 34 Ind. 115, 7 Am. Rep. 215; Tholen v. Duffy, 7 Kan. 405; Bramblett v. Carlisle Deposit Bank, 122 Ky. 324, 92 S. W. 283, 6 L. R. A. (N. S.) 612; Iichtenstein v. Lyons, 115 La. 1051, 40 So. 454; Ticonic Bank v. Johnson, 31 Me. 414; Agricultural Bank v. Bissell, 12 Pick. 586; Sandford v. Lundquist, 80 Neb. 414, 118 N. W. 129,18 L. R. A. (N. S.) 633; International Bank v. Bradley, 19 N. Y. 245; Crowell v. Jones, 167 N. C. 386, 83 S. E. 551; Newton v. Woodley, 55 S. C. 132, 32 S. . 531, 33 S. . 1; Geisburg v. Mutual Bldg., etc., Assoc. (Tex. Civ. App.), 60 S. W. 478; Brown v. Johnson, 43 Utah, 1, 134 Pac. 590, Ann. Cas. 1916 C. 321, 46 L. R. A. (N. S.) 1157; Parker v. Cousins, 2 Gratt. 372, 44 Am. Dec. 388. But see Timberlake v. First Nat. Bank, 43 Fed. 231; McCurry v. Hartwell Bank, 236 Fed. 556 (Ga.); Purvis v. Frink, 57 Fla. 519,49 So. 1023; Loganville Banking Co. v. Forrester, 143 Ga. 302, 84 8. E. 961, L. R. A. 1915 D. 1195; Smith v. Parsons, 55 Minn. 520, 57 N. W. 311; Insurance Co. v. Carpenter, 40 Ohio St. 260.

76 See Smith v. Parsons, 55 Minn. 520, 527, 57 N. W. 311; Allen v. Dunn, 71 Neb. 831, 99 N. W. 680; Sundahl v. First State Bank, 32 N. Dak. 373, 155 N. W. 794; Covington v. Fisher, . 22 Okla. 207, 97 Pac. 615; Garland v. Union Trust Co. (Okla.), 165 Pac. 197, and the same period is suggested (though not named in the local statute) in Tallman v. Truesdell, 3 Wis. 443, 452.

In Oklahoma the court has sanctioned a method -of partially defeating such a statute as that referred to in the text. Though the statute forbids the present taking of interest for more than a year in advance, it has been held permissible to take a large part of the interest on a mortgage payable in ten years in the form of notes payable in one year from the time when the money was lent. Metz v. Winne, 15 Okl. 1, 79 Pac. 223. See also Garland v. Union Trust Co., 49 Okl. 654, 165 Pac. 197; Baker v. Pittsburg Mortgage Co. (Okl.), 171 Pac. 23.

77 Fowler v. Equitable Trust Co., 141 U. S. 384, 12 S. Ct. 1, 35 L. Ed. 786; Brown v. Scottish-Amercian Mtge. Co., 110 111. 235; Swanson v. Realization Ac. Corp., 70 Minn. 380, 73 N. W. 165; Pierce v. Davey, 43 Neb. 45, 61 N. W. 92; and see Oklahoma decisions cited in the preceding note. But see contra- McCall v. Herring, 116 Ga. 235, 42 S. < E. 468; Allen v. Dunn, 71 Neb. 831, 99 N. W. 680 (statutory).

78 Camp v. Bates, 11 Conn. 487, 495; Patton v. Bank of Lafayette, 124 Ga. 965, 53 S. E. 664, 5 L. R. A. (N. S.) 592; Planters' Bank v. Bass, 2 La. Ann. 430; Agricultural Bank v. Bissell, 12 Pick. 586; Planters' Bank Snod-grass, 5 Miss. (4 How.) 573 Merchants', etc., Bank v. Sarratt, 77 S. C. 141, 57 generally state what yearly rate of interest is permissible, it is not illegal to contract for interest at that rate, payable semiannually,79 or quarterly,80 prior to the maturity of the obligation. Where the debtor has the right to pay the whole debt at the expiration of any interest period, there is no objection to making the interest payable at shorter periods, as one month;81 and in one case at least, a reservation of interest at monthly intervals has been held permissible though the principal of the obligation was not due for a year.82 Whether this would be universally followed is possibly open to question.88