bably reopen many of the furnaces which were closed and sold by the sheriff during the depression. If it could be regarded as permanent, it would lead to the investment of sufficient capital in the manufacture of iron to provide in full for the domestic consumption; and the competition of the native and foreign manufacturers would reduce the price to the lowest limit which the natural advantages for the production in the country admits. The domestic competition alone would effect this. Domestic competition in the production of cut nails, which are of American invention and manufacture, and have never been imported, and the improvements in the methods of manufacture, which that competition has induced, have reduced their price from $6 the keg of 100 pounds, in 1839, to $2 80. Those, however, who would otherwise be tempted to engage in the manu. facture of iron, are aware that a large portion of the recent advance, instead of being an addition to profits, is but the necessary insurance against the hazards of a revulsion in the foreign markets, which may, within a brief period, again reduce the price below the remunerating rate. They remember that, of the 298 furnaces in the State of Pennsylvania, 167, or 56 per cent., were out of blast in the fall of 1850; that the amount of iron made in that year was only half what it had been in 1847; and that, in the succeeding year it was still less, prices having still further declined, and failures, and sales under execution having increased. They know that, under the present tariff, every decline in the foreign price is aggravated in its effect upon them by a corresponding decline in the duty. A reduction of one dollar in the foreign price relieving the importer from thirty cents in duty, compels the domestic producer to submit to a reduction of one dollar and thirty cents. A system which thus aggravates the fluctuations in price, increasing it when it is high and decreasing it when it is low, subjects business to unnatural hazards, and to the same extent unnaturally enhances the rate of insurance, which the gross apparent profit must include and leave a margin for an adequate real profit beside, before it tempts sagacious calculators to a new investment of capital. It thus unnaturally limits competition, and thereby prevents the reduction of price which free competition would cause. The risk, whatever it may be, is a part of the estimated cost of production, which must be replaced

out of the price, and thus fall on the consumer. If that risk which is created by the revenue system were now annihilated, by converting the amount paid upon importation at present prices into a fixed duty, with a guarantee of its continuance, the result would plainly be, to induce a large increase in the domestic production of iron, beyond what the price under existing circumstances will create. If prices should continue to rise, the fixed duty will be more advantageous to the consumer than one which should rise with it. When, on the other hand, iron shall begin to decline abroad, it will come to our market at an equivalent reduction, to compete with a number of domestic producers larger than under the present system, and either not decreasing at all in consequence of the fall of price, or at all events not decreasing so fast as they would, if a declining rate of duty were hastening their ruin. The change of system, by diminishing the risk of domestic production, and thereby contributing to a permanent increase in its quantity, would tend toward a permanent reduction of cost without a reduction of the revenue of the government. It may be said that the present system relieves the foreign producer from a portion of the risks of his business, diminishes by thirty per cent. the effective reduction of price upon so much of his commodities as comes to the American market, and thus reduces the general cost of his production. To this it may be answered, that whatever saving is effected to the American purchaser is at the expense of more than an equal loss to the treasury of his government. The fact that when the iron-masters of Wales reduce the price of rails a dollar per ton, thirty cents of that nominal reduction is virtually returned to them for every ton which goes to the United States, undoubtedly enables them to make the reduction larger than it would otherwise be. The advantage, however, is shared equally by all the purchasers of rails, as well in Europe as in America; while the rebate of duty which enables the iron-masters to concede a reduction of price, is borne by the American treasury exclusively.

As the profits of every business are amassed in fragments, some trifle destined to swell the heap being included in the price of every article offered for sale, if the seller can bring it about, it follows that an item for the benefit of the insurance fund is included also, and that the entire body of consumers contribute to it. If goods

are sold upon credit, the whole body of purchasers are made mutual insurers of payment. Those who pay for what they purchase themselves, pay also for what is furnished to those who fail to pay. If the people of Illinois, for instance, tolerate a system of laws, or a laxity of social morality, maintained by public opinion, which renders the collection of debts in their State uncertain, tardy, and expensive, every one of their merchants who has occasion to make purchases in New York, or any of the Atlantic ports, will obtain his goods at a figure sufficiently advanced to cover the estimated risk and cost, not in his own case simply, but in that of the average of his fellow-citizens. Returning home he will distribute the premium of insurance he has been required to pay, with interest, among his customers. If it could in practice be thus assessed in a roundabout way upon the community, who had it in their power to remedy the evil, there would be little to regret. There is, however, a difficulty in discriminating between customers on grounds not personal to themselves; and it is much easier to require a trifling advance from the whole body than a more considerable one from a limited class. It is thus that the entire body of consumers are made insurers against every species of insecurity, and are therefore alike interested in removing the causes of insecurity, whatever may be their origin. They are bound over together to promote good faith and maintain justice everywhere.

When we have eliminated from gross apparent profits, that portion which is really the compensation for physical and mental labour or wages, and that which goes to make a fund to guaranty the employer of capital against the hazards incident to the method in which he is using it, we shall find the residue to be nearly equal, or tending to equality with Rent or Interest. Men are sufficiently fond of speculating in matters of chance: and what seems mere chance to one person is discerned by another, from more ample knowledge of all the facts upon which an event depends, to be within the limits of that high probability which is sometimes called moral certainty. This consideration will serve to account for the existence of some margin of fluctuating width, between profit and rent. Great capitalists are proverbially timid. They underbid each other for absolute security, or what approaches nearest to it; and their com

petition tends to depress the rate of interest, and thus to establish a margin upon which intelligent courage may lay the foundations of fortune, without any imprudence, and without levying contributions for risks which are not incurred. Men borrow capital for the purpose of associating it with their own labour; and, although it should bring them no higher rate of profit, strictly speaking, than the interest which they pay, it enables them to earn wages they would otherwise have been compelled to go without.

Rent, in the usual sense, the rent of land, is profit stripped of all accessories. The capital in this case is fixed and immovable. There is no risk of its destruction, no trouble in establishing its identity. The laws of most countries have given unusually stringent remedies to enforce its ultimate restitution, and the collection of the rent during the pendency of the lease; for the laws have been made by the landlords. It is true that it may be deteriorated by remorseless exhaustion, or by an injudicious system of cropping, in which the injury is undesigned. Against this, however, protection is sought by covenants fixing the mode of culture. That such covenants, operating as a restraint upon the tenant, which often impairs the efficiency of his labour, should be necessary, is one of the evidences that the system of tenant-culture is radically vicious; and it is abundantly certain that they fail in many cases to secure their object. Sufficient confidence in their efficacy is felt, however, in those countries where this system prevails, to reduce the rent of land to a rate even below that at which it is lent upon the security of government, bringing it as low as two and a half and three per cent. per annum, upon the value at which it sells.

The interest of money loaned to individuals varies with the degree of security with which its repayment may be counted upon. Governments have attempted to limit the rate which may be stipulated in a contract for the loan of money, and to enforce the regulation by declaring the entire contract void, so that the principal cannot be recovered in the legal tribunals; and often by superadding other penalties. They have seldom, however, interfered with the sale of an existing security, such as a mortgage or promissory note, further than to limit the amount to which recovery can be had against the seller, upon his personal guaranty of the security, to the amount

which he received on the sale, with legal interest thereon. While such a transaction is not within the purview of the statute against usury in borrowing, it answers the same purpose, and is the mode usually resorted to by men in business, when they desire a loan and cannot obtain it at the legal rate of interest. It is not difficult to invent devices by which the usury laws can be evaded, where the interest, real or supposed, of individuals requires it. A degree of risk, however, attends the attempt, for which the lender requires and receives compensation. He has to take the chance that the borrower will repudiate his bargain, and that the ingenuity with which the transaction may have been disguised may not prove a match for the astuteness of the courts. He is ordinarily favoured by the willingness of juries to wink hard, to avoid seeing the evidence which tends to establish a defence that is commonly regarded as unconscientious. There is, however, a degree of odium which fastens upon the habitual violator, even of a law which fails to enlist the moral sense of community in its support. This odium, like the risk of pecuniary loss, limits the number of competitors for loaning money at extrastatutory interest, and enables those whom it does not deter to secure additional compensation. The principal effect of the usury laws has everywhere been to increase the cost of loans to those who are under the necessity of borrowing at usurious rates, and to weaken the respect for law, by the spectacle of their daily violation without punishment. It is probable that the latter consequence might be avoided, by diminishing the severity of the penalties; for example, by permitting a recovery against the borrower of the whole sum he contracted to pay, but confiscating the usurious excess of interest for the public charities, or some analogous provision, which should relieve the informer from the discredit of repudiating his contract for a selfish benefit. The British Parliament was so much impressed with a belief that the usury laws were ineffectual, that, in 1831, they were repealed, so far as they affected commercial paper having less than six months to run, by a temporary act, the provisions of which ceased at the end of five years. At the expiration of this period the act was renewed for five years longer, and finally was renewed without limitation.

In the beginning of the year 1837, the Legislature of New York