Limitation has been abolished in England; has the press been flooded with the language of complaint ? Are borrowers full of resentment? Are they indignant at the rates charged in the City and elsewhere?

But there are, no doubt, wicked practices, positive crimes, against which society ought to be protected. Usurers tempt the young and the foolish with loans at high interest, and the consequence is ruin. But is the folly of such persons, who are necessarily few, a sufficient reason for punishing the whole community, not of lenders, but of borrowers, who seek a most valuable service? But indeed, a law of universal limitation of interest is not the proper remedy for the evil. Judges can easily be provided with reasonable powers of revision in special cases. Many contracts, of various kinds, are cancelled by the courts as iniquitous and immoral; they might be entrusted with the same discretion over interest with the approbation of all.

And now, what are the causes which regulate the amount of interest? Lending is a service on sale in a given market; precisely as the labour of workmen offers itself for hiring. But there is always a special element in lending; there is always a 'risk, sometimes an enormous one, that the thing lent, along with its reward, will not be recovered. Wages paid in advance would be a parallel to a loan; the man may be idle or get drunk, and the stipulated work never be performed. In no market does risk, with the insurance to be given for it, play so large a part as in lending.

How then is the value of the service of lending determined? Like every other act of exchange, by the law of supply and demand, plus the insurance against risk.

Few things on a large scale, if any, have their price so powerfully affected by the fluctuation of supply and demand as lending. The demand may spring up like a storm; so vehement may be the desire to borrow, as is often seen in commercial panics. In the determination of the ultimate price of a loan, the true nature of value, as has been previously explained, receives a remarkable illustration. The character of the demander, the opinion framed of the certainty of the exchange being completed by the payment of the interest, and the repayment of the debt, are most governing factors in fixing the rate of interest. It is mind which estimates and judges and gives its form to the feeling called value; it is this feeling which rules that one loan must pay 5 per cent., another granted at the same time 50.

The variety of loans in the lending market strikingly resembles that of flowers; so manifold are their forms, and still more the colours which they wear to the lending mind. Sometimes it is the state of the demand and supply, more frequently the quality of the security offered against risk which creates this multiplicity of form. For steadiness and for cheapness combined, the consols of England are unsurpassed. Faith in the safety of the loan is perfect, that faith being the offspring of the opinion held of the character and solvency of the people of England. This opinion is so strong that investors are ever ready to buy an annuity of £3 a year at a price not far short of £100. Next to consols in the possession of these great qualities come mortgages on land; the rate of interest is somewhat higher, but the steadiness a little stronger than that of the funds.

It has often excited great surprise that when the money market is agitated by violent storms, and loans are not to be procured, if even at all, except under exorbitant interest, the mortgage-market dwells amidst the serenest calm; the ruffle on its surface may not exceed per cent. On the other hand the bank rate may descend to 2, and advances be freely obtainable at I, and all the while the interest on mortgages retains its dignified repose. The feelings of the lender and the borrower are the creators of this result. They are not the same men as those who dwell in the banking and commercial worlds. The lender desires a safe and permanent investment. Steadiness of interest, next to solidness of security, possesses the greatest importance in his eyes. He looks upon a varying interest with repugnance ; income to be relied on is what he seeks. He repels an interest of 6 per cent., if next year it is to fall to 2. On the side of the borrower, to have the loan undisturbed for a long time is a main object; to change or disturb his lender when the value of money lent seems to fluctuate would defeat the end he seeks, and would ultimately land him in having higher interest to pay.

The force of opinion in the determination of value is singularly shown by the varying prices of Government stocks in relation to the rate of interest which they yield. Here feeling, whether founded on fact or imagination, controls the action of the investing capitalist Mr Shadwell quotes from the "Journal of the Statistical Society," for 1874, a table drawn up by the late Mr Dudley Baxter which places this great principle in the fullest light.

A table from a paper in the "Journal of the Statistical

Society," for 1874, showing the different rates prevailing

These figures do not give the nominal rates of interest, covenanted by the legal conditions of the loans, but the interest they would bring to an investor who purchased these stocks at the prices of the day. Accidental circumstances obviously create great variations in such figures. France in 1874 had just emerged from desolat

ing war: at the quotations of the present day she would take her place in the list of Low Interest,

One fact comes clearly forth from this table which deserves attention for the illustration it gives of the benefit which a colony can derive from a mother country. Australasia takes rank among the States which borrow on Low Interest, and that great position is due to her connection with England. The rate of interest on capital lent is naturally high in those regions-not because there is any peculiar risk involved, but because it is scarce, and possesses great productive power in accumulating wealth under the peculiar circumstances of a colony. Industry, which is mainly agricultural, gathers up great results at trifling expense. The yield of corn per acre may be small compared with what it is in old countries, but the virgin fertility of the soil has not been exhausted by long cultivation, manure is not so urgently needed, the climate calls for no expensive farm-buildings, the land can be purchased or hired cheaply, and is exempt from high rent. Cattle, and especially sheep, repay slight care with bountiful returns. A large relative produce against small cost are the very conditions which bring high remuneration to both capital and labour, and yet leave handsome, fortune-making profits to the cultivator. This is what may be called the Colonial State, and it is characterised by the two distinctive features that both interest and wages are naturally and legitimately high, and are paid with as much ease as the low rates of each prevalent in an old country.

But incomparably the largest amount of the general loan fund of England is contained in that portion of the