them? No; such money never paid more than the rate they fixed upon it. But they fixed no rate on money borrowed on annuity; and because from this such money obtained a high rate, they were charged by the committee with not producing their intended ef fect. It might just as truly have pronounced them non-effective, because they did not prevent the pawnbroker from obtaining twenty or fifteen per cent. Laws of any kind may as well expressly sanction a thing as tolerate it; for that is lawful which is not contrary to law. Lenders were allow ed by law to lend at five per cent, according to the common mode of mortgaging, or to lend at a high rate in the way of annuity; and they naturally preferred the latter. This proves precisely the reverse of what the committee in its wisdom imagined; it proves, not the want of efficacy, but the great efficacy of the Usury Laws; it proves that usury is only restrained to the point prescribed by these laws; and that when it is free from their prohibition, it exacts a rate of interest ruinous to borrowers.

But who were those who thus, during the war, borrowed at a high rate on annuity? They consisted in a considerable degree of profligate spend thrifts, gamesters overwhelmed with debts, men who, from some cause or other, had lost their credit, or individuals who had only a life-interest in their estates, and therefore could not mortgage. A man may offer a firstrate security in vain when money is plentiful, if it be probable that he will not pay the interest punctually, or that his estate will be sold or involved in litigation. Borrowers like those had no resource but the annuity system, they made this system familiar to lenders, they took a large amount of money from the market, and they made it necessary for many of the best character to borrow in the same manner. Through the option which they gave to lenders, many men of high credit and ample estates were compelled to borrow on their system; but nevertheless, even then a great portion of the borrowers obtained money at five per cent. The evil was confined to the individuals who at that time were constrained to borrow; the rate was not raised on money which had been borrowed previously; and the vast body of those who had mortgaged never paid more than five per cent.

The case, therefore, stands thus:The Usury Laws had always effectually imposed a maximum on the rate of interest throughout commerce, manufactures, and domestic trade; they had done this in regard to all the money borrowed on mortgage in the ordinary manner; they had done it to the whole community, with the exception of a comparatively small number of individuals; and they had done it in the whole lending and bor rowing of the country, saving such only as were expressly exempted from their operation. In the teeth of all this, and because they had not prevented usury where it was actually lawful, the committee solemnly de clared that they had failed of the ef fect of imposing a maximum on the rate of interest. That such a declaration was put forth, and was put forth as a reason for making a gigantic change of law, by a body of British legislators, is a certain fact, however incredible it may appear. Alas! it is far from being the only fact which will dye the cheeks of the man of common sense with shame, as he looks at the modern history of Parliament.

That the Usury Laws have always effectually imposed a maximum on the rate of interest, except where usury was lawful, is thus a truth wholly above question. They have been per haps much less violated and evaded, according to the judicial construction of their letter, than any other laws of equal operation. If a law ought to be abolished, because it does not wholly prevent what it is intended to prevent, or

because it is frequently violated and evaded, the House of Commons ought forthwith to abolish the laws against theft and murder.

The usurers urge, that these laws, during the war, imposed great hardships on the mortgage-borrowers, by increasing to them the difficulty and cost of obtaining money. We deny it. There was then, as every one knows, a great scarcity of money-did the laws produce it? No; it was produced by the enormous wants of the State, and it would have been as great had they not existed. If there had been no such laws, how would these borrowers have been circumstanced ? The wants of the State would have been the same, and it would still have outbid competitors; if to them the rate had risen to fifteen per cent, it would have given twenty in case. it

could not otherwise have procured money. The scarcity, the high rate, and chance for a large increase in the value of the principal, given by the State, and the liberty enjoyed by every lender, of demanding any rate what ever, would in all probability have raised the rate in the first instance to ten per cent; this would have been the rate paid, not only by those who borrowed at the moment, but by all who had previously borrowed. Every man whose property was encumbered would have been called on for the market rate of the day, and refusal would have been out of the question. The rate on trading money would have risen to the same point, and the funds would have fallen until they paid a higher one, for the borrowing of the State was a matter of imperious necessity. No matter what rate might have been paid by other borrowers, the State would have been compelled to pay one still higher; and it was because the laws kept the rate down to them, that it was enabled to borrow so cheaply. The difficulty of borrowing would not have been in the least diminished, in respect of scarcity and competition. Higher offers would have been necessary, lenders with a rising market would have kept back, and the rate would have risen to a height on inferior securities perfectly ruinous. Our conviction is, that borrowers would have had to pay a considerably higher one, than that which was paid by those who borrowed on annuity. This would not have been the worst. The high rate would have greatly diminished the value of land, and the magnitude of securities; rents must have been not raised, but lowered; and the same quantity of land would scarcely have formed a security for half the money. Then, in consequence of the high rate paid by the State, the taxes would have been greatly raised.

When this is looked at in connexion with the fact, that a large portion of those whose estates were encumbered, were never put to the expense of a penny by the scarcity of money, that a great number of those who borrowed during the scarcity did so at 5 per cent, and the ordinary expenses, and that the body of those whose property was mortgaged never paid more than 5 per cent, it will, we think, be readily acknowledged, that the Usury Laws did anything rather than injure the mortgage borrowers. If we concede that

they were a cause of expense to parti cular individuals, this is below notice when weighed against the vast benefits they yielded to the body.

As to many of those who borrowed on annuity at a high rate during the war, they were people who could not have borrowed in any other manner, had no Usury Laws existed. Such must ever be the resource of spendthrifts, who are overwhelmed with debts, and who have only a life inte rest in, or who cannot, from some other cause, give a satisfactory mortgage on, their property. Such men must always pay a far higher rate than other people; and they would have had to pay a much higher one during the war than they did, if these laws had not kept the rate down to other bor rowers. Mr Thompson, in the House of Commons, alluded, in support of his case, to what was disclosed by the bankruptcy of Howard and Gibbs. He could not, we think, have given a more striking proof of his utter incompetency as a changer of law. He spoke as though the Usury Laws were the sole cause why men destitute of credit and property could not borrow as readily and cheaply, as men amply endowed with both. What he thus cited in his favour, formed, in reality, a

decisive argument against him. It proved to what a ruinous extent im providence and need on the one hand,> and rapacity and power on the other, will go, when they have not these laws to restrain them.

The argument, that the Usury Laws prevent the necessitous traders from borrowing in times of commercial distress, now claims our attention. It is alleged, that the evils they produced in this way, during the late pa nic, prove conclusively, that they ought not to exist; and have even wrought wonderful conversions to their disadvantage. The political changes of opinion in these days frequently excite our disgust, but they are rare ly of a kind to effect our conviction. Our opinion of these laws is not to be shaken, because a banker, that is, a money-lender, changes his, to assist in their destruction. Far be it from us to say, that such a man must necessarily do this from interested motives; but we will say that he is too much interested in the matter to be taken as an example. Now, according to probability, what would have hap pened, if no Usury Laws had exist

ed previously to and during the panic?

When the pressure for money was first felt, which was some time before the panic commenced, the lenders would naturally have advanced large ly the rate of interest. If a scarcity take place in corn, cotton, or any other commodity, the sellers in the first moment make a large addition to the price; and what they do would always be done by money-lenders in similar circumstances. This advance would have been made to nearly the whole trading world; and it would inevitably have added greatly to the difficulty of procuring discounts and loans, to the embarrassments, to the bankrupt cies, and to the general losses. It would have been, from its tendency to destroy the credit of borrowers on the one hand, and that of Banks on the other, precisely the thing to create a panic.

But then it is said, that many would have been able to borrow money, who were ruined, because they could not do so. Where are the proofs? The Bank of England rejected many bills, which were offered it for discounting -would it have done differently, had the rate of discount been higher? No! Would a higher rate of interest have made it more liberal in its loans? No! In so far as it is concerned, there would have been the same difficulty in obtaining money.

Why did not the London and Country Banks lend more liberally? Did they refuse necessitous borrowers, merely because the rate of interest was too low? No, they refused because they had not money to lend. In general they did lend to the utmost of their ability-money which they ow ed was called from them on all hands -they could scarcely meet their obligations-many of them were compel led to borrow-and not a few lent be yond their means and became bank rupt. It cannot be doubted that, upon the whole, they accommodated borrowers to the farthest point which their means and safety would permit; and that from the sheer want of money, they could not have gone farther, no matter what interest might have been offered them.

With regard to individuals, did they hoard their money because they could not obtain sufficient interest? No! They drew it from the banks from the fear that these should fail, and of

course offers of high interest would not have tempted them to let it remain. They hoarded it, because they believed that it would be safe only in their own keeping, and that,-no matter what interest might be,-it would be the most profitable to hoard it. Now what temptations could bor rowers have offered them? Our readers must bear in mind, that the loans were only wanted for short periods; the generality of them were only want ed for two and three months. Suppose a man had wanted to borrow, on bill or otherwise, L.1000 for three months; the interest of this, for the term, at 5 per cent, would have been L.12, 10s. at 10 per cent L.25; and at 20 per cent L.50. If this man had been in danger of bankruptcy, who would have lent him the money for the sake of even the 20 per cent? Who would risk L.1000 to gain L.50, with the probability before him, that by so doing, he would lose the chief part of his principal? When the borrower is in such danger, the price of the loan loses its character of interest, and assumes in some degree that of the premium of insurance. It must be pro portioned to the risk. In such a case, L.250 would have been scarcely sufficient to tempt the lender, although it would have been at the rate of 100 per cent per annum. The needy borrowers, who, as it is alleged, would have been saved from ruin, were men whose credit was gone; and from this cause, prudent people would not have lent them money on any terms. The truth is, the individuals who had money, would not part with it, because they thought it would not be safe in any hands but their own; many of them held it for the sake of holding the gold of which it consisted; the offer of 10 or 20 per cent for it would have been disproportioned to the risk, and would have had no weight with them; and the needy borrowers were people, who, from the want of credit, could not have borrowed on any terms.

We may observe farther, that many of the individuals and trading houses possessed of money, would not have been tempted by any rate of interest to part with it on loan; because they conceived their most profitable plan would be, to take advantage of the forced sales and low prices, and employ it in purchases.

When the Bank of England, the London Banks, and the Country ones,

lent all the money they could part with-when individuals hoarded their money, regardless of interest, from the idea that it would be safe in no hands but their own when borrowers col lectively were accommodated with all the money at 5 per cent, which, under any rate of interest, could have been expected to be lent-when the credit of needy borrowers was destroyed and when the offer of 10, 15, or 20 per cent, would have been no tempta tion in the eyes of the possessor of money, we ask, where is the evidence that the Usury Laws produced evil? We ask in vain, for the usurers do not deal in evidence. Assuming that the offer of exorbitant interest might have induced the Banks to lend some what more than they did, what would have followed? It is notorious that many of them lent beyond their means and became bankrupt, and that the remainder generally only retained what was barely sufficient to preserve them from the same fate; it may therefore be regarded as certain, that if they had been more liberal in lending, the failures among them would have been much more numerous. Of course a few individuals might have been benefited, but the community at large would have suffered far more than it did. If there had been no Usury Laws, a few individuals might have saved themselves from ruin, by borrowing at high interest; but then the whole trading world would have been compelled to pay an exorbitant rate for several months; and in consequence, the loss on one side would have greatly outweighed the gain on the other. To the mass, the difficulty of procuring money would have been much greater, and, on the aggregate, the failures would have been far more numerous. The Usury Laws yielded to the community during the panic, not evils, but benefits of the high est order.

The evils then prevented by these laws will assuredly, after the abolition, always be experienced on similar occasions.

Then it is asserted by the usurers, that the Usury Laws are a prolific source of embarrassment and litigation. A more groundless assertion was never made use of to delude a blind and infatuated country. As to embarrassment, they are free from ambiguity, and every man, if he think good,

may easily avoid violating them. But if they even were obscure, and were frequently violated unintentionally, this would form a reason for amending them, but not for their abolition. As to litigation, they produce infinitely less of it than any other laws of equally comprehensive and incessant operation. That which is founded upon them, arises chiefly from delibe rate efforts to evade them; and a large part of it may be easily prevented by making in them amendments. AÍL effective laws are the parents of embarrassment and litigation; and if their value is to be estimated by the small portion of these they produce in proportion to the magnitude of their effects, the Usury Laws are more va luable than any other.

We have, we think, said sufficient to convince our readers, that if the Usury Laws be abolished, these consequences must follow-there will be constantly great variation in the rate of interest; the rich will borrow at a comparatively low rate, while the poor will have to pay an excessively high one-in time of peace, a large portion of the borrowers must be always, and the whole trading and manufacturing world must be very frequently, at the mercy of the lenders; there must be always to many, and frequently to all, a great scarcity of money; and the rate of interest must undergo continual and violent fluctuations. In time of war there will be a constant scarcity of money, which will keep all bor rowers more or less at the mercy of lenders; the whole body of the mort gage-borrowers will have to pay an extremely high rate of interest; all other borrowers, including the State, will have to pay a much higher one than they paid heretofore; and during war, as well as during peace, the rate will fluctuate continually and violently. We will now inquire how this will operate on the individual and collective interests of the community.

When a man begins business, he always greatly overrates his chances of success. He is weary of a masterhe wishes to marry-he is ambitious of rising in the world-he estimates his qualifications to be far greater than they really are-he magnifies profits, and overlooks losses-and if he have not capital to begin with, he thinks he could afford to pay almost any interest for borrowed money. He will

agree to pay almost any rate that may be asked, provided a Bank or an individual will accommodate him. When he gets fairly commenced, he must then borrow from necessity; he must retain the money, have his bills discounted, and have frequent further loans for a short term, to save his credit, or escape utter ruin. A vast portion, we may say the chief portion, of the merchants, manufacturers, and tradesmen, begin business partly with borrowed money, which they obtain from the Banks or individuals. The capital of many of them, when they begin, consists in a great degree of such money. As to their borrowing at a certain rate for a term of years, it is out of the question: no man, when he lends money on personal security, will bind himself to that which would prevent him from attempting to regain it, should the borrower be likely to become bankrupt. Beginners will borrow at an exorbitant rate when they commence; and when they get the money fastened so that they cannot repay it, they will be sponged for higher interest until they are ruined. The smaller merchants, manufacturers, and tradesmen, will generally have to pay a much higher rate of interest than the richer ones. If they have not a farthing of capital borrowed in any other way, they must almost daily, particularly the merchants and manufacturers, have their bills discounted, or, which amounts to the same, taken in account by their bank ers. While they will have to pay this higher rate of interest, they will be compelled to sell their goods at the prices taken by the richer ones. They are so circumstanced, that it is impossible for them to be successful, or to maintain themselves in business, if loans of money cannot be generally within their reach, at a moderate and unvarying rate of interest; therefore they must reap the most bitter evils from the abolition of the Usury Laws. The middling and small traders and manufacturers have hitherto been of the highest value to the state, not only on account of their numbers, industry, and good conduct, but be cause they have formed the nursery of talent, enterprise, and opulent houses. Those who have a large capital of their own to begin business with, are, in comparison, few in number; they are reared in a manner Vol. XXIV.

which disqualifies them for being good men of business; they seldom possess much ability; and they more frequently diminish their capital than incrcase it. The most eminent and wealthy traders and manufacturers are, and generally have been, men who began the world with very little capital, and in many cases with none, exclusive of borrowed money. He who has little or no fortune, is bound to good instruction and discipline, while he is a clerk or an apprentice; when he commences business, the smallness of his capital binds him for some years to a further course of good instruction and discipline; the double apprenticeship confirms his habits, and brings out his powers to the utmost. How much the commerce and manufactures of this country depend on the ability, skill, and enterprise of the merchants and manufacturers, independently of capital, is a matter on which we need not dilate; and nothing could be more fatal to them than to place them under the monopoly of capitalists by birth. The abolition of the Usury Laws, by fettering, ruining, and annihilating the middling and small men of business, will in various ways injure the State in the most serious manner.

We have shewn that every second or third year may be expected to bring a fit of distress, and a scarcity of money. At the beginning of such scarcity, the lenders will not only push up interest, but they will refuse to lend, in the hope, that by holding their money for a week or two, they will make much more of it. Now, the whole trading and manufacturing world has at all times to borrow almost daily from necessity; the rich, as well as the poor, must have their loans, and their bills discounted or passed to account. In such a fit, this necessity for borrowing is rendered far more general and imperious. In the first moment many will be refused, to their ruin, merely from the wish of lenders to make the most of their money; while, to the remainder, interest will be made destructively high just at the time when they are all sustaining grievous losses. Whenever the whole trading and manufacturing world shall be plunged into loss and distress, its loss and distress will be fearfully augmented, by the refusal to lend, and the exorbitant interest of

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