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the money lenders. The middling and not the honour of the empire, for that small traders, &c., must then be ruin- has been done already—but the inteed, either by inability to borrow, or rests and security of the empire. In by the high terms of the lenders. To time of war, the whole of the mort." place before the lenders of money, an gage borrowers will be compelled to: irresistible temptation to refuse loans, pay 8 or 10 per cent, and many of and demand a ruinous rate of inte- them will have to pay more. What rest, at all times when the whole of will be the effects ? Such of them as the merchants, manufacturers, and now have to pay half their rents for tradesmen, shall be enduring heavy interest, will then have to pay about losses, and be compelled to give any the whole. How widely this will ope-, rate of interest that may be asked, rate, may be judged of by the fact, would be, in our judgment, one of the that half the whole land of the counmost fatal errors that the State could try is estimated to be under incum. commit.
brances. A vast portion of them will While it is essential that the Banks, be deprived of income. Their incum. in times of general distress, should brances must be greatly increased in lend as far as their own safety will extent, if even the amount remain unpermit, it is much more essential that altered ; their property must suffer an they should not lend farther. If a enormous loss of value ; and many of Bank ruin itself by lending, it does a them must be stripped of property. grievous injury to the community, In war, the mortgage borrowers are even though its loans save two or the great competitors of the State in three trading houses from ruin. Its borrowing. The rate paid by the late loans cannot save so many, as its fall ter must rise, as their rate rises ; and will destroy. The abolition of the it must always be the highest. If Usury Laws will, in such times, place they have to pay 8 or 10 per cent, the before the Banks almost irresistible State will have to pay more; the pubtemptations to lend beyond their lic funds must be low, in proportion means. They will be entreated and as the rate on mortgage money is high. bribed; they will be supplicated to The increase of interest paid by the fix their own terms on satisfactory se- mortgage borrowers universally will, curities; while they will be exposed by its inroads on rents, and its creato this, they will know that they pose tion of arrears of interest, add mightsess money which they shall not want, ily to the scarcity of money caused by in case they be not assailed with run, the war. What will be the conseand, as a run never gives warning, quences here? This will perhaps be they will think they are in little dan- the best answer to the question-if ger of one. They will be tempted, such had been the state of things duand then a run will compel them to ring the last war, the State would, in : stop payment. That they will benefit all probability, have been compelled to from the ability to borrow at high in- borrow one-third more, in respect of terest, is what we cannot subscribe to the amount of its debt; and to levy A Bank could scarcely offer to do this, one-third more of taxes. Whether it either to friends or strangers, without could have done this and what the blasting its credit. The abolition of fruits would have been to both itself the Usury Laws will tend powerfully and the community, whether it could to increase the number of failures have done it, or could not have done amidst Banks in times of distress. it-are matters which we leave to the
This country is at present in the decision of the reflecting. enjoyment of peace; but how long If an empire like this, which is frewill the peace continue? No man, quently for a long term of years em whose judgment is of any value, will broiled in such war as compels it to venture to say in reply-two years. borrow an enormous suin annually, Thanks to that destructive system by do that which has the effect of almost which we have been in late years go- doubling the rate of interest during verned, war is almost unavoidable. It war, it does what madness could only is not for us to know what the present be expected to do-even if it do it Ministers will do, but we cannot be when it is in the enjoyment of peace, ignorant, that do what they may, it which is likely to be of long duration. will be scarcely possible for them to But if such an empire do so, when, preserve peace without sacrificing like this, it is, if not on the eve of
war, at least in danger of war, it is A high rate of interest must tend guilty of such ruinous conduct as materially to diminish manufactures madness never exhibited. The effects and foreign trade, both by diverting are not confined to times of war; they capital from them, and by raising are felt always, and their pressure is prices so, in some branches, as to preoften the greatest during peace. vent exporting. It must operate most
Do the merchants, manufacturers, balefully on the home trade. and tradesmen expect they will es- A high rate of interest must almost cape--that they will be able to borrow constantly diminish the national caat 5 per cent when the mortgage bor pital. At its commencement, it must, rowers and the State will have to pay by lowering the public funds and the almost twice as much ? Let them not price of land, annihilate hundreds of deceive themselves—the Banks will millions of property. It must continot lend them money at 5 per cent, nually plunder the many for the bewhen they can obtain 8 or 10 for it on nefit of the few ; and much of its government securities. They must at plunder must be destroyed in the any rate pay as much as the State. At course of transfer, by litigation, exthe best, they will have to pay this penses, and losses. By impoverishing high rate of interest; and the fluctu. the mass of the community, it must ations of trade will frequently compel constantly narrow the field of the them to pay one much higher. Let lenders, and destroy the general prothem beware of believing those who fits which to a very great extent suptell them that the repeal of the Usury ply them with money to lend. It will Laws is a question between them and injure a vast portion of the lenders the Landed Interest, and that it will much more in one way, than it will benefit them however much this In- benefit them in another. Such a rate terest may suffer from it. They are of interest must therefore generally as much benefited by these laws, as operate to increase scarcity of money, the landowners; in time of peace they and raise itself. are more so; and consequently they How Mr Thompson means to deal will be the greatest sufferers by the with the pawnbrokers, we do not repeal.
know. It will be an uncouth anomaly The farmers, &c. who borrow on to make money a commodity to every personal security, will in both peace one else, and to refuse to make it one and war, but especially in the latter, to them; it will be inonstrous injusbe ground to powder by exorbitant tice to deny to them a right granted interest. The effects of this on their to all the rest of the community. If own interests, and on those of the they be allowed to make the most of State, we need not describe.
their money, a rate of 100 per cent Questions, like this, deeply affect in will not satisfy them. They will be one way or another the interest of the rendered a scourge to the poor in working classes. Great numbers con- towns. tinually rise from these classes, and We do not know whether it be nebegin business in different lines, cessary to notice the example of Holthrough the ability to borrow a little land and Hamburgh, on which the money at a low rate of interest. Give usurers place so much reliance. Are them a high rate, and place them at they circumstanced like this country? the mercy of lenders, and this will be Are they so extensively engaged in trade prevented; or at any rate they will and manufactures, that fluctuations then only borrow to their own ruin. If in these can produce such scarcities of the merchants and manufactures gene- money as they produce here? Are rally have to pay a much higher rate of they frequently involved in long wars interest, they must add the increase to which compel them to borrow vast the price of their goods, or subtract it sums annually? Their example bears from the labour which enters into in a very small degree on the question; such price. The merchants will raise and, in so far as it does so, it is in fatheir goods. The manufacturers will vour of the Usury Laws; in them the have their interest and raw produce rate of interest fluctuates violently, raised; they will be unable to raise and when money is scarce, it is pere their prices in foreign markets, and niciously high. We too may cite an in consequence they will be compel- example. In 1793 the National Conled to reduce wages.
Husbandry vention in France declared that “ wages will suffer in a similar manner. ney was merchandise," and abolished
all restraints on usury. What followe laws be wholly abolished. Those who ed? The consequences were so fatal, borrow on mortgage, or personal secuthat twenty-three days afterwards, rity, at a higher rate than 5 per cent, the enlightened measure was revoked. will be compelled to pay the interest From this example our Turgots and constantly in advance: and they will their followers will draw no instruc- be deprived of all indulgence in re
spect of time. The lenders will not But then Mr Thompson, in com- be able to give them much indulgence, passion to his illiberal and bigoted without losing the power of recovering opponents, does not ask for the total the rate agreed on by law. Here again abolition of the Usury Laws, although the borrowers are placed in a much he is exceedingly anxious for it. He worse situation, than they would be still will not suffer the usurers to ob- in should the laws be wholly abolishtain more than 5 per cent by law, not- ed. It is absurd to suppose that lendwithstanding that he suffers them to ers will lend to borrowers on terms, obtain any rate they please without it. which the latter, after they have had If the House of Commons adopt his the use of the money, may pay or not, measures, we trust it will scoff no as they think proper; and it is wicked more at the ignorance and barbarism to give to men the power of violating of former ages. To declare that men solemn engagements, by which they have a clear right to do a thing, and obtain the money of others. But, then to incapacitate them for exercie however, the lender in many cases sing this right by law-to declare con- could recover usurious interest by law tracts to be just and necessary, and in one way, if he could not in another. then to prohibit the law from being He could arrest, or foreclose, for his called on to enforce their fulfilment principal; and this would be sufficient to encourage men by law to violate for obtaining any interest he might their agreements, to borrow money claim, provided he would let the prinon false pretences, and to vest money cipal remain. If it be right for bor. on promises made only to be broken— rowers to covenant to pay, and to pay to make the law the source of lying voluntarily, more than 5 per cent, it and cheating—to proclaim that a prin- must be equally right to place them ciple is wholly at variance with know- under legal compulsion to pay more ledge, right, justice, and the public when they agree to do it: In generoweal, and then to fashion it into a sity to them, let the Usury Laws be negative law-all this forms such a abolished wholly, rather than to the specimen of barbarous, blind, childish extent contemplated by Mr Thompignorance and folly, as never disgraced son. any former Parliament.
And now when the repeal of the Now, what will be the real effect of Usury Laws will manifestly produce this reservation ? To a great extent such gigantic evils, what do the usuin the discounting of bills, the dis. rers promise as countervailing benefits? count is deducted when the money is Assuming that all they promise will be advanced ; the borrower here pays the realized, do they offer anything wore interest before he is suffered to touch thy of being put into the balance the principal; in truth, the former against these evils ? Do they prove never comes into his hands; therefore that the repeal will, in general, make it makes not the least difference to him, loans more plentiful to all classes, or whether the laws be wholly abolished, any class, of borrowers? They canor be thus far spared. If the Banks not; for the common complaint is, that grant discounts and loans at a higher under the laws, lending even tó the rate than 5 per cent to those who keep poorer borrowers is carried to excess. accounts with them, they will, instead They admit—they even make an arof giving credit for the interest to the gument of the admission-that during end of the half year, or year, exact it peace the laws place no restraint whatat the moment when they advance the ever upon the mass of borrowers of all money. If they lend to chance cus- classes, except for a few months occatomers, they will have the interest in sionally. They here stand on the exadvance, instead of giving credit for it ception to the general rule. They do until the time for receiving back the not plead that even in these few principal. Here Mr Thompson's boon months the repeal will benefit borrowplaces the borrowers in a worse situa- ers in general; they only aver that it iion than they would be in, should the will benefit a comparatively small
number of individuals. Here again According, therefore, to the confes. they stand on the exception to the sion of the usurers, laws ought to be rule. They do not assert that during destroyed, which are only injurious in war the laws injure borrowers in ge- the exception and the special case. On neral ; they merely maintain that they the ground that the exception and the injure an insignificant portion of them. special case should be followed instead Again they stand on the exception to of the general rule, eternity should be the rule. Do they prove that the laws disregarded for the sake of the passing prevent lenders from making just and moment, the body should be sacrific equitable profits? They cannot, forced to the individual, and the sepait is notorious that no regular trade rate and collective interests of the come will afford more than 5 per cent formunity should be made subservient to borrowed money: we doubt whether abstract principle. at present any such trade will fairly This forms the general ground of atford 5 per cent; land will never afc fashionable legislation, and one of its furd more than 3 or 4 per cent; farm. most baleful characteristics is, its evils ing, when times are good, will scarce fall the most heavily on the lower ly afford 5 per cent, and in these days and middle classes. All the new laws we fear it will not afford anything. It made, or projected, touching trade, is manifest that if the lenders could currency, pauperism, &c., are calcuobtain more than the legal rate, they lated to injure these classes far more would deprive the borrowers of their in proportion than the higher ones. just and equitable profits : it would One takes away business-another des be the gain of the few, to the loss of stroys employment-a third annihi. the many. The usurers cannot say lates capital --a fourth cuts down wa. that business in general will afford ges-and a fifth seizes the means of more than 5 per cent; and they can subsistence in distress ; all operate only aver that occasional speculations harmoniously to second each other; will. Again they stand on the ex- and to enable one to destroy, what ception, and a very indefensible one, another may overlook or be unable to to the rule. They own that in gene- reach. The repeal of the Usury Laws ral during peace, the lenders cannot will benefit largely a part of the rich, obtain the legal rate, and they cannot while it will do comparatively small deny that if the latter could always injury to the remainder ; but it will obtain a higher rate, it would be ex. injure the rest of the community in tremely injurious to the mass of the proportion to their want of riches, community and the interests of the and it will have the most pestilential empire. They cannot prove that in effects on the interests of the most times of trading distress, the mere needy. It is a measure to sacrifice the chants and manufacturers can afford body of the population, to a few indi. to pay more than 5 per cent; or that in viduals. time of war the mortgage borrowers Before this article will see the can afford to pay more; on the con- light, the question, as far as appeare trary, it is notorious to all, that if in ances go, will be decided in the House either case more be paid, it is paid, of Commons; and we think it will be not out of profits, but out of capital; decided as we have described. How it is at the best, the incurring of one it will fare in the House of Lords, is loss, to avoid another. The whole a matter on which we will offer no cone they promise in the way of benefit is jecture. This House may, like the in reality this-In general none shall Lower One, rush to the most perilous be benefitted ; occasionally a few shall conclusions, on no better evidence be benefitted, by being allowed to than erring abstract propositions ; it choose one loss instead of another, at may, like the literary teachers of the the risk of grievously injuring the Lower One, decide measures to be wise many. A little litigation shall be pre- and necessary, merely because they vented, a little expense shall be saved, emanate from this individual or that a few bankruptcies shall be avoided, party, or one dubbed with this or that certain estates shall be preserved from gorgeous party appellative ; it may, in the hammer, and a small number of imitation of the great egotists of the money lenders shall be permitted to age, pronounce laws to be pernicious, make large profits, no matter what because they have been longer than evils it may bring on the community five years in existence, and have never and the empire.
been sanctioned by those whosc legis
lation bas filled the empire with evils: menials; our limbs were not made for -it may do all this, but we hope it fetters, and we neither have had nor will do something far more consistent will have cause to regret it; we are with justice and wisdom. We hope it sure we shall render far more service to will decide at once, that no case--that both by steadily opposing them when not the shadow of a case has been they do what is calculated to work produced to justify the repeal; and their own injury, than by daubing all that reason and experience are wholly their measures with panegyric. It has in favour of the Usury Laws. If it been most truly said, that the Duke will not do this, we hope that, at the enjoys a greater share of public confia least, it will institute an inquiry alto- dence than any other Minister has en gether different from that of 1818. joyed since the days of Mr Pitt. Does Parliamentary inquiries, when proper. he know why the country reposes this ly conducted, yield vast benefits ; but confidence in him? Is it on account when improperly conducted, they yield of his splendid military talents and only delusion and evil. It has been as services ? No! Is it on account of serted, that of the twenty-one witness- his past political labours ? No, he es, who were examined touching the never before was placed in a situation Usury Laws, by the committee in to acquire fame as a statesman. It is 1818, two were lawyers, nine were at- because the country hopes that he torneys, six were merchants, and one will employ his great powers in the was a stockjobber. Now, in the name right manner—it is because the counof common sense, ought the evidence try believes him to be a man of busiof witnesses like these-witnesses ha- ness, a practical statesman-a Minisving, in their own estimation, a deep ter whose acute, solid, straight-forpersonal interest in the repeal—to de- ward understanding, will terminate cide the question? They gave no in- that system of frantic quackery and formation touching several essential destructive experiment, from which it parts of the question, and on other has suffered so long and so deeply. On essential parts, they gave no infor- this momentous point, let him not de mation that was satisfactory. The ceive himself. If he continue this syscommittee acted, as Parliamentary tem, he will soon be as little confided committees too often act: it was led in by the couutry as any Minister ever by those whose object was, not to col- was, since the death of Mr Pitt. Proofs lect facts to enable them to make a just surround him in abundance. What decision, but to collect evidence to supe stripped such a Ministry as the Liverport a decision which they had made pool one of public confidence in the previously. If the Lords find them- latter days of its existence, in spite of selves compelled to institute an en- nearly the whole Press? What stripquiry, let it be a proper one ; let it ped Mr Canning of public confidence embrace the interests of all classes of when he was made the Premier, in borrowers, and particularly of those spite of nearly the whole Press? Why which are the most numerous and ve- was the Goderich Ministry shook to luable; and let it apply chiefly to facts, pieces by public contempt and deri without attaching too much import- sion, in spite of the chief part of the ance to individual opinions.
Press? And why has the retirement We will conclude with saying a few of Mr Huskisson been made almost a words to the Duke of Wellington, matter of national rejoicing? The anwho, we think, is not publicly pledged swers to these questions are pregnant against the Usury Laws : they flow with instruction to his Grace, of inesfrom that spirit which prompted us, timable value ; and he may find in not many months ago, on more than them what his duty is, touching the one occasion, to employ our pen in his Usury Laws. They may suggest to favour. We are the friends of him him that this duty isand his Ministry, but we are not their TO DECLARE THAT HE WILL NOT COUNTENANCE SPECULATIVE CHANGES WHICH ARE NOT CALLED FOR BY PUBLIC NECESSITY; AND THAT NO EVI. DENCE EXISTS TO PROVE THAT SUCH A CHANGE OUGHT TO BE MADE IN THESE LAWS AS WOULD IN THE FIRST MOMENT OF ITS OPERATION DERANGE AND EMBARRASS AGRICULTURE, MANUFACTURES, COMMERCE, AND DOMESTIC TRADE-ADD LARGELY TO THE SUFFERING WHICH ALREADY EXISTS AMIDST THEM-AND, IN ALL PROBABILITY, PRODUCE A MORE TERRIBLE FIT OF RUIN AND DISTRESS THAN THAT OF 1825, AND THE FOLLOWING YEAR.