The National Register. — London, England, 1816-04-29 00:00:00

r o / 'bt4l No. 433.—V0r.. IX. ON TILE EXPEDIENCY OP RAISING the LEGAL RATE, of INTEREST. Iraox A rAacruLET JUST PUBLISH= HT IL B. =GOV Nr, (SQ.) The war is now at an end. A re-action has ensued, which has involved all in one common distress. It w ill not be suptassed that much money is afloat in the market, and even if there were, yet under the depressed state of 'agriculture, the lauded interest, generally speaking, could not afford to pay even the legal rate of interest tar the loan of it. It is deeply the interest of all to consi der what measures it were proper to adopt, in order to relieve the country under the existing difficulties. If it should be thought too lea u measure to allow snore than 5 per cent., to be taken on good security, yet as money may now be burrowed at any rate, however exorbitant, by way annuity, some measure ought to be adopted to prevent the clashing consequences arising out of this system. For instance, let it be made legal to take 7 or 8 per cent., on such securities as annuities are new generally granted upon, viz. life interests, and rever pions, and leasehold estates ; and at the same time render ,it illegal to grant a redeemable annuity. This would at once open the market to fitir bidders : the extra interest would compensate for the risk, more especially when re payment of the money could he compelled, and borrowers with inferior securities would be saved from great oppres sion. The borrower where he had a determinable inter est, for example, a life estate, would still have to insure his life ; but, subject to the money borrowed, the assur ance would belong to himself; he might keep the assur ance on foot after the money was paid off for his own be nefit, or he might sell it ; whereas an assurance for money lent on an annuity is ulways effected by the lender, al though paid for by the borrower, and naturally falls to the ground when the annuity is paid off.—To this plan it may be objected, that irredeemable annuities would l:e granted in order to evade the law. This objection, and the mode of obviating it, require great consideration. It would hardly be endured that the sale of an irredeem able annuity should be prohibited, nor clues it seem ne emery to resort to so violent a measure. It is a well known fact, that very few life annuities are ever granted, without being . subject to redemption. Where an irre deemable anuuity is granted, it is generally a family trans action, and wholly free from fraud. It would not there titre be attended with any practical inconvenience to fix the rates at which such annuities shall be bought accord ing to the plan proposed in the bill so often referred to, which was dropped. This measure, I am persuaded, would never affect the persons whose conduct it would seem to regulate, and It would facilitate the state plan now in action of raising money by the grant of ab solute life nnnuites, although even in regard to this limited traffic, individuals should be allowed to give considerably more than Government offers. It would at the same time prevent lenders from flying to this scheme in order to evade the law, ur f Ing the borrower rely upon the honour in granting a redemp tion. _ It may perhaps still further he objected, that this measure would open a door for all classes to borrow at the increased rate. A man having a fee simple estate, and also a life estate, might pledge the life rate as a se curity for a loan at the highest rate of interest, the lender relying on his other property, or on a lien on it by means of a judgment, as a better security. This, it must be admitted, might be done. But still no new evil would be introduced; for a man in the same circum stances, or with fee simple (..a:...tes only, mar, as matters now stand, under colour of an annuity, borrow money at 4.0 per cent.; and the greater the amount of the an nuity that is taken, the more it assumes the shape of a loan, Om it becomes the more certain drat the annuity will be paid oft' in a reasonable time. The bast, however, although the boldest me..isure, would be at once to sweep fret a the statute book all the laws against usury. This would leave money like other commodities, to find its level; and would essentially be nefit those upon whom it would seem to have the harsh est operation. Conflicting opinions, however, upon this great question must necessarily exist. It is thought by some that the rate of interest should be reduced. The objection to such a measure has been already stated, that the law, although made, would be inoperative, and would sub ject borrowers to harsher terms than would be imposed on them without a proteetiog law. The story cf Don quixote's interference on behalf of the peasant whom his master was beating, should not be lost on ma:Mad. If atio nal( trAt+ Our tttg, ConsiUtutton aub iLatul. MONDAY, APRIL 29, 1816. the borrowers can convince the legislature, that the re duction by an act of Parliament of the rate of interest wi!l really be a benefit to them, and through them to the country in general; of course the aid of the legislature will not be refused to them. Bat they are bound to prove, that either the rate of interest i really reduced in the market, or that any law in any state was ever pro ductive of benefit where the market rate was above the price fixed by the law. Annuities, as the law now stands, are in. elr,et usurious loans of money, and they prove, as I have already obser ved, that mankind will, is-extreme cases, in despite-of acts of Parliament, make their own money bargains, it were intended to lower the rate of interest, of course the lint step would be to render annuities irre deemable; or, in other words, to prevent loans in onv shape at more then 5 per cent. This step, accompanied with an increased legal rate of interest on infirm secu rities, has already been recommended; but if it were taken alone, the immediate consequence would be, not that redeemable annuities • would cease, but that smaller sums would be paid for them, and the borrowers would be compelled to rely on the hon6r of the lenders to suffer a re • purchase. This is not a matter of speculation. Before re deemable annuities, with a power to repurchase, were legal, this was the plan resorted to, ued with pernicious effect as against borrowers, to evade the usury laws. The attempt succeeded, and the Judges were, in point of fact, forced to yield to the prevailing habits of mankind; and to give legality to such grants with power to repurchase, in order to save horrowers from oppress:on. To render annuities irredeemable, would once more, it is to be feared, expose borrowers to the evils which the system, as it at present stands, guards them against. 'When annuities were, to evade the usury laws, made irredeemable, the great anxiety of the legislature. as we have seen, was to render them redeemable. Now that annuities are univer sally made redeemable, the only object of making them irredeemable would be to toner the market rite sit interest : an object which, in the present state of things, must neces sarily prove unattainable. It is not to be denied, that annuities ought to be placed on some theting, which woidi make them accord better with the existing laws aguitee usury, whilst they arc suffered to remain in the statute book. But to render annuites irredeemable, would only increase the evils under which borrowers now labour, it' even the legal rate of interest were not redeced. But if that measure were to he followed up by a reduction of the rite of interest below the market rate, the landed interest email not stand the shock. In the presenr state ofeommerce, when we speak of the market rate nfintercAt. look in point of tract to the general rate, as wed in this as in other states, for the average value of our money is fixed by the general operati.rni of the minded interest throughout all commercial nation , Our own funds, therefore, may safely he considered as the just standard of the market rate of interest. Now at this moment more than 5 per cent, can he obtained in the funds. If, therefore, the rain of interest were to he re duced to d per emit., all the loans to individuals would be promptly called in; for it would be impossible to ask the liltis lature not only to refines. the rate, lint also to allow (Hum-% time to pay "wir debts, The money so called in would of eonrAC be invested in the funds. This would occasion a ri , e in the find!; and that would probably drive men to lend their money to foreign states, where more interest could be obtained. The landed interest would not only be compelled to pay off their existing debts. hut would he prevented from obtaining any further In.ut. It W 91114 be idle to talk of the future or probable benefits Al a system which %%flied at once paralyze the band of tile agriculturist throw:Joint the kingdom. IMPERIAL PARLIAMENT. 110tiE OF COM sli ISII, WroNICPAN, APRIL 21. Mr. K. Dorotss presented a Petition from :)tarrifeit s, signed by 610 permit's, concerning the situation of Mr. Us slop. owl 7U olive persons. subjects of this country, who had been taken b General Murillo in his expedition against Carthageoa, and had been condemned to death : Mit who had sine.. been seat to Spain, to await the dettimiaittion of the blueish 6uvelli• Lord C.4:II,WMF WIT said. that Government took measures sue this subject, whirl, left no doubt that the persons of these individuals were Out of danger. 111.11.THortNTON, pursuant to the notice be hid given, rate to nvwe for " is return of the total nominal %/Me of all notes pre. 'tented at the nalik et . Englanck and refits. payment as bc.M: forged. in the last four years, mud up to the latest period to which it could be inside out, sprcit'. Mg the amount of each year." lie observed, that the practice of forging notes ha risen to a great height lately. and lie understood partictemely shire the restoration of peaceda, .latic of those noses were 50 well executed. that they were with ilillieulty ili.tinguished from stool ones. Ile also emsh;rstooil that several el those notes were bron , :lst liana the Guitierat, but he hoped this W0111(1 suet be foiled correct. Ilk object' in making the motion Was, Illat I Wile lie des ised by which such fin gets miaht he rendered more This !ie coneeived ri;eht be dune by a ildforent method of making them from that which was at Several for this purpi:se had oiready ir:cn retooled to lYc kieol of Iltual.dad ; ;Lad PRICE 93(/. one by Earl s.tunhope, which b.td been rejected by the e; il.k etf too expensive. fie (Gen. T.) conceived Out tire adoption fpf some plan was necessary ill prevent the areat evil which I.e pointed out. tie then moved as above, aid the motion agreed to. Mr. CI:RWEN inquired whether it was in the contemplation of Government in brio¢ t 4, ward any new nieusore 4.11 the • .jert of the Poor Laws! if not, he should deem it its duty iu bring it tinder the conAileration of Partiament. Lord CIgTLIIREAGII said, that Milit! , lle.ri WON not prepnred to recommend the adoption of any me.isture on this diffienit sub. jeer, and lit looped the lion. Gentli man %%mild brine forward whatever plait might se em expedient in his judzlikt Mr Huth Olt to wished to know, whether 1 3 , an ;dam had gone forth to that etiert ) it was the lint tition of (.ovil nutria to pursue rigorous measures to collect the Property 'fax' Mr. VA NsITTART assured the Finn. Gentlen);:n i:o orders had been &then by the Government to use rigorous tueasui es tier collecting the Tax. Indeed, he hail stated his intention to bring fat ward a measure to give rebel; which would be ready in a few days.—Adjourned. 'ItIL RSDAY. APRIL )23. , A disensriou arm , . in consequence of a motion for a Com mittee, to revise the lima teintim• to the importation of Foreign !Aliens. It was contended, that these laus, so far as they impose a transit duty, were iikjui ions to commerce. laird ( Len e loft maintained,that our commerce duriug the war was the efleet or a diseased and chilling sy , tem. On a die ition, the motion was negative., by a majority of 7;,. A nttinl;er of Petition: wire prey:wed from various persons against any alteration in the I:ms wjlk rospett tu wool, anti against the leather tax; others were alto presented 'prayina economy awt rem netintent,and recoinint.nding a cununtitatiun of tithe:. _ . Lord G. Erre-snout rose and made his promised u.ntion, to reduce w ithin proper and eenstitittional limit, the Establish ments of the Country. Ills f.ord , hip said, on comparing the present Establishments with those formerly, he could perceise that th^ increase of the National Debt and the amount of the Estimates were such, as in a constitutional point of view to create the greatest alarm. lie was couvintsni, that aimless a different policy was pursued by Ministers—unless Oileeneliteene was adopted to every flow town* of the State, the Country must sink finder the pre:sure. '1 he Noble Lord concluded with mov ing an Address to the Print e Regent, which in subst.,tiee !epic scuts to his Royal Highness the impolicy of keeping up so large a military establishment. the necessity of retretiehinenti. sNe.. Mr. J. I'. On tNT seconded the ;notion at some II lagtli. Our ‘penditeile this year, lie said, exeeellNl our ine; me by 111,fitil,u6O1.! It teas impossible that the Hume must nut sec the immerse importance of this subject, mid view with the most it does alarm the trightfsil precipice on which we stood. The itt . the EACH I..tit. Elt, in opposing the mu• tion, said, nor income fell short of the expenditure. by 13 lions only, net 19 million , . Ile took this opportunity of stating that a Man trintidftim no part of the arraneemests fin* the pre.sent yea-. Tim country had been I i•buyoki till 17 trilliums of and lie saw no grounds for thinly appi obensions. 'rite motion was also opposed by Lord l'almerston,awl ,oppor ted by Lord Nugent, Air. Macdonald, Mr. Curti cooled Mr. J. Smith. The House divided on an amendment, morel by Lord Pal tnerston, for proceeding to the other tali rs of Le day —Ayes, 13F—Noes, 192 —Alajority, sii. Lord CSSTI.ER a tGII übinincil leave to bring in a rill to cow. times! Ow Alien Act under the same provisions as otter true peace uf Amiens.—Adjoierned. FRIDAN %FRIT. Lord COrTili ANI: gave notice, that he should on the 3d of May move to raft:r the eharkes he ha,l exlilhitetl against Lord Ellknburough to a Committee of the whole house. STATE OF IRELAND. Sir J. NEWromr rose to bring forward his motion relative to the present State of Ireland ; and observed, tlint in calling the attention of the House to this .41111/jeCt, the first question wheel would arise Was, 114/+Y it was possible Let two coontr:es shookt tor Ispriards of six centuries ham,. been connected is England and Ireland have lire-u; and that one euttatr.v :koala remain .4) disaffected, SO miserable, and so wretched, whiht the ii•her had made suet' rapid strides in improvement, civilization, and nu exampled cultivation. The answer, the Right 111,11. Barmiet said. would soou be found, it' the history of the two countries was looked into. It was because Great Britain wished , o claim union with Irehind, but would never estend to her British law and British justice. The. Hon. Baronet then proceeded to take a review of the State of Ireland, from the origin of her connection with this could. y down to 11:e time of Ja,ous the First, at vehicle time, the Right lion. Bnronet islet, i`Gkiail•lil had been sent ft um this country to the pros Mee of Visit however, took posse•siou of toe totality SI.IdiVIS <llil/:: In take possession ul mend garrisen a conquest ; thus, li steld tit aim 1 , - erating the stale 4.f that country, animosities pool d.seni site we reit sown, es Rich ey..11 tip to tile, preset ti,oe lout newer been ermitratea, and which had. indeed, been the sourer of nil the utieer . .eS eowhiete It eland had tinee been subject. 'I tee Ho. nom - able. Bartmet then proceeded at considerable length to take a review of the di, erent measures adapted by dinereet ailitlioist rations towards Li I'l4ll l i, fi1.211 that time to the Revolu tion, trout the Revolt:time fu the neees , iou uf Ike tli.ese of litutover. and from that period to the time of the Union ; 1,0,1 especially COMlliCtlieti WI the conduct of he Irish Parbanwitts theut<vhes towards then constitutive, (),, o . I`.Nlt e mr ^ f i n the retain of George I. on one uce.i*u unenvied to vote 2 . 11 ,0, ea for yl 51415 to come; and that measure was nei!rly carried, theft. bring a majority of one vote ettly against the motion. Another Para:tun ni, in the reign of Cringe 11. , sat thirty tine years. Mu, eatisiart itself to outlive oil rs t . t , tint ,,,,„ ms , aw l osio podely sc i ssoring its interests trans raise of illy people ; tnosr . .lei tither simiku aros had tended liesterially to alienate the minds bf the pe-ple trom Ties - ce things re maned (.11 I. Te, when ill, nit the entire neili'ary Borne eons Mstthdrawm from train I tor Me i •urpt se- of tie American %tat, and site was kit tu