The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1855-10-30 00:00:00

THE USURY LAWS.

IT was only in August last year, that an Act was
passed finally repealing the Usury Laws, although
the extinction was reached by many intermediate steps,
extending over a series of years. A limit to the rate
of interest was so long a feature of our commercial
policy, that, although modern enlightenment has
led to a totally opposite view of the question, recent
events may induce many to consider whether this
feature in free-trade is really an improvement. One
of the arguments in 'favour of the repeal which was
principally insisted upon, besides the facility for eva-
sion, was the alleged right of every man to obtain
all the profit he could for lending his money in the
same way as he did for lending any other commodity.
This appears very plausible in the abstract as a theory,
but the practice has not proved quite so beneficial as
to justify the mere abstract reasoning. In the first
place, it gives too great a power and influence to money
over labour, and thereby affords an opportunity for
oppressing industry, at the very time, perhaps, when
it most needs encouragement. It is for the benefit of
the community, that capital and industry should co-
operate ; but the former having obtained an undue
advantage, they prove to be antagonistic, whenever
the opportunity arises for the money interest to show
its power. Many causes may combine to stimulate
trade, and as the vast commercial transactions of
Great Britain are necessarily dependent, in a great
measure, upon credit, and thereby subject to the
money power, no sooner has the mercantile interest
placed some reliance on the continuance of the aid
which is indispensable, than some alarm is raised, no
matter how groundless or how absurd, and forthwith
the money power raises the rate of interest, and in so
doing takes the largest share of the profits, if indeed
it does not take all, and perhaps something more. So
long as the rate of interest was limited to five per cent.,
the lender might be more particular as to the soundness
of his security, and the effect of any pressure was con-
sequently to confine accommodation for a time to those
most entitled to it. The suffering was then chiefly
felt by those who were trading beyond their means,
and if mercantile failures resulted, there was often
consolation derived from the reflection, that the market
was weeded of men of straw or over-rash speculators.
So far, some advantage was gained ; and the two in-
terests of money and labour were in a measure knit
together. Now, however, the screw is applied by
raising the rate of interest, and good and indifferent
suffer alike in paying extravagantly for assistance,
which commercial profits will not justify, but which
has been rendered indispensable through the advantage
obtained by the moneyed interest of having the means
within their own power, and being able, by combina-
tion, to dispense their aid on their own terms. Had

7-
_OCTOBER 30 18,55,

-----=-----
bent 'get
the restriction imposed by the Usury Laws for ak,,
tamed, it would have been next to impossible 4:
counts to have been refused, because raoneY
thee
att,,_
too plentiful not to need employment ; but thy tf,,,,"T
of England, for its own purposes, increases Ole raJ,,o
and then nothing more easy than for other in itZ
hsooldmernschtoto follow
oanwn epxraomfiptlewhwilheiehthe e;to taxatoktr'rzti
tile interest, which has incurred responsi9 , ariloli
reliance on such aid, becomes the sufferer. lixiti
It may be argued that the late exorbitant (I ye,tri
on the Bank of England for gold, and the 5 , Z,
that Russia was also obtaining supplies throuettr.e: dhow
indirect indirect channels, rendered necessary a restri la
discounts, in order to protect our own Int the
2,,
[ interests. We may admit the necessitl of r. forp
check against the drain of gold, whether for r ,„,, tpoi,
for Russia, but we deny that the means ts_d `ph
best. They could not prove effectual for he? -tioti.
alleged, and so far from protecting our own Is jiti '4',,afi
interests, they have a directly contrary effeet'gi ? 11'4111
Directors of the Bank of England had rereitO ~)4'll
intention of restraining a demand, which° lid
141.
their balance below what they considered the to f
tkosi
safety, they might have refused discounts i
_l°ll
titular houses, as they have done before :0 ',.qsi
tempting opporiunity for their own profitslo. I
444ett
pa itihiS is nehygi
ns
tginhteherexiatsoetsetdoef:stihinbelteeßroeankbs
jtetcot:irevic,o7o2:..me
ra.;.;vohoi;slthoovotittetCi,i the
injury injury is inflicted on British commerce "ve" loll,' 1) -
bhUe::adsnieurnrycoLmapwesllehdast,othaerrpelfyoret,hperosvcreedwin::(befoi!ntei''' Of il
could have been of any avail, rsilAua'haleA:ll tbtel
soopupThnredesnseßiosasnnk.of commercial credit i'lew.,- 1 r'cl. ce
our home-trade
ctatoufrsrornamssi;utswhbtuehiifitunnecessari ."-a°ls Ne,
hthaeveßbaez citedpir AO "%
1401 it'stm V °l'
clnascleeebde,initgwcoonlrrdebete,
difficult
rcpt
ffiiesuccshaltodititwfoaoaniner efppfrotourr:nbitilleiltear:tYltsetPcill3l3seellts7:6;°lll:: tat'je:74-1
from which more favourable inferences 31195r00re itl' 114
The decrease in bullion of 2526,0 ,;'s,icleil(ls. ' of
accounted for by the payment of the ur , of e„
to the national creditors and to the lielueirb'esel # 141
stock, the decrease of balances under ere Ilee
being no less than £3,281,222, winieN,s6,Gl:i `411;
increase of notes in circulation of Oil '''.:otc,.oi klti
the other hand, there is an increase of Pri:ecori!", )
of £1,068,282, a decrease of private dei r i e
£915,980, showing the great withdre+7secoles 1111
modation, and a decrease in goverunle;;ltbegogli 'tse]
£857,103. Where, then, could have O4-bree, ,4lt
efflux of gold, unless we were to sille ee tOl Al)
less than half-a-million sufficed to Ps:l' the '(Oet ,!'%it
millions to the recipients of dividends' 0110 pol nil
them themyoe
weDcl
the
ewr
riahigc Thedoa
nhvfotha nttihtltti inference
advantage
feeeaeoyUrsraeossiliffitotiehaineeiii,;(:_itylDbo3. ass,eloittyttoto:: :0!
,:sros)1::41
eimihwppaa 1 leorvnehetstaeuhvn meec pretence, which taken.
but for the Bank Act of 1844, to angl3l:-8011 teat'
profits, and in so doing to inflict a gret
ri Nt
The Usury Laws were designed 11°' °;,ive 'yO :tll
the interest of labour from the opPre'' 00) qd
which the holders of n all ay
money have ' ~, ill Cil, If
themselves so desirous to exercise, but ns.diOttioi qtkit
h k, '
the latter class from the temptation of -11 r toei A
which fraudulent borrowers are ever ree t[edso, 1,1114
A limitation to the rate of interest constitliA it, the
which protected both parties : and thoileoslPro 'l,
argued that the lender of money bad 511 lo I,''''i
with the lender of any other commodits,,, ;eel; '"t
what profit he could, the cases, it will '''' ieil°o k/
reflection, are not analogous. If a 1°1;4 ~t€
another a house, a horse, or any thing ti. id? re
which the borrower contracts to Pal'iiti;l; f''' 01 t,"
a tangible lien on the gnna' 11 only th.ells;#l ;1
possession. The borrower requires '-%nneYit 'O,A ~'
for that he pays, while in borrowing :i.ier ann/d0 LL
used in a similar sense to that of any °'.- to heee'a '
but must again be parted with in order they q
• ci; is, we ti
any service to the borrower. The 13- ed .
much greater, and as the temptation t° es Di
hazardous speculation is increased by tilfeinterest'ii l''
borrowing money at extravagant rates °.t•note V S.
left ti 04 El
which also tended to divert it from oSetl' or 4
merce, the legislature wisely interP , te 0
restricting the rate of interest assisteuaos
ref/
money-lending to channels where the sell° fair ti t
otti 11
security rendered the permitted profit 3ciene ; /
neration. All this has, however, been Intl 0500 ii • ,
is, nominally, free-trade in money as I°l. tY '
n4Ol ;
and the consequence in the one case ''''
as a P i
is
dearness instead of cheapness. It w-aiiits!, 1
theory that freedom from legislative restript r 0; I
be productive of plenty and prosperity' 400 ;1 ,
has proved the falsity of such prediel ti,er,
though we cannot hope to see a return t° 04
which have been forsaken, it is well that
00,t, i i
' should be reminded of their mistakes ill t 5 0
more caution may be used in future attollP i
out modern notions of political econonlY. )
----.------
I'
THE BANK CHARTER AC
04'ii
• ii eea ,
IT is now above eleven years since t-eatil . ili
the Bank of England Charter Act, as it I.o' 0 °'hi
royal assent on the 19th of July, 1844;:o 4.1'1 li
expiry of ten years gives the Government,, l';,ii 1
re-considering its provisions, upon o'3o ,if 1
months' notice, the subject naturallY °_.„fere f ,
than ordinary attention, particularly \vitli ro'ffilt:iii
the recent threatening aspect of move the ''') I
may be unnecessary at this time to discuss 00,
0,, i ,
which prompted Sir ROBERT PEEL in Prehope rit,,si
measure; but in the speech from the li to, s'l °'
closed the session of 1844, it was referre',oo z ro''
ing "to place the pecuniary transne,tily, the
country upon a sounder basis, without ,tilt'','
tr '
inconvenient restrictions on commercial in
majority are of opinion that it Ihas ini-or9 rs
spects—that it has not placed the Pee'', t'
g `III' l, .01 r
tions of the country upon any sounderotiock sleti.
.
viously existed, and that, so far fr 0 ;ai ge%; a itu"
inconvenient restrictions on conamere' 00 ": t t;
tary difficulties have been more freciptinaettlie-fly ;
severe in their operation since its:orclitir ;i'
previously, notwithstanding the o'l' trto'
, Atis tir
coveries of gold in California and - AV'
Al. ti
could not then have been foreseen. brier,
,04 .
The provisions of the act may be Ala 10011'0'
r EPg oi 41
By the second section, the Bank 0' fourteen
04
set apart securities to the amount of I°-10t, be °'p,
and so much gold and silver as should 100,,i5sori 010
in the banking department, and issue Prtioe, the
100
to the joint amount. By the third stec gold; ;,1 lici
was not to exceed a fourth part of the g°
otit rite ,
the fourth section, all persons were 4. the AP
Ilion, at
The ; pt
Bank of England notes for gold bu
a gold, ..e".iii
£3. 17s. 9d. per ounce of standart" ,0r eel' v
bans' ease ti
section enacted that, if any other
.o ~,cre ,
nn,ht 1" infest 0
issue notes, the Bank of Ens; ado aieP
amount of their securities in the issue ,e 0 ee ii
tof I.l°' te" ~0
the extent of two-thirds the amoun ~ refer ,cll,
tile act Eio
be issued. The other sections of the re 1
weekly publication of the returns, In
errnitti4l yejj:
upon other bankers issuing notes; P , e. ea' .mt
who tne ani
tinuance of the privilege to these ;al ~,ttr
if th partner-, after ef,
but depriving them of it should An •
firm, then not more than sai'd to ilnP°se TO"'
exceed that number, so as ill-ee.
_[.. of the etl/I,ot
fectual bar on any future extens.l7d by the goi )1
however much it might be requir
,oent A.,°,41,
The total al , in PPi,Oll
demands of commerce.
other banks 0 Pll ,
future to be circulated by all oth
and eles.e' t-'silate
Jon
and Wales was, for two hundred
ty-tw° (1 0
banks, R 5,194,491 ; and for seven
9,.._ . ~
~
0 689, :37, '''.
.[..„0,
Banks, £3,495,446, together, ;
~ .o.,glaild 3'
average circulation of the Bank of x'"
injusticecrtai naobnbrydlss

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