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
ofi
interestone a
view, g
of
feature t h ofe
question,
teioonmTreercceinatl
policy, that, although modern enlightenment has
led
atotawllyas so long
o
ppos
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 rower, 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

[OCTOBER 30, 18,5

the restriction imposed by the Usury La\
tained, it would have been next to impossa
counts to have been refused, because money
too plentiful not to need employment; but
of England, for its own purposes, increases
and then nothing more easy than for othe.
holders to follow an example which
so much to their own profit, while the
tile interest, which has incurred response
reiance on such aid, becomes the sufferer.
It may be argued that the late exorbitant
on the Bank of England for gold, and the
that Russia was also obtaining supplies thro
indirect channels, rendered necessary a restric
discounts, in order to protect our own
interests. We may admit the necessity
check against the drain of gold, whether for
for Russia, but we deny that the means tak
best. They could not prove effectual for tl
alleged, and so far from protecting our own
interests, they have a directly contrary de
Directors of the Bank of England had ;
intention of restraining a demand, which Iva
their balance below what they considered tb
safety, they might have refused discount
titular houses, as they have done befor
tempting opporiunity for their own prof is
ibehcnooyajmuidurinjury
traisinglihsehihsyaiinflicted
ns
ettgltbe
he existed,e ante ootnofe
nf
aihi nri!srhoe Bank
bsjtavail,ecommercee to
tr.r all,
A t ueo
th:ra":
,raetolof:
Usury Laws has, therefore, proved raise'l;,,,ldO‘a
been compelled to apply the scree' lwe"
the $
oppression.os soundness
ea
Then hdoamße seas.
Bank
r af
dcommercial
from
k returns, which we publisile:,9o+
ti
have been cited as a justification for the sLerrieli. 01 4'
the Bank Directors ; but so far from thisibe receAPi
case being correct, it is diametrically ace'o
the unnecessary uncrnedeci:„,:yt Ill'e23le‘e.
Indeed, it would be difficult to ppint t° be al°.
from which more favourable inferences3r;jore
The decrease in bullion of. £526,860 'saieols.4
accounted for by the payment of the wi of Y",,0
to the national creditors and to the halue;besell'o
stock, the decrease of balances under ;here
being no less than £3,281,222, while
50 10.
, pc/
increase of notes in circulation of only ate ate°
the other hand, there is an increase of Pr' aritie°4,
of £1,068,282, a decrease of private
al of $47,01
£915,980, showing the great witharaw!),fectitidy
modation, and a decrease in governrcelL''
£857,103. Where, then, could have 00frtbrot
efflux of gold, unless we were to suPP°/eoboce 't of
less than half-a-million sufficed to Pai,y ty:
millions to the recipients of dividends!
111
the
.t
them in small sums. The inference is t tbe
,fj?
libe way, and we have a right to assume till'rt/ o`, ty
Directors have taken advantage of the
them by the repeal of the Usury 1-°hfic‘
/
colourable pretence, which they would
but for the Bank Act of 1844, to atiglellan- f
profits, and in so doing to inflict a great
injustice upon the mercantile comnrarlitY.J. tor)
The Usury Laws were designed not °P';'„ tru.o
the interest of labour from the oPPresis;ges P)
which the holders of money have in al; --to
argued
rhhhgeel
which fraudulent borrowers are ever reeti
with the lender o f anytr
iiinelmhaes themselves
eoi
aoscttnleasctosithsoededfterhsloebiemloordtuhatesh
et to
temptation exercise,
"al ototeo.
what profit he could, the cases, it will be Rod 'o
reflection, are not analogous. If a man 0e
epooarofrtnitihnieeotrsnere:eyesotamnchradoandostaitahinottyullegiorlo,ejeottcpt.tyl:,
another a house, a horse, or any thing for lode'.
which the borrower contracts to paY, til.che be 141.0:
a tangible lien on the goods of w,blate use; 0
ufpabonuosreyst
dst
meshsieanusrtivosatihn
e.
pays,The bvoThrriloewienr
broerrolvivzorneeoYinioyclimet.
similar m igt
oa
tanhr
bes
ee nbpsoittooewdt
borrower.
that ofwith
T dernsun
itt
goo, beteinac;l;g: fes
much greater, and as the terapta"":•he facia'
hazardous speculation is increased by interest,
borrowing money at extravagant rates ° • te
ipaitno A
which also tended to divert it from sa-
4. toga, 49
merce, the legislature wisely to
restricting the rate of interest assts`'onessejoi
money-lending to channels where the soundness
fair re,/
security rendered the permitted profit adoe; 74,„
neration. All this has, however, been unii as 0/ I
is, nominally, free-trade in money as we' .1 the'
and the consequence in the one case as 11
It was a. riti
tbhe eo
productiver ytha freoefdopmlentfryoamndle
is dearness instead of cheapness.
has proved the falsity of such predictlem&
though we cannot hope to see a return to ".10 tp
1")
should be reminded of their mistakes ia
which have been forsaken, it is well thateJ
more caution may be used in future attene
out modern notions of political economy
gpirsolastpievreitrye,strbal.liit:
5t11:0:4.j

oaf
that

royal assentrestnoe
onfk;
ot
oweTfnHoaEyntEneoatgvhrßlesa
neAele9sve,KteehhsnaCtryothHfeeeraAjroAußs
locyTslt:iE,enralßeislsen4l4iAtte:Cll;e:
retie'`
er e
eti
riii,
to:
iii:
ii
viticispmwimt
nn
ihh
country
expiry
om
0 majority
ue
ec.
the recent
nI
ue
inconvenient
nn cT
closed
sor n t
sB
months' ia, • ded
iameruyel
fromat rot lrdyatinbsw with
aute:slit.islijo,si:l:ll;
re-considering its provisions, upon gii7es
cif
t $
notice, the subject naturally e''eeferell li
nt threatening aspect of monetarYibe if,,,,
teiaeotnps:piliepceusarecntli.la
ii
0,4,
prompted Sir ROBERT PEEL in Pre- pie jitl'
the session of 1844, it was referreu, v#,` ow
upon a sounder basis, without '0(0' til
yenient restrictions on commerciaJ e 'IV 4e'
are of opinion that it ',has fai-e .0 t,
of the country upon any sounder riopo9,
that it has not placed the pectipo tlstc
inconvenient
existed, and that, so far from no:credit', A
restrictions on commercial ot all', ilv
tart' difficulties have been more freclaescialelP P:
severe in their operation since its ell railiarli9
previously, notwithstanding the "trgntrO' 1
coveries of gold in California and Ags e
: 11101" ti
could not then have been foreseen. s brie.. tO
The provisions of the act may be thus
,401
,liiot';
By the second section, the Bank of l'feeo3oPilife
set apart securities to the amount of 011"ot be fey
and so much gold and silver as should llivaissotil
in the banking department, and issue Prtuior, the
spf
to the joint amount. By the third sec fioia i ',,,i
was not to exceed a fourth part of the
_b cotitl'-id
the fourth section, all persons were „ 0'.4
Bank of England notes for gold bulliono,_
.t. the
,linti
£3. 17s. 9d. per ounce of standardbgificier ceasei/ty
section enacted that, if any other
ja.a.l:. jocreas% 0
issue notes, the Bank of England ni .11,1l_artoeY
amount of their securities in the issue eutoeities costit y
the extent of two-thirds the amount f
00. Lefer iii
be issued. The other sections of the ylire fesfOcog,
weekly publication of the returns, 1
ermittil( aeilii
upon other bankers -issuing notes, Po
then
ojoyipi
tinuance of the privilege to those wilt 1"
ers ill a V),
unnecessaryb ordinary
Pul place caeitltet the
but depriving them of it if the par nhould aftetoli ei
firm, then not more than
si' sto imPose 1,40
exceed that number, so as indeed _
~_., or r 4
fectual bar on any future extellsi°n ot 11!,_'e gro7o
'red by ',rove
however much it might be required
tint a"- el)
demands of commerce. The total arae,_ in Sficioili
future to be circulated by all other ban to
,en fpacer
and ele% '
and Wales was, for two hundred
,tio
seventy" 37 Joint
a 14
banks, £5,194,491; and for se _., . 0
~.
AMOY ' .. 0".
Banks, R 3,495,446, together, £B,-
10a
Bank of Eng
average circulation of the Ban

14! .7 ti47l
aut

05;1,i
to or
at this.
aoro
to
apts

c1111:101
e
I et 110 Iv
a .0002 iii
foltyi
oa/0