The National Register.
London, England, 1816-04-28 00:00:00

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No. 433.—V0i.. IX.

ON THE EXPEDIENCY OE

RAISING the LEGAL RATE of INTEREST.
[FROM A TASIMIET JUST Pt7OI.IISIIID 111 r Z. a. suourw, ESQ.

The war is now at an end. A re-action has ensued,
which has involved all in one common distress. It will
not be supposed that lunch money is afloat in the market,
and even if there were, yet under the depresses! state of
agriculture, the 4indssl interest, generally speaking,
could not afford to pay even the legal rate of interest fir
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 undsv the existing difficulties.
If it should be thougl:t too bold a measure to allow
more than 5 per cent., to be taken on good security, yet
as money may now be borPowcsl 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
now generally granted upon, viz. life interests, and rever-
sions, and leasehold estates ; and at the same time render
it illegal to grant a redeemable annuity. This would at
once open the market to fair bidders the extra interest
would compensate for the risk, more especially when re-
payment of the money could be 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 ; wherists an assurance for money
lent on an annuity is always effected by the lender, al-
though paid tin• by the borrower, and naturally falls to
the ground when the annuity is paid of—To this plan it
may be objected, that irredeemable annuities would be
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 does it seem ne-
cessary to resort to so violent a measure. It is a well
known fun, that very few life annuities are ever granted,
without being subject to redemption. Where an irre-
deemable annuity is grant sa, it is generally a fiunily trans-
tiction, and wholly free from fraud. It would not there-
fore 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 dripped. 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-
s•,lute life annuites, 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, nicking the
borrower rely upon the honour in granting a redemp-
tion.

It may perhaps still further be objected, that this
measure would open a door for all classes to borrow at
the increased rate. A man haying a fee simple estate,
laid also a life estate, might pledge the life rate as a se-
curity for a loan at the highest rate of interest, the
tender 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 don°. But still no new
evil would be introduced; for a man in the same cirewn-
stances, or with fix simple estates only, may, as matters
now stand, under colour of an annuity, borrow money
at 40 Iwr cent.; and the greater the amount of the an-
nuity that is taken, the more it assumes the shape of a
loan, for it heroines the more certain that the annuity
will be paid oft in a reasonable time.
The best, however, although the boldest measure,
would be at once to sweep from 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 luw,
although made, would be inoperative, and would sub-
ject borrowers to harsher terms than would be imposed
on them without a protecting law. The story of Don
Quixote's interference on behalf of the peasant whom his
waster was beating, should not be loam mankind. If

.41ur sifts, It ottatitution attb Kabul.

SUNDAY, APRIL 28, 1816.

the borrowers can convince the legislature, that the re-
duction•by an act of Parliament of the rate of interest
will 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. But they are bound to
prove, that either the rate of interest is 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 effect usurious
loans of money, and they prove, as I have already obser-
ved, that mankind will, in extreme cases, in despite of
acts of Parliament, make their own money bargains,
If it were intended to lower the rate of interest, of
course the first stop would be to render annuities irre-
deemable ; or, in other words, to prevent loans in any
shape at more than 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 honor of the lenders to suffer a re-
purchase. This is not a matter of speculation. Before re-
deemable annuities, with a power to re-purchase, were
legal, this was the plan resorted to, and 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 re-purchase,
in order to seer borrowers from oppression. 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, retards 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 theta
irredeemable would be to lower the market rate of interest :
an object which, in the present state of things, must mots-
sarily prove unattainable. It is not to be denied, that
annuities ought to be placed on time footing which
would make them accord better with the existing laws
against usury, whilst they are suffered to remain in the
statute book. But to render anuuites irredeemable,
would only increase the evils under which borrowers
now labour, if even the legal rate of interest were not
reduced. But if that measure were to be followed up by a
reditetien of the rate of interest below the market rate, the
landed interest could not stand the shock. In the presenr state
of commerce, when we speak of the market rate of-interest, we
look io point of fart to the general rate, as well in this as in
other states, for the average value of our money is fixed by
the general operations of the monied interest throughout all
commercial natious. Our own funds, therefore, may safely he
considered as the just standard of the market rate of interest.
Now at this moment more than a per cent. can he obtained in
the fonds. If, therefore, the rate of interest were to he re-
duced to -1 per cent., all the loans to individuals would be
promptly called in; for it would be impossible to ask the legis-
!Mare not only to reduce the rate, but also to allow debtors
time to pay their debts, 'lime money so called In would of
course be invested in the funds. This would occasion a rise
in the funds; and that would probably drive men to lend
their money to foreign states, where more interest could be
obtained. "Flue lauded interest would not only be compelled
to pay off their existing debts, but would be prevented from
obtaining any further loan. It would he idle to talk of the
future or probable benefits of a system which would at once
paralyze Ma hand of the agriculturist throughout the kingdom.

IMPERIAL PARLIAMENT.
HOUSE OF COMMONS, WEDNESDA%, %vim 21.

%Ir. K. Douotas preaeuted a Petition from Diitufrias, signed
by 640 tieNons, concerning the situation of Mr. Hyslop, ind 70
other persona, subjects of this countr, N ho had been taken by
General Murillo in lit, expedition against Carthagena, and bail
tutu comic 1111 l cit to death ; Litt sa Ito had since been sent to
Spain, to await the determination of the Spanish Govern-
ment.

Lord CasTi-rats:acit said, that Government took Pleasures
on this subject, whicb left no doubt that the persons of these
individual% were out of danger.
Gen.Ttioitsrots, pursuant to the notice he had given, rose to
:nose for " a retwrn of the total al value of all notes pre-
sented at the ltaiik of England. and refused payment as being
forged, in the lest four years, and up to the latest period to
which it could lie made out. specifying the alumna of each
year." Ile obt.erved, that the practice of forging notes had
risen to a grog t height lately, and he understood particularly
since the restcration of peace. Marv- of those notes were so
well A:scented, that they were with dilErillty distinguished from
good ones. lie also understood that several of those notes
wore brought from the Continent, but he hoped this would 114 t
bo t I cornet. His object in making the 'nation was, that
some remedy might be devised by which such folgery mit:lit be
rendered more ditficolt. This he conceived might he done by
a different method of making them from that which was at
present followed. several plans for this purpose had alt ei dy
Luca presuated N ttsolank ; and aelioui other.,

Paid Sid.

one by Earl Stanlimbc, which bad been rejected by the Bank an
ton expensive. He (Geo. T.) conceived Om the adoption of
some plan was neees-ary to prevent the moat evil which he had
pointed ont. He then moved no above, and the motion wit*
agreed to. . _

Mr. ConweN inquired whether it was in the contemplation
of Government to bring forward anv new measure on the son-
ject of the Poor Laws? If not, he should deem it his duty.to
bring it under the consideration of Parliament.
Lord CA4II.III4PAGIi said, that Ministers were not prepared
to recommend the adoption of any 11It:01141'e 011 1111/1 diftienit an h-
ject, and he hoped the Hon. Gentleman would bring forward
whatever plan :night seem expedient in his jiigmenr.
nnoison 474 wished to know, whether (a. an alarm bad
gone forth to that effect) it was the inteotiou of Government to
pursue rigorous measures to collect the Property Tax?
Mr. VansmanTasewred the HonAiestletmin noorders bad
been given by the Government to use rigorous measures for
collecting the Tax. Indeed, he had stated his intention to
bring forward a measure to give relief; which would be rend,
in a few days.—Adjourned.

THURSDAY, APRIL 25.
A disenesion arose in consequence of a motion for a Com-
mittee, to revise the laws relating to the importation of Forszign
Linens. It was contended, that these laws, so far as they
impose a transit duty, were injurious to commerce.
Lord CASTLRR FAG!' maintainedtliat our commerce dialog the
war was the effect of a diseased and chilling system. On a
division, the motion was negatived by a majority of 75.
A number of Petitions were presented from various persons
against any alteration in the laws with respect to wool, and
ngainst the leather tax; others were also presented praying
economy and retrenchment,and recommending a commutation
of tithes.

Lord 6. CAVFNutsR rose and made his promised motion, to
reduce within proper and constitutional limits the Establish-
ments of the Country. His Lordship said, on comparing the
present F4tablisliments with those formerly, he could perceive
that the 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. He was convinced, that unless a
different policy was pursued by Mll ini.ters—unlets retrenchment
was adopted in every departnieut 011ie State, the Country must
sink under the pressure. The Noble L9rd col:mini:lrd with mow
_
MA, totl•

.10 part _ present
year. The country had been relieved from 11 millions of tax-
Attila' and he saw nn grounds for gloomy apprehensions.
The motion was also apposed by Lord Pahnerston,and suppor-
ted by Lord Nugent, Mr. Macdonald, Mr. Curwen, and Mr. J.
Smith.
The House divided on an amendment, moved by Lord Pal-
merston, fur proceeding to the other orders of the day —Ayes,
158---Noes, 102--Majority, 50.
Lord C tsTLERZAGH obtained leave to bring in a Bill to con-
tinue the Alien Act under the same provisions as after the
peace of Amiens.—Adjourned.

FRIDAY, APRIL !6.
Lord COCHRANE gave notice, that .lie should on the 3d of
May move to refer the charges he had esdithited against Lord
Elleaborough to a Committee of the whole house.
THE STATE. OF IRELAND.

Sir J. NIEWPORT rose to bring forward his motion relative to
the present State of Ireland ; and observed, that in calling the
attention of the House to this subject, the tirst question which
would arise was, how it was possible that two countries should
fur upwards of six centuries have been connected as England
and Ireland have been ; and that one country should remain to
disaffected, so miserable, and so wretched, whilst the other had
made such rapid strides in improvement, civilisation, and un-
esampled cultivation. The answer, the Right Hun. Baratta
said. would soon be found, if the history of the two countries
was looked into. It was because Great Britain wished to
claim union with Ireland, bat wonld never eoend 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 country down to the time of James the
First, at which time, the Right Hoo. Baronet said, colonists
had been sent from this country to the province of Ulster, who,
however, took possiosion of the country as soldiers going to
take possession of and gurris,:ii a conquest ; thus, instead of ameli-
orating the state of that country, inninOSities sod discords were
sown, which even tip to the present time had never been
eradicated, and which hal, indeed, been the source of all the
miseries to which Ii el mil bad •ince bu'r'n subject. The Ho.
nourable Baronet then proceeded at considerable length to
take a review of the different measures adopted by different
administrations towards Ireland, from that lime to the Revolu-
tion, from the Revolution to the accession of the House of
and from that period to the time of the Union; and
especiatly commented on the conduct of the Irish Parliaments
themselves towards their eollstillicnts. One Parliament in.**
reign of George I. on one occasion attempted to vote supplies
• and that - carried,
motion.
thirty.

for- ?I years to come; _ measure was nearly
there being • majority of one vote only against the
Ahother Patti nt, in the reign of George 11., sat _
three Nears, thus causing itself to outlive all its original
connections, and completely separating its interests from
those of the people these and otlit r similar acts had tended
materially to alienate the minds of the people from the
Government. These things remained till Ins, when almost
t m entire military force was withdrawn from Ireland for the
rurp, se• of the American war, tied she was left tts herself—

ing an Address to the Prince Regent, which in substance repre-
sents to his Royal Highness the impolicy of keeping up so large
a military establishment, the necessity of. retrenchments, dm.
Mr. J. P. GRANT seconded the motion at some length.
Our expenditure this year, he said, excetded our income by
19,991,9601.! It was impossible that the House must not see
the immense importance of this subject. and view sere
moat serious alarm the frightful precipice on whit* we
The CHANCELLOR Or the ExcHisteun, in opp 1110.6.-
lion, said, our income fell short of the expenditure by IS mil-
lions only, nut 19 millions. He took this opportunity of stating
that a loan :multiform no part IV' the arrangements for the resent
. .

bus left to herself, parties ceased, and the law became peed,-
dominant. It might Le said, that the King's Writ theh ran
through every family ; and never were the laws so well obeyed
as during that brilliant period. Let the same system be again
adopted. Restore uolim toe the country again, and again would
Ireland return to obedience, to the laws, and to the govern-
melds but never would that brilliant period-return till the
same system as Men prevailed should be again restored. The
(Inn. Baronet then proceeded to advert to the Act of 1793,
and to the measures of that day ; which, he said, were far from
tending to unielioi ate their situation. Anil having said thus
mach, he would call on Gentlemen to look to the records of
Parliament, and •ce in how sma!l a compass the benefits con-
ferred on that unhappy country would lie, and then look to the
sacrifices of bland and treasure which she had made. Her
taxes, previous to the Union, never exceeded 1,500,0001. ;
while, since that period, her annual average expenditure had
been 1000,0001.; and her debt had been increased from
1 1,000,0001. to 1,..;0,000L Her blood bad been liberally shod
in a contest of twenty years ; nod now, at the, expiration of
that period 6.000.00 of her population were excluded from
the advantages of the Constitution, and a force of 25,000 men
weie quartered upon her to keep the refractory in awe. Why,
he would ask, were there refractory at all in Ireland any more
than in England ?—from misgovermnent ; and into that misgo-
vernment he now called on the Haase to enquire.—The lion.
Baronet went on to state, that among the evils which menaced
Ireland were to be enumerated Orange societies, illicit distil-
lation, the mode of electing High Sheriffs,. ; and what had been
too much the practice, namely. the patronage of those who tra-
duced and vilified three-fourths of their countrymen, because
they were of,a different religious persuasion. He described
amid dilated on these topics at some length. and concluded" with
roving an Address to the PrMce Belem, which declared the
necessity of providing an army of 25,000 men for the security
Vi si, %sus a rust ground for enquiry into the state of that
count Y, with a view to extirpate The evils ; and requesting his
Rood Highness to lay such Documents before the House as
~;,01,111 lead to a deliberate investigation, and to the rescue
. f the country from the disorganized state. in which it at pre-
saw is. _ _ .

Mr. Peet complimented . the Rt. Hon. Bart on the dispas-
sionate manner in which he had brought the subject forward,
unmixed with party matter. With respect to the motion, he
was disposed to concur in pact. He would not conceal the
state onreland, and must regret that a state of disturbance does
exist , nor would he refuse information on that paint. The Rt.
Hon. Gentleman referred to various Writers to shew, that evils
had arisen from the bad habits of the natives, and customs
which were diegracefid. It would be desirable for the House
re ascertain the state of the lower orders. Most of the poor
take small portions of land from the farmer, which was partly
paid for irrlabour, and partlyin rent ; his food was very course;
and it would be higisly desirable lithe Irish peasant could have
those comforts which the English peasant enjoys. He then
proceeded to discuss the existing causes as stated by the Rt.
Hon. Gentleman, and in respect to the appointment of High
Sheriffs, which be admitted might reptile amendment. The
Rt. lion. Batonet had not ,alluded to Catholic emancipation;
hut he could not avoid Mating, that, in his opinion, such a mea-
sure e °Mil not lend to tranquilize the people. On the contrary,
lue believed that the residence of the landlords would do more
to prevent the disturbances so generally deplored. He con-
cluded with moving cer ta in amend scents, " generally concurring
the regret for the necessity of the establishment of a military
force in Irilatel daring profound peace, and re %nesting the
hying belie e, the House such documents as should show the
distill bid state of that country, 6:e.
, ',ruse err considered the question as bearing on the
ieterests of, Britain itself. The Rt. Hon. Gentleman, having
disclaimed party feeling, proceeded to descant upon what he
considered the misgovernment of Ireland ; and first with re.
aspect to the Insurrection Act, two months had elapsed since the
Act was apalied for, at which time only two counties, Tippe.
vary and Meath, were stated to be in a disturbed state; since
then four countries were added to the unmber. So that, instead
of 24,900 meat to keep the country in a state of repose, 40,1100
men would not be sufficient. It had been truly stated, that it
was owing to a general discontent against the law, and hatred
to those persons appointed to administer the laws. The amend-
meat of the Rt. Hon. Gent. would not cure the evil—the come_
qiiences were already known—the CaliseS ought to be enquired
into, or a remedy could not be applied. He wished to know
whether any measure was to be brought forward for the relief
of Ireland. If not, and they were to be left in a helpless and
degraded state, it was a mockery of Government. The carry.
tag of the Catholic Question would be calculated to do much
good, if rendered palatable to the Protestants. In fact, it was
the rine qua ann. There was a power of making Leland the
• mainstay of our State; and, by misgovernment, she wax capable
el being made mar deadliest enemy, and our destruction.—lf
Government wished to govern Ireland, it Should retrace its
swats, and not govern by n Protestant ascendancy. but by a
stomp 4 to union among .all classes of the community in that
toiletry.
Mr. V. FITZGERALD contended, that the evils complained of
had not arisen from the prevent or any recent Giver 'RI of
Iceland; but from the bad Government, Ages before there was
any difference of religion between the two conotrieF, It was
'his intention to propose the repeal of the House-duty in Ire-
; and that the duty on hearths should be taken off all
houses that had not three hearths in each. These might seem
masters of little importance to the House ; but they were of
great importance to the Irish peasantry. —He hoped, small as
those concessions might appear, that they would be considered
as proefsof the willingness of Government to benefit, as far as
possible, 'he people of Ireland. But be would nut consent to
the abandonaumt of the penalty for a violation of the Excise
Laws; as he considered their enforcement to be most materi-
ally necessary to.the maintenance of peace and order in Ire-
iand.
)Ir. GRATTAN theucht the prestiou was capable of being re-
do:cif to three Leads; first, financial distress; secondly, of
commercial distresses; and, lastly, the state of insurrection in
which some parts oft were plunged. The best remedy should
te to repeal the Penal LAWS, as applicable to the Catholics.
tic: fiminciol distress was very great; but this country should
consider, that it. had both the DitalAs and the remedy in its
r.wn Any thing that destroys Ireland would destroy
Great Britain; and, therefore, whenever we found Ireland
sucking ender distress, we ought to administer to her assistance
ith our wealth. The commercial correspondence between
tae two countries should be established on grounds of mutual
advanteer a The great mode of cure for, the evils under
whirls Ireland groaned, was by administering retie, where it
etas applicable, to the greater evils, and the lesser borthens
world of themselves. As to the insurrections ittirelawd,
i u Inc opinion, they ought to be. put down by a mild eiternime of
the lava, rathcr.flhatu by the, power of the military; Or it' the
furrow measure were pummel, the very criminal wha steered.
si-ol or the law, roast praise that Constia ;stip° which emits:mama
, • .. :hated s.-et

to ..