The National Register.
London, England, 1818-08-17 00:00:00

Tt?t NATTONAT, AMSTER

by the Act of thes3d ; for it would he absurd, AS it seems to
me, to leave these provisions on the statute book, when a
maw may by law take what he eau get kr the loan of his
money. In repealing the usury laws it appears to me that
it would be eery desirable to add two provisions • the on
that no man should lend money at interest alit t 7hselo'da`g
his name, W. liit Icuder, on the face of the scent ity. Thi•
Would prevent all underhand transactions. I inysi If lit ver
hole* An instance., although now and then Wan Ito! reason Ott Monday afternoon, I .
for piti%acy may occur, in %hick a person Wily leitddig his theatrical celebrity, were .ettiti tk
money at interest was desirous to conceal his name. The silent in the yawn of 't. artin's
otherprovision which 1 would take the liberty to zureet is, Dr. Athe and two nth wed
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a chinse makitig it penal (of course Ida not mean iii i t
to lend money at interest, or by way of annuity, to an inlaid,
and placing it oast of the power of the infant when lie comes
of age to ratify such a loan ; and allow hint to recover it
by action, if he actually do pay it, and giving hint the benefit
of a discovery in equity against the lender. There is a clause
partly to that effect, in the Annuity Act, which might, with
the necessary alteration, be adopted in this case. Fur some
few Years past it has been usual to insert powers a f sane
wholly at the discretion of the mortgage' in mortgages of
real property. This power enables the mortgagee at once to
secure to himself the repayment of Isis principal ; and it ap-
pears to me, that when that operation is fall,/ understood. the
effect will lie to lower the rate of interest oil real securities,
I may observe, that within the last few sears many persons '
have borrowed money by way of amenity, who, in former
times, dial not einsage in such transactions. Scarcely any
man entered into a building speculation, with a small capital, '
who did not raise mousey by annuities, aeon the %readily of his
buildings, and very frequently before they were covered in.
I have known gross frauds practised in this respect, such as a
finished house !diem' to at party. and a description of au
initialising' one afterwards substituted. Houses have been
shown as a security, in the finishing of which great numbers
of workineu were entrlityetl, all of whom were taken off the
inoment the transactiou was completed, anal the annuitant*
were then left without any security for the annuity. By
these and other frauds, I apprehend that more money has
been lost than gained by loans ander the shape of life annui-
ties al small amounts ; and I have known s al very dis-
tressing Casts in which unprotected females have lost the
whole means of their subsistence by such transactions ; and
it does appear to me, that if the usury laws had not existed no
such mischiefs as those which I have pointed out, would have
ensued, because loans are coaducted with great caution and
regularity. In many instances professed a llama y stealers
have collected small autos from all descriptions of persons,
until they formed a considerable aggregate; this they here
laid out in their own names in the purchase of one annuity,
and there has been a deed to declare the trust of the annuity, '
for the persons whose names were advanced, according to the
proportion in which they had advanced them ; they thee pro.
cure themselves to be appointed receivers of the rents, in
order to pay the atonally, for which they have a commission,
mill the annuitants are necessarily compelled to appoint
them their receivers also, for which they charge another
commission. The temptation on the part of a solicitor to
lend mosey upon annuities is very strong, because without
any cheek upon his charges he demands whatever suite he
pleases, and be takes race that it is instantly paid ; for in no
instance is the borrower allowed to leave the room until he
has paid the solicitor's charge. It frequently happens, that
the solicitor was originally concerned ler the man who boos
rows she money, although lie has taken the pekoe to find out
man who wants to lend it, and he does not feel that interest
in obtaining a proper security for the annuity, which it is
always the duty of the solicitor to do in a regular transaction.
In short, annuities in their rise were a mere evasion of the
law of the land ; is their progress they overturned the laws,
and in their consummation they ruined most of the parties
who engaged in them. The Act of the 17th of the King,
which was intended to restrain such transactions, led to more
Ihigation, perhaps, within the same space of time than any
other Act on the Statute Book. The moment the borrower
felt the annuity press heavily eu hint, he attempted, and often
with mimeos, to net aside thee grant ; this red to great oppres-
sion on both sides ; the lender considered himself as out of
the pale of the law, and exacted a rate of interest which lie
considered would cover at once his risk and his disgrace.—
'lite borrower considered himself as oppressed, and applied
part of the very money which he borrowed in defeating the
'reality which he haul gist it for it ; all these circumstances led
to the oppressive mud irregular way in which such transactions
are conducted. The Act of the 63d of the King has put a total
stopto all litigation in regard to greats of annuities : that Act
lots now been five years in operatim, and not a single annuity
granted within that period has been the subject oils law suit ;
but sousing short of a repeal of the usury laws can put a
stop to the abuses which attend grants of annuities; they
strongly encourage a spirit of gambling; for as-the re-pay-
ment of the money lent cannot be inforced, and the annuity
is granted upon a contingency, the borrower too frequently
neglects to pLovide for re-payment of the loan, but trusts to
chance for the determination of the annuity.
1)o you think it would he best for all descriptions of persons,
and for the state, that there shonld be no boundary or re-
straint whatever upon interest, but that it should be left to
the convenience, wants and agreements of the borrowers and
leaders?—Under the existing-circumstances of the country, I
am clearly of opinion, that it would he for the benefit of all
parties that there should be no restraint upon locus at interest.
By the existing circumstances of the country, I mean the
degree of commercial enterprise that pervades it, and the
immense capital that it possesses; it the market rate of in.
terest rise above the legal rate, there are already numerous
devices hy which the usury laws are evaded, and the bor-
rower is forced to pay not only the market rate, but a com-
pensation for the risk and disgrace which attend a breach of
the laws. The high rate of interest which can new be ob•
tained in France, and which is paid in Eaglastal as regularly
as our own funds, is a strong argument in favour of the re•
' peal of the laws, of the market rate of interest were at this
moment above the level of the law, instead of bring as it ac•
tually is below it. In a comtnercial cumin.% like ours, with a
large capital, usnry laws must, I apprehend, always be inja.
lions to the trite interests of the comm y. Used' laws
merely fallow the state of the market, they are at best nn-
necessary, if they disregard the state of die market, they will in-
evitably themselves be disregarded. Fronithe filictinition of the
value of money, it is impossible to pass a law wrack s'te't at all
times accord with the state of the market. The greater the
penally Mutt is imposed on the breach of the law, the less is
the chance of the law being enforced. Our usury laws have
been hourly broken, and an instance rarely oecurs in which
the heavy penalties have been recovered; there appears to
me Do foundation whatever for the notion that it is for the
hem fit of the g 'remittent that the legal rate of interest shout'
be low ; a wise government, I conceive, would encourage a
ready circulation of money amongst landed proprietors, and
, not drive them to shifts to evade usury laws. Whether our
wury law* be repealed or not, the landed interest will always
command the use of the capital which Bind- necessities rail
for; upon loans to Dover nruent, I ;apprehend, die/reef rate of
,reillilsto has no influence; hhe rate of interest of he Stock
8 iitte regulates them, and that is not infitimilled by the
legal WI.

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