The Sun.
London, England, 1839-06-25 00:00:00

USURY LAWS BILL.

The Marquis of L ANSDOWNE moved the Order of
the Day that the whole House resolve itself into a Commit-
tee upon the Bill, to perpetuate the Bill that had been
passed two years ago for ex( mpting certain bills of ex-
change and promissory notes from the operation of the
laws relating to usury. In doing so, he should feel it ne-
cessary to explain the principle of the Bill, and, after the
trial that had now b.scri had of the Operation of the Bill,
he hoped their Lordships would consent to make the Bill
now perpetual. He could first explain what had been
the law—next, what had been the alterations of the law,
and then shew the public necessity upon which those alte-
rations rested. Simetime ago, after one of the fullest
inquiries that had ever taken place into the transactions of
the Bank of England, among the various enactments that
were introduced ito the Bill, on which the
charter was founded, in consequence of recom-
mendations given by the Governors > and. Direc-
tors of that establishment, as well as, by other
merchants in the City of London, it was thought conve-
nient to relieve the Bank of England from its obligations
in its discounts of bills unpaid by the laws of usury. That
was agreed to by both Houses of Parliament. A year or
two after that relief had been extended to the Bank of
England it seemed reasonable to the Government and to
the commercial portion of society that that relief which had
been afforded to t .. non L—..airie,plal sar toodowl. to-.• 11

netted with and engaged in commerce; and that they I.
should have a facility afforded to them in times of need of
lending and procuring money at a rate of interest higher
than 5 per cent. upcn bills of Exchange at six or twelve
months' date. When that Bill came before their Lord-
ships, though no one was prepared to oppose it, yet the
Noble Duke opposite prevailed on the House to consider
it as a kind of experimental Bill, and to confine its opera-
tions for two years. The Bill having so passed—the Bank
of England haying the pcwer to lend money at a rate of in-
terest exceeding 5 per cent., and all per!ons engaged in com-
merce having now enjoyed that same privilege—it was most
necessary now to make that law perpetual, which experience
had proved on the one hand to be harmless, and on the
other preeminently beneficial. If he could anticipate that
any state of circumstances could arise in the city that
would make that law otherwise than beneficial, he would
willingly agree to limit the operation of the Bill again,
but he could not satisfy himself but that that which rested
on permanent principles must ever be beneficial to the
country. He could not reconcile himself to this being any
longer a mere temperary measure. He desired to see it
embodied in the Legislation of the country, on which the
commercial part of the community could rely, as the law of
the land. The argument by which this Bill was supported
did not rest on the Usury Laws, as bearing upon the landed
interests of the country, but upon that demand for capital that
existed in the commercial world at certain periods, and which
made it of paramount importance that all the capital in
the country should be able to be brought at any given time
upon any
particular pressure which it might be an object
of essential importance io meet. Occasions continually-
arose from unexpected failures, from political events, and
from circumstances over which parties could have
no controul, which made it imperative upon them
at any rate of interest to get assistance to carry
them through the difficulties in which they were involved;
and at those times there were persons in possession of
capital, who, though obtaining legitimate interest upon it,
might be induced to lend their assistance to those houses
that were pressed, but which, under other circumstances,
they would not be disposed to do. This Bill was there-
' fore to enable capital to be disposed of in the most advan-
tageous mannar. All the Bill proposed to do was to
remove a bar from a man lending money to another who
was in immediate want of it, and upon such securities as
he could net otherwise make available. When the Bill
went into Committee he should move, on the introduction
of an amendment to the effect of extending thu law to all
deposits upon securities of any Exchequer bills, public
annuities, transfers of South Sea stock, India bonds, and,
in short, to all that were called public securities. In the
course of the transactions which had taken place it had been
usual upon loans to accompany a, .
promissory note with depo
sits of securities in the shape of Exchequer India bonds,
and so on, but it had been found that any promissory notes,
accompanied by such securities were vitiated, and became
subject to the laws of usury. His amendment should go
to'cure that, and he trusted the House would not only
allow the bill to go into Committee, but that it would
agree to perpetuate it.
The Duke of WELLINGTON did not rise to oppose
the House resolving itself into a Committee. His object
was not so much to object to the principle of the Bill as
to perpetuating it. If it were to be made perpetual he
thought it gave room for a vast number of frauds. Many
instances of this kind had already come to his knowledge
from his intercourse with persons who were unfortunately
more liable to fraud than others—he meant officers in the
army and their families—who had suffered considerably.
Though he was anxious, therefore, that the Bill should
pass in order to relieve the commerce of the coun-
try from any pressure at this particular moment,
yet he could not agree tohold out to the
public permanently any opportunity to enable those who
had fraudulent intentions to carry those intentions into
execution, in respect to the unfortunate individuals to
,otflaere
whom hegnhaardi rtehfoesroreepl.rsoHnse
fernotinreathtcisddt.ohseerliplotuioslet
fore to
no further, arid in that way to limit the dura-
tionmis-
fortune while they provided for. that which was necessary,
but boyf
Bill to the Ist of
.January, 1842.
The House resolved itself into a Committee.
The Marquis of LANSDO \VNE proposed his amend-
ment to the effect already stated, which was agreed to.
Lord WYNFORD considered. that the Bill, as it now
gtl(i)iisngl3
equal to an entire repeal of the Usury Laws.
stood, was
He proposed an amendment to the effect, that should a
bill' of ;exchange or promissory nate he renewed at the
expiration of twelve months when due, the party granting
the renewal should not be allowed to renew it at a greater
rate of interest than 5 per cent.
Lord A SHBURTO N said that this Bill introduced a
principle of great
i importance. It was a principle ex-
tremely plausible n its appearance, but it required those
who were in favour of such theories to watch narrowly the
operations of experiments on which they were founded.
Except the city of Hamburg, there was no city in Europe,
or in the New World of America, in which there was not
a restriction by law upon the amount to be paid upon loans.
He was satisfied that CO inconvenience would result to the
public by giving this Bill a trial for two or three years
more. If the principle was right, and the theory was a
sound one, there would he no necessity for any restrictions
at all. He had made enquiry in the commercial world as
to what had been the effect of this Bill, and he believed the
benefits arising from it had been very much overrated,
though he did not mean to say that any material evil had
I arisen from it. His opinion was that it had tended to im-
pede the power of the Bank of England, to lessen the
circulation, and that it had increased the confusion and
distress that at present prevailed.i He bed likewise made
inquiries respecting its working n another point of view,