The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1840-01-14 00:00:00

THE USURY LAWS.

(From the Morning Herald)
A ministerial evening contemporary claims a large mea-
sure of credit for the cabinet of Lord Melbourne, on the
score of the aid which that cabinet has lent to the efforts of
certain classes of moneyed men, to repeal entirely the usury
laws. The question is one, as it seems to us, of exceeding
delicacy—one not to be disposed of quite so summarily as
.our contemporary appears to imagine, even although his own
authority is supported by that of Jeremy Bentham. It may
be only fair, however, to permit our contemporary to state

his views in his own terms : . •
" Our readers will recollect that during the late session of
parliament, as well as during the last five years, the govern-
ment have made various propositions for the modification or
repeal of the usury laws. In these useful measures, as in
many others, they had to encounter a tory opposition, and
bills proposed to be made permanent or efficient were
amended, as by parliamentary phrase it is . said, and were
limited both in their duration and in their enactments.—
Lord Ashburton called the attention of the House of Lords
to the religious objections applicable to the:government bill ;
Sir Robert Inglis seemed to consider the enfranchisement
of mercantile security to he a branch of the detested Jew bill:
and the country gentlemen would have preferred leaving
the farmer without the means of borrowing at all, to the
alternative of paying for money that which it was really
worth. The. mere fact that Jeremy Bentham had
written against the usury laws was sufficient to make
the tories rely upon their stupid enactments as part
and parcel of the British constitution, and `five per
cent.' would assuredly have been a less objectionable party ,
cry than ' Protestant ascendancy.' Feeling convince upon
general principles that the measure of Lord Melbourne s Go-
vernment was a sound one, it has been with peculiar pleasure
that we find our judgment confirmed by the high authority
of Mr. Samuel Jones Loyd, equally - distinguished as an en-
lightened economist and a practical man. He observes in
his late pamphlet, ' The partial repeal of the usury laws has
been of incalculable advantage to the commercial community,
by securing the free circulation of capital, and the power, by
the inducement of higher interest, of determining the appli-
cation of it to those quarters in which the demand may be
the most intense. It was essentially necessary that the al-
teration of the law should precede any attempt to separate
the management of the circulation from the banking business ;
and it will be found-the means of obviatingrnany of the diffi-
culties and alleviating many of the inconveniences as may be
apprehended as consequent on such alteration."
We must be allowed to observe that the " advantages"
connected With the relaxation of the Usury Laws,•to which
Mr. Loyd adverts, may not be admitted, as establishing the
soundness of that principle, which has, hitherto, been deno-
minated the principle of usury, whatever be the more ho-
. nourable title which it is destined to attain, in the approach-

ing age of universally-diffused " intellect." A relaxation
of the Usury Laws may, at particular seasons, and under
the pressure of derangement in the financial affairs of the.
country, be found to impart relief, as the use of poisons may
in particular stages of disease be found to check the progress
of debility.
Bentham's argument in favour of usury is akin to the ar-
gument employed by Mr. Loyd. Bentham establishes that
the existence of stringent laws against usury is apt to inflict,
injury on the poorest classes of borrowers, without checking
the practice of borrowing et a ruinous rate of interest. The
reasoning is, to a certain extent, sound ; yet it leaves alto-
gether out of view certain considerations most important in
attempting to arrive at a just conclusion upon the sublect.
Concurrently with what is usually styled the progress of
civilisation,' may be noted the perpetual tendency of money
to rise in value, and of labour to decline. As population in-
creases, and as commercial exchanges multiply, the uses of
money:become more numerous, and the ,cemand- for it, by
consequence, greater. In conditions of society, which we,
in the plentitude of our s elf-sufficiency, are wont to regard
as only semi-civilised, the custom of barter in as infinite vari-
ety of forms prevails,and enables the people who carry on
the business ollife,sto a great extent, to dispense with the use
of money: • The advance of " however, in-
volves the gradual ascendancy bf the money-power in every
state; and all wise governments, in all ages of the world, have
deemed it necessary to sustain by legislative enactment, the
cause of industry against the encroachments of the usurious
principle. It may be true, that direct legislation against usury
may never have succeeded in checking altogether the practice
of. lending at an enormous rate of interest—because, un-
doubtedly, under all systems of government there has been
found wretchedness willing to borrow on any terms and rapa-
city net unwilling""-to lend,a little, for the chance' of receiving
back an hundred, or a thousand fold. The good effects, how-
ever; of legislation against usury, are proved by the fact
that a public opinion has always been created, in aid of the
law—a,public opinion .which branded as disgraceful the ac-
ceptance of more than a moderate per-centage for the use of
money. The law has already in this country, been mate-
rially altered, and may, very probably soon, be altogether re-
pealed. Public opinion will, in this event, follow the law, as
it did before ; and the imputation of usurious dealing will lose
its terrors. But mark the result. The power of the moneyed
claSses will in conseqUence of such a revolution in senti-
ment, be obviously increased to a scarcely-calculable extent ;
while the whole commercial arrangements of society will
assume, every day, more deeply the aspect of gambling.. The
money of the country will, gradually, find its way into the
Possession of a smaller number of men ; while the parties de-
sirous to borrow must, in order to meet the demands of the
parties willing to lend, engage in trading transactions of the
most wildly-speculative character. Such his been for many
years, too much the tendency of English trade ; and the re-
peal of the usury laws will, unquestionably, stimulate that
tendency to an incalculable extent.
The evils, for which, according. to: Mr. Loyd, the partial
repeal of the Usury Laws has proved, to a certain extent, a
remedy, have been caused almost exclusively by our unsound
system of currency. A rectification of the disorder of the
currency might be found more efficacious in relieving the
distress of the mercantile community, than the repeal of the
Usury LaWs will ever prove.