The Statesman.
London, England, 1818-07-15 00:00:00

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ABSTILAC47o, rat MIN-Urn of Enteric";
indoor woes
COMMLTTItE UN THE USURY LAWS.
David Ricardo, tag. aausiered.—l do adt think
the laws which restrain the rate Of interest are bees.
idol; upon meat occasions they are evaded, sedate
disadvantageous only to those who conecientiettsly
adhere to them. The effect bf their repeal would be
bet trifling; but if any, it Would tend to lower the,
rate of interest. The laws injure the commercial.
world with regard to discounts, not only wren the
fonds afford 'a greater rate of interest than fire per.
cent.. bet when the funds Afoul less, at the same
time that the market rate of interest is mach above,
five per cent. In the stock market these laws ere
evaded by means of the difference between the money
price and the time price of stock, which enables'
person to borrow at a higher rate of interest thee
five per cent. if possessed of stock, or to lend at a
higher sate, if the difference between the money price
and the time price afford a higher rate. The trial
which took place some time ago, as to the legality of
continuation,' did certainly diminish such bargains:
The transaction never has the appearance of money
being raised at more than legal interest. A: mei
bargains either for the purchase or the sale of stock
for money or time, and the rate of interest is never'
spoken of : it is the effect of the transaction, bet
never the avowed object of it. The Government
loans could not, in my opinion, be carried on if time'
bargains were dinged. The abrogation of the Usurp
Lasts would produce no ill effect woos the finan = _
operations of Government in time of war—l mean its
the negotiation of loans. It would tend rather to
facilitate them : the Government is not bound by the
Usury Law., ((trio allowing discount for prompt pay
tnent for a loan they frequently give considerably
more than five per cent. Frequently when loans ere
raised at an interest below the legal rate, the mode le
which the discount on prompt payment is calculated.
affords a rate of interest sometimes 7,8, or 9 per
cent. If the Usury Laws could riot be evaded, she
loan cootrectors would not be able to give the Mi-
nister such good terms; his transactions would be
cramped, if he were prevented from borrowing at the
market rate of interest. I have already stated my
opinion that the interests of commerce would he be.
nefited by the abrogation of these laws; and l huge
no doubt that persons possessed of coosi.lerahle cap..
01 in the United Kingdom, desirous of milting the
most of their money, would not transfer their capttali
,unless they could easily evade these Laws.
George Frere, Esq. examined.—l am a partner le
the house of ForstOr, Cook., and Frere, of Lincoln'sl
Inn. The laws against usury have had the effect dl
increasing the difficulty to country Gentlemen of bor.
rowing money upon mortgage. Indeed it has been
almost impossible to obtain money on mortgage at
legal interest ; and the consequence has been that
Gentlemen with landed property have been compelled
'to raise money upon annuities, at the rate of from
9 to I'2 per cent. ; when, if it had not been for these
restrictions, they might have procured money et from
six to eight per cent. In case of life tenancy, the se-
curity is made for one life only ; and in cases of per-
sons possessed of estates in fee simple, the securities
are commonly, as I have understood, made for three
lives, named by the lender. When application has
bean mathrte the Ceert of Chancery foes foreclosure;'
the Court has shown great indulgence on account of
the Kern of the times, and it has been very dial. i
cult to obtain a foreclosure. The difficulty of gbtain•
lag money open mortgage at the regular interest air.
tainly renders the landed property less desirable; and
least have impeded the sales and reduced the value.
I think that the repeal of these laws would be a great
public conveoience, and I am not aware of any in-
convenience.
Sir Samuel Romilly, a Member of the Committee,
ss.*mined.—Wilt you be kind enough to inform the
Committee, whether it is the course of the Court of
Chancery to refuse a foreclosure on account of the
*stress of the times?--Nn, there is no such rule in
the Court of Chancery, and Uwe known the Court
refuse applications to enlarge the time for foreclosing
an estate Needed upon no other grounds than the
distress of the times; the Court, however. generally
enlarges the time for redemption, upon the payment
of all the interest and costs, without any reference
to the particular state of the times; the Court does
that two or three limes, and sometimes oftener, and
though I do not recollect instances myself, I under.
stand that there are instances of the Court giving
more time on account of the distress of the times :
perhaps I ought to state, that although tile Court of'
Equity will give time before making a decree of fore-
closure absolute, yet the creditor may have recourse
to all remedies at law, besides insisting on a foreclo.
saes in the Coed of Equity; ind a Court of Equity,
In such cases, ran Ore the debtor no mike'', l have
known instances of a mortgagee filing a bill of fore-
closure, bringing au ejectment to get possession of
the estate, bringing an action upon the bohd Of the
covenant, and proceeding to take his debtor in ese..l
eolio*kl keeping him in eaecutiou, till he got eel
islsso*Ureclosure.
has year experience enabled you to form an opi-
nion as to the operation of the Usury Laws upon the
landed interest ?—As far as my experience goes, I
should say, that the laws against 'dory are very in.
jurious to the landed interest ; the effect of them, lt
think, is, that when ihe proprietors of estates are en.
der the necessity of raising money, at times wises
money is extremely scarce, .they are obliged to raise.
it by the granting of annuities, or in other nodes?
extremely disadvantageous to themselves.
Mr. Rowland Wimburn, p
partner in the house which has had the transaction
efi
many annuities. When I first knew that practicer, It
was chiefly confined to mere life-holders granting
annuities. Of late years there Ins been no money'
to be obtained upon mortgage, unless it has been
'trust monies, or monies which under the poettelll
of settletneot are directed to be laid out on mod.
gage, under the direction of the Court of Chancery;
and whenever monies of that kind hate been able to
be obtained very large sums of money, I believe, and
indeed I know, have been given for the procuration,
under the name of the bill of costs. Latterly, a
great number of annuities have been granted by per•
sons possessing estates in fee simple. Almost always
upon occasions of that kind, they postpone their ap-
plication till they are driven into a corner in point of
time) and it is very seldom indeed that their siteation

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will admit of titaf•kina of eittriry acid nei..7,
pincers mortgage money am the best of terms. •
Mr. Nehemiah M. • Rothschild szamined.—A.re
you not of opinion that the Usury Laws are ineffectata
in keeping down the rate of interest ?—Yes, cite.
teinly.
• Pave you found those restrictions injurious 54 the
discoing of bills ?—Not ip a commercial point of
view.-
You could always 'digestant good bale at five per
cent., that is, without any deposit Wing placed
Certainly.
To what do you impute that bills could be albs
counted at five per cent. when money could *et iwai
obtained upon the best landed securities at that rate Pi
First, upon bills they can always be seat into that
Bank ; the owner who discounts, can always re.:
discount them at the Bank of England, at aey time
when he wants the money.
Rave you ever considered the general operation of •
the Usury Laws, as hearing upon the value of money.
in England ?—Yes, I have considered it, bet I wowed
beg him to take this opportunity of delivering my
sentiments in writing.—[The witness delivered in the
following paper, which was read :]46 I think the
operation of the User, Laws, as bearing upon the
silos of money io England, of great importance to
tradesmen. In this cowry it is different to those
on the Continent : there, a bill drawn upon loch
persons, is seldom seen ; while in ibis Country they'
abound, and er. doubtless w great and necessary ac,
commodetion to that part of the community. Small.
manofireiticeri likewise derive many advantages from
this kittd of-insistence, as many of them haveTtiends;:
or a confidential person in town, on whom they drew
at short dares, against their good 4 sent to the Landow
market; ; these bills become negociable at the legal
rate of five per cent. discount, which enables scab.
persons to carry on their concern, not only with most
facility sod-advantige, hut to a much greater entente
It is impossible for me to say positively, what would
be the Consequence to this., and many others of a
similar description, were the Usury Law, repealed;
but I believe great advantage would, in many cases,
be taken of the necessities of. such persons, by the
lender demanding probably two or three times the
rate of interest from them on their security, as would
be required in discounting the bills of first and second
rate boasts ; therefore it appears to RIP, that the less
opulent should be protected in some way from being
"'posed to so great a reduction in their profits,
through the necessity of turning their capitals. by
immediately discounting their drafts at an eatrava.
gent rate. those persons not having hitherto had
much difficulty in discounting their bills at the legal
rate of fire per cent. discount."
Mr. Edward Wakefield called in and essmined.—
You hare been for many years conversant with land.
ed propeety, as a land surveyor, and ao agent and
land steward to several Noblemen and Gentlemen ?
—1 have.
Have you had much experience in the sale and
purchase of landed estates ?-11 have.
Wire you known much inconvenience to arise to
the landed Gentlemen, whets the market rate of in-
tereit was above five per cent. from the difficulty of
prorating loans upon the mortgage of estates ?
During the war, when the Government of the coun-
try was giving more than five per cent. for large
loans, sthe monied mots would not lead upon landed
security at so low a rate as the law determined for
them; the conseqeence was, that the borrowers, in
order to raise money, were obliged to grant annui-
ties at an enormous rate, which, in point of fact,
was °sly finding out the way of escaping from the
law.

Do you think that the late pressure upon the
landed proprietors would have been much relieved it
the Usury laws had not been in existence?--1 have
no doubt but they would; I could give a eery strong
instance, without mentioning names, which has late-
ly come throogb my office, of a Nobleman who pos.
sesstd as estate, open which there was not an entail,
and *pen which be was unable to borrow money upon
mortgage, and therefore began borrowing money
upon annuities, which increased his debt till he has
been obliged to sell it, and this is a property com-
ing to nearly 200,0001.
In consequence of annuities being granted over
large estates, does it not frequently happen, that
the proprietors are prevented from selling them to
more advantage, by dividing those estates?—That
was the case in the very estate in question, which
bad been sold in November, 1814, I believe in lots,
for somewhere about 150.0001.; but it was ne-
cessary to law down 160,0001. in order to pay off
the annuitant', whose securities ran over the whole,
lend who 'mild not permit a title to be made to any
*me lot.-
:Wee there set a very considerable loss trees the
impossibility of completing the sole, trim the annui-
ties being over the whole estate ?-1 have not the least
eloisht about it; and 1 think I may add, that I never
*new a landed proprietor who was driven to borrow
by way of annuity, bet that be increased 'his debt,
and In.the long run be was ruined.
Deyeo not think that coustant instances of this
kind most occur in times of difficulty ?—I hate no
doubt about it.
Does it not occur, that there ere freqnent in-
stances where landed proprietors will be exposed le
very severe loss, by not hekag able to raise money
upon particular emergencies?—Yea. •
Bare you observed, in frequent instances, that
lauded proprietors, in consequence of not being able
to take money, hare been obliged to sell their estates
at en enormous sacrifice of price ?—1 believe that,
lend is fenced is with so many, securities, that it
takes a much longer time to force a sale, than almost
any other commodity.
Weald it not have been more advantageous to have
borrowed money upon mortgage, at seven and a half
per cent. interest, than to bare sold an estate in
11116.?-1 have oo doubt that is would have been ad-
vantageous to many landed proprietors to have so,
done; but that depends upon the opinion which those.
persons might have eutertaiaed opoa the futon vale,
of laud.
Do you think /bat land would be increased in ea..
lee, if the proprietors had it in their power to great
a fair benefits security on it, at the• market rate of
interest, at the time, bullied of being obliged to have
mourn to annaitire, and to more espeusive modal
of raising money ?-1 think, in pokyt of principle,
like all other things, it may be more valuable by