Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1817-06-06


" violated the necessity for borr owing,
" an TIE lesire 10 lend, combine TO e.
& !g-lc ihcm. fine OILY effect which they
" iil's,acc, Is ~ raise'the rate of interest.
" rs INCREASING the risks TO which the
" iciidsT j. exposed.
g |, - ,h1s, that Il spirit of usury has
=" been Invariably excited by an attempt
&C To limit interest, or 10 abolish il entire
/" ~. The more violent the deuunciati-
OIL, the more rigorous its execution, the
higher the interest became. The gfea-
&C ter the risk encountered by the lender,
the more necessary il became thar he
should be Unidentified by high premi-
um of assurance. Mahomet proscri-
bed loans on interest what happened
ia Mahometan Countries Money nus
lent AT interest, and the lender was o.
bligcd to procure indemnity. not only
for the u.s. of hi Capital, but for the
hazard violating the law. The same
thing occurred among Christians as
long as they prohibited lending al int
rest and when the necessity for bor-
rowing caused them TO tolerate it "a
mong the Jews the latter were exposed
to so many humiiations, reprOaches
and eXtortions, that an uSurious inte-
rest was alone capable of covering their
notifications and multiplied losses.
In Countries where the rate OF n,e-
rest IS not fixed by law, il is not higher
on that account. II was lower in HJl-
land than in any other Country in Eu-
rope, and Holland has never known
rate of interest fixed by law. 1t is a.
polished in France, and yet they do not
lend more usuriously there than else
where But when in 1866 Louis 18th
reduced the rate from to- 4, money
was still lent at 5, and one per cent.
was added as a premium of insurance
" against the risk from contravening the
law. The same thing took place i'm Ii
vonia, when IN 1856 the Empress Cath
" arine reduced the rate from to 5. Tn
" til that time money could be got on
good security at 6 : from that time z,
and even more were given.
Nevertheless, there are cases where
II is proper that interest should be re-
gulated by law that is, where money
Is repaid, and there has been no agree
ment as to the rate of interest. For ex-
ample, a debtor or depositarv who
keeps sum OF money, against the con-
sent OF the proprietor guardian, an
administrator, husband, bound TO
make restitution, owe, in many cases.
interest on the Capital for which they
are responsible. In those cases the
rate of interest should be prescribed by
law Tor The ri uu | because there has
been no previous stipulation. But this
rate ought not TO bear the name of le-
gal interest, because there ought to be
no such thing as illegal interest any
more than an illegal rate of exchange,
or an illegal price for wine, cloth, iron.
and other merchandise.
he risk TO which lenders are expo
seq by the administration, affects moi
m M mt Loo l.. IL
are made on the best security. In ber-
rowing on pledge, or hypotheca,ion
there can be no risk TO the lender. ex-
cept when the administration is vicious
since The borrower, whatever NAV be
ms conduct or the result of his specula-
:, tons, has given 10 the lender suRici-
ent security. In supposing the admi-
nistration good, the rate of interest i'm
" these cases will always be the simple.
necessary interest: If the premium of
insurance Is incorporated in the trans
:, action, that fact proceeds always from
adetect III the administration"
There is much more on this subject in the
Chapter, from which the above is taken and i'll
that winch follows. The author in oppositiou TO
Locke, d0nteSqueu, and Blackstone concurs
| with Hume and Smith, in the doctrine that the
current rate of interest depends not on the
qnan.it! OF money IN the country, but OIL the
quantity OF Capital in the mark et for loan and
the demand for that capital. In young conn.
uies, ne says, the demand for capital prec edes
us accumulation In these countries interest
Is high; " Russia and the U. States of America
are the two countries in this situation, q there
tore interest is higher there than in the coun-
tries OF Europe, where the developement of
inohstry commenced at an earlier date"
He says, book 8. page IO3-" In proportion
as a country becomes richer, the mass of capi-
tai IN the market for loans rises more and more
10 level with the demand, and interest falls
by degrees to its proper standard"
FROM passage in subsequent part of the work it
appears that BonapaIte was still on the fIrone f France