Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1856-01-15
REPEAL OF THE UsURY LAWS.

nEE CAL oF INK SSSN4 A~h'''
In former article on this subject, we examined
some Of the arguments usually advanced in support
of auti-usury laws. We showed that such laws were
sustained by any precept of the Bible the profit
biton therein being only municipal regulation Pc
culiar to the Jews, and which It would be sensciess
in nations, differently situated, to adopt. We also
proved that money does not receive its value from
dictum OF governments, but was regulated by the
great laws of value which govern every other COM
modify, i.e. the prime cost OF production and the
supply aud demand. We also demonstrated that tho
repeal of our anti-usury laws would benefit the needy
borrower in every way, and could possibly nure on
y that class whose trade it TO oppress by cItor-
tionote loaus. -- ...
We desire, in the next place. to examine the effect
of sp,iu.ury sws historically. The friends OF these
most unwholcsoms restrictive statutes, answer the
arguments advanced against them, by saying that
they arc distractions and theoretical unsupported by
actual experience Let Us see whether The answeri is
true.
The history Of every nation, ancient and modern
proves that the complaints Of money borrowers
ssan.t money-lenders have ever commenced with
;s first efforts of the government to control the rate
Of interest money; aud that these complaints, lead
ing stringent legislation have increased part
oassm with the rigor Of the laws. Thus. in the ear
licr periods Of Roman history, we hear nothing Ut
such complaints because free trade in money exlsted
but so soon as the government undertook to manage
dealings in money and to prohibit restrict the rate
of interest," just 90 soon do We hear loud and bitter
complaints against extortionate usurers. These
complaints led to ssverer laws, which, in their turn,
led to still louder complaints, until as We are iuform.
cd by Taotus, shis became the must frequent cause
of sedition and open rebellion. At ono time, when
the matter came before the Roman Senate, 1t found
that largo majority Of the Senators were deeply in
vuved in the violation Of these laws, which they had
helped to enact. 1t was ascertalned that even mo
viruous hrutus had received fory.hve per cent. OH
money loaned. "The price OF money" says Montes-
quisu, "ruse higher just in proportion to the severl-
ty Of the law and the danger Of the borrowers taking
advantage Of it." Mcpherson, in his history Of COM
merce, besrs the same testimony. "The clamor and
persecution, says he, "raised against those who took
in,eres, for the use Of money, violent, that
they tthe lendersl were obliged to charge it much
higher than the usual price, and hence the usua rate
Of interest what Ne should now call most exor-
bitaut and scandalous usury."
The Koran prohibits all interest upon money, and
henco We fud that, in all Mahomedau countries the
rate of interest is most erorbtant Indeed, we are
informed by travellers, that interest in Mahomedan
countries il ten or even twenty times as great in
countries where its receipt is allowed
Hallam tells Us, that during The 18th century, when
the rate Of interest in Italy and Cataloua where par.
ties allowed, for the most part, to make their
own bargains, was comparatively moderate, while in
Franco and England, wherei it was wholly prohibited,
twas e1orbtantly high Hume says that in the times
OF Henry VI Of England when all interest was proh.
bited, the lowest rate Of ;ntoyeEt nae fourteen per
cent. The following fact, which is we'll authenti
gated speaks most concu,ively upon the effect
Of such restrictive laws. In 1865, France made
6ye per cent. the legal rate Of interest. In
l766 the law was changed and the rate reduced from
avo to four per cent. lts said that before hS change
loan. could Aare been eGsy obtained, good security,
Of fre per cent 6ut an additional PER cent. ras no."
charged to eouer III. rIk of egoay. The same thing
happened in Livouia, in 1876, when the Empress
Catherine reduced the legal rate from sx to Ave psr
cent SO soon as the change was made, the market
rate Of interest ross one per cent higher.
In England, during the reign OF Henry W., as
already stated the lowest rate Of interest was IL per
cent, although the taking of any was sernly prohibi-
ted This remained the current rate until the law
was changed and III per cent was allowed. In the
preamble to this law the following remarkable Ian
guage occurs. "The prohibiting act Of Ed~Grd L.
hath not done much good as mns hoped for; ont
rather the rice Of usury hath much more exceedingly
a6ounded, to the utter undoing Of many gsatlrme@,
merchants, occnpiers and others, TO the importa6h
hurt Of the Commonwealth"
! AL laws against usury were abolished by the
Revolution in France; YET. it is sad that NO rise al
Interest followed. In Holland there gro nc laws
agsns. ysgry, and we iud that the rate of interest
here 10 lower than iu any other country.
Such il tia uniform testimony OF history. We
defy the production of single contradictug fact
The proof is conclusive and should convince every
reasonable aud impartial man. But lot us see II we
cannot add to this testimony by facts of more recent
| date
The auti.usury laws of England have at last yield
ed to half century of fierce attack. The test OF
their injurious effects was most thorough and con
yinciug First these laws were repealed as to nego-
table paper and the effect Of this partial repeal was
most seusibly experienced during the money 2reSsuFs
of 1887. After this the general law was repealed tor
one year at the ead Of that year, the repeal for
aEeher year snd 30 on, from year to year the test
Haa applied, and, it being demonstrated that the re-
peal worked great relief to all branches OF trade and
comaoroe, the repeal was, in 1854 made perpetual
Never was legislation more cautious and conservn-
tive-never was the effect Of innovation so carefully
examined and, never was it's benefit more clearly
demonstrated. The Bank of England, the largest
money Institution known to ", has been released
from the operation Of the aati:usury laws for about
t.euty years. yet we know that ta rate of interest has
always hesu exceedingly low, when compared with the
Bank rates in this country. 1t was but the other day
that we received news stating that the Bank OF Eng
land had raised the rate Of interest to per cent? and
the resu was almost panic; while, in this country,
We think little Of paying double or treble that rate, in
times Of pressure.
Anti-usury laws can have no other effect than that
which we ascribe to them. They mA2t drive capital
from the lpsn maket whenever the legal rate is less
than the current worth Of loans. They must, here
fore, HASTEN, ,SrEsstrY AND PRoLosG epery pressure
IN TIE money market They trammel Commerce in
the times When she most needs liberty they iniure
III like manner svsry other interest, and work great
moral evil upon society. These effects We propose
10 trace in our next article on the subject.
0 g.
THE CHALLENGE AMENDED.
Yesterdays Wing says that while it is "an1ious
LOT puoic meeting Of the citizens of Richmond in
oraer 10 AFFORD them fair opportunity of Expressing