Year: 1866

Usury Laws.


There are some errors in political economy
which seem to be so deeply engrafted In the
human mind that no amount OF argument
or experieuce can dislodge them. Of this
description, in my opinion, are all laws which
undertake to discriminate between money
and other commodities, and toset fixed and
uniform value upon it, whilst they are per-
mittsd TO fuctuate according to the laws Of
snnnlv and demand 1t has often been shown
that such laws are erroneous in principle, ~
operative for the purposes intended and SUD
versiye of the very ends they proieSSeulS
have in view The peculiar circumstances
of the country at this crisis IN her history
and the great demand for capital IN recon-
structing its industry and developing It's no"
latent resources, have given occasion Tor
the remarks. however trite in themselves,
which follow.


If legislature were to undertake to say
that no corn, no bacon, NO cotton, should De
sold at any other than price fixed oy Itself
the whole community would denounce 1t as
wicked or imbecile Such legislation was
common in the most enlightened countries
few centuries ago, and there are not want
ing instances oft in more recent times. 1t
has generally been based upon dearth, real
or supposed, of the commodities affected by
it. and the end intended to be reached was
the protection of the poor from the eXtor-
tionate demands of the rich. Experience
having clearly proved both the futillty and
the mischievous effects of all restraints upon
the free interchange of other commodities,
it remains only to apply its teachings to the
article money. Suppose there were (as III
fact there isl q scarcity of bacon III the
country, there must be suffering amongst the
people. Suppose, also, that there were an
act of the legislature prohibiting tie sale OF
that article at higher price than the one
fixed by itself say twenty cents per pound
The merchant finds the article So high priced
every where that he cannot without loss,
bring it here and sell it at the prescribed
rate In the case supposed, all become sui
ferers, and no one who respects the law Is
benefited. But the law is felt to be InIquIt-
ous and to work great hardship, and so un-
scrupulous men do not hesitate to disregard



into the State and to sell it for say thirty
cents per pound. They will not do it, how
ever, for they will argue with themselves,
and ought to say to their customers: 1T IS
true, | could afford to sell for thirty cents If
the law permitted me; but in doing so, as
the law stands, | should have many risks to
run There is first the risk of being indicted,
-, l,y,r
selling at all for more than the prescribed
rate | also run the risk of being sued and
compelled to refund all that l receive over
and above the legal rate with costs, besides
harassments and vexations innumerable. !
can have no security that any one transac-
tion will be free from these troubles and in
conveniences, and it is scarcely in the nature
of things that they should not arise in some
instances Against all these risks | must
indemnify myself so far as | can, by the in
creased prices of my goods. Fifty cents per
pound is not full indemnity, but 1t Is the
least that can or will take" Here, under
the false pretence of protecting the poor
from the rich, we see a grieyOus injustice
done to all classes Nor does the evil stop
here. The law is violated and brought into
contempt, and when this is permitted i'll any
instance, the bonds of society are slackened;
the reverence for law which should be habit
ual in the minds of all men Is lowered, and
the tendency of society is downward.


Whatever there may be of truth in these
remarks, is just as applicable to money as to
| the article named. The train of events
which caused a dearth of the one, has affect
/ ed the other in like proportion: and the
restriction laid upon the free Use of money
is operating as injuriously upon the interests
| of the community as would the supposed re-
striction upon the sale of bacon. Scarcely
a day elapses which does not witness sac
rifces submitted to for the purpose of OBJ
tanning the temporary use of small amounts
of capital, which far exceed those of the
case supposed-sacriices which render all
business unhealthy and precarious, and
when incurred on a large scale must end i'll
ruin. The evil is undoubtedly crying one,
and much of it traceable to unwise legisla-
ton.


1t is difficult to conceive why a man who
| is presumed to know and to be capable of
attending to his own interest in all other
respects, should be held incapable of bar
gaining where the use of money is concern
ed. He may sell his lands, house, or any
thing that he has, for much less than the
value, and the law holds him to his contract
but if he put too low an estimate on his
own credit, or be driven by the urgency of
his wants, to pay more for money than
the arbitrary estimate placed upon it by the
law, it forthwith annuls his contract, stulti
tes him, and Injuries the man who may have
afforded him a timely accommodation. His
property may be upon the eve of a forced
sale, and a sum much beneath its value
would relieve it. His neighbor may be will
ling to loan him money, but will not do sc
ut the legal rate. If the law were not in the
way, they eould come to terms satisfactory
and advantageous to both. That neighboI
may buy the property for less than he was
willing to loan upon the faith of it, and the
law regards the transaction as legitimate
and fair Money, like everything else, is
worth what it will bring but in some
places and under certain circumstances, it
has an extraordinary value; and such is the
case now and here. The close of the wal
found the country nearly bare of it; the
cotton which has since been sold has scarce
ly furnished the means of supplying the
wants oflife, and the legal rate of interest is
not likely TO tempt much capital in this
direction. The men who have it in other
parts of the country can use it more safely
and conveniently at home


There should be a vigorous and united
effort to repeal law which is at all times
useless and often pernicious in its effects