374 Tradesman and Merchant — Commercial Fopulalion 



per cent 



Italy ; 3 



Holland 3 



Barbadoes 10 • 



Ireland 7 



Sweden 6 



France 7 



Spain 10 



Scotland 10 



Turkey 20 



England 5 and 6 



This disparity was a marked disadvantage to the EngUsh merchant 

 and tradesman, and statesmen sought to remedy it.^ A common 

 theory was that the commercial rate was determined by the legal rate." 

 The power of the legislature over the rate was a question of much de- 

 bate. Some caught the truth that trade made low interest, and that 

 legislation would be ineffectual, either lopping off trade or causing 

 e\asion.^ The interests vested in the pubHc debt after the Revolu- 

 tion prevented reductions as far as they could.'' But the increase of 

 trade, wealth and capital lowered the commercial rate in England to 

 3 and 4 per cent before 1740, and the English merchant enjoyed 

 more of an equahty of competition.'' 



The actual disadvantages under which the English merchant 

 labored during the greater part of the period studied, from this dis- 

 parity of interest rates, had several direct effects. In the competitive 

 markets the Dutch could undersell the English by the difference in 

 the amount of interest. •"' The higher rate made English merchants do 

 business on a smaller scale, ^ and invest in business which made a 



' Interest on monc\- was first allowed in 1546, and again in 1571 ; the maximum 

 rate was 10 per cent. The legal rate was reduced to 8 per cent in 1624, and to 

 6 per cent in 1651 and 1660, and to 5 per cent in 1714. See 37 Hen. \TII, Cap. 9; 

 13 Eliz., Cap. 8; 21 Jas. I, Caj). 1; 12 Chas. II, Cap. 13; 12 Anne, Cap. 16; 23 Geo. 

 II, Cap. 1. 



- Very full discussions of the principles are given in Gent. ]\Iag.. 1737: 717-36; 

 771-788; Dobbs, Essay on Trade, 18-29; Gilbart, 165-170. 



'North, Discourse, 4, 7-8; PoUexfen, Discourse, 60. Gilbart, 165 thinks there 

 was much propriety and justification in the passage of the early laws fixing the 

 commercial rate of interest. See his reasons. 



■• See Barnard's efforts to reduce the interest on the public debt 1737 and 1750. 

 Bourne, Eng. JNIer., 294-5. 



5 Gent. Mag., 1739: 10; "Wealth and C\)m.," 1; Chalmers, Estimate, 98; .Vllen, 

 Ways and Means, 9. 



•^ Barbon, Discourse, 79. 



" Culpepper, Plain Eng., 15. 



