94. REPORT—1849. 
smaller farmers and labourers, who were thereby forced to carry their deposits to 
charitable banks, and obtain their loans from charitable loan-funds at 93 per cent., 
or else resort to local usurers at from 25 to 100 per cent. He ascertained that this 
arose from the laws relating to usury, which made it illegal to charge more than 6 per 
cent. for loans under 10/. where no pawn was made, although pawnbrokers were 
allowed to charge on some’sums more than ten times that per-centage. Some per- 
sons alleged the rates of interest which pawnbrokers were allowed to charge to be 
exorbitant ; if this was true, the best remedy would he to leave the trade in money 
perfectly free, and then the competition of money-lenders would reduce the rate of 
discount, whether on deposit or on personal security, to the least possible amount. 
But there were two circumstances which indicated that the rate of interest was not so 
excessive as it appeared to be; first, the effects produced by the lower scale allowed 
to be charged in England and Scotland; secondly, the failure of the Monts de Piété 
established in Ireland for the purpose of lending upon pawns cn more favourable 
terms than pawnbrokers. The restricted per-centage allowed to be charged on small . 
sums by the regular pawnbrokers in England and Scotland had set up a class of 
tradesmen, known in London as “‘ dolly-shop keepers,” and in Scotland as ‘‘ wee- 
pawns,” who evaded the law by nominally purchasing from a borrower articles of less 
value than the licensed pawnbroker will receive, with a tacit agreement that if the 
latter comes back in a month or six weeks at furthest, he will get his goods on paying 
the sum lent, and a bonus, this bonus being a penny per week for one shilling, or 
at the rate of 4333 per cent. per annum. The obvious remedy for the evils of ** wee 
pawns,” and the other evils connected with the trade of pawnbroking, was, in Pro- 
fessor Hancock’s opinion, to leave that trade perfectly free; let borrower and lender 
make their own bargain, and let the law not interfere except to enforce bond jide 
contracts, and to protect against frauds. As to Monts de Piété (whose introduction 
had been advocated by Mr. Henry John Porter at the Meeting of the British Asso- 
ciation in 1840), the attempt to establish them in Ireland had, after the trial of several 
years, ended in a complete failure. The whole investigation of the facts with regard 
to pawnbroking, ‘‘ dolly-shops,”’ ‘‘ wee-pawns,”’ and Monts de Piété, taught a lesson of 
the folly of legislating on different principles for the poor andrich. The real remedy 
for the evils of the system was to establish the same freedom in lending small sums 
that had for some years existed with regard to large sums.. The defenders of the pre- 
sent state of the usury laws could be reduced to a complete dilemma. For how stood 
the case? The merchants applied to Parliament for a suspension of the usury laws, 
on the ground that these laws, instead of keeping down the rate of interest when any 
commercial crisis tended to raise it above the legal rate, really raised it much higher 
than it would have risen, compelling them to pay 20 or 30 per cent. when they need 
only have paid 8 or 10 per cent. If this reasoning were correct, as all economists 
admitted it to be, could anything be more cruel than to expose the poor to the evils 
from which rich merchants had been relieved? But if the economists were mis- 
taken, why was the suspension of the usury laws not repealed, and why were pawn- 
brokers allowed to violate the spirit of these laws? In the commercial crisis of 1847, 
whilst the Prime Minister advised the Bank Directors not to charge less than 8 per 
cent. on loans on approved security, to the rich merchants of London, the law made 
it illegal for any one to lend small sums to poor farmers to help them through the 
same crisis at a higher rate than 6 per cent. How were they to get money at 6 per 
cent. when the market rate of interest was 8 per cent.? When merchants were al- 
lowed to borrow at 8 per cent,, why should farmers and the poor be prohibited from 
borrowing at the same rate? 
On the Discovery of Gold in California. 
By Prof. W. N. Hancocs, LL.D., M.R.I.A. 
Professor Hancock proposed to investigate the following questions :—First, on 
what causes did it depend whether prices in the British dominions would be affected 
by this discovery? secondly, How could we ascertain whether as a matter-of-fact 
our prices were affected by it? and thirdly, If our prices were likely to be altered 
by it, how could we guard against any extensive change in prices being produced? 
These questions were of immediate and practical importance, for the discovery of 
the abundant gold and silyer mines in America in the sixteenth and seventeenth 

