rsrRY. 



principles of justice. If A lets his horse to B for 

 a journey, for B's pleasure or profit, no one doubts 

 the propriety of A's asking and receiving a compen- 

 sation for the hire of the horse. Why, then, should 

 not A be equally entitled to a compensation, if he 

 lends money to B for the pleasure or profit of the 

 latter? If "the compensation asked be a reasonable 

 recompense only, for the inconvenience to which A 

 is put, or for the hazard which he runs of not re- 

 ceiving back the thing lent, there is no difference 

 in the principle, whether the loan be of the horse 

 or of the money. If it be exorbitant or illegal, the 

 impropriety and injustice equally apply to each case. 

 And yet it has been rare, either in the policy of na- 

 tions or the opinions of moralists, that the transac- 

 tions have been viewed in an equally favourable 

 light. One ground of the common prejudice pro- 

 bably has been, that money, being the common me- 

 dium of trade and commerce, is more generally in 

 demand, and more universally useful to all persons, 

 than any other commodity ; and therefore the whole 

 community are eager to borrow upon as cheap terms 

 as possible, and the lenders are as naturally desirous 

 to lend upon as high terms as possible ; thus be- 

 getting a mutual jealousy, and a strong tendency 

 to hard bargains. In times when money is scarce, 

 the necessity, as well as the difficulty, of borrow- 

 ing, is greatly increased, and an inflamed spirit of 

 discontent is generated against those who possess 

 the means of relief, and will not afford it, but upon 

 the terms of an exorbitant compensation. They 

 thus become odious, first as individuals, and next, 

 when they become numerous, as a class. In this 

 way, money-lenders are deemed to have a peculiar 

 interest hostile to that of the pubb'c at large ; and 

 even if the laws do not prohibit the charge of high 

 interest, they are stigmatized as extortioners and 

 usurers. Besides, the poor, the extravagant and 

 the dissolute, generally live beyond their means, and 

 therefore have the strongest desire, as well as the 

 strongest necessity, for borrowing. In proportion 

 as their wants rise, they are more ready to contract 

 for high interest ; and as they are unable to pay 

 when the proper time for payment arrives, they are 

 compelled to submit to further exactions ; and the 

 creditors, as they perceive an increasing hazard of 

 losing the principal, are disposed to indemnify them- 

 eelves against the risk by additional premiums. 

 From these combined operations, always going on, 

 in such cases, with accelerated force, there is al- 

 most a certainty of ultimate ruin to such borrowers. 

 The creditors are thus compelled to more vigilance, 

 and to more effort to obtain or secure payment, 

 until, at last, the borrowers seem to be the victims 

 of misfortunes which they are unable to resist, and 

 the creditors to be the instruments of harsh and 

 vindictive oppression. Thus public sympathy be- 

 comes enlisted on the side of the sufferers, without 

 adverting to the rights or the indulgences of the 

 creditors, simply because the latter can bear the 

 loss without as much suffering. 



But a more extensive ground of prejudice has 

 been derived from religious sources. Those who 

 are enemies to the allowance of interest in general, 

 often make no distinction between that and usury, 

 and hold each to be equally reprehensible. Chris- 

 tians, in an especial manner, have drawn arguments 

 from ihe prohibition of usury by the law of Moses, 

 among the Jews ; and the school divines, partly on 

 this account, and partly on the authority of Aristo- 

 tle, who has fancifully said that money is naturally 

 barren, and to make it breed money is preposterous, 



have not hesitated to pronounce it contrary to the 

 divine law, both natural and revealed. The canon 

 law, too, has proscribed the taking of any, even i In- 

 least, interest for the loan of money, as a mortal sin. 

 It is not surprising, under such circumstances, that 

 men, in the dark ages, should have looked with 

 horror upon the taking of interest, and that the. 

 military and feudal lords of those days, who were 

 always needy, and always borrowing, full of the 

 pride of birth and rank, and full of disdain for the 

 humbler avocations of life, and especially of Ilio^' 

 connected with the accumulation of money, should 

 have looked with contempt upon the usurer, and 

 have augmented the popular delusion. But that, 

 in enlightened times, the religious scruples to which 

 we have alluded should still have prevailed, is one 

 more illustration of the difficulty of correcting error 

 when it has once fastened itself on the community. 

 Nothing can be clearer, than that the Mosaic pre- 

 cept was merely a political, and not a moral pre- 

 cept. It did not prohibit the Jews from all taking 

 of usury. It only prohibited them from taking 

 it from their own brethren, the Jews. But the 

 Mosaic law, in express words, permitted them to 

 take it of a stranger. The Jews have, accordingly, 

 been great money-lenders upon interest in all ages ; 

 and this has, probably, in Christian countries, still 

 more augmented the prejudice against this vene- 

 rable, but unfortunate people. Indeed, so strongly 

 is this prejudice fixed, that a man of a sordid and 

 avaricious character is, even now, proverbially 

 called a Jew. There is, however, not the slightest 

 foundation, either in natural or revealed religion, 

 for any prohibition against the taking of interest 

 upon money, any more than against the taking of a 

 profit for the use of any other thing loaned. 



But the policy of most nations has not suffered 

 the right or rate of interest to rest upon the mere 

 moral law, or the doctrines of religion. In almost 

 all nations, in modern times, the legislature have 

 regulated the subject, and prohibited, under severe 

 penalties, all contracts and bargains, by which any 

 excess of interest, beyond the rate prescribed by the 

 law, is secured. In many countries, they have de- 

 clared all such contracts utterly void, so that even 

 the principal loan cannot be recovered; thus mak- 

 ing the supposed want of conscience, on one side, 

 a full justification of the grossest want of conscience 

 on the other. In some countries, they have allowed 

 the interest, if paid, to be recovered hack. In 

 other countries, they have refused this, and adopted 

 an intermediate course, allowing a recovery of the 

 principal, sometimes with a small interest, and 

 sometimes with no interest. Among statesmen and 

 political economists, it has been for a long time a 

 vexed question, how far the regulation of interest 

 upon money is founded in sound policy, or public 

 convenience. That it should he regulated by the 

 legislature to the extent of declaring, by a general 

 rule, what interest shall be allowed when the parties 

 have been silent, and what shall be allowed where 

 there has been a wilful delay of payment beyond 

 the stipulated period, would seem to be a proposi- 

 tion susceptible of little question or debate. It is 

 far better to have some certain rule in such case*, 

 to furnish a universal guide, than to leave the 

 amount to be ascertained by a judicial decision in 

 every case of difference between the parties. And 

 where the parties have been silent, if such a rule 

 exist, it may fairly be presumed to be acquiesced 

 in or adopted by them. The question, then, is not, 

 whether the law ought, in cases unprovided for by 



