104 



FARMERS' REGISTER— ESSAY ON USURY LAWS. 



thirds of its real value under the hammer, sells 

 well. Wliat then is the ellect of the protecting 

 law in this case? Why to make the debtor, by a 

 sale- of property, pay 33^ per cent, virtually for 

 money, instead of six." In times of great pecuni- 

 ary embarrassment, like tlie present, the property 

 sold ofiendoes not bring more than atburtli or fif h 

 of its value. It v/ould be better in such cases that 

 the debtor should pay two or three hundred per 

 cent temporarily on money, than have his ])roperty 

 thus sacrificed. If, during these pressures, money 

 prices tall never to rise again, llien there would 

 be no advantage in borrowing money to save pro- 

 perty: but every body knows they are of short 

 duration, and j^rices quickly regam their former 

 level. Under these circumstances, the wisdom "of 

 no set of legislators that have ever yet appeared 

 in this world, can determine the rates which may 

 be advantageously given for money by the bor- 

 rower. Sucli circumstances evidently throw the 

 B djject of interest entirely beyond the reach of 

 definite calculation, and of course, out of the region 

 of wise legislation. And suppose for a moment 

 that a rate of interest, too exorbitant for the occa- 

 sion, should be obtained, may not the borrower 

 soon relieve himself trom the pressure by paying 

 off his debts by new loans? whereas if your pro- 

 perty is once sold under the hammer, at one-third 

 or one-fifth of its real value, there is tin' end of the 

 matter — the sacrifice is perlect and complete, with- 

 out the possibility of palliating or averting it by 

 subsequent good fortune. 



We know that tradesmen very frequently see an 

 excellent opening for the employment of caj)ital: 

 if they are enabled to command it immediately, 

 high profits may be realized, and their Ibrtunes 

 made. Such men must go bej^ond the ordinary 

 rate of interest to procure the capital required; but 

 the wisdom of the law steps -in, and interdicts the 

 transaction, and thus robs the individual of his 

 profits. Has this man, do you think, any reason 

 to thank the guardian law lor its unlucky inter- 

 ference7 Six per cent, is the legal rate in Virginia, 

 and I believe for some time past has been the 

 market rate too; and yet I have known instances 

 of individuals borrowing at the rate of ten per 

 cent, both for purposes of trade and agriculture, 

 who have been enabled by their returns, to pay the 

 interest, and reahze liandsome profits. Of course 

 this happens only under peculiarly advantageous 

 circumstances, and therefore, ordinarily to borrow 

 money at ten ))er cent, for business or trade would 

 be ruinous to the borrower, iint when those cir- 

 cumstances do occur, the borrowing is an advan- 

 tage, and the law is a very unwise one, which 

 interposes a bar, and declares its judgement su- 

 perior to that of the parlies concerned. 



A young man enters upon the great theatre of 

 life, fidi of buoyant hope and of laudable zeal. He 

 wishes to engage in the' business for which he is 

 best prepared. Capital is wanted — having noth- 

 ing but his energy, talents, and prudence to back 

 .him, he is obliged to give a little more than the 

 ordinary rate of interest to cover the great risk 

 occasioned by lending upon personal security alone. 

 But the wisdom of the law dissipates all his hopes 

 and projects, by preventing his borrowing at such 

 a rate as his circumstances may alone enable him 

 to do. Can there be wisdom in a law which thus 

 arrests the laudable enterprise of the aspiring 

 young man, and forc-es him into a state of inac- 



tivity and apath}? The French pro\'erb well and 

 truly, asserts "c'estle premier pas qui coute." The 

 first step in life is' the most ditlicull and the-'^ost 

 important; upon it Vv'ill generally depend your weal 

 or woe. If then, when you come ibrth, with all 

 ihe ardor of youth, pressing iorward to.the high 

 mark which' imagination has pointed you to in 

 the vista -ol" the future, and find all your enthusiasm 

 repressed, and ardor chilled, by the unwise inter- 

 lercnce of the law,"you sink into listlesness and 

 idleness; the principle of energy is destroyed with- 

 in you; and you are drawn by a desire of e:!feke- 

 ment and by a disposition to relieve the insufferable 

 tedium of idle hours, first into dissipated society, 

 and then through all the scenes of youthfiil' fi-olic 

 and youthlul sport, to the darker vices of. gambling 

 and drinkmg, with all the black ' and melancholy 

 train consequent on these prolific sources of mis- 

 chiel' to the whole human fmnly. "Idleness" 

 saj's Banyan "is the devil's workshop," and the 

 money making propensity in the human farriily, 

 much- as it has been reviled and slandered by the 

 unreflecting, and unthscriminating observer, tu^ns 

 us often from the path of iniquitj' and vice, gener- 

 ates habits ,of regulaHty and order, and saves us 

 from th;rt- intolerable idleness, that dreadtul ennui 

 which drive too frequently their unfortunate vic- 

 tims to the card table and the bottle. My warm 

 and urgent advice to you, then is, that you should 

 as early as possible when your education is com- 

 pleted, and -you are prepared to enter actively upon 

 the bustling scene of 'lile, engage in some business, 

 some occupation, which may afford you profit and 

 employment. A short seasori of vacancy at this 

 period ol' your life may be decisive of your future 

 liite: I cannot fhcfefore but look witli an eye of 

 condemnation on any law which has a tendency 

 to withhold capital from the grasp of the ardent 

 and young adventurer intodife. 



We have already seen that profits in some 

 trades are much higher than in others, owing to 

 greater risk, uncertainty, expense, disagreeable- 

 ness, &c., and that money lent to the adventurer 

 in these hazardous trades, u]ion the credit of the 

 business alone, must necessarily and properly be 

 at a high rate to cover the great risk.. Again, I 

 have shown you that higher. profits are made on 

 small capitals than on large ones. Hence business 

 fiov/s towards great cities, because of the gi-eat 

 capital there accumulated, and the consequent 

 cheap and advantageous .manner in which all 

 trades of an enlarged and extensive character are 

 carried on. Capitalists Avho have millions at com- 

 mand are contented with two or three per cent, 

 profit, men who have S^IOOO or #2000, or still 

 more, >B100 only, must aini for higher] profits: two 

 oi- tliree per cent.- profit would not stimulate ta 

 action at all in the latter case; 50 or 100 per cent. 

 ))rofit must be made, or the "business would be 

 ifiven up. In the April No. of the Farmers' Re- 

 gister, mention is' made of a capitalist in Kurope 

 borrowing- ,9 10,000,000 at two and a half per cent, 

 tor the purpose of talcing up some Pennsylvania 

 stock. This is a good rate of interest on so large a 

 capital, but it would not do for a caphal of ,^10,000 

 and much less tor one of i^lOO. It is for this rea- 

 son that the small capitalists take possession of the 

 little trades, -and the large capitalists, push fbr- 

 ward tlic great business of the world, and thus 

 arises a most salutary- division of lobor throughout' 

 creation. The selling of poulti^'j of butter aud 



