FARMERS' REGISTER— ESSAY ON USURY LAWS. 



107 



steam car, the cotton mills, power looms, and spin- 

 ning m.achines, those miracles of the nirc, are the 

 resuhs of their inappreciable labors. It is the pro- 

 jector who has created the vast ditlcrence between 

 the savage of North America and the cix'ilized 

 European. It is the projectGr who has created the 

 almost unmeasurable land ol' luxuries and cornforts 

 enjoyed by the poorest peasant of modern times, 

 biit which" the emi^erors and kings of the ancient 

 world were deprived of. To raise our voice 

 against the projector is in fact to declaim against 

 the progress of civilization. But projectors ollen 

 fail entirely in their schemes, and the capital bor- 

 rowed and consumed by them, is a clear loss to the 

 community. I am willing to grant all this, and 

 even to allow the failures to be double, triple or 

 quadruple the instances of success: the fierce of our 

 argument is so exuberant, as to allow of any num- 

 ber of Jailures short of the whole, and still be 

 sound. There ma}^ be ninety-nine lixilurestbr ex- 

 ample, before the discovery may be etiected, but 

 when the discovery is once made, its benefits may 

 endure forever. Columbus was a projector. He 

 discovered a new world which was to be the home 

 of the pilgrim, and the asylum of the persecuted ol 

 all nations. If the whole" weahh of Portugal and 

 Spain had been sunk in this discovery, the discove- 

 ry would more than have compensated the loss. 

 Fulton was a projector: and the very day that his 

 boat moved by the impulse of steam power on the 

 Hudson, he gave to the world, not what Avould 

 compensate alone for the failures of those engaged 

 in the investigation of steam power, but what 

 would more than compensate for all the failures, of 

 all projectors, from that moment to the present 

 time. He gave to the world that Avhich has 

 changed it^aspect and done more tbf the progress 

 of civilization and wealth, than any invention since 

 tlie introduction of the art of printing.* In like 

 manner, he who at last makes some great improve- 

 ment in agriculture, opens some new channels ol 

 commerce, discovers new routes, invents new ma- 



* I cannot forbear making an extract from a discourse 

 of Jud^e Story, delivered before the Mechanic's Insti- 

 tute, Boston, in 1829. It will serve to show that the cold 

 and withering treatment which the projector receives 

 from the world, is amply sufficient to repress his ener- 

 gies within proper limits, without the aid of law. "I 

 myself have heard (says Judge Story) the illustrious 

 inventor of the steam boat relate in an animating and 

 affecting- manner, the history of his labors and discour- 

 agement. 'When,' says he, 'I was building my first steam 

 boat at New York, the project was received by the 

 public either with indifiierence or with contempt, as a 

 visionary scheme. My friends indeed were civil, but 

 they were shy; they listened with patience to my ex- 

 planations, but with a settled cast of incredulity on 

 their countenances. I felt the full force of the lamen- 

 tation of the poet — 



"Truths would you teach, to ?avc asinkui^' laiul, 

 "jVll shuii, nouc aid you, and few uuderstaiid." 



•'The loud laugh often rose at my expense, the dry 

 jest, the wise calculation of losses and expenditures, 

 the dud, but endless repetition ofthe "Fulton Folly:" 

 and even when the boat moved and the experiment 

 succeeded — "All (says he) were still incredulous: 

 none were willing to trust the evidences of their own 

 senses. I was the victim of disappointment. Imagi- 

 nation superseded the influence of fact, it was then 

 doubted if it could be done a^ain, or if done, it was 

 doubted if it would be made of any great value." 



chines, discovers new processes of industry, more 

 than pays for all the iiiilures incurred by others. 

 "The career of art (says Bcntham)the great road 

 which receives the Jbotsteps of projectors, may be 

 considered as a vast, and perhaps unbounded jdain, 

 bestrewed with gulis, such as Curtius was swal- 

 lowed up in. Each re{]uu-es a human victim to 

 lall into it, ere it can close; but when it once closes, 

 it closes to open no more, and so much of the path 

 is safe to those who follow. What general, let 

 him attack with ever so superior an army, but 

 knows, that hundreds or perhaps thousands must 

 perish at the first onset? Every man for himself, 

 but "God,.'' adds thepnnerb, ("and it might have 

 added the general and the legislator and all other 

 public sen-ants) "lur us all." Thus do we see that 

 the lew projectors who succeed, more than com- 

 pensate for the liulures. I hope then I have suc- 

 ceeded in clear] V proving that the usury laws can- 

 not be defended on the ground that they favor 

 those engaged in regular and old occupations, and 

 prevent the lending" of money to projectors and 

 prodigals. 



Bank interest should conform to the ordinary mar- 

 ket rate. 



But it has been asked whether banks should not 

 be restrained in the rate of interest which may be 

 taken? To this I answer, that as banks not only 

 afford a considerable portion of the ca]iital with 

 which trade is carried on, but likewise the largest 

 portion of the circulating medium of the countrj^, 

 it behoves them, on this latter account, to be go- 

 verned in lending money upon somewhat different 

 principles from private individuals. There is no- 

 thing more sensitive than a paper currency. Its 

 value and credit depend on its ready convertibility 

 into specie, when presented for payment. The cre- 

 dit of a bank is like the chastity of woman; it must 

 not be assailed by the brealh of suspicion even. 

 Hence, a bank should not indulge a speculating 

 spirit; all its transactions should be of the safest 

 and surest character; its securities should be such 

 as could be easily converted into cash, and it should 

 never lend to doubtfid or suspected persons, be- 

 cause the credit of the bank depending on the 

 ready convertibility of its notes, it Avould be liable 

 to be broken by a run at any time, if its debts 

 could not be easily collected. For this reason 

 banks ought not to lend in those cases where the 

 risk is very great, because if they succeed the 

 community would not be benefited, inasmuch as 

 the profits would go to the stockholders in the 

 shape of di\adend— and if they fail, the solvency 

 of the bank might be endangered, the value of 

 the notes destroyed, and the currency of the coun- 

 try deranged. AV^e have seen that very high in- 

 terest is generally the result of the risk which i-s 

 run, and not of "the profits expected to be made: 

 loans in these cases then, ought to be made by in- 

 dividuals, and not bv banks, for the success or 

 tailure of the individual would not effect the cur- 

 rencv like that of the bank. For these reasons, 

 I am" willing to allow a restriction of bank interest 

 to the ordinary marketable rate, but never below 

 this point— and I would have it to var}^ from time 

 to time, with this rate. I am sony to find that in 

 this opinion I am forced to differ from one of the 

 most profound and intellectual statesmen, not only 

 of this country, but of the age in which we live — 

 a statesman whose penetrating and perspicacious 



