116 



FARMERS' REGISTER— ESSAY ON USURY LAWS. 



iiecurityj and consequently can borrow money at as 

 cheap a rale as any one. In tact there is great ad- 

 vantage in lending money to a prodigal on good 

 security; for his career will soon bring his property 

 into the marlcet and the lender who has a lien on it 

 will generally be enabled to get it at his own price. 

 This fact is well known to" all speculators in the 

 money market. Suppose however that no one will 

 lend to the prodigal, because of the restraint of the 

 usury laws. Do you think thereby to prevent his 

 spending his patrimony? Certainly not. He will get 

 li-om tradesmen th.it credit which the law will not 

 allow him to get irom the money lender. Suppose 

 he. goes to the merchant and buys goods worth 

 ^100, but is charged by the merchant !jj;133; does 

 he not virtually boiTow in tins case at the enor- 

 mous rate of 33 per cent.? lie may buy of the 

 horse jockey tor #150 on credit, a horse worth but 

 !B 100 cash. In this case he will give 50 per cent. 

 Now I maintain, and I believe the proposition sus- 

 ceptible of demonstration, that it is infinitely better 

 to throw the prodigal into the hands of the money 

 lender, than of the \-arious tradesmen of the com- 

 munity; for in the first place, money lencUng is his 

 business, and hke all r^ular dealers, he can do 

 this business upon cheaper and more advan- 

 tageous terms to the borrower, tlian he could who 

 do'es not carry it on regularly. The dealer of whom 

 the prodigal should purchase i^; 100 worth of goods, 

 would think an advance of 33^ per cent on account 

 of credit given, a mere trifle: a regular money 

 lender would never tliink of exacting such exor- 

 bitant interest. In the second i)Iace, public opinion 

 acts ^vith more force against the exactions of the 

 money lender than against those of any other class 

 of dealers. The sales of the merchant, tailor, 

 horse dealer, &c. may he-kept secret, or if known 

 cannot be properly judged of, in consequence of the 

 variable prices of the articles disposed of: but the 

 money lender must record his securities, the trans- 

 action thus gets publicity: money, as I hav^e before 

 said, is an article of commerce whose agency and 

 value are well understood, and a too exorbitant rate 

 of interest would be sure to brand the money lender 

 with a considerable degree of inicimy: the money 

 lender therefore is in most cases the fittest person 

 to obtain credit liom. Suppose however the pro- 

 digal has no property? Then it is a matter of very 

 little consequence whether he fall into tlie hands of 

 the shaver or not: where there is no fleece there can 

 be no shearing. The money lender will consent 

 to lend, in all probability, in such a case at no in- 

 terest whatever. Prodiii:als in this condition most 

 generally borrow of li-iends (small sums from 

 each) who make up their minds to lose Avhat they 

 lend, and theretbre take no interest at all, or only the 

 legal. Such loans partake principally of the na- 

 ture of gifts, and therefore have but little to do 

 with the subject under discussion. Thus do we 

 see that even on the very principles of those who 

 contend for the usury laws, they cannot check or 

 diminish prodigality in the slightest degree; but on 

 the contraiy, exert a most pernicious influence 

 against the prodigal. But why, let me ask, all 

 this solicitude — all this guardian care of the public 

 for the prodigal and his interests'? Is he the most 

 important member of society? You answer, no — 

 In almost every point of view, he is one of the 

 least worthy. Is there a universal proclivity in the 

 human family to profligacy and prodigality? 

 No not one in twenty ig a prodigal. Can it then 



be just and expedient, even if the usury laws 

 checked prodigality (which they certainly do hot,) 

 to impose restriction on the holders oi money 

 throughout the nation, thereby violating every prin- 

 ci})lc "of equity, nmning Counter to the great and 

 harmonious system of tree trade and the regulating 

 laws of supply and demand, tor the benefit of the 

 least Worthy and the least numerous class of socie- 

 ty? -Surely not. 



Again, iithas been urged that thes« laws prof ec^ 

 the necessitous, the indigent., the simple, S)'C, 1 must 

 refer to what has already been said as a sufficient 

 refutation of such arguments, with the additional 

 remark, that we do not assert that cases may not 

 occur where borrowing on interest may ruin the 

 individual. AH we assert is^ that borrowing mo- 

 ney is generally better than other species ot 

 credit, which may be obtained — that if under pe- 

 culiar circumstances the. money lender has it 

 sometimes in his power to oppress, and take un- 

 due advantage of the necessities, of others, in 

 other trades men do the same things, to a much 

 greater extent. We are not near so liable to 

 mnposition in borrowing money, as m many other 

 transactions. I have known. a man who had ta- 

 ken- a peculiar fancy to a horse, to give $;500 for 

 him, when no man, not even the owner, could va- 

 lue him at more than $;150. Is this undue ad- 

 vantage taken by the owner any reason why the 

 legislature should regulate the price of horses'? I 

 have known a man to be obliged to pay five times 

 the value of a jewel which Avas associated with 

 his fondest recollections, merely because the owner 

 knew his attachment to it, and took advantage of 

 it. Is this any reason, to bring in a law to fix the 

 ]3rice of jeweliy ? . Certainly not: and yet it Avould 

 Idc just as reasonable, as to defend the usury laws 

 for the purpose of protecting the necessitous, the 

 simple, &c. And besides all this, the law can 

 never attain its end. You may suppose it elTicient 

 in one direction, bvU equally bad and even Avorse 

 consequences Avill flow from some other quarter. 

 You had as Avell expect to defend Virginia from the 

 incursions of her future enemies, by building a 

 cliain of forts around the mouth of the Pianki- 

 tank alone, as to think of putting an end to prodi- 

 gality, and of protecting the indigent, the necessi- 

 tous, the simple, &g., b.y saying they should not 

 borroAv money at more than six per cent. Worse 

 than useless are the vain attempts of the legisla- 

 tor to stop the floodgates through Avhich the Avealth 

 of the prodigal and imprudent is floAving. "The 

 fool and his money Avill soon part," in spite of all 

 the officious, impertinent, intermeddling kindness 

 of the laAvs. 



The last argument urged in favor of the usury 

 laAvs, Avhich I shall examine is, that deriA^ed 

 from the fact, that almost all nations from the time 

 of il/oses to the present day, have either proscribed 

 interest altogether, or restrained it within certain 

 limits. Generally I have the utmost respect for 

 those opinions universally prcA-alent among man- 

 kind, and am Avilling even to concede that the uni- 

 versality of belief, in the majority of cases is, pri- 

 ma facie evidence of their correctness. We must 

 make, hoAvever, distinction betAveen questions of 

 feeling and of reason. "On questions of feeling'" 

 I have elsewhere said "the opinions and senti- 

 ments of the Avorld are generally correct." But 

 on those Avhich depend on reason, common opin- 

 ion is by no means so unening a guide. If I am 



