USURY. 



but of his fecurity. If tlie fpcndthrift has no fecurity to 

 offer, how is he more likely to get money at a high than at 

 a low rate ? A friend is the only perfon hkely to accommo- 

 date him, and he will not take more than the ordinary rate. 

 Prodigals ufually borrow money in moderate fums, at the 

 ufual rate, in various quantities ; and when they can find a 

 lender difpofed to fpeculate, and obtain a compenfation for 

 the great rilk of trufting them in the high profits of the 

 tranfaftion, fuch a perfon will negleft the prohibitions of 

 the ufury laws, and make the poor man pay fo much more 

 for the additional rifli they make him run. Befides, the 

 moft certain road to ruin for all prodigals is to obtain goods 

 upon credit, as long as their credit lafts, and here no law 

 interferes. 



The proteftion of indigence is another reafon urged in 

 behalf of thefe reftraints ; but it may be aflced, Can any one 

 rate of intereft be adapted to every man's fituation ? To 

 fome it may be profitable to borrow even at ten per cent., 

 whilft others may find fix per cent, too high, compared with 

 the fum in profpeft, whereas the ufury laws determine one 

 ftandard of exigency for all. This arrangement operates, 

 not in protefting, which is the pretext, but in crulhing the 

 indigent. If the protcftion of indigence were the objeft 

 of thefe laws, they ftop fliort of their pretended objeft : 

 they without doubt prevent a poor man from borrowing at 



of any of thofc which are already known to us. It falls, 

 in (hort, upon every application of the human powers, in 

 which ingenuity (lands in need of wealth for its affiftant." 



It is indeed manifeft, that, in this view, the ufurj' laws 

 are abfurd, unlefs il be poflible to dillinguilh, before trial, 

 good from bad, that i?, fuccefsful from loling projefts ; in 

 which cafe, the law ought to fix a maximum for the loans 



to the one, and leave the other free accefs to the market, 



which is plaiiily impoffible. Thofe who are too prudent to 

 ri(k their money upon an unpromifing fchcme, will rilk it 

 upon no fcheme at all, but will lend only to eltabhfhed con- 

 cerns. The temptation of higher profit than ufual is abfo- 

 lutely necelfary, to prevail upon capitalifts to embark in 

 new trades. Tiie ufury laws prevent, therefore, any capital 

 from finding its way into thofe channels by way of loan, 

 and direftly difcourage projefts, that is, invention and im- 

 provement in all the arts of life ; for, without difcouraging 

 the ufeful and the good, they cannot difcourage the wild 

 and the bad. Shall wt then fay, that tlic danger to the 

 capital of the community, from a failure of certain fchemes, 

 is fo alarming as to juftify us in putting down all manner of 

 fchemes, as far as lies in our power ? Let it only be re- 

 membered, that every thing valuable in civilized life is the 

 fruit of fchemes ; that all we enjoy above the lot of favages, 

 comes from arts that were once mere projects ; and we mall 



a high rate ; but they take no mear.s of compelling the not be <lifpofid to condemn, in one fweeping fentence, every 

 rich to lend him at a lower rate. innovation. This is in truth to denounce, as rafh and 



A third reafon alleged is the proteftion of fimpHcity. ill-grounded, (we ufe the author's forcible illuftration,) all 

 But how fimple muft that man be who gives more than he thofe projefts by which our fpecies has been fucceffively ad- 

 knows, or may eafily learn to be necelfary, for the ufe of vanced,fromfeedinguponacorns, and covernigthemfelves with 

 money 1 Nothing may be more eafily afcertained than the raw hides, to the ilate in which it at prefent (laiids. What- 

 market rate of intereft. It is to a very great degree inva- 

 riable, and it is the fame throughout the whole commimity. 

 A fimple man, or a man who is not very fimple, may be de- 

 ceived in other bargains ; but in cafe of loans, the legidator 

 neither does, nor can afford, him the leaft affiftance. The 

 unwary borrower has always the fecurity in his own hands ; 

 and if he has been really over-reached, he can have no diffi- 

 culty in obtaining redrels. If, indeed, perfons may be fup- 

 pofed to be fo fimple as to need protection in their money bar- 

 gains, they are cxpofed to as great a danger in all their other 

 tranfaftions, in which no lawgiver ever dreamed of afford- 

 ing proteftion to finiplicity. 



As a fourth reafon in favour of thefe reftraints, it is al- 

 leged that a free accefs to the money-market tends to en- 

 courage projedtors. Dr. Smith has very much contributed 

 to the prevalence of this notion. He claffes projectors with 

 prodigals ; ftigmatizes both as perfons likely to wafte the 

 capital of the community, and approves of the maximum for 

 its tendency to keep a portion of that capital out of their 

 hands. We cannot, within our limits, do juftice to Mr. 

 Bentham's elaborate refutation of this dogma, and the ex- 

 pofition of the prejudices upon which it is founded. 



The reftraint, as he juftly remarks, profelling to fall 

 upon rafti, imprudent, ufelefs fchemers, does in faCl fall 

 upon fuch perfons as, in the " purfuit of wealth, or even of 

 any other objedt, endeavour, by the affiftance of wealth, to 

 ftrike into any channel of invention. It falls upon all fuch 

 perfons as, in the cultivation of any of thofe arts which have 

 been by way of eminence termed ufeful, dircdl their endea- 

 vours to any of tliofe departments in which their utility 

 fhines moft confpicuons and indubitable ; upon all fuch 

 perfons as, in the line of any of their purfuits, aim at any 

 thing that can be called improvement; wlather it confift in 

 the produftion of any new article adapted to man's ufe, or 

 in the meliorating the quality, or dimiuiftiing the er.pencc, 



ever (as he fays) is now the routine of trade, was, at its com- 

 mencement, projeS ; whatever is now ejlablifhment, was at 

 one time innovation. — And why fuch fears, after all, of our 

 being impoverifhed by failing fchemes ? Lone before the 

 exiftence of the ufury laws, the profperity of our race was 

 running on in an accelerating courfe ; — long before the 

 ftatutes in this country, its wealth and general improvement 

 was rapidly and conllantly advancing. There were every 

 now and then failures, and individual loffes in confequence ; 

 ftill their proportion to the bulk of fuccefsful projects was 

 triflnig ; and no one can maintain, that, fince the reftraints 

 were impofed, the proportion has diminiihed. Were the 

 law filent on this head, money woiild ftill be lent to pro- 

 jeftors, by thofe moft deeply interefted in the prudent dif- 

 pofal of it. We may fafely truft their difcretion for its 

 being kept out of defpcrate ri/lcs. No one, indeed, has ri- 

 diculed tlie over-anxiety of fuch regulations as pretend to 

 fave men's capital from injudicious application, more hap- 

 pily than Dr. Smith himfelf. It is the great text, of which 

 his immortal work is the illuftration, almoft in all its pages ; 

 and in no paffagc is he more fevere, than where he reprobates 

 the intermeddling of government to prevent private impru- 

 dence. After remarking, that the number of prudent and 

 fuccefsful undertakings is every where much greater than 

 that of injudicious and unfuccefsful ones ; he adniiiiifters 

 the followmg memorable corrcftion to rulers for their love 

 of meddling, and we may obfcrve, that it is quite as well 

 merited by the promoters of the ufury laws, as by any other 

 clafs of legiflalors. " It is the higheft impertinence and 

 prefumption, therefore, in kings and m\n\[\.m to pretend to 

 watch aver the economy of private people, and to reftrain their 

 expence, either by lumptuary laws, or by prohibiting the 

 importation of foreign luxuries. They are thcmfelvrs al- 

 ways, and without exception, the greatcft fpendthrifts in 

 the fociety. Let them look well after their own expence, and 



ihey 



