known to be safe, can do all the work required, what injury arises by protecting passengers against the danger of an unsafe one?

That though boilers may be constructed to bear the required pressure, yet the accident on board the Norwich packet shows that the boiler itself may be carried away bodily by high steam.

That these considerations show, the interference asked for, is neither vexatious or unnecessary.

Such we believe to be a true and fair statement of the case, on both sides of the question: whereon let our readers judge.

Having dwelt so long on this question, we have little more room to bestow on Mr. Colden's Life of Fulton, though his exertions to procure a repeal of the present most vexatious patent law-his detection of the knave Redhaffer's fraudulent engine of perpetual motion-his unremitting labours on the subject of canal navigation, until his premature death on the 24th of February, 1815, would furnish room for much useful reflection and discussion.

We sincerely believe that when Fulton died, his country sustained a loss that will not easily be repaired.

DEFENCE OF USURY.

ART. II.-Defence of Usury; showing the Impolicy of the present legal Restraints on the Terms of pecuniary Bargains; in Letters to a Friend. To which is added a Letter to Adam Smith, Esq. LL. D., on the Discouragements opposed by the above Restraints to the Progress of inventive industry, &c. By Jeremy Bentham, Esq., of Lincoln's Inn. 8vo. pp. 276. London, 1817 MR. BENTHAM's celebrated Treatise on USURY, wherein he examines the justice and the policy of the laws relating to that subject, and demonstrates the absurdity and inefficacy of legislative restrictions, has produced a revolution in the public sentiment in Europe on the question of usury, and ought to do so here.

The book has been excellently well reviewed, and the argument well considered by the Edinburgh reviewers; it is at least as well done in the following account of Mr. Bentham's work from No. 18. of the British Review; which we have selected, because it gives very fairly and faithfully, all the difficulties that attend any alteration in the present system of laws on this subject; difficulties, that exist with less force in America than in Europe. In short, it is high time we should give up this plan of over-legislating, of regulating every thing, of pretending to know a man's private interest better than he knows it himself, and of laying traps and creating temptations to trangress a system of laws that do not harmonize with the present state of society, and that are continually broken, not merely by subterfuges and evasions, but in the face of day. The admirable argument of MR. HAY on the subject of usury in the Virginia legislature, ought to be in the hands of every American. His motion did not succeed; but ignorance and prejudice will ultimately retire from the contest.

Mr. Bentham's Treatise on Usury, proceeds on the following plan. He considers the arguments against unrestrained bargains for the loan of money under the following heads: 1st, the prevention of usury: 2dly, of prodigality: 3dly, to protect indigent persons against extortion: 4thly, to repress imprudent speculators and projectors: 5thly, to protect ignorance and simplicity against imposition. As to the first. What is usury? The taking of more interest for the loan and use of money, than the law allows. The offence then, is the mere creature of society and of law. There is no natural standard of interest. Whether usury be permissible or not, then, depends on the policy of the law that creates it.

Defence of Usury.

Interest varies in every country; in England it is five per cent., in Pennsylvania
six, in New-York seven, in Calcutta twelve. In bottomry bargains, it is unre-
strained: among the Romans in the time of Justinian it was twelve per cent.; in
England under Henry VIII., ten. Interest like every other bargain, must ulti-
mately depend on the scarcity of money, and the value of it; that is the use that
can be made of it. The Jews indeed were forbidden to take interest from each
other; but they indemnify themselves against all the world beside.

Secondly, to restrain prodigality. Can this be done? Will laws against usury
prevent it? Cannot goods be sold cheap by the prodigal; or bought dear of the
usurer, and resold in such a way that the law cannot touch the transaction? Does
not the illegality of the contract increase the risk, and therefore enhance the de-
mand, and of course the evil complained of? Who is to judge of comparative pro-
digality? Will you put half the community of grown persons in baby leading
strings? Of all vexatious legislation, that is the worst which intermeddles in private
concerns, and pretends to teach a man of business how to conduct his own affairs.
Moreover, it is right that prodigality should bring with it, its own remedy in its
own punishment.

Thirdly, to protect indigence. If I want money, I alone can know how
If I want a house in a particular situation, who but my-
much it is worth to me.
self can judge of the value of it to me? Wherever fraud and deception takes ad-
vantage of ignorance, the principles of equity interfere, without the aid of
usury laws.

Fourthly, to restrain projectors and speculators. These men usually do much
mischief to themselves, and much good to the community. But where is the
line of speculation to be drawn? Who is to be called a projector? A term applied
That harm may be done by a mis-
almost universally by ill-bred short-sighted ignorance, to superior knowledge
and skill which it cannot comprehend.
chievous and fraudulent use of credit, is granted. Morris and Nicholson did much
damage: but which of the laws against usury prevented their mode of gambling,
or repressed their speculations, or applied at all to their case? The character of
the usury-laws throughout-in every case-is to fail in preventing the evil
against which they were enacted.

Fifthly, to protect ignorance and simplicity. A man who knows nothing of He is too simple and ignorant to cure himself. What does medicine falls sick. the world say? Send for a doctor who has made it his study and profession to cure the sick. A man is too simple and ignorant to make his own bargains-Let him ask advice of his friends or his lawyer. Will you make laws to annihilate ignorance and folly? You had better have at once a hospital for simpletons in the vicinity of your lunatic hospital.

There is no sound argument in favour of these laws. The pretences for them are founded in gross ignorance of men, of manners, of trade, and dealing.

But they are inefficient: no man can mistake how to evade them: by privacy
in conducting the contract: by loans on conditions increasing the risk: by buy-
ing dear and selling cheap, &c. Of all laws, those are the worst that can never
be executed. Laws against usury are demoralizing. They drive men to shifts
and evasions in lending and borrowing, that blunt the edge of moral feeling. They
Do not all banks and bankers take more
are unfair, because they prohibit what is generally permitted and practised under
other shapes, and by other means.
than legal interest? Do not all purchasers of paper in the market, money brokers,
shavers as they are called, practise usury with impunity? May I not ask and take
my own interest for my plate, my goods, my house, my lands? This is well put
both by Mr. B. and his reviewer. It is high time these very weak, these very
absurd, these laws for the encouragement of deception and evasion, should be
repealed; and remain no longer a disgrace to our statute book.

A
DEFENCE of smuggling, addressed to the chancellor of the
exchequer; or a defence of Spa-fields meetings, addressed to
the secretary for the home department, would not have excited
greater indignation nor encountered fiercer prejudices than this de-
fence of usury will find directed against it by the majority of rea-

ders, even in the present day. The very sound, and ordinary acceptation of the term, carry with them a host of opposition, which no strength of argument can overcome. As soon as the word usurer is mentioned, the imagination conjures up a hard featured Israelite propounding to a thoughtless youth, or a decayed tradesman, the exorbitant terms upon which only he will consent to relieve his embarrassments; and, the iniquitious bargain being finished, we see. the former sent away with his hundred pounds, to be repaid at the end of a few months with half as much more, and the latter with a still smaller sum at a still higher interest. Usury being thus identified with every thing low and disgraceful, the synonym, in short, for fraud, meanness, and cruelty, he must be a bold man indeed who will venture to write in defence of it.

He, then, who holds Mr. Bentham's doctrines will be inclined to ask, in the first place, what are the general principles, whether of trade, politics, or morals, upon which we undertake to justify a restriction on the rent of money, more than upon any other thing which is let out upon hire. If I convert my money into land, or houses, or ships, or horses, or carriages, I am permitted to receive for the loan of them as much as any one chooses to give, or thinks he can afford; nay, what is more, if I were to melt down my guineas and dollars into plate, I should be allowed to ask for the use of this plate, by the day or month, a remuneration to any extent that might be agreed upon between myself and the borrower; but as soon as I should re-convert it into the current coin of the realm I should be once more restricted as to the terms of lending it, and, in consequence of the laws against usury, I should subject myself to a very severe penalty, were I to take for the loan of such coin more than a twentieth part of its value by the year. What is there in the die impressed upon my metal, he would say, to prevent me from enjoying the same freedom as to the terms upon which I may let it out, which was allowed to me whilst it was in the shape of tureens, spoons, or salvers! For land, too, of which money is merely the representative, I may exact and receive any usury that a tenant will give me. I may have ten per cent. on the amount of my purchase money, or fifteen per cent., or even a hundred per cent. For the use of a house, in like manner, I may charge with the same unlimited freedom; and in short, for every other species of property I am not compelled to observe any rule in modifying my demands, except that which is established by competition in the general market, where each wishes to have as much and to give as little as he can; but with regard to the rent of coined gold and silver, for I call the interest a rent, I must not, at my peril, receive more than five per cent. as the annual return from it. What argument founded in the nature of things, or in the general conveniency of society, can be adduced in support of this exception!

Secondly, in driving all other bargains, as to occupancy for definite periods, I am allowed to e: rcise some discretion with regard to risking my property for an adequate compensation even in the most hazardous employments of it to which it could possibly be

exposed. I may let out my house, for example, to a maker of fireworks, my land to a brick-maker, my ship to be used as a privateer, my waggon to carry gun-powder, and my horse to work in a coal-pit. In all such cases the law leaves me entirely to myself; trusts me with my own interest so far as to allow me to make such terms as will, in the ordinary course of things, meet all hazards and cover all losses; but with regard to money, as before, I am not allowed to run any risks in letting it out upon hire; in other words, I am not allowed to receive any compensation in name of such risks. What can be the ground of distinction between a house, for example, and money, which merely represents the value of a house, that, for an adequate premium, I have it in my power to incur all hazards with respect to the one and not with respect to the other? It is not easy to perceive the views, theoretical or practical, upon which legislators proceed, in forming such distinctions and in enacting such statutes.

Thirdly, as the price of all other things rises and falls with circumstances, and particularly as they become relatively scarce or abundant, how absurd must it be to fix by law the price of money, or, in other words, the rent to be paid for its use, when it is very well known that there is scarcely any other commodity which varies more in its marketable value? To the very same merchant at different times, money may be worth ten per cent., and it may not be worth four per cent. At this moment, owing to the stagnation of certain kinds of trade, loans can be raised by government at little more than three and a half per cent., whereas were there a greater demand for capital created by the revival of our manufactories, loans could not be negociated under five, or even six per cent. In short, it seems irrational, in the highest degree, first to permit men to deal in money, as they deal in land or cattle, that is, to try to sell or to let it out upon hire, and then to restrict them in their profits, and limit their enterprise. The whole system must assuredly rest on prejudice, and not on large and enlightened views of political science; it must derive its origin from those barbarous times when the fineness of a man's coat, the length of his spurs, and the expense of his dinner, were all fixed by acts of parliament.

We may perhaps trace the very general dislike and abhorrence which are directed against usurers to the single circumstance that all loans of money, prior to the times of an extended commercial intercourse, were granted by the rich to relieve the pressing necessities of the poor; and that the former sometimes so far availed themselves of the dependent state of the latter, as to deprive them of personal liberty, and thus to secure their services for life. The loan of money in this case was like the loan of food to a starving man; it was to be consumed for present support, not to be laid out with the view of re-production; a demand, therefore, for usury in such circumstances could not fail to he regarded as the very utmost stretch of inhumanity or of avarice. In small societies too, where every man could trace the bonds of affinity or of blood by which he was united to the other members of the community, any return

J.

demanded for the use of a pecuniary loan would at once appear more criminal in itself, and brand with deeper odium the sordid creditor who could thus take advantage of necessity to oppress a We find, accordingly, in the laws of Moses that usury was not at all permitted among the family of Israel; the privilege to exact increase being entirely confined to their dealings with strangers. "If thy brother," said that divine legislator, "be waxen poor and fall into decay with thee, then thou shalt relieve him. Take no usury of him nor increase; but fear thy God that thy brother live with thee. Thou shall not give him thy money upon usury, nor lend him thy victuals for increase." And in the fifteenth psalm we see usurious practices coupled with "taking reward against the innocent," and described as one of the sins which every good man would study to avoid. A prejudice thus respectable from its origin gained ground, perhaps, at least Mr. Bentham thinks so, in the first ages of Christianity, when virtue was made to consist, in no small degree, in the severe duties of self-denial.

may

In accounting for the prejudices against usury we cannot surely ascribe much to the absurd notion of Aristotle, that "all money is in its nature barren," for in the very infancy of trade the advantages of having a ready command of the medium of exchange, could not escape the observation of the dealer. The man, too, who had a piece of land without wealth to stock it, would instantly perceive that a loan, on reasonable terms, to enable him to buy a few sheep, would, if not directly productive itself, render available to him the productive properties of his farm. It must be admitted, however, that the phrase, "a barren breed of metal," is completely English, having been received with applause from the stage in the time of Shakspeare; but moreover, that Lord Bacon, in the same age, gave it as his serious opinion, that the power of taking interest upon money was granted to the subjects of Elizabeth, for the very same reason that the right of divorce had been granted to the Jews by Moses, "propter duritiem cordis." All these objections to usury, in fact, proceed from the very same source, the presumption that loans were never made for the purposes of traffic, and to enrich the borrower as well as the lender, but solely to relieve indigence, or to ward off distress. Different views, however, are now opened both to the legislator and the people at large. Every body knows that, in these times, a rent is paid for money on the very same principle that it is paid for land or for a ship, and that the object of the borrower, in all these cases, is to gain so much by the use of the article for which he pays rent as to enable him, after making such payment, to add to his comforts or to his capital. It therefore naturally occurs to the most superficial to inquire, wherefore the holder of money should be restricted in the rate at which he lets out his property, whilst the land-owner and the ship-owner are left at perfect liberty to make the best bargain they can.

Leaving out of view the old prejudices already mentioned, and the bad sound of the word usury so nearly allied to these prejudices, we may still be able to account for the fact in question by referring