this period of the world, and in parts of this land of equality, by showing, that in all time its companions have been liberty, science, civilization, morality, and religion-that its spirit is one of enlarged liberality and benevolence—that its practices have been in consonance with its spirit, and that wherever it extends, and as far as it extends, it is a benefit and a blessing.

If I have at all succeeded in this undertaking, I may hope it will encourage such of my hearers as may be devoted to mercantile pursuits, to press on with ardor in their career, to cherish it as one surpassed in real dignity by no other, as affording abundant opportunities for the display of the highest talent and for the development of the most exalted virtues, and finally, as one, which embracing within its comprehensive range the whole family of man, and pushing its civilizing adventures to the remotest corner of the habitable globe, may proudly take a foremost rank among liberal pursuits, and challenge for itself the title of Universal Benefactor.

ART. II.-EXAMINATION OF THE POLICY OF THE LAWS AGAINST USURY.

[The following lecture, now first published, was one of a course delivered upon mercantile law, ten years ago, to the Mercantile Library Association of Philadelphia. Since that time, the subject has engaged much of the public attention, and many stronger views may have been presented of it, than those here given. It was the intention of the writer to present what seemed to him to be a practical, common sense, examination of the policy of the laws against Usury, suitable to a class generally composed of young men, so far as it could be done in the short space of a single lecture.]

HAVING sufficiently delineated the characteristic features which distinguish an usurious loan of money from those contracts in which an interest is allowed to be taken beyond the legal rate, and pointed out the penalties which, by the law of England, and by that of Pennsylvania, are inflicted upon an offender, we shall dismiss this part of the subject, which may be said to be the legal consideration or view of it. The political question remains; that is, the wisdom and policy of any such regulations. I cannot promise you to be as decided and explicit in my opinions and conclusions here, as it was easy to be in relation to the law. Whether commercial men have greatly differed or not on this question, I am unable to say, but certainly political economists and legislators have maintained the most opposite doctrines concerning it. It is my intention to present to you the most prominent arguments on both sides, for the zeal and ability of the respective advocates have left little to be added for either. Those who have contended against any legal regulation of the rate of interest, have, indeed, as we have shown in the last lecture, to oppose themselves to the practice and experience of many ages and various nations. For more than two thousand years, we know, it has been considered in Europe to be a proper subject of legislative enactment, while every other species of property has been left to be used and disposed of according to the will and contracts of its owner, providing only for honesty and good faith in the transaction. Money, only, has been restricted in its profits and increase, and placed under the government of the law.

We acknowledge the weight of this authority, but we must not shut our ears against the voice of reason, or refuse to give a full and fair audience to those who deny the justice and wisdom of this ancient usage. The change in the condition of society, the great and enlarged improvements in commercial knowledge and dealing, may afford ample reasons for a change in this policy. As to the antiquity and universality of the law against Usury, we must remark, that those against witchcraft are quite as ancient, and have been, at least, as universal. "Thou shalt not suffer a witch to live," was the injunction of the Mosaic law. The punishments of these dreaded criminals continued, even in this enlightened country, down to a very late day. It is held by the law of England to be an offence against God and religion, and is punishable with death; and this sentence has been inflicted by great and wise judges. This is the reverence for antiquity, and the adoption of ancient laws, without allowing ourselves to inquire into the evidence of the existence of the crime or the reason of the punishment. Since this offence has been stricken out of the penal code of Pennsylvania, we have not suffered more than before by the practices of witchcraft; on the contrary, witches have disappeared with the power to punish them. It may be that we can dispense with the laws against Usury with as little injury; at least the argument of long usage and ancient authority is much weakened by this as by many other examples.

The disputants, on this question, set out with the sagacity of skilful polemics, each endeavoring to throw the burden of the argument and proof on his adversary. The advocates for the free use of money say, that inasmuch as in relation to all other property, men are permitted to make their own contracts according to their own opinions of their convenience and advantage, to ask and to give what they may think expedient and just for the sale or the hire of any article of property, it is therefore incumbent on those who maintain a different doctrine as to money, to support the exception by clear and satisfactory arguments, or to let money fall under the general rule which is applied to other things of traffic or exchange. The advocates, on the other hand, of the restrictions on Usury, insist, that as money has been an exception to the general rule of property from the remotest time, it falls upon those who question the justice or wisdom of the exception, to make out their case, and to prove it to be impolitic or unjust, before they require the restriction to be removed. All this, however, is but preliminary, and the question should be discussed and decided on a fair, full, and rational consideration of the whole subject, as applicable to the present state of the world. We should not be held, arbitrarily, in the trammels of opinions and systems of former times; great changes have taken place in the business of men; society has altered its relations in many important matters; the rights of persons and property, the interests of trade, are better understood, and conducted on principles widely different from those which formerly prevailed; and these changes have swept away much of the policy and many of the judices and superstitions of earlier ages. Still, we should not look carelessly or scornfully at the lessons of experience, because they may be assailed by plausible analogies and ingenious reasoning. We live in an age of inquiry and ratiocination, and in a country where the freest latitude is given to the spirit of examination and improvement. The authority of time goes for little, perhaps too little, and of names for still less. Every

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man will have his reason addressed, and his judgment convinced, before he yields his assent to any thing. This is all well, if it run not into licentious excesses; into a wrangling, sceptical propensity to question every thing, to unsettle every thing; to demolish or change what has been long received and sanctioned, from the mere love of innovation, or a dangerous indulgence in rash, untried, and undigested theories. We will, then, enter upon our cursory examination, for such it must be, of the question of Usury, with a due respect for the opinions that have been long entertained of it, but without surrendering ourselves submissively to their authority, or refusing to listen to those who have impeached it. We begin with the opposition.

The broad principle taken by Bentham, the most distinguished of the opponents of the laws against Usury, is, "That no man of ripe years and of sound mind, acting freely, and with his eyes open, ought to be hindered, with a view to his advantage, from making such bargain, in the way of obtaining money, as he thinks fit; nor any body hindered from supplying him upon any terms he thinks proper to accede to." Every word of this postulate has been well considered, and it certainly presents, prima facie, an imposing front. It seems, indeed, to be almost a selfevident proposition; and, apart from the right assumed by society to govern men in the use of their property, and to put restraints on their natural rights, it is so. We admit that this right is wise and beneficial, when exercised wisely; and if the welfare and safety of the community require that a contract for money, or any other contract, should be put under certain restrictions, the right of society to impose them is undeniable.

I hold it to be a sound principle in all governments, whether political or domestic, that too much law-making, too much governing, should be avoided, and that the great object of every general regulation should be some important, general benefit. To impose fetters on individuals, unless they be really insane or incompetent to act with reason, to prevent them from injuring themselves, is always of doubtful policy, and a doubtful right. The task of the legislator would be interminable, and as multifarious as the follies of mankind, if he were to undertake this extensive protection of their interests, and to preserve every one from rash and ruinous bargains; from absurd speculations and injudicious sales and purchases, which are a much more common and seductive means of wasting an estate than borrowing money at too high a rate. On this system of government which descends to the personal guardianship of every individual, every species of bad management by which he may injure himself should be interdicted; every wild project and improvident expenditure would come under legislative superintendence. But nothing of this sort is pretended or could be accomplished. A man may go to ruin in every way he pleases, except by borrowing money. If he wants a thousand dollars under a pressing necessity, or for some beneficial object, he is not permitted to give more for it, whatever may be its real value, than it was thought to be worth by a legislative calculation made a century ago; but he may make any sacrifice he pleases of his property by way of sale, to obtain the money he wants. He may pay, without limit, any amount, at his pleasure, for horses, for wine, for the indulgence of the most wanton waste and extravagance. There is no prodigality of this description, however vicious, which the law will restrain; no ruin

it will avert; no undue price or imposition it will invalidate, short of actual fraud, because it is the contract of parties competent to make their own bargains. In such matters, with the exception of palpable fraud, inexperience, necessity, simplicity, a profuse and reckless spirit, are trusted to deal on what terms they may, and the law holds them to their engagements; but an agreement to pay the merest trifle beyond the legal estimate for the use of money, is utterly void, and followed by severe penalties.

The reason given for this interference, that it prevents a prodigal from wasting his estate, seems to be altogether insufficient for this object, unless it went much further, and put its hand upon the property in his possession, so that he may not sacrifice it by much greater losses than he would incur by borrowing money. Why should he not indulge a spirit of extravagance in hireing money at an exorbitant price, while he may not only encumber, but entirely part with his property, at his pleasure? or, how is he preserved from ruin by forbidding the first, while the latter is free from all restraint? Is it not more reasonable to say, that by allowing him to borrow on such terms as the market will afford, and having good property to offer as a security for the loan, he could obtain the money required at a far less loss than will fall upon him, by a forced and untimely sale of his real or personal estate; for he must and will have the money in the one way or the other? If the money market were open and free, the borrower, with a fair security, would seldom fail to get it at a fair price, or with no considerable excess; but if this is denied, and money should be, as it often is, of more value than that fixed by the law, the borrower is compelled to obtain it either by an improvident sale of his property, in which advantage will be taken of his necessity, or he must borrow it at an illegal rate of interest, paying the lender not only for the use and value of the money, but for the hazard he is exposed to in thus lending it. This is the result of the legislative protection of a man against himself; which, like most cases of intermeddling, defeats its own purposes. You will not allow him to pay seven per cent. for the money he wants, and which he might have restored without injury to his estate, and you force him to part irrevocably with that estate at a loss, perhaps, of fifty per cent. In such cases this assumed guardianship of a man's interests and contracts may seriously injure a prudent and judicious borrower, while in the case of a determined prodigal and spendthrift, it will probably hasten, but can never prevent his ultimate ruin. If the effect be doubtful, the prohibition should be removed, because every restraint upon the use a man may make of his own property, ought to be justified by a clear public benefit.

But the laws against Usury are said to be intended not only to protect the prodigal and weak from extortion and ruin, but also to prevent imposition upon those whose necessities may compel them to borrow. This is, assuredly, legislating on very uncertain and unsatisfactory ground. How is it possible to measure the necessity of every case, or to make a rule which will suit all? A man may have need of money to carry on a business he is engaged in, but must abandon it without this aid, which will return him twelve or fourteen per cent. for every dollar he borrows, and who can therefore well afford to pay seven or eight per cent. for the capital thus obtained. But the law ties his hands; overrules his judgment; assumes to know better than he does what he can afford to pay,

and what his industry and skill can make from the loan. You must borrow at the rate that has been decided by strangers to you and your business to be reasonable and tolerable, or you must abandon your whole design. The individual is forbidden to prosecute his own business in his own way, according to his own knowledge and judgment, perhaps with the loss of all he has, and the community is deprived of the advantage of his labor and skill.

The legal rate of interest is that for which it will be lent on a sufficient security, and by suffering no other loans to be made, they are confined to the rich, or to those who have security to give. The honest and industrious man, who has nothing to offer but his personal responsibility for the money he wants, cannot obtain it, because he is not allowed to pay a higher premium than the borrower who gives pledges for its repayment; when, perhaps, by a reasonable addition, which he can afford to give, and the lender would take, he might get an important relief or assistance in his business. What is there unjust or impolitic in permitting such bargains and arrangements to be made? The borrower judges of the price he can pay for the use he will make of the money, and the lender judges of the price he will take, combining the market value of the money with the risk of its ultimate loss from the inability of the borrower to repay it. This risk is fully recognized by the law as a proper ingredient in the calculation of the rate of interest, in other cases, as bottomry and respondentia, and why not in this? If the parties are prudent, they are the best judges of their mutual interests; and may be trusted with their own bargains. If they are rash and prodigal, they have so many broad roads to ruin open to them, more tempting than this, that it is idle to bar this narrow path. A free market for money would produce a fair and regulated competition for it, as it does in relation to every other article of trade and subject of contract, which, generally, would keep its price at a just rate according to the circumstances of the times and of each particular case. Men would be able to borrow at a rate measured by the use they could make of the money; and they would lend on a calculation of its true value, and the hazard of the loan; and this is as it should be. If it is urged that although the prudent and sagacious may be trusted to make these calculations and bargains for themselves, yet we must protect the weak and ignorant from the rapacity of money lenders, the answer, already suggested, occurs, that the remedy is so far short of the evil as to have no practical efficacy, and that to have any real utility, it should be extended to all other dealings in which simple men may be overreached; and this is admitted to be impossible. In truth, of the value of money there is a much more general and easy understanding than of many other subjects of traffic and contract, as to which no attempt ever has been made, or would be practicable, to preserve the simple or improvident from imposition and mistake. There are many that will occur to your recollection, in which the opportunities to take advantage of inexperience, credulity or necessity are more frequent, more easy and more extravagant than happen in the loan of money; and yet such contracts are left to the will and discretion of the parties, without reserve or restriction, or any safeguard beyond the prohibitions of manifest fraud, and the employment of dishonest tricks and contrivances.

It is no uncommon occurrence that a man really possessed of a good