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lick funds, as he can get by lending it to his neighbours at legal intereft. By this means you have confi. ned the bufinefs of pawnbroking, and lending fmall fums on perfonal fecuriry, to a few obfcure men of A fmall fortunes, who must make exceffive profits, otherwife, they could not fubfift by the produce of the fmall ftock they have to employ in that way; and by the fame means you have expofed the neceffitous poor to infinite hardships and oppreffions; fo that your prefent laws, for fixing the rate of legal intereft, have done great mifchief to the poor, without being of any benefit to the nation, by increafing either its trade or

have been extremely negligent, if
we confider the prefent rates of na-
tural intereft in this kingdom. From
the current price of our publick funds,
and from the practice as to mortgages
of lands, or pledges of plate or jew-
els, we may conclude, that the na-
tural intereft of money upon large
fums, fecured by mortgages or
pledges, is not above 41. per cent.
and when a man of extraordinary
credit wants a large fum for a short
time, I believe, the natural intereft
of money, in that cafe, is much the B
fame; therefore, as to all thefe cafes,
our legal intereft is by much too
high: We can never expect, that
any rich man will be thereby in-
duced to employ his moncy in
trade or commerce.

But, Sir, with regard to fmall C
fums, whether lent upon pledges, or
upon perfonal fecurity, the natural
intereft of money has by our penal
laws againft ufury, and our publick
funds, been raifed to a monstrous
height. Even upon pledges, it is
now raised to above 30l. per cent. D
per annum; for all our pawnbrokers,
by their fales of goods without ac-
count, and by taking as much for
a week, or a day, as they do for
a month, do make a great deal a-
bove 30l. per cent. Then as to the
natural intereft upon fmall fums,
lent on perfonal fecurity, it is now
come to exceed all bounds. I have
been told by brokers, who deal in
this way, that it is now ufual for
the lenders to have a filling in the
pound premium, befides legal inte-
reft for three months, which is 251.
per cent. per annum; and that fome-
mes they have a fhilling in the
pod for a month, which is at the
rate f 60l. per cent. per annum.
fignif nothing to make a new law
against efe practices: They proceed

from the

It

E

F

As you have already made G
againft ufur and from your furnish-
ing every max with an opportunity,
to get near sigh an intereft for
his money, by png it in the pub

commerce.

As to our publick funds, Sir, it is certain, that befides many other evils, they have contributed greatly towards enhancing the natural intereft of money lent in fmall fums, either upon pledges, or perfonal fe. curity. If they could be all paid off and abolished, the natural intereft, upon fuch fums, would foon come to be but a very little above what is now the legal; the natural intereft upon large fums, efpecially thofe lent upon mortgages of land, would fall to a trifle; and the whole lands in Britain would fell for near double the price they now fell for ; but this is a bleffing we cannot expect for many years to come; and as little can we expect, that the natural intereft of money lent in fmall fums, will fall much below what it is at prefent; there is, therefore, no one thing, in our whole frame of government, that requires a more immediate regulation, than what relates to the legal intereft of money. I will be bold to fay, that it would be better for us to have no legal interest at all, nor any laws against ufury, than to continue under our prefent regulation. Should we repeal all the laws we have, for fixing the rate of intereft, and punishing ufury, neither our trade nor com

merce

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merce could fuffer; becaufe the natural intereft of large fums, upon good fecurity, is now below the legal; and many of thofe, who have now but a fmall property in the peblick funds, would draw their money from thence, in order to fet up the A trade of pawnbroking, or to lend their money at 8 or 10l. per cent. per ann. to their neighbours upon perfonal fecurity, which would relieve, not only our neceffitous poor, but also many an honeft tradesman, and fhopkeeper, from the oppreffions and B difficulties they now groan under; and it would probably, in a fhort time, bring the natural intereft, even of fmall fums, to a rate very little above what is now the legal; because it would increase the quantity of money, ready to be lent in that C way, without increafing the demand; which would, naturally, reduce the price of that commodity, as well as it does the price of every other.

This, Sir, would be the effect of repealing all the laws we have for fixing the legal intereft of money; D but a new law, for this purpose, if therein we follow nature as clofe as poffible, will produce ftill a greater and better effect. If any fuch law were to be thought of, we ought, certainly, to reduce the legal intereft of money below what may now be E got by putting it in the publick funds, with refpect to all fums lent upon a mortgage of lands, houfes or publick ftocks, and with refpect to all large fums lent upon plate or jewels. With refpect to large fums, lent upon perfonal fecurity, it may be fixed at the prefent rate; but as to fmall fums, lent upon fuch fecurity, the legal intereft ought to be raised to at leaft double what it is at prefent. Then, with regard to money lent upon a pledge of goods, as all who deal in that way are properly pawn- G brokers, a particular law fhould be made for regulating that bufinefs, and for fixing feveral diftin&t rates of intereft, according to the fum lent,

F

which rates ought, I think, to begin with the rate now ufually taken by pawnbrokers, and to diminish gradually, till it be brought down to the rate of intereft now fixed by law.

By fuch a regulation as this, Sir, the effect I have already mentioned, with regard to the poor, would be increased, and it would have a very good effect upon our trade and commerce; for, by reducing the legal interest upon mortgages, we fhould raife the price of our publick funds, which would force fome of our rich men into trade, and prevent others from drawing their money out of that bufinefs, in order to veft it in our funds, or upon mortgages of land; and the higher our funds were, the more ready would our fmall proprietors be to fell out, in order to lend their money at a high intereft to neighbouring tradefmen and fhopkeepers; which would render bankruptcies lefs frequent than they are at prefent. Thefe bankruptcies, I know, Sir, are by inany imputed to the prefent luxury and extravagance of our people: Perhaps fome of them may be owing to that caufe; but most of them, I am convinced, are owing to the difficulties our tradesmen and fhopkeepers meet with, in borrowing money to anfwer any preffing demand.

When

a run of bufinefs, or a difappointment of expected payments, forces fuch a man to have recourse to borrowing, he is generally thrown into the hands of exceffive ufurers and extortioners, who fwallow up more than his profits; by which means he is difabled from ever getting out of their hands, till a ftatute of bankrupt cy, or an act of infolvency, clears him from them, as well as from his juft and honeft creditors; fome of whom are, by that disappointment, perhaps, thrown into the fame labyrinth, and forced to make their efcape by the fame means: Whereas, could tradefmen readily borrow

money

money even at 10l. per cent. without
injuring their credit, by having their
notes hawked about among brokers,
they could fupport a disappointment,
or by retrenching for a year or two
they could recover a lofs, and pro-
bably prevent their names ever ap- A
pearing in the London Gazette.

Therefore, Sir, for the fake of our country, for the fake of our trade and commerce, and for the fake of our neceffitous poor, fome new regulations ought to be made, both with regard to the legal in- B tereft of money, and with regard to the bufinefs of pawnbroking.

The next Speaker in this Debate was Efchylus, who spoke to this Effect:

Mr. Prefident,
SIR,

HE Hon. gentleman and I

Thappen to differ very widely,

I fhall readily grant, Sir, that when a man forms any project, by which he expects great advantage, and applies to a moneyed man to affift him with money for carrying it on, the latter may, in that cafe, juftly inflift upon being a partner in the project, and upon having fome share of the expected profits; but, then, he ought to agree to lofe his money, in cafe the project should fail of fuccefs; for if he fhould take the projector's bond to make the money good to him, whatever might become of the project, his infifting upon, or receiving any part of the profits, I fhould look on as the height of injuftice and extortion. What then would it be, fhould he infift upon the projector's being bound, not C only to return him his whole money, but a certain yearly profit, or what we call intereft, whether the projector makes any profits by his project or no?

in our opinion, about this question. He fays, he confiders himself as an advocate for the poor by speaking in D its favour, and I look upon myself in the fame light when I fpeak against it; for I cannot but think, that it would be lucky for the poor, could we banish all pawnbrokers, and ufurers, out of the kingdom. As money is, of itself, quite barren, E and never can produce any thing: As it is no perishable commodity; and as it never can be made worfe by being made ufe of, I doubt much if, according to the principles of primitive christianity, any intereft, or hire, fhould ever be demanded for the ufe F of it. I think, the trouble of the lender in delivering it out, and receiving it back when he has ufe for it, is fully recompenced by the borrower's keeping it fafe for him, during the time it is lent; and as to the rifk the lender runs, it is his own G fault if he runs any, confequently he ought not to defire any man to pay for the danger he exposes himself to by his own folly.

Therefore, Sir, when the cafe of
ufury, or intereft, is ftrictly examined,
I am afraid, we muft allow it to be,
in fome measure, contra bonos mores.
But as it is the publick intereft, that
all the money the people have fhould
be employed in trade, or bufiness,
therefore, to prevent its being lock'd
up, or buried by the rich, all coun-
tries have agreed to allow the lend-
er to take fomething for the ufe of
his money, which we call intereft;
and this intereft fhould never be al-
lowed to be more than just what is
fufficient to tempt rich men not to
lock up or bury their money, but to
lend it to those who can make use of
it, and upon whofe fecurity, for the
payment of the intereft and princi-
pal, they can depend; for to talk of
allowing them a premium, or confi-
deration for the risk they run, is to
talk of what none but the lender
can prefcribe bounds to, which would
be an excufe for the highest extortion
a lender could be guilty of.

After having thus fhewn, Sir, what
I take to be the true caufe, and, I
think,

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In A

think, the only juft caufe for the
law's allowing any intereft for money,
you may perceive, that I fhall make
no fcruple to join with the Hon. gen-
tleman in that part of his fcheme,
which relates to the reducing the
prefent legal intereft of money.
this I fhall moft heartily concur ;
becaufe, I think, 51. per cent. a
great deal more than what is fuffici-
ent for tempting the rich not to lock
up or bury their money. I am per-
fuaded, that three per cent. is fuf-
ficient for this purpofe; and that B
every rich man in the kingdom
would lend his money at this interest,
rather than let it lie dead by him,
and exposed to the danger of being
ftol'n by fervants, or violently taken
from him by house breakers, or rob-
bers.

C

But, Sir, to increase the prefent legal intereft of money in any cafe, or upon any confideration, is what I fhall never agree to, because, I think, it would be unjust in itself, and deftructive both to our trade and commerce; for, from the earlieft D hiftories, to this very day, we may learn, that trade and commerce have always flourished moft in those countries where no intereft was allowed to be taken, or where the legal intereft was extremely low; and that the most ready and effectual way for E lowering the natural intereft of money, has always been to reduce the legal; the reafon of which is very plain No man will chufe to tranfgrefs the laws of his country, if he can, by any means, avoid it ; therefore, by reducing the legal in F tereft of money, you always force great numbers into trade, who would otherwife have chofe to live idly upon the intereft of their money. This increases the number of merchants and tradesmen, and vaftly increases the national stock in trade; by which means fuch a supply of ready money is yearly brought into the nation, and fuch an addition made to the quantity of money ready to be lent at intereft, that the natural

G

interest of money foon becomes equal to the legal, and then it is full time to make a new reduction of the latter.

This, Sir, is an additional reason for making a new reduction of the legal intereft of money, because it is allowed, that the natural interest of money upon mortgages, is now come to be below the legal; and as to the diftinction the Hon. gentleman was pleased to make, between the natural intereft of large fums lent upon mortgages, and that of fmall fums lent upon perfonal fecurity, or upon pledges, I fhall grant, that the former is generally a little lower, but the difference can never be near fo great as he imagines: Therefore, I am apt to believe, that if a man cannot borrow a small fum at legal interest upon his perfonal fecurity, it proceeds from his being reputed to be in bad circumftances, or a bad manager, and not from any want of money ready to be lent in that way; and if a man cannot borrow at legal interest upon a pledge of goods to more than the value, it must proceed from his applying to fome extortioner, and not to an honeft neighbour, who has more money by him than he has at that time occafion for; but I am fully convinced, that no man will apply to a common extortioner, except thofe who are ashamed of giving the true reason why they are then under fuch a difficulty, or those whose circumstances are fufpected, or conduct question'd in the neighbourhood.

It is, Sir, in my opinion, fo far from being for the publick good, to give a loose and a legal fanction to thefe extortioners, that, if it were poffible, we should root them out of the land. If we could do so, it would make every man more circumfpect in his dealings, and more careful of his character among thofe of his acquaintance; and I can hardly think, that ever any man was faved from a bankruptcy by dealing with

fuch

fuch lenders; for, if a man, by his
imprudence or extravagance, once
throws himself into their hands, it
cannot prevent, but it may protract
his ruin, by which he is enabled to
draw in more creditors, and to make
his fall more fenfibly felt, by every A
man that had any dealings with him,
which can never, furely, be of any
advantage to the publick.

every fuch fhop in town will afford a melancholy proof. Sir, it is the idle, the extravagant, the drunkard, who are obliged to conceal their dif trefs, because they are afham'd of the cause. But even to such, is their going to the pawnbroker really a relief? It is fuch a relief, Sir, as a dram is to one, that has got a habit of dram-drinking: It yields a prefent momentary relief; but it brings certain death at last. Whereas, if the dram-drinker had, in time, been deprived of his beloved liquor, he would, no doubt, for fome days, have been in great diftrefs; but nature would at laft have recovered it felf, and he might have lived to a good old-age.

I am, therefore, surprised to hear any gentleman ftand up as an advocate for giving a legal fanétion to extortioners; for fuch I must call all B those who take, or defire a greater intereft, than what is now allowed by law; nor fhould I give them any other name, were fuch a law paffed, as the Hon. gentleman propofes; becaufe, I think, the prefent interest, allowed by law, is more than any C man of a truly humane difpofition would defire to fqueeze from the neceffities, or from the honeft labour and industry of his neighbour. But I am still more furprised, when I hear a gentleman ftand up as an advocate for pawnbrokers, and for giv- D ing a legal fanction to their extortion. I know, Sir, it is pretended, that their business is a great relief to the poor, and they have been at great pains to make the world think lo; but I am convinced of the contrary. The bufinefs of pawnbroking E is the bane and deftruction of the poor: It encourages them in idleness, in debauchery, and all manner of wickedness. A poor labouring perfon may by fickness, or by fome accident, be reduced to difficulties, and obliged to borrow a fmall fum of mon y; but fuch as are known to be fober, diligent, and induftrious, never go upon fuch an occafion to the pawnbroker: They apply to fome one of their acquaintance, or to their mafter, or to the parish; and from one or other of thefe, they can G never fail of finding relief. Who are they, then, it will be faid, that apply to the pawnbrokers? For that great application is made to them,

F

Even fo, Sir, were it poffible for us to put at once an abfolute end to all manner of pawnbroking, publick or private, those who are now got into the habit of going to fuch fhops, would, for fome time, be in great diftrefs; but this would give fuch a check to most of them, that they would give over their idlenefs, extravagance, or drunkennefs, before being quite undone; and by induftry, fobriety and œconomy, might foon recover, fo far as to be able to ftand the fhock of any little misfortune, without being obliged to apply any where for relief.

Upon the whole, Sir, I muft lay it down as a maxim, that for the encouragement of trade and commerce, and for the very falvation of the poor, or at leaft fuch of them as the publick ought to have any concern for, no higher intereft ought ever to be allowed by law, than just what is fufficient for tempting moneyed men to let their neighbours have the ufe of their money, rather than let it lie dead by them; and as the prefent legal intereft is more than fufficient for this purpose, you may reduce it if you will, but in no cafe, nor upon any pretence whatfoever, ought it, I think, to be raifed. There may be, at pre

fent,

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