vantages of the thoughtless and unwary. In these cases a great deal of fraud and extortion was doubtless practised, and the very name of usury came at length to be associated with every thing that was fraudulent and base. But the association is evidently accidental, arising from the manner in which the business has been carried on, and not from any thing in the nature of the business itself.

2. The second reason for the restraint is the prevention of prodigality. Whether it is in itself desirable that legislators should undertake by positive laws to prevent prodigality, may perhaps be doubted; but at any rate it does not appear that the measure in question is at all likely to have that effect. In the first place, prodigals are rarely in the habit of resorting to this expedient. No man ever thinks of borrowing in order to spend, so long as he has any ready money of his own, or what he can conveniently turn into ready money. No man has any occasion or is at all likely to take up money at an extraordinary rate, who has the ordinary security to give. Besides there is another set of men from whom prodigals are in the habit of borrowing indirectly at a high interest, in spite of all the laws that can be made-the tradesmen who deal in the goods they want. Every one knows it is much easier to get goods than money. People trust goods upon much slenderer security than money; it is very natural that they should do so. For if the ordinary profit of trade be 15 per cent. a man can afford to be three times as adventurous in trading, as he can in lending money. Hence a prodigal can much more easily get the goods he wants than the money to buy them with. Here then are men who for the sake of the extraordinary profit are willing to run the extraordinary risk, and who without the smallest danger from the usury-laws may accept any rate of profit they please to take, or he to offer.

3. The third reason is the protection of indigence against extortion. A man of this description wishes to borrow in order to engage in some profitable undertaking. His success is uncertain, and as he cannot offer the ordinary security, no one will advance the money without some compensation for the extraordinary risk. Upon these terms he could get it, and upon these terms he judges, who has nothing to hinder him from judging rightly, that it will be for his advantage to get it. But the legislator, who from his situation cannot be a competent judge, says 'no, you shall not have the money.' And this is the protection the law affords to the indigent! "The folly of those who persist without reason, as is supposed, in not taking advice, has been much expatiated upon; but the folly of those who persist without reason in forcing their advice upon others, has been little noticed, though it is perhaps the more frequent and the more flagrant of the two.

I apprehend that this scheme of protecting the indigent borrower from the oppression and extortion of the money-lenders, proceeds upon an idea of the nature of the connexion between the parties derived rather from history than from experience. Formerly, (that is in the days of republican Rome, from which we are apt, upon various subjects, to derive many more ideas than are justly applicable to the present state of things,) the rich lent to the poor; now it is perhaps more commonly the reverse. The widow and the orphan, incapable of employing their property to advantage themselves, entrust their little pittance into the hands of some great commercial specu

lator, the ocean of whose capital is probably fed by a multitude of such little streamlets; he is the great borrower, and he borrows, not in order to spend, but to embark in some concern the proceeds of which are at once to pay the interest and produce him a handsome profit besides. The law therefore, if there must be a law, should run the other way ;-it ought to be a protection to the indigence of the lenders against the rapacity or the oppression of the borrowers. But the fact is that there is no necessity for any law in the case, since the business will be much better adjusted by the competition of the multitude of borrowers, and any individual inconvenience which may be removed by legislative interference is dearly purchased by throwing an additional impediment in the way of all commercial transactions.

4. In the fourth place, the protection of simplicity against imposition is alleged as one of the objects of this law. Now in this respect it is evident that the limiting of the rate of interest must be quite nugatory while there are so many other occasions in which the simple are much more liable to become sufferers, and in which it is impossible for the legislature to interfere. Buying goods is the business of every day; borrowing money is a business which occurs but seldom. In buying goods a man is much more exposed to imposition than in borrowing money. In buying goods, if I find I have been imposed upon, my loss is commonly irretrievable; if I find I have given toohigh interest to one man, I need only borrow of another at a lower rate and pay off the first.

5. Dr. Smith's principal argument in favour of the restrictive laws is founded on the apprehended danger lest, otherwise, an excessive portion of the capital of the country should fall into the hands of "prodigals and projectors." If as high interest as eight or ten per cent. were permitted, sober people, he thinks, who will give for the use of money only a part of what they are likely to get by it, would not enter into the competition. A great part of the capital of the country would thus be kept out of the hands which were most likely to make a profitable and advantageous use of it, and throw it into those which were most likely to waste and destroy it. The conse quence which Dr. Smith apprehends from the case he supposes, does not seem to be necessarily connected with it. Is it not very conceivable that the money-lender would rather accept five per cent. from the regular trader than eight or ten from the speculator? If he prefers the latter, it is because he considers the difference in the interest as more than adequate to the difference in the risk. If he judges rightly in this, there is nothing in the transaction that a prudent legislator would wish to prevent; if he is wrong the loss must fall chiefly on himself, and unless he is an absolute fool, he will presently learn more wisdom from experience.

Dr. Smith's clasification of prodigals and projectors under the same genus, is an instance of no uncommon species of sophism. Projectors are a class of men who seem to have fallen under our author's displeasure ;-the name seems in general to convey an indiscriminate idea of reprobation; and those who are led away by the tyranny of sounds will doubtless imagine that to ask whether it be fit to restrain projects and projectors is the same

thing as to

ask whether it be fit to restrain rashness and folly, and absurdity, and knavery, and waste. But nothing can be more evident, than that under this class must be arranged all the most eminent benefactors of mankind; all those who have raised us by their genius, industry and perseverance from the barbarous state of naked savages; all those who are now exerting themselves to strike out new paths for industry, to increase the comforts and conveniences of human life, and to add to the happiness of the human race; all those who are hereafter destined to exalt our posterity above their fathers, and to continue that course of improvement which mankind have so long and so successfully pursued. Every art we now possess, every "sober and regular trade" we now carry on, was at one time or other a project; liable to all the objections, exposed to all the difficulties, attended by all the uncertainties, which occur in the projects of the present day. If it had been unwise to put a stop to these projects when in their infancy, equally impolitic would it now be to discourage those enterprising spirits who are perpetually looking out on the road to improvement, merely because they chance to bear a name which the prejudices of men and of the times have led us to look on with suspicion.

Hence it is easy to perceive, that if this law had the effect which is ascribed to it of checking projectors, this tendency could by no means be ranked among its recommendations. But the influence which it exerts in this way is in fact very limited, and even this is exerted in checking not the rash, extravagant, gambling speculator, but the respectable, honest, and enlightened improver. It may be added, that by increasing the difficulty of legally carrying on their undertakings, it deters men of respectability from attempting any thing of the kind, and gives a great advantange to persons of low credit and easy consciences, who will not scruple to violate this or any other law whenever they find it for their interest. If then the law does not find the character of a projector such as it is commonly represented, it has an evident tendency to make it so.

Such then are the grounds upon which this restriction is defended. It has perhaps been made to appear that the advantages ascribed to it, problematical as some of them are in themselves, are by no means effectually secured by it. There are no ways in which this law can do any good, there are a variety of ways in which it cannot but do mischief. It precludes many altogether from getting the money they want. To many more the terms are rendered more disadvantageous than they otherwise would be. This arises partly from the addition to the ordinary risk occasioned by the law itself, for which the lender must be indemnified; he must be insured as it were against the law. But besides this, the law tends to raise the interest by driving a great number of lenders out of the market; who are deterred by the danger of the business, and the disrepute that has fastenend upon the name of usurer. This ignominy and reproach which is heaped in consequence of these laws upon that generally meritorious class of men, who not more for their own advantage than to the relief of the distressed have ventured to break through them, is not the least of their evil effects. A man is in want of money to enable him to pursue some extensive and beneficial project; a Watt or an Arkwright, we will suppose, occupied in schemes productive of the 3 A

VOL. II.

most lasting benefit to his country and the world. I can furnish the necessary assistance, but the immediate expenses are great, the difficulties to be overcome are formidable, and the final success perhaps uncertain. Under these circumstances it would not be prudent to lend the money at the ordinary rate; the risk of losing the principal is greater than the interest would compensate. Still however the borrower is desirous to run this risk, and thinks it worth his while to obtain the necessary capital at the higher rate at which alone I am willing to lend, and accordingly the bargain is made. Now what is there dishonest or really disreputable in all this? Wherein does it differ from various other contracts which are openly made every day? A man we will suppose is carrying on a manufacture which is particularly liable to loss and damage from fire. He applies to the insurance office."No," say they, "we cannot insure you at the ordinary rate, the risk is too great; but at a higher we will undertake it." And upon these terms the insurance is effected. This is a transaction which takes place in the face of day continually; and I should like to see what satisfactory distinction could be made out between the two cases. Does the law intend that no man shall be permitted to encounter a risk to a greater amount than five per cent.? Or that if he does he shall not be indemnified accordingly? If this be its intent it does not go far enough. No man should be permitted to venture a ship out at sea in time of war, or in stormy weather; or to undertake a hazardous operation in manufactures. In short the whole train of commercial enterprize would be universally impeded.

The effect of these laws upon the morals of the people is equally pernicious. They open a wide door to treachery and ingratitude. To purchase a possibility of being enforced, the law neither has nor can have any other resource than that of hiring the borrower to break his engagement and thus crush the hand that has been stretched out to help him.

Such are the mischiefs of laws to prevent usury; even supposing that they were really adequate to produce this effect. The fact however is, that with whatever care such laws may be guarded against the possibility of evasion, there are a variety of methods by which in a commercial country like this it is possible as long as there remains any liberty of trade at all, to raise money upon any terms that may be found necessary for procuring it. Such are the method of drawing and re-drawing described by Dr. Smith; the method of selling accepted bills at a reduced price, and various other practices. But besides these there are various cases in which usury is not only .permitted but countenanced. The trade of pawn-broking is neither more nor less than usury, and sometimes very exorbitant usury; and a species of it which the advocates of the restrictive law should consider as the worst of all, because it is commonly practised upon indigence and simplicity. Yet here the law prescribes no limit; but a much more effectual and the only just limit is provided by nature in the competition of the respective traders.

Another species of interest which is discountenanced by the law and not less loudly by public opinion as a sort of usury, is what is called compound interest. The same general principle of liberty which points out the impropriety of the other restrictions applies with equal force here. Nothing can be more evident than that by prohibiting compound interest the law favours

the borrower at the expense of the lender. If the latter had received his interest at the day, he would have made compound interest of course by lending it out again. If he does not receive it punctually he is therefore by so much a loser, and is debarred from all compensation for his loss, while the borrower is by so much a gainer. Thus rewarding the defaulter for breach of faith, iniquity, indolence or negligence, punishing the lender for his forbearance, and holding out to him a continual temptation to hard-heartedness and rigour.

From these and other considerations I think it is abundantly manifest that the law which restricts the rate of interest is no exception to the general maxim which inculcates the impolicy of such legislative interferences; that it does not attain the ends it professes to have in view; that many of these ends are not in themselves desirable; that it does no good but a great deal of positive mischief, and that the thanks of every friend to his country will be justly due to the enlightened and public-spirited statesman, who shall erase from the statute-book this along with many other enactments which have so long discouraged the industry and retarded the prosperity of these islands. V. F. F.

ANTIQUITY OF DRINKING HEALTHS.

ཧཱུྃ༠༦༦་་༥་༠༠༥༠་

To the Editors of the Northern Star.

YOUR readers will before this time have discovered that to me, who profess myself an admirer of the manners and usages of "olden times," the antiquity of any of our popular customs is a most powerful recommendation for its continuance; either from prejudices of my own creation, or those which I may have imbibed from the peculiar course of studies to which my attention has been directed, I entertain a partiality for the manners and learning of the ancients, which nothing I have yet read or seen has been able to remove. No doubt, as your very able and ingenious correspondent V. F. F. has justly remarked, succeeding generations have made great improvements on the knowledge and discoveries of their predecessors, and so far have certainly the advantage; but these improvements, it must not be forgotten, are in the walks of science and art. If we compare the ethics of ancient and modern times, I am afraid the result of the comparison will not be in our favour. We may equal or excel the worthies of Greece and Rome in elegance of language or brilliancy of elocution, we may be better chemists, more subtile logicians, or more accurate reasoners on the phenomena of nature; but when simplicity of manners, sincerity of professions, and disinterested services are taken into consideration, we shall too often be found lamentably inferior: those warm expressions, those friendly offers of assistance which the actual feelings of generosity once dictated, are now improved (if I may use the term), into unmeaning compliments, which the tongue utters though the heart disowns, and, like many of our customs, are only mutilated copies of their manners whom we profess to have surpassed in all that is great and good. Of this description is the drinking of healths,