A Summary of the History and Law of Usury, with an Examination of The Policy of the Existing System, and Suggestions for its Amendment, Together With an Analysis of The Parliamentary Procedings Relative to the Subject, up to the Present Time, and a Collection Of Statutes. By James Birch Kelly. 1835. Adapted for html by Andy Chalkley 2017

A Summary of the History and Law of Usury, with an Examination of The Policy of the Existing System, and Suggestions for its Amendment, Together With an Analysis of The Parliamentary Procedings Relative to the Subject, up to the Present Time, and a Collection Of Statutes.


Adapted for digital format by Andy Chalkley in 2017
[Page footnotes have be renumbered to become Chapter footnotes.]


It is better to mitigate Usury by declaration, than to suffer it to rage by connivance.

Lord Bacon.


By James Birch Kelly.

of the inner temple.


LONDON:

RICHARD JAMES KENNETT,

59, GREAT QUEEN STREET, LINCOLN’S INN FIELDS.


1835.


GEORGE HAYES, PRINTER, DARTMOUTH STREET.


To the honorable the house of commons of the united kingdom of great Britain and Ireland, with the sincere hope that their future measures may tend to the further advancement and prosperity of the nation they represent;

The following pages are most respectfully inscribed, by their very obedient and faithful servant, the author.


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From the termination of the late war, and more especially from the passing of the Reform Bill, public attention has been constantly drawn to the correction of whatever has, by lapse of time, become unsuited to our present circumstances.

The subject of Usury has, in common with others, attracted its share of notice, without, however, producing any other result than a general and increasing conviction of the necessity of some material alteration in the existing law.

That a change more extensive than any that has yet been made must soon take place seems generally to be admitted, but considerable diversity of opinion exists, as to its nature and extent.

Those who recommend the total Repeal of the Laws relating to Usury, look more to the advantages of Trade and Commerce than to the interest of the Landed Proprietor, while others, who look alone to the dangers to be apprehended by the Aristocracy, forget the Trading part of the Community. That the suggestions of the Author will reconcile those interests he cannot pretend to determine, but it will be to him a source of no small gratification, if they should, in any degree, contribute to so desirable an end.

No evil consequences appear to have followed the alteration made in the Law during the last Session, by virtue of which Bills and Notes having not more than three months to run, may be discounted at any rate of interest, and the experiment may therefore be regarded as affording a safe and excellent ground work for further change; for which, indeed, repeated Parliamentary discussions have prepared the public mind.

In 1832, a Bill for the alteration of these Laws was introduced into the House of Commons, by W. A. Mackinnon, Esq. M.P. for Lymington; but, from the pressure of other business, he was unable to proceed so far as to ascertain the feeling of the House. To this able and enlightened Member the Author is indebted for many useful hints; and, while acknowledging them, with unfeigned pleasure, cannot but express his satisfaction that the cause has regained so temperate and efficient a supporter. Since that period, several notices of a similar nature, which have been given by other Members, have been suffered to drop.

A like notice was given for the ensuing Session, when it is hoped public expectation may not again be disappointed, nor so favourable a time for considering this important question be allowed to pass without the Legislature coming to a safe and satisfactory decision on its merits.

Preface.

In offering this work to the Public, it has been the object of the Author to give a plain and concise Summary of the History of Usury in England; and a statement of the Law, as defined by the decisions of the Courts at Westminster Hall.

He is not aware of the existence of any very recent Treatise on this subject. The last he has met with is by Mr. Comyn, in 1817; since which period, an Act of Parliament respecting Bills of Exchange, so far as they are affected by Usury, in the hands of the third parties, and two Acts explaining and amending the 14 George III, relative to Foreign Interest, as well as the recent Clause introduced into 3 & 4 William IV, c. 98, authorising the discounting of Bills and Notes not exceeding three months date, or which have not more than three months to run, at any rate of interest that may be agreed on, have materially altered the Law; it is, therefore, obvious, that many principles and decisions cited in former publications as authority must now have ceased so to be.

These observations are made by the Author ex necessitate rei, with no view to lessen the merits of any of the learned writers who have preceded him, much less to invite a comparison between their productions and his own, but only to show that room is made, by these alterations, for a new Treatise on the subject of Usury.

In dividing the work into Contracts and Agreements, which have, for the most part, been deemed within the Statute and Usurious, and those which have in general not been so considered, he is aware how difficult it is to class every case distinctly under the head to which it may be applicable; but, notwithstanding these objections, he trusts they will be counter balanced by the advantages of the arrangement. In the fifth Chapter will be found information as to the relief from Usurious Contracts and Engagements, which may be obtained on application to the Courts of Law and Equity, with the mode of proceeding in each. In the Sixth, the means to be used for enforcing the Penalties incurred under the Statutes, and the Evidence relative to Actions qui tam are explained.

Endeavour has been made to ensure accuracy, by a careful examination of the authorities referred to, and the language of the Judges has, in all cases, been made use of, where it has been found either establishing new, or confirming or refuting prior principles or decisions, in order that the reader might rather be left to draw his conclusion from the opinions ex pressed by the Courts than to trust to any explanation of them.

CONTENTS.

PART I.

INTRODUCTION................................ i to viii.

Chapter I.

Summary of the History of Usury...................... 1

Chapter II.

Of Agreements and Transactions which have for the most part been deemed within the Statute, and Usurious.

Section 1. Where the Borrower has been furnished with Goods instead of Cash.................... 34

Section 2. Discounting Bills, not of a Mercantile Nature..

Section 3. Where an Extra-charge has been made for Brokerage, &c...........................

Section 4. Compound Interest on Mortgages, &c.........

Section 5. Where the Risk of losing the Principal is slight..

Section 6. Where the Interest only is risked..............

Section 7. Retiring Partners.....

Section 8. Stipulations made on the Transfer of Stock, by way of Loan........................ 53

Section 9. Where something besides Money has been given or contracted for in consideration of the Loan

Chapter III.

Of Agreements and Transactions which for the most part have not been deemed Usurious.

Section 1. Where Usury is incurred by mistake.......... 58

Section 2. Where the Principal is bonâ fide hazarded...... 60

Section 3. Post Obit Bonds.......................... 62

Section 4. Loans on Contingencies...................... 65

Section 5. Where the Transaction is by way of Annuity.. 66

Section 6. Usage of Trade, Prompt Payment, &c......... 72

Section 7. Where there is a Penalty for Non-payment...... 76

Section 8. Foreign Interest............................ 77

Chapter IV.

Consequences of Usury.

Section 1. Where Securities are void.................. 80

Section 2. Renewed or substituted Securities............ 83

Section 3. How third Parties not privy to the Usury, are affected by it.......................... 86

Section 4. Sureties, and how affected by Usury.......... 88

Section 5. Consequences of Usury.................... 90

Chapter V.

Relief in Cases of Usury.

Section 1. Relief from Usury at Law.................. 93

Section 2. Relief from Usury in Equity................ 95

Section 3. Bankruptcy.............................. 99

Section 4. Evidence on Usurious Contracts............ 101

Chapter VI.

On the Penalties of Usury.

Section 1. Who are liable to Penalties................

Section 2. Proceedings for Penalties and Limitations of Actions qui tam

Section 3. Where the Action must be brought

Section 4. Compounding Actions qui tam.

Section 5. Evidence in Actions for Penalties.

Section 6. Indictment.

Part II. Observations on the Policy of the Usury Laws, with suggestions for their Amendment.................. 160

Appendices................................ 115, 193,225

Index

A table of the cases cited.

A. Page Abrahams v. Bunn.. 91, 111 Ackland v. Pearce.... 86 Ainsworth ex-parte 74, 100 Ancaster (Duke of) v. Picket............ 35 Anonymous Case........ 101 Anderson v. Maltby.... 52 Ashton v. Longes...... 103 Astley v. Reynolds.... 95 Auriol v. Thomas.. 44, 77 B. Baker v. Mellish...... 97 Ballard v. Oddey...... 59 Bangley, ex-parte.... 100 Barclay v. Walmsley.. 43 Barker v. Vansommer and another.. 39, 96, 97 Barjean v. Walmsley... 90 Barnes v. Hedley.... 84, 99 Barnes v. Worlich.... 41 Barnard v. Young.... 54 Page Barnett v. Tomkins.... 82 Bassett v. Prowe...... 89 Batty v. Lloyd......... 63 Baugh v. Cradocke.... 102 Becher’s Case........ 76 Bedingfield v. Ashley 62,65 Beete v. Bidgood...... 49 Bent v. Baker........ 111 Bernard v. Fitzhouse... 93 Bernard, Lord v. Saul.. 93 Berny v. Pitt........ 63 Bevan ex-parte........ 49 Bland v. Featherstone... 110 Bodily v. Bellamy.... 78 Body v. Tassel........ 80 Boldero v. Jackson.... 55 Borrodaile v. Middleton 106 Bosanquet v. Dashwood 97 Bowyer v. Bampton.... 86 Brand v. Cumming.... 97 Brard v. Ackerman 102, 103 Brooke v. Middleton 46, 106 Brown v. Barkham.... 47 Brown v. Fulsbye.... 80 Bruce v. Hunter...... 49 Buckler v. Millard.... 59 Buckley v. Guilbank.. 59 Burton’s Case...... 50, 76 Bush v. Buckingham.. 59 Button v. Downham (or Droman)...... 50, 65, 89 C. Caliot v. Walker.... 44, 49 Carstairs v. Stein...... 44 Cecil v. Sutton and an other............ 39, 96 Chambers v. Goldwin.. 48 Chauncey v. Tahourden 97 Chapman v. Black.. 84, 85 Chesterfield v. Janssen 40, 61, 64, 65, 71 Chippendale v. Thurston 54 Clarke v. Shee........ 94 Cleve v. Powell...... 102 Cole v. Gibbons...... 40 Coombe v. Miles...... 38 Cotterell v. Harrington... 71 Crook v. Jadis........ 88 Cuthbert v. Haley.... 84, 85 D. Dagnall v. Wigley.... 88 Dalbiac v. Dalbiac.... 96 Daniel v. Cartony.... 86 Davis v. Hardacre.... 37 Davison v. Pitt...... 55 Dewar v. Span........ 78 Page Dixie’s (Sir Wollaston) Case.............. 107 Doe v. Barnard...... 55, 81 v. Chambers.... 56 -- v. Gooch........ 71 Duffen v. Smith...... 102 E. Eaton v. Bell and others 49 Eden's Bankrupt Law... 99 Edmonson v. Popkin 82, 94 Ekins v. East India Company ............. 77 F. Farquharson v. Barstow 54 Fereday v. Wightwick 72 Fisher v Beazley.. 81, 106 Fitzroy v. Gwillim... 95, 107 Flight v. Chaplin...... 66 Floyer v. Edwards.. 42, 73 Floyer v. Sherard...... 67 Forrest v. Elwes...... 54 Fountain v. Grymes.... 67 Fussill v. Brookes.... 80 G. Gardner v. Morefield... 109 Garret v. Foot...... 62, 76 Gilpin v. Enderby...... 53 Glassfurd v. Laing.... 59 Goad's (Dr.) Case.... 71 Goldsmith v. Bunn.... 86 Gray v. Fowler.... 83, 91 Gwynne v. Heaton.... 40 Gwyn ex-parte........ 46 H. Hammet v. Yea...... 45 Harris v. Boston...... 44 Harrison v. Hannell.... 82 Hart v. Draper........ 110 Hattam v. Withers.... 103 Harvey v. Archbold.... 77 Heathcote v. Paignon... 98 Henson ex-parte...... 46 Hindle v. O’Brien.... 83 Hodges v. Lovatt...... 95 Holland v. Pelham.... 70 Hutchinson v. Piper.. 44 Hylton v. Hylton...... 98 I Irnham v. Child...... 69 Jennings ex-parte..... • 83 Jestons v. Brooke...... 57 Joy v. Kent.......... 62 K. Kent v. Lowen.. 46,87, 103 King v. Clifton........ 110 King v. Fraser........ 109 King v. Hamlet.... 40, 97 L. Lamego v. Gould...... 65 Lawley v. Hooper.... 68, 69 Le Blanc v. Harrison.. 56 Page Lee v. Cass.......... 46 Lloyd v. Williams., 41, 107 Long's Case.......... 110 Long v. Wharton.... 62, 65 Lowe v. Waller.... 36, 86 Lowes v. Mazeredo.... 87 M. Machin v. Delaval.... 82 Maddock v. Hammett... 106 — v. Rumball.. 55 Mallory v. Bird........ 106 Manners v. Postan.... 57 Marchant v. Dodgin and others............ 85 Marsh v. Martindale.... 59 Mason v. Abdy........ 50 v. Gardiner.... 96 Massa v. Dauling.... 41 Masterman v. Cowrie.. 44 Matthew v. Lewis.... 64, 83 Matthews v. Griffiths.. 44 Maugham v. Walker... 112 Meere's (Sir Thos.) Case 47 Moody v. King........ 103 Moore v. Battie...... 55 Morris v. Jones........ 70 Morissett v. King...... 52 Morse v. Wilson...... 53 Murray v. Harding 59, 67,68 N. Naish ex-parte....... 70 Nash v. Duncombe.... 102 Neville v. Wilkinson.. 94 Newall v. Jones...... 49 Nicholls 77. Lee........ 84 O. Oliver v. Oliver.... 26, 27 Ossulston (Lord) v. Lord Yarmouth.......... 47 Owen v. Barrow...... 112 P. Parr v. Eliason....45, 87 Patrick exparte in re Holthouse...... 45, 100 Peachy v. Osbaldestone 43 Pearson v. M'Gouran... 109 Perryman v Steggall and another............ 103 Phillips v. Cocagne.... 91 Phillips v. Weague.... 83 Pickering v. Banks.... 84 Pigou ex-parte in re Harvey........ 75, 100 Pike v. Ledwell...... 54 Pitt v. Cholmondeley... 98 Plumbe v. Carter...... 74 Pollard v. Scholey.... 57 Polwarth v. Cooke.. 39, 96 Potkin's Case........ 89 Pratt v. Willey........ 36 Preston v. Jackson.... 84 Q. Queen (The) v. Dye.... 113 R. Page Regina v. Dye........ 113 v. Sewell, alias Beaus.......... 84, 94 Regulae Generales... 93, 110 Reynolds v. Clayton.. 76 Rex v. Drury........ 71 v. Hendricks.... 108 v. Rout.......... 107 v. Upton........ 113 v. Walker........ 107 Rich v. Topping.... 36,103 Richards v. Brown.. 50, 66 Roberts v. Trenayne 51, 81, 83 Roberts v. Goff.... 83, 94 Robinson v. Bland.... 90 - v. May...... 89 Rowe v. Bellasis...... 71 S. Saunder's Case...... 55 Saunderson v. Warner.. 7 Soome v. Glean...... 61 Scott v. Brest...... 56, 109 Scott v. Nicholl...... 91 Scott v. Nesbitt.... 96, 97 Scrivener ex-parte.. 96, 99 Scryme v. Rybot...... 39 Scurry v. Freeman 108, 109 Sharpley v. Hurrell..., 60 Shep Touch.......... 55 Skip ex-parte...... 96, 99 Smedley v. Roberts.... 55 Smith v. Bromley...... 94 Smith v. Prager...... 111 Solarte v. Melville.... 56 Stanton v. Knight....92, 98 Symonds v. Cockerill.. 71 T. Tanfield v. Finch...... 71 Tarleton v. Backhouse... 48 Tate v. Wellings...... 55 Thompson ex-parte.... 99 Thompson v. Powles 46, 77 Turner v. Hulme...... 85 Twisleton v. Griffiths.. 40 W. Wade v. Wilson...... 106 Page Walker ex-parte in re Petrie......45 Wharton v. May...... 64 White and another v. Wright.......... 54, 81 Whitmore v. Francis.. 97 Wickes v. Gogerley.... 84 Williams v. Hedley.... 94 Winch v. Fenn........ 44 Wood v. Greenwood.... 109 Wright v. Laing 92, 98, 108 Wright v. Wheeler 56, 84, 99 Wyatt v. Campbell... 88,104 Y. Young v. Wright.... 86

ON THE HISTORY OF USURY.

Chapter I.

A SUMMARY OF THE HISTORY OF USURY IN ENGLAND.

Usury is said by some to be derived from the Latin words ‘Usus' and ‘AEris', and by others, from ‘Usus' and ‘AEei', and was originally defined to signify money given for the use of money, whereby a gain was made by contract above the principal by way of remuneration for the loan; and this not only applied to money, but to goods, corn, merchandize, or any thing else: if of the latter it was commonly termed increase, and was uniformly prohibited in all Christian countries, and in England both by the common and statute law. [1]

It may now, however, (since under restrictions it has been sanctioned by the legislature,) be defined as the taking of a rate of interest above what is permitted by law.

[1] Paley Mor. Phil. “If a woman should lend her neighbour two egges to have three againe, were it not damnable Usurie! !" - Fenton.

“Interest, therefore, is the gain allowed by law for the use of money.” “And Usury, the extortion of any sum beyond what is legal.” In its former sense, Usury was at an early period of our history invariably stigmatised by ecclesiastical writers as contrary to the divine law, and by the canons of the church it was forbidden and punished, as sinful and against scripture. [1] Their objection to it seems to have arisen from the then current construction of the law of Moses, by which it is prohibited to the Jews, in their dealings with each other, in the following words:

“Thou shalt not lend upon Usury to thy brother, Usury of money, Usury of victuals, Usury of any thing that is lent upon Usury. Unto a stranger thou mayest lend upon Usury, but unto thy brother thou shalt not lend upon Usury. That the Lord thy God may bless thee in all thou puttest thine hands to, in the land whither thou goest to possess it.” [2]

[1] Usurarius monitus non desistens si clericus, ab officio et beneficio suspenditur, si laicus, excommunicatur. Decret. 5 lib. tit. 19. de Usuris. Alexander in Concilio Toronem 1180 Romae. Corp. Jur. Canonici. It was ranked with heresy, schism, incest, and adultery,—sentence of excommunication was to be denounced by a Bishop or Prebendary at least: Canones Synodi, London, Anno 1584, c. 4, and by Hugo Cardinalis said to be a Sodomia Naturae.

[2] Dueteronomy. 23, c. 20, 21 v. 25 Lev. 36 & 37. Psalms 15; 5.

According to a learned commentator on the sacred volume, the foundation of this precept was to impress on the minds of the wealthier Jews the necessity of kindness and benevolence to the poor of their own nation, who, being thus gratuitously assisted, might be enabled, under divine providence, to better their condition; [1] and Sir Edward Coke conceives it was permitted to be taken of strangers only, as a mean to exterminate or depauperize them, so as they should not be enabled to invade or injure God's people. [2]

It is clear that by “strangers,” were meant the Canaanites and all those neighbouring tribes with whom the Jews might trade, and have any intercourse or transactions, for their mutual advantage.

The Reverend Fathers alleged that as money was in its nature barren and unfruitful, and only instituted by mankind for the purpose of exchange, it would be monstrous to make it productive, which would in fact pervert it from the very purpose it was originally intended to serve, its becoming a source of profit having never been contemplated. One of these holy men, St. Basil, who flourished in the fourth century, expatiates with virtuous indignation on the unnatural and increasing fertility of money when placed out at Usury, “brought and bringing forth (says he, with “pious horror,) on the same day, though not gifted “by the god of nature with genitive or procreative “faculties.” [3] Indeed in such general detestation was the practice of Usury held by the Church, that it was decided in the counsel of Lateran that it could not be allowed, although the profit were applied for the redemption of captives.

[1] Lewis.

[2] 3 Inst. 151.

[3] Vid. Appendix A, 1.

The latter position of its natural sterility is said to have been derived from Aristotle, [1] though the passage relating to it has been suspected to be spurious. [2] Its fallacy has been ably exposed by a modern writer. [3]

On the other hand there were not wanting those who contended (and their opinion has long since been generally adopted,) that the precept of Moses was to be understood in a political, and not in a moral sense, as it did not entirely forbid the taking of Usury as a thing malum in se, but only restrained the Jews from receiving it of their brethren, while, by express words, it gave them liberty to demand it from “strangers.” “A distinction,” observes an eminent writer with much force, “which could hardly have “been admitted into a law intended by the divine “author to be of moral and of universal obligation. [4]

[1] Aristot. de Politica, lib. 2, c. 10, 8vo. edit.

[2] Black. Comm. vol. 2, 450.

[3] Bentham's Defence of Usury, 101. Calvin's Epist. 383. The ancient Fathers, Lactantius, Basil, Chrysostom, Augustin, &c. as well as hosts of Councils and Casuists, were unanimous in their condemnation of Usury. Gibb. Dec. and F. of Rom. Emp. vol. 5. p. 376 note.

[4] Pal. Mor, and Polit. Phil, vol. 2, book 3, c. 10. Blac. Comm. vol. 2, p. 454.

As to money being naturally barren and unfruitful, the same might with as much truth be affirmed of many other kinds of property into which it may be converted, as houses, carriages, and the like. These are equally unprolific, and yet it has never been said that it would be unlawful for their owners, by lending them on hire, to derive a reasonable profit for their use; so if a man were to borrow a daric of another, though it might be barren and not beget another daric, yet, if the borrower were to buy with it two ewes and a ram, it is probable that at the end of a year they would not prove barren, but that he might have two or three lambs in addition; and if the three sheep were again sold to repay the sum borrowed, and he were to give a lamb for the use of the money, he would still be a gainer by two, or one lamb at least, by the bargain; an idea, says the able and ingenious author of the Defence of Usury, which does not seem to have occurred to Aristotle or his disciples. [1]

[1] Bentham's Def of Us: 101. Sir Rob. Filmer on Us. Sir Rog. Twisden's Edit. p. 102. That money begetteth not money is a weake argument, for the gaine that is raised out of any thing is not always the fruit of that same thing, but rather of his skill and industrie that doth employ it; the Earth itself, without the labour of him that useth it, will yield in small gaine. Contractus ubi frater non laditur, charitate non repugnat. Ex. of Neshech.

It may be remarked as singular, that while Aristotle's notable doctrine of the natural barrenness of money is adopted and quoted by most writers in this and other countries of Europe, down to the 17th century, it never had any influence in Greece.—For his opinion, vid. Appendix A. 2.

On these grounds it has been maintained that there is clearly nothing in the divine precept, (which was evidently intended for the Israelites alone,) [1] to prohibit any Christian community from making such regulations for the convenience and benefit of society as would allow of money becoming as profitable to its owner as any other species of his possessions; an opinion which is strengthened by the fact, that the practice is nowhere forbidden in the New Testament, which on the contrary seems indirectly to sanction it, [2] as in the Gospel of St. Luke we find our Saviour, though in a parable, thus expressing himself:

“Wherefore then gavest thou not my money into the bank, that at my coming I might have required mine own with Usury.”

[1] Michaelis observes, that the Mosaic Law contains three several Statutes on the subject of Interest, which are not, as is commonly imagined, precisely of the same import. In the first, Exodus xxii. 25, mention is made of poor Israelites only, and from them the taking of Interest is prohibited. In the second, Leviticus xxv. 35, Israelites that have waxen poor are still the only parties spoken of, and Michaelis infers, that hitherto it was allowable to take Interest of an opulent Israelite, but that in consequence of their laws being evaded by chicanery, Interest among Israelites was totally forbidden in the fortieth year after the Exodus:—he argues that the prohibition of Interest was more equitable and expedient among the Jewish people than it would be among us, from the summary nature of Mosaic justice, from the greater certainty of the security, inasmuch as the Israelitish debtor was generally possessed of landed property, and if not, it was in the creditor's power to seize his person, his wife, and children, from the fact that the borrower was generally poor, which is not always the case in modern times, and that the lender had not those means of profitably investing his money which existin our days. On the whole, the German critic regards loans among the Jews as Alms-deeds, the subject of exhortation but not of legal contraint. See Commentaries on the Laws of Moses.

[2] St. Luke, c. 19, v. 23. St. Matthew, c. 25. v. 27.

In St. Matthew it is still stronger; “Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with Usury.” We may rest satisfied, that this injunction would not have been given even parabolically if it were either immoral or contrary to the Mosaic law. In support of this view of the subject, there exists the testimony of two learned divines who differed widely in their religious tenets, St. Thomas Acquinas and Calvin, the latter of whom changed his previous opinion, and candidly admitted that he knew of no scriptural authority by which Usury was altogether condemned, [1] and many other learned and pious men were of opinion that Usury was only unlawful, even among the Jews, when contaminated by oppression, cruelty or extortion. [2]

Lord Chief Justice Lea, in the time of James I. seemed to think that it was only biting Usury, such as was practised by the Jews, that was illegal at common law, but that Usury, such as 10 per cent, was not condemned but tolerated, if a man chose to endanger his conscience. He adds, that divines were not agreed on the subject, some of them holding that griping Usury alone was forbidden. [3]

[1] St. Thos. Acq. Op. de Usur, c. 4.—nullo testimonio, says Calvin, “scripturae mihi constat usuras omnino damnatas esse.” Calv. Epist. de Usur.

[2] This seems now to be clearly settled, for among the twelve questions submitted to the Grand Sanhedrin of the Jews, summoned at Paris by Buonaparte in 1806, were the two following:—XI. Is Usury to their brethren forbidden? XII. Is it permitted or forbidden to practice Usury with strangers? To which it was answered—The Mosaic Institute forbids unlawful Interest, but this was the law of an agricultural people.

The Talmud allows Interest to be taken from brethren and strangers, but forbids Usury. Mill. Hist, of Jews, 3 vol. p. 407.

[3] Saunderson v. Warner, Palm. 291.

This distinction, however, between biting and toothless Usurie, which now began to be more commonly made, is treated by Roger Fenton, B.D. in his elaborate work dedicated to Lord Chancellor Ellesmere, as a vaine device. He tells us the Hebrew word for Usury is “Neshec', which signifies “cruel biting,” the Greek, “Pleonasmos,” “painful travailing,” and the Latin, “Foenus,” “unnatural brood;” and concludes that the nature of the thing itself is therefore greatly to be suspected, for certainly, he adds, it is ominous and very suspicious to have a bad name.

The difference between the use and abuse of Usury has been well laid down by Grotius, who thus expresses himself on this subject: “if the compensation allowed by law does not exceed the hazard run, or the want felt by the loan, its allowance is neither repugnant to the revealed nor the natural law; but if it exceeds these bounds, it is then oppressive Usury, and though the municipal laws may give it impunity, they cannot render it just.” In the dark ages, how ever, when learning was confined to the monastery, and commerce almost unknown, the former reasoning prevailed, and accordingly the severest denunciations were thundered by the church against this “horrible and damnable sinne,” as it was termed. [2] And it will be seen hereafter, by the recital of some of the acts of parliament relating to it even of a more recent date, that it was not until mankind became more enlightened, and more alive to the advantages of the use of capital at a moderate rate of interest, and foreign trade had increased, that more correct notions were entertained on the subject; and even then it was sometime before the practice was legally sanctioned, and the mists of prejudice wholly cleared away.

[1] De jur. belli et pacis, 1 I. c. 12, s. 22.

[2] Horrible et damnable péche. Roll, Abr. tit. Usury.

At the period of the Crusades, when religious zeal blinded our ancestors to every thing but military glory and the restoration of the cross, the Jews who had come to England from Normandy, soon after the conquest, [1] and who by their industry and frugality were possessed of the greater portion of the ready money of the kingdom, at a time when trade and merchandize were held in contempt, seem early to have availed themselves of the dispensations of the Mosaic law, as to transactions with “strangers.” We find them in the twelfth century the chief if not the sole lenders of money for gain or Usury, [2] which then signified the same thing; and being no less odious on account of their religion, than hated for their wealth and alledged extortions, were often heavily fined and imprisoned, and at length were driven out of the kingdom for this offence. [3]

It is but fair, however, to observe that they were subjected at this time to such gross and open injustice, such cruel oppressions, and such mortifying indignities, and their properties, [4] and their lives were held by so precarious a tenure, that it can hardly excite sur prise that they should seek to indemnify themselves by turning their money to the best account, and by rapid and exorbitant gains secure some compensation

[1] Anglia Judaica, p. 4. Hen. Brit. vol. 6, p. 278. But according to other historians they were settled here long previously. Vid. Spelman, and others.

[2] It is said the Jews were allowed to take Interest or Usury at common law, Plow. 85. Stat. of Merton 1235. Fleta, lib. 2, c. 57.

[3] Hume's Hist. of England, 2 vol. p. 225. They were also accused of clipping the coin.

[4] Madox History of the Excheq. p. 168. Anglia Judaica, vide Appendix A. 3.

for the hazard they run in parting with it, as well as for the constant perils to which they were exposed. [1]

Commerce, to which credit is of the first importance, and without which it cannot successfully be carried on, was at this period at a very low ebb, for as long as the Christians were forbidden to take interest for the use of their money, few would be inclined to lend it for the purpose of trade, and that of the Jews was more profitably employed in Usury. It seems to have been no uncommon thing for them to receive for its use at the rate of 50 per cent. per annum. [2] Incredible as this appears, it is the less improbable, as we find they were restrained by an order of Henry III. A. D. 1272, on the petition of the poor scholars of Oxford, whose books they held in pawn, from taking more than 2d. in the week for every 20s. they lent them for the future, which is a little more than 43 per cent. [3] A late author, [4] however, thinks this license of Henry III. only applied to small sums, and was not meant to sanction large loans at 40 per cent. And this view of the subject, so far as the license is concerned, seems supported by the words “lesser sums than 20s.” and by Stow and Holinshed’s account of the massacre of the Jews in 1262, which was caused, says the former, “because one Jew had wounded a Christian man within

[1] Hen. Hist. Brit, vol. 6, p. 280.

[2] Matt. Paris, 586. Hume's Eng. 2 vol. p. 225.

[3] Ang. Jud. p. 122.

[4] Plow. Treat. On U.S.

Colechurch, in London, and would have enforced him to have paid “more than 2d. for the Usury of 20s. for one week," [1] from which it may be inferred that this was then the common rate of interest for such loans.

The Jews do not appear, however, to have carried on the lucrative business of Usury wholly without competitors, for “The Caursini,” [2] a company of Italians who were settled in London about this period as “Merchant Strangers,” and who were agents for the Pope in collecting his revenue in England, were grievously complained of for their extortionate con duct in exacting 60 per cent. for the money they lent. In order to evade the law they charged nothing for the first three months, but 5 per cent for every month afterwards until the money was repaid; and as they lived in security, and were not kept in perpetual dread of being plundered as the Jews were, being moreover themselves Christians, and employed by the head of the Christian church, their extortions were the more scandalous in the eyes of the people.

[1] Stow. Chron. Hen. 3, 192. Holinshed Hen. 3, 800. Letters Patent of the French King John, bearing date 1360, are now extant, authorising the Jews to lend in pledge at the rate of 4 deniers per week for every livre of 20 sous, which is more than 86 per cent. Say. Polit. Econ. p 301.

[2] Mr. Millman in his History of the Jews calls them ‘Caorsini, from the town of Cahors in France. Matt. Paris, Holinshed and Stow ‘Caursini.” Du Cange ‘Caorcini, who believes many of them belonged to an ancient and wealthy family of that name in Italy, and says ‘Usurier de chaorse’ was a bye-word. Du Cange Gloss. Voce Caorcini, Wid. Dante infer. c. 2. While Malynes, in his Lex Mercatoria, calls them Cursini, and says they were Italian bankers.

Indeed an old writer complains that the Pope, by means of the Caursini, was as bad as the Jews, and thus describes the subterfuge practised to evade the law: “If a person wanted a summ he could not pay under six moneths, he would lend it at three with out any interest at all, and then covenant to receive fivety per cent. for every month afterwards that it should remain unpaid; now in this case, says he, I am no Usurer, for I lent my money absolutely with out interest, and what I was to receive afterwards was a contingency that might be defeated.” When, remarks Matthew Paris, the Jews came to understand thisChristian mode of preventing Usury, they laughed very heartily.[1]

Though agents of the head of the catholic church, by this conduct they drew down upon themselves the censures of the English clergy; and Roger, the then bishop of London, having in vain admonished the Caursini to desist from such oppressions, excommunicated them, A. D. 1235. For this they cared but little, being conscious of the Pope's protection and their interest at Rome; they shortly afterwards caused the bishop to be cited there to answer for his conduct, which induced the historian shrewdly to suspect that the Pope was both their accomplice and abettor, and shared with them in the plunder. [2] But however the sordid avarice of the Caursini might

[1] Matt. Paris, 286. Ang. Jud. 123. For a translation of one of their Bonds, vid. Appendix A.4.

[2] Vid. Matt. Paris, p. 418, who calls the Caursini ‘pestis abominanda,” and tells us that the Bishop, who was old and infirm, in his dilemma applied to his patron Paul for advice, who not only approved of what he had done, but spiritedly added in his letter, “E.v si Angelus vobis his contraria praedicaverit, anathema sit.”

bring upon them the sentences of the church, or the cupidity of the Hebrews excite the ire of monkish historians and chroniclers, they sink into utter insig nificance, according to Plowden, when compared with the mode adopted by a modern Christian, the father of a peer, who, we are told, no later than the last century, contrived to amass a considerable fortune by supplying the retailers of fruit, fish, and vegeta bles, in the streets of London, with 20s. and a wheel barrow every Monday morning, on condition of their returning the barrow with a guinea on Saturday night, [1] by which his profit amounted to 260 per cent.; nor was this industrious money-gainer considered a Jewish Usurer, but rather a benefactor to the poor, who were thus enabled to obtain a living. This ex pedient, however, has not novelty to recommend it, for according to Malynes taking the shilling penny by the week, of fish-wives and other retailers of small wares, was a common practice in his day, A. D. 1686.

[1] Plow, on Usury, p. 108, n,

The imprudence of the law in thus throwing the business of Usury almost entirely into the hands of the Jews, without placing it under any statutable regu lation, left their rapacity without restraint, and they are said to have taken every advantage of the necessi ties of those who applied to them; some idea may be formed of the inflexible rigour with which they enforced their obligations, from the following letter of Peter of Blois, archdeacon of Bath, to the bishop of Ely, [1] if indeed the reverend writer, in his alarm, has not been led to give much too high a colouring to his facts: “I am dragged, (says the archdeacon,) to “Canterbury, by the perfidious Jews, to be crucified amongst their other debtors whom they ruin and torment with Usury; the same sufferings also await me in London if you do not mercifully interpose for my deliverance: I beseech you therefore, O most reverend father and most loving friend, to become bound to Sampson the Jew for six pounds which I owe him, and thereby deliver me from that cross.”

[1] Epist. Paul Blesens, 156, p. 242. This treatment may account for his bitterness against Usurers, for in another letter he observes,

“Faenerator tristissimus habet exitus hujus vitae, cujus mors detestabilis, cujus finis interritus, cujus damnatio sine fine.” Ep. 131. and vid. Appendix A. 5.

After this no one can be surprised at the universal execration in which they were held, and the popular clamour which was raised against them, and which led to their total expulsion from the kingdom, in the eighteenth year of the reign of Edward I. A. D. 1290, and for which the grateful Commons granted that monarch a fifteenth; but however the people might rejoice at thus getting rid of a greedy and irreclaim able race of unbelievers, the chroniclers seem to think the king himself would much rather have retained them as a source of revenue, to recruit his privy purse when in need, by plunder and exactions as heretofore, for which booty a portion of the exchequer had been set apart, and called “The Exchequer of the Jews,” and that the fifteenth was but a poor compensation for the rich harvest he continually gathered from this op pressed people. Indeed one of them scruples not to say that when Edward drove out the Jews, “he killed “the Henne that layed the egges.”

On the banishment of the Jews, the English, as well as the Lombards and other foreigners who were settled here, began to follow their example by taking up the trade of Usury, “which proved it,” says Tovey, “to be a crime no-ways peculiar to those of the circumcision;” [1] and this they did in despite both of the censures of the church, and the prohibition of the municipal and canon laws, which rendered them liable, when detected, not only to be excommunicated and branded with the opprobrious name of “babtised “Jews,” [2] but also to the forfeiture (even after death,) of the whole of their goods and chattels to the king; so that it was much doubted whether the borrowers of money fared any better with these new Usurers, whose transactions were obliged to be carried on in secret, than with the Jews, as it became necessary to pay them not only for the use of their money, but also for the infamy and liability to punishment which they incurred by lending it. According to Montes quieu, the severity of the Usury laws amongst the

[1] Ang. Jud. Id. 252.

[2] St. Bernard seemed to think them worse than Jews. “Taceo quod sicubi desunt Judaei, says he, pejus judaizare dolemus Christianos feneratores, si tamen Christianos et non magis babtizatos Judaios convenit appellare.”

Mahommedans and Romans, where Interest and Usury were confounded as the same, was attended with the like result, “il falut payer (says he) pour le prét de l'argent, et pour le danger des peines de la loi,” thus, he justly observes, laws excessively good are the source of excessive evil. [1]

The church, at common law, held jurisdiction over Usurers, “for the good of their soules,” [2] and was wont to punish them by excommunication and censures until they made restitution, and to grant them pardon only on condition, or “dum tamen,” that they forsook their evil courses. [3] Most of the early acts of parliament contain a saving clause in favor of such jurisdiction. It seems, however, that it either had not exclusive authority over Usurers, or if so, that it was invaded at an early period by the temporal courts, for it appears that in the fifteenth year of the reign of Edward III. A. D. 1341, the clergy, through the archbishop of Canterbury and other bishops, complained that “the justices had “punished Usurers,” to which an answer was returned making a distinction between the living and the dead Usurers, “that the king and his heirs shall have “the cognizance of Usurers dead, [4] and the ordinaries

[1] L'esprit des Lois, c. 21 and 22.

[2] Pro reformatione morum et pro salute animal. 15 Ed. I, c. 6. Roll. Abr. tit. Usurers.

[3] Canon 109. “The clergy, (says Bolton) who had a chief stroke in making the common law, they were the more severe against Usury, because it was unfruitful for them, as they had not tythes of Usurers profits.” Ex. of Neshec, p. 31.

[4] That his Majesty might take possession of their wealth.

of the holy church the cognizance of them in life, as to them appertaineth, to make compulsion by the censures of the holy church for the sinne, to make restitution of the Usuries taken against the laws of the holy church.” [1] And it was a charge to justices in eyre to enquire who had died Usurers, which being then a crime second only to murder, [2] was punishable by forfeiture of the Usurer's goods and chattels to the king, and the disherision of his heir; [3] but this was confined to those who were found by inquest, within a year and a day of their deaths, to have died “habitual “Usurers,” and not when before death they had discontinued the practice, and done penance for it. [4]

[1] 15 Ed. III. c. 6. Roll. Abr. tit. Usurers.

[2] Among the Romans, Cato, Seneca and Plutarch inveighed against Usury, Gibb. Cicero tells us in what abhorrence it was held at Rome in his day, “Improbantur ii questus qui in odia hominum incurrunt, ut faneratorum,” De Off. lib. 1, c.42. They considered it twice as bad as robbery. How criminal Cato thought it may be gathered from his opinion, “Cum ille, qui quasierat, dirisset, Quid fenerari? tum Cato, Quid hominem inquit occidere?” Cic. de Off lib. 2, c. 25. And by the French Law it was punished with death. Domat. Civ. Law, p. 128.

[3] Brac. lib. 2, c. 26, fo. 60. Glanv. Trac. de Leg. Ang, lib. 7, c. 16, and this whether he left a will or no.-A Mortgage was also considered a species of Usury, Ibid. lib. 10, c. 8, s. 3. It was also one of the articles enquirable of in a Court Leet. “De Christians Usurers et d'touts lour biens.” Vid. Miroir des Justices, 17 b. c. 1, s. 17. See also Dial. on the Excheq. 2 book, c. 10, p. 48.

[4] 3 Hen. VII, c. 5,

But alas for human infirmity! it was found that the anathemas of the church, though aided by the forfeitures of the law, were insufficient to put down this “damnable sinne,” and statutable instead of spi ritual punishment must now be had recourse to for its extirpation; accordingly Parliament took up the matter, and various statutes were passed from time to time for its suppression, but it will be seen hereafter with how little effect; they all eventually proved in operative, having tended, by the confession of their makers, to introduce much greater inconveniences than those they were meant to remedy.

An Act was passed in the third year of the reign of Henry VII. A. D. 1488, whereby the taking interest for money on any bargain, promise, by bill, or other wise by the name of “dry exchange,” was forbidden, [1] as contrary “to the law of natural justice, the common hurt of the land, and the great displeasure of God.” Such bargains, &c. were to be void, and the parties or their agents to forfeit £100.; and lest they should escape by means of perjury at a trial, the chancellor was also empowered to examine and determine the same, with a reservation nevertheless to the church, “to proceed according to law for the preservation of their soules.”

[1] Dry exchange was an evasion of the Usury Laws, by means of a Bill of Exchange, which the borrower drew on a fictitious person at Amsterdam, or any foreign town, at the then current rate of exchange, which he delivered to the lender; at maturity, the Bill was returned protested from Amsterdam, and the borrower charged with re-exchange and incidental expences; and in this way, 20 or 30 per cent. was made, the Bill having never been out of the country. Plow. p. 128.

About the same time another Act was passed, levelled more particularly against brokers, which complains “that divers English and estrangers are inducers to Usury,” and sentences all such, when found out, to lose their license, to forfeit for every default £20. and to be imprisoned half a year; “and furthermore to be punished by the pillorie or otherwise, to their open rebuke and shame.” [1]

Only eight years after these enactments, so far was Usury from being restrained by the pains and penal ties they contained, that it became necessary to pro vide against certain subtleties and devices which began to be practised, by means of the fictitious sales of goods, and in various other ways, to evade the law; [2] to counteract which, another Act was passed shortly afterwards, A. D. 1496, [3] which repeals the former, and provides instead the penalty of one moiety of the value of the goods, &c. at the rate at which they may have been sold or lent, where the Usury shall have been committed by the sale and re-sale of goods, &c., or by the rents of lands, or by means of any other form or mode by which the statute might be avoided, “reserving however to the spiritual jurisdictions their lawful punishments in every case of Usury.”

[1] 3 Hen. VII. c. 6.

[2] According to Tacitus, the Roman Laws forbidding Interest were in like manner continually eluded, “Totius repressa, (says he,) miras per artes rursum oriebantur.” Tacit. Annals, lib. 6.

[3] 11 Hen. VII, c. 8,

The law thus remained until the year 1545, when it is doubtful whether the alteration allowing interest, which then took place, was not more to remedy the complaints that were daily made of the extortion of Usurers, whose enormities it was found wholly impossible to suppress, than with any positive view to benefit commerce, which was now, however, beginning to be somewhat better understood. The existing laws had long been found injurious to trade, and a bar to improvement, for it became apparent that the necessity of credit increased in proportion to the extension of commerce, and that credit was not to be obtained without compensation. [1]

By an Act made in the thirty-seventh year of the reign of Henry VIII. c. 9. intituled “a Bill against Usury;” it is forbidden to take above the sum of ten pounds in the hundred for the forbearing or giving day of payment of one whole year, and so after that rate for a longer or shorter time; and thus, for the first time in England, interest was negatively and indirectly sanctioned by law: the sense of mutual benefit having at length triumphed over both the decrees of the church, and the prejudices of mankind. It was restrained however to the then moderate rate of 10 per cent. [2]

[1] Hen. Hist. of Brit. 12 vol. p. 337. Hume's England.

[2] It seems curious that the rate of Interest, when Interest was allowed, should, in remote-antiquity, have been similar in various countries. Nehemiah c. 5, v. 7, reproves the Jews in Syria, for taking the 100th part, which Bishop Patrick informs us, meant that the 100th part of what was lent was paid by way of Interest every month, or 12 per cent. per annum. Solon allowed 12 on the 100, at Athens; and afterwards at Rome, it was fixed by Cicero's edict at 1 per cent. per month, and Interest upon Interest at the end of the year. Add. Att. lib. 6, ep. 1. While 12 per cent, per annum is the legal rate of Interest in India, at the present time; in England, we have seen it commenced at 10 per cent. per annum; in the Low Countries, according to Malynes, in his Lex Mercatoria, it was lawful to take 12 in the 100 of merchants and traders; and 12 per cent. is said to be the common rate in China, North Amer. Rev. July 1834.

This statute proceeds to enact that every person receiving more shall forfeit for every offence treble the value of the wares, &c. so bargained, &c., and suffer imprisonment, and make fine, and ransom at the king's pleasure; it contains various clauses to prevent interest being taken at a greater rate, “by way or means of any corrupt bargain, loan, exchange, chevizance, shift, interest of any wares, merchandize or other things whatsoever, or by any other covin, engine, or deceitful way or conveyance.”

But this Act only lasted seven years, for the church, which then materially influenced every thing, caused it to be repealed in the following reign; the remains of ancient superstition being still too strong to allow of the existence of so salutary a law, though a striking proof of the inutility of fixing the rate of interest too low by legal enactment was afforded by the fact, that while the law had tacitly allowed £10 per cent. to be taken, money could scarcely ever be obtained under £14 per cent. [1] and in consequence of the legal rate being so considerably under the market rate, the law was constantly evaded; and such, at all times, under similar circumstances, has been and ever will be the case.

[1] Hume Hist, of Eng. 4 vol. p. 354. Hayward, p. 218,

Nothing will better demonstrate the progressive change in the feelings and opinions of the nation respecting “Usury,” than the language of the various succeeding Acts of the legislature relating to it, from which it will be seen how slowly our forefathers became converts to the doctrine, that Usury, under proper regulations, was not sinful; and that great advantages to the commercial interests of the country would accrue from its being permitted by law.

Accordingly we find that an Act, in the reign of Edward VI. A. D. 1552, [1] which restores things to their former footing, commences by stating that the former Act only permitted “Usury for avoiding more evil and inconvenience that before that time was used and exercised, and was not meant or intended for maintenance or the allowance of Usury, as divers persons, blinded by inordinate love of themselves, had mistaken, but rather was intended as against all kinds of Usury as a thing unlawful.” But, for as-much as it cannot be put down without temporal punishment, it declares all interest illegal, and attaches to the taking of it a forfeiture of the value of what is so lent, and the Usury imprisonment, fine, and ransom at the king's pleasure, premising “that Usury is, by the word of God, utterly prohibited, as a vice most odious and detestable, as in divers places of the holy scriptures is evident to be seen.”

The intended rigour of this statute defeated its purpose, for instead of diminishing, Usury increased. [2] In less than twenty years afterwards, the impolicy of altogether prohibiting interest was acknowledged, and it became once more the subject of legislative consideration. By the 13th of Elizabeth, c. 8. A.D. 1571, the Act of Henry VIII. is revived, and interest again tolerated at 10 per cent, “it being found,” says the statute, “that the Act of Edward had not done so much good as was hoped for, but that rather the vice of Usury had much more exceedingly abounded;”

[1] 5 & 6 Edw. 6, c. 20.

[2] “Thus the forbidding of all Usurie, is the very maintaining of damned Usurie; therefore, that which is lawful, in my conceit, should be approved, and the restriction and stints clearly sette downe and nominated.” Ex. of Neshec.

it next praises the Act of Henry VIII. as one by which the vice of Usury was well repressed: yet while per mitting it to be taken, with singular inconsistency, it is still declared that all Usury is forbidden by the law of God as sin and detestable, and that the Act thus revived shall be construed largely and strongly for repressing Usury, with the usual saving of the power of ecclesiastical courts to punish offenders as heretofore. [1]

This statute, as may be supposed, was not allowed to pass the House of Commons without a violent opposition; it encountered all the concentrated virulence which the ignorance and superstition of its opponents could bring to bear on the question. [2] One of the principal speakers against the bill was Dr. Thomas Wilson, who, in 1569, only two years before the statute, had published his famous “Discourse upon Usury, by way of Dialogue,” [3] a work which he dedicated to the Earl of Leicester; and as his written sentiments may have more weight than his speeches

[1] Yea, with the thunderbolt of excommunication! to terrifie such as do wilfully defend Usurie. Rogers on Usury, A. D. 1578.

[2] Vid. Parl. Deb. A. D. 1571, 4 vol. p. 138.

[3] The Romans, according to this author, never began to decay till Usury lorded among them.

in Parliament, a passage or two will be extracted to shew that it was not the rate of interest, but the principle, to which he objected. The learned Author not only condemns those who availed themselves of the then moderate rate of £10. per cent, but con siders him equally guilty who takes the slightest interest for the use of his money. “The Usurer, (says he,) who taketh less bicause he would seem honeste, shall go to the Divell, bicause he hath wittingly sinned against God, as well as the other that taketh more:” for, adds this uncompromising moralist, “there is no meane in this vice, more than there is in murder, theft, or whoredom, and there fore I saie and maintaine it constantlie, that all lending in respect of any gaine, be it ever so little, is Usurie, and so wickednesse before God and man, and a damnable deed in itself.” Having thus con signed the Usurer to perdition for his “wickednesse,” he proceeds to examine how far the borrower is blameable in the transaction, for some had considered the latter as a particeps criminis, and sharer in the “sinne,” and as the reasons he assigns for acquitting the borrower are such as borrowers of the nineteenth century must approve, they shall be given in the words of the Author, more especially as they appear to be the result of his calm reflection, after his anger against the Usurer has had time to subside: “And now (says he,) cometh to my mind a matter most needful to be spoken of after such heats of speeche used against the Usurer, that whether he that payeth Usurie be an offender or no, for some think because there can be no Usury without borrowing, those therefore that borrow are at fault as they which do give cause of this horrible offence; I do answer, that everie borrower doth not sinne, because it is an involuntary action, and much against the borrower's will, [1] who would rather with all his hart borrow freelie, and paie nothing for the loan than otherwise.”

[1] “For the sinne of rape cannot be without the innocent party that is ravished.” Dr. Downam, Lord Bishop of Derry, quoted in Blaxton's Eng. Usurer, 2nd ed. 1634. Qui injuriam patitur non peccat. Aristot. £thec, lib. 5, c. 11.

Dr. Wilson was far from enjoying the enviable distinction of being the only one who, about this period, raised his voice, and published his sentiments, against the restoration of the statute of Henry VIII. which was now again about to let loose the Usurer upon society. He was followed by a host of learned divines, who emulated each other in their efforts to stem the tide of demoralization which this enactment was likely to reproduce. Dr. Fenton, in his learned work, triumphantly states as a fact, which is no less true than surprising, “That Usury was never even defended for fifteen hundred years after Christ.” That it is beyond the pale of all law, both divine and human, he considers an incontestable position, “The testimony of all authority, (says he,) civil and humane, ecclesiastical and prophane, naturall and morall; of all ages, old, new, middling; of all churches, primitive, superstitious, reformed; of all common weales, Jewish, Christian, heathenish; of all lawes, forraine and domesticall, are against Usurie.” Other divines proceeded in the same strain, “God, nature, reason, (says Mosse,) all scripture, all law, all authors, all doctors, yea, all councils beside, are against Usurie.”—“Philoso phers, Greekes, Latins, Lawyers, Divines, Catholics, Heretics, (adds Bishop Jewell,) all tongues, all nations, have thought an Usurer as bad as a theefe.”

That the detestation of taking Interest for the use of money, or Usury, was not confined to the Church alone, is clear, for even fifty-three years after this statute had passed, it appears the prejudices of the learned judges were not a whit less strong. On the bench we find two of them not only expressing their own unqualified abhorrence of the practice, but quoting with great satisfaction the authority of a learned brother against it, in the classic language of the day. “Doddridge and Whitelock agree, (says the reporter). que a cette jour, use de money, n'est bon consideration quia encounter ley natural, car comme Herle dit, est monstrous que argent producera argent et ad ettre defame par touts estatutes comme horrible damnable!” [1]

[1] Oliver v. Oliver, 2 Roll. Rep. 469.

It should seem therefore, that as the belief in the unlawfulness of taking Interest, or Usury, was still generally retained, it was policy which dictated its toleration, under legal restraint, in preference to any further attempts at suppression by enactments, which, in defiance of their severity, after a lapse of time, only drew from their framers the reluctant confession that this “odious vice had more exceedingly abounded.” Another proof how seldom laws are effective when they are opposed to the constitution of society; man kind, observes a learned writer, being governed not by extremes but by principles of moderation. [1]

Even this Act was not passed without due caution, its duration being limited to five years; it was, how ever, subsequently made perpetual; [2] as foreign trade increased, and money became more abundant, the rate of interest thus fixed began to be considered as too high, Henry IV. of France having reduced it in that country to 6½% per cent, an indication, (says the historian,) how much France had advanced above England in commerce, [3] it was not long, therefore, before another change took place in our own. In the next reign the rate was reduced, by 21st of James I. A. D. 1624, to 8 per cent, the Act ending with this - remarkable proviso, “That no words in this law contained shall be construed or expounded to allow the practice of Usury in religion and conscience.” [4]

[1] Montesquieu l’Esprit des Lois.

[2] By 39th Elizabeth, c. 18, s. 31, 32.

[3] Hume's Hist. of England, 5 vol. p. 484.

[4] Pal. Mor. Phil. 3d Book, p. 1. c. 10.

We are told that this provision was introduced to please the bishops, who otherwise would not have consented to its passing, there being in fact no clause in this Act, as in the former statutes, disgracing Usury. [5] Spiritual persons still entertained the same

[5] Oliver v. Oliver. “Les evesques ne voile assente a ceo quia null clause come just Dodderidge dit que disgrace Usury come en la precedent Statutes.” 2 Rolle's Rep. 469.

objections to its propriety as before, however it might be thought expedient by the legislature. Its operation like that of the preceding statute, was limited to seven years, but was rendered perpetual in the succeeding reign. [1]

The clause disgracing Usury, is alluded to with great satisfaction by many of the divines who wrote about this period, as an admission by the legislature that Usury was against the law of God: “There are infinite colours, mitigations, evasions, distinctions invented on earth, (says Blaxton,) to cover heaven exploded Usury; nay, the tired earth, he adds, becomes barren, onely the Usurer's money the longer it breeds the lustier, and an hundred pounds put out twenty years since is grandmother to two or three hundred children; pretty striplings, able to begette their mother againe in a short time.” By such observations was the taking interest for money opposed as late as the beginning of the seventeenth century.

It is to this reverend divine that we are also in debted for a description of the Usurer's person, from which our readers cannot fail to recognize him at a glance: “The Usurer is known (says he,) by his very lookes often, by his speeches commonly, by his actions ever; he hath a leane cheeke, a meagre body, as if he were fed by the divill's allowance, his eyes are almost sunke to the backside of his head with admiration of money, his eares are set to tell the clocke, his whole carcass is a meere anatomy.”

[1] 3 Car. 1, c. 4, s. 3.

[2] Eng. Usurer, by John Blaxton, 1634. “Si unum noris omnes noris.” Dr. Pie.

From this time, we may consider that whatever religious scruples remained, they were, among the mass of the people, fast wearing away. The complaints made against the “Sinne of Usury” began to decline, trade extended, agriculture improved, experience shewed how much the country had profited by allowing a moderate rate of interest for the use of capital employed in advancing industry, ingenuity and com merce; and then gradually changing such rate to suit the state of the times, and place the kingdom on a level with other European nations. [1] Interest (observes an historian,) being justly considered the barometer of the state, and the lowness of its rate an infallible sign of the flourishing condition of the people, and of the increase of industry. [2]

The Commonwealth, A. D. 1650, further reduced the rate of Interest to 6 per cent. This was followed by 12th Charles II. (being the first year of the restoration,) which begins by reciting, “That the abatement of interest from 10 to 8 per cent. had, from notable experience, been found beneficial to trade and agriculture, with many more advantages to the nation, and reducing it to a nearer proportion with foreign states with which we traffique.”

[1] Montesquieu attributes the decline of commerce to the proscription of loans at Interest. Esprit des Lois, lib. 21, c. 20.

[2] Hume's Essay on Interest.

Yet even in these comparatively enlightened times, we find the Judges differing in opinion as to the legality of taking Interest on the discount of a bill of exchange. Vid. Barnes v. Worlich, post.

The gradual change of public feeling on this subject is again remarkable, all the former statutes being styled either bills or acts against Usury, but this was intituled, “An act for the restraining of excessive Usury.”

Money, at this time, was commonly procured at 6 per cent, though the legal rate of interest had been till then 8 per cent., clearly shewing that however the law may limit the amount of profit to be derived from the use of money, it will, like any other com modity, fluctuate in the market, and the interest of it alternately rise and fall as the supply more or less approximates to the demand; all legislation to reduce interest below the common market rate must become inoperative, from the tacit convention of the parties concerned. [1]

[1] In Russia, in 1787, when Mr. Bentham wrote his Defence of Usury, he tells us the rate of Interest was fixed at 5 per cent.; many borrowed but nobody lent money at that rate; 8, 9 and 10 per cent, being the common rate, even on the best landed security. Def of Us. let. 7. In France, in 1766, Interest was reduced, by edict, to 4 per cent., yet 5 per cent, was the common rate given. Wid. Smith's Wealth of Nations, book 2, c. 10, p. 45.

The law remained without further alteration till the 12th of the reign of Queen Anne, A. D. 1713, when legal interest was fixed at the present rate of 5 per cent, by an Act which is entitled “An Act to reduce the rate of interest, without prejudice to parliamentary securities.;” As this statute now contains the law on the subject, and prescribes penalties for its infringement, it will be proper briefly to allude to its leading features; it begins by reciting the great advantages which this country has derived from the successive reductions of the rate of interest from 10 to 8 per cent, and thence to 6 per cent.; and that, by reason of the late war, the owners of lands had be come impoverished, and from the great interest and profit which had been made of money at home, foreign trade was neglected, for the redress of which mischiefs it became necessary to reduce the high rate of interest of 6 per cent. to a nearer proportion with the interest allowed by foreign states: it then enacts, that from and after the 29th of September 1714, no person shall take for the loan of any money, wares, merchandize, or other commodities whatsoever, more than 5 per cent for the forbearance of £100. for a year, and so on in proportion, and for a longer or shorter period; and that all instruments securing a greater rate shall be utterly void; and that all persons who shall contract for and actually receive more than the rate aforesaid, shall forfeit for each offence treble the value of the money, &c. solent. This statute, like all the preceding ones, is founded on the statute of Henry VIII., and varies little from it beyond changing the rate of interest.

Express Acts of Parliament have empowered two corporations to borrow money on such terms as they think proper.

By the 3rd George I. c. 8. A.D. 1716, the Governor and Company of the Bank of England are enabled to borrow money upon such rates and terms as they shall think fit, although it may exceed the interest allowed by law, and their contracts are exempt from stamp duties.

And by 3rd George I. c. 9. s. 16. the South Sea Company is allowed the same privilege.

Hitherto mention has been made only of the rate of interest applicable to contracts in Great Britain, it remains therefore to notice foreign interest, which is regulated by express statutes, and to observe that our courts of justice direct the payment of interest accord ing to the law of the country in which the contract is made; for this reason, Irish, American, Turkish, and Indian interest is recoverable in England; and it is evident that were such contracts not to be enforced, foreign trade would be destroyed. Neither is it un reasonable to charge the borrower with such interest, when it may fairly be presumed that he has received an equivalent advantage by the use of the money in the country where the contract was made.

Thus 12 per cent. is fixed by the 13th George III. c. 63, s. 30, as the legal rate of interest in India; and 6 per cent. by 14th George III. c. 79, as the legal rate of interest in Ireland and the West Indies, which declares that all mortgages, made in Great Britain, to any of his Majesty's subjects, shall be as valid as if they had been made in the country where the property lies, provided that the interest does not exceed 6 per cent. and the lender does not advance more than he knows the property to be worth, with a forfeiture, in such latter case of treble the value of the money lent. And by 3 George IV, c.47, repealing the 1George IV, c. 7, all mortgages, bonds, transfers, &c. for securing money in Ireland or the West Indies, as well as col lateral securities given by third parties, may be exe cuted in this country, whether entered into at the same time or subsequently.

By 3 & 4 William IV, c. 98, s. 7, bills of exchange and promissory notes, not exceeding three months date, or having more than that time to run, may now be discounted at any rate of interest that may be agreed on, without the parties incurring the penalties of Usury.

For the Statutes relating to this subject, see Appendix A. 6.

Chapter II.

Of agreements and transactions which have for the most part been deemed usurious.

  1. Where the borrower has been furnished with goods instead of cash.
  2. Discounting bills, not of a mercantile nature.
  3. Where an extra charge is made for brokerage.
  4. Compound interest.
  5. Where the risk of losing the principal is slight.
  6. Where the interest only is risked.
  7. Retiring partners.
  8. Where stock is transferred.
  9. Where something besides money is given or charged for.

Section 1.

Where the Borrower has been furnished with Goods instead of Cash.

As early as the time of Henry VII. A. D. 1496, it became necessary to provide against the law's being evaded by the pretended sale of goods and merchandize, in order to obtain a profit for the use of money, when no interest was allowed; and ever since interest has been permitted, and the rate fixed by different statutes, it has been the most usual mode resorted to for eluding the penalties they contained, and obtaining by such means a higher rate than is legal. The lender, instead of money, furnishes the borrower with goods, at a price which is generally much above their real value; these the borrower must of necessity sell as soon as possible, which he usually does at a considerable sacrifice, receiving perhaps one half of the amount for which he has given security, while the lender not unfrequently, through an agent, becomes the purchaser of his own goods at a reduced price, and has them again in readiness for a similar dealing: thus charging the borrower with interest on the sum at which they were sold, when the amount advanced is only what is necessary to re-purchase them.

In all cases of this description, the only question to be determined is whether the transaction be a sale or a loan; if a bonâ fide sale, the seller is of course entitled to the price agreed on, although the purchaser may have lost by a re-sale; [1] but if it be only a shift, and merely colourable to obtain more than legal interest, and in reality a loan, the party furnishing the goods must be contented with what they actually produced to the borrower on a re-sale, while any security he may have taken for them becomes ab solutely void, as tainted with Usury. For, as the statutes are to be construed largely and strongly for repressing Usury, the Courts invariably look to the substance of the transaction, and not to the form or colour it has been made to assume; and wherever it can be shewn that a loan of money was intended, under the disguise of a colourable sale of goods, there is an end of the action.

[1] Ancaster v. Picket, cited 1 Bro. Ch. Ca. 151.

Lord Kenyon held that it was usurious to substitute goods for money, at an excessive value, in the dis count of a bill of exchange, secus, if the goods were taken at an ascertained value. [1] The rule, however, has been laid down at law more strictly by later authority.

One Waller, being in want of cash, applied to a money broker to raise him £200.; Harris and Stratton hearing of this, offered through the broker £100. in goods at warehouse price, and £100. in cash, but after protracting the business by repeated delays, under pretence of not being prepared with money, they ultimately agreed with Waller himself to let him have goods for the whole amount; these were sorted out and delivered to Waller, who in return gave to Harris and Stratton a bill of exchange for £220.: the goods were then, by Waller's directions, taken to an auctioneer, who sold them for £117: 2: 2: the question left to the jury, was, whether this was a bonâ fide sale of goods, or a loan under the pretence of a sale, and the jury finding the latter, and that it was usurious, the Court of King's Bench afterwards, on a motion for a new trial, refused to disturb their verdict. [2]

[1] Pratt v. Willey, 1 Esp. N. P. C. 40. Rich v. Topping, Idem 176.

[2] Lowe v. Waller, Doug. 736.

In a later case, Hardacre applied to Davis to dis count him a bill of exchange for £700.; this Davis refused to do, unless Hardacre would take for it £250. by cheque, a promissory note at two months for £286: 12, and a landscape in imitation of Poussin, to be valued by agreement between them at £150, to this Hardacre consented. Davis afterwards brought an action on the bill so discounted against Hardacre, and was non-suited by Lord Ellenborough, Chief Justice, before whom the cause was tried, who thus lays down the rule: “Where the party is compelled to take goods in discounting a bill of exchange, I think the presumption arises that the transaction is usurious; to rebut this presumption, evidence should be given of the value of the goods by the person who sues on the bill; [1] in the present case I must require such evidence to be adduced, and I wish it may be understood that in similar cases this is the rule by which I shall be governed for the future: when a man goes to get a bill discounted, his object is to procure cash, and not to encumber himself with goods; therefore if goods are forced on him, I must have proof that they were estimated at a sum for which he could render them available upon a re-sale, not at what might possibly be a fair price to charge to a purchaser who stood in need of them.” [2]

[1] Vid. Chapter 4. s. 3., as to innocent holders of bills, &c. tainted with Usury.

[2] Davis v. Hardacre, 2 Camp. N. P. C. 375.

If, however, the party applying for the discount readily takes or wishes to have goods in part payment, with a view to gain by speculating in them, it will be different, for in a case which was tried shortly after the preceding, the same learned Judge made this distinction between them:

“Upon this evidence (said his Lordship,) we must rather presume the goods were charged beneath their true value, and it lies upon the person applying to prove the contrary, if he would impeach the dis counter's title on the score of Usury;” [1] and plaintiff had a verdict.

In like manner, in equity, where goods had been delivered to a young man who wished to raise money, and had given a promissory note for the goods so delivered, the Court of Chancery restrained pro ceedings at law until the value of the goods had been ascertained by a sale, on payment of which, the promissory note was ordered to be restored. The facts were these: Barker, (the plaintiff) who was then a student in the University of Oxford, and who had recently come of age, applied to a Jew to raise him a sum of money, who recommended him to another, who introduced him to the defendants, who were silk mercers, and they finding, on enquiry, the youth was entitled to some reversionary property, let him have silks, to the amount of £2224., for which he gave them a promissory note, payable twelve months after date; the Jew then (as Barker's, the plaintiff's, agent)

[1] Coombe v. Miles, 2 Camp. N. P. C. 553.

took possession of the silks, and sold them on his account for £799. In the mean time the promissory note was endorsed by the payees to a third person, who was no party to the sale, nor had in any way interfered in the business. Afterwards Barker filed a bill in Chancery against the tradesmen who had fur nished the silk, to re-deliver him his promissory note on payment of what the silks actually produced at the sale; this they refused to do, contending that it was a fair transaction: but Lord Chancellor Thurlow, who heard the cause, thought and decreed otherwise. “I am to enquire, (he observed,) whether, under the mask of trading, this is not a method of lending money at an extraordinary rate of interest? There is no doubt that if they had talked of this as a loan of money, there would have been an end of the case. The question then is only, whether there is any method of shewing the Court that they meant so, short of their treating of it as such in plain language? There is not a doubt that in this case the transaction was merely for the purpose of raising money to supply the necessities of this young man. Do they deny knowing the goods were to be sold? I take it, therefore, as an advancement of goods, instead of money, to supply his necessities. [1]

[1] Barker v. Vansommer and another, 1 Br. C. C. 149., and Polwarth v. Cooke. Cecil v. Sutton. Scryme v. Rybot, cited thercin, Eq. Ca. Abr. 91.

And in a case, (decided in June 1831,) where the defendant had appealed from an order of the Vice Chancellor, who had granted an injunction to restrain him from proceeding at law, on securities given for the price of goods by an expectant heir, on the ground that the onus lay on the defendant to prove that the transaction was not a loan: the Lord Chancellor Brougham affirmed the decision of the Vice-Chancellor with costs. [111] However, on this case subsequently coming before the Court, on a bill filed by the plaintiff to vacate the securities, on paying the amount the goods fetched on a sale by auction, it appearing - that the expectant heir had dealt with the reversion with the privity and sanction of his father, the tenant for life; the Chancellor considered this a totally new case, and different from Barker v. Vansommer and another, which had been cited, that being a loan (said his Lordship) at usurious interest, to cover which the sale of goods was resorted to; and stated that in all cases where relief had been given, it had been done on the ground that the plaintiff had been in a position to place the defendant in the same situation he was in before the contract; and as this could not be done here, and as the father of the plaintiff had been aware of, and sanctioned the transaction, he decreed that the bill should be dismissed. It is clear, therefore, that goods cannot (unless under peculiar circum stances) become the medium of raising or borrowing money at an extra rate of interest, nor will the borrower be liable to one shilling more than they realise him on a re-sale, when fairly converted into cash, as he is liable, it appears, not for the value, but for the sum really made of them. And, according to Lord Mansfield, as this is the easiest way of evading the statute, so it is the one most frequently adopted. [1]

[111] King v. Hamlet, Trin. Term 1831, and Hil. Term 1834. Cole v. Gibbons and another, 3 P. Wms. 289. Twisleton v. Griffiths, 1 P.Wms. 310. Chesterfield v. Janssen, 2 Wes. 125. Gwynne v. Heaton, 1 Br. Ch. Rep. 1.

Section 2.

As to Discount of Bills, not of a Mercantile character.

It appears at one time to have been doubted whether it was not usurious to take interest before the time expired for payment of the principal; as it was contended that a person who discounted a bill for £100., at the rate of 5 per cent. per annum, and retained at the time £5. for the interest, in fact, lent only the balance, or £95, and therefore had received more than the legal rate; the Judges differing in their opinions on the subject. [2]

The right, however, (in favor of trade,) has long been clearly established; and it is now as lawful to take interest at the time of forbearing, as afterwards, for having forborne. [3]

This, however, must be understood as applying solely to bills of exchange, in reference to their mercantile character, and the established custom

[1] Doug. 738.

[2] Barnes v. Worlich, Cro. Jac. 25. Noy. 41.

[3] Massa v. Dauling, 2 Str. 1243. Lloyd v. Williams Blac, Rep. 793.

respecting them, which forms an exception to the general rule of law; as to which Lord Mansfield observed, in one case, “Usage certainly will not pro tect Usury, but it goes a great way to explain a transaction. Upon a nice calculation, it will be found that the practice of the bank in discounting bills exceeds 5 per cent, for they take interest upon the whole sum, for the whole time the bills run, and pay only part of the money, viz. by deducting the interest first; yet this is not Usury.” [1]

[1] Floyer v. Edwards, Cowp. 112.

But where a bill of exchange, not of a commercial character, for £5,000., which was negociated to redeem annuities drawn by the grantor, and payable to the grantee's order three years after date, and for the discount of which £750, was charged, the balance being made up of the re-purchase money of the annuities, arrears and costs, and a bond given for the whole amount; although a verdict was found for the plaintiff, who sued on the bond, yet Lord Alvanley and the Court of Common Pleas, on a case reserved, decided it was void, being given for a bill of exchange which secured a much larger amount than legal interest on the sum which would be due at the end of three years, as it was for the forbear ance of £4,250., for which the party was to receive interest for £5,000.; that it was not a discount in the regular way of trade, but merely a shift to obtain more than legal interest: the plaintiff was non-suited. A case was put in argument by defendant's counsel, (then Serjeant, and subsequently Mr. Baron Bayley,) in which it was supposed that a bill for £10,000., payable in twenty years, was to be discounted, as the interest amounted to the whole sum, the lender would have nothing to advance, though at the end of the time he would be entitled to receive the £10,000.

It is not usurious, however, for an acceptor to discount his own acceptance for more than 5 per cent. on the time the bill has to run, for here there is no loan or forbearance. [1]

As this exception from the general rule is made in favor of trade, and peculiar to bills of exchange and promissory notes, we may conclude, that to discount a bond or mortgage, at the rate of 5 per cent., would be usurious.

Section 3.

Where an extra charge has been made for Brokerage, &c.

When interest was first taken by way of discount, any further charge for commission, trouble, &c. was not allowed, being considered an excess of interest, and usurious. [2]

[1] Barclay v. Walmsley, 4 East. 55.

[2] Peachy v. Osbaldestone, 7 Mod. 353.

However, the rule has been relaxed in favor of trade, and it is now decided that bankers and others, whose business it is, may legally take, not only 5 per cent. interest, but also a commission for their trouble and expence of correspondence, for discounting, accepting, paying, or protesting bills, provided such commission be reasonable, warranted by custom, and not used as a cover for Usury. [1]

Brokers and factors in like manner are entitled, above the legal interest of their money, to a fair remuneration for their services, according to the custom of the particular business to which the broker or factor is attached; the extent of which, in case of dispute, is a question of fact for the determination of the jury. [2]

But where a broker or factor advanced money for the purchase of goods, and received a higher commis sion on the purchase than he would have been contented to take had he not advanced the money, it was held usurious. [3]

Part payment of a discount by bills, which have some time to run, without first deducting the interest of them, though acquiesced in by the parties, for their mutual conveniences, is clearly usurious. [4] Unless it be done by a banker, who has charged no commission, postage, or stamps; and where the amount gained by the interest of the second bills does not exceed what might have been fairly charged by him for com mission, and the jury are of opinion it was not a

[1] Auriol v. Thomas, 2 T. R. 52. Winch, q. t. v. Fenn, id. note Masterman v. Cowrie, 3 Camp. 488. Caliot v. Walker, 2 Anstr. 495.

[2] Carstairs v. Stein, 4 M. & S. 192.

[3] Harris v. Boston, 2 Camp. 348. Hutchinson v. Piper and another, 4 Taunt. 810.

[4] Matthews, q, t, v, Griffiths, 1 Bos. & P. 153. n. Peake's N. P. C. 200. 1 East 92.

device to exceed a reasonable remuneration. [1] Nor is it illegal for a banker who lends his customer a sum of money, after the loan, to stipulate that the customer shall leave a certain balance in the banker's hands by way of remuneration for managing the banking account.

Messrs. Ladbroke and Co. lent Holthouse (who became bankrupt) £4,000, and it was agreed subse quently that the bankrupt (whose account was a large and troublesome one) should not keep a less balance in their hands than £1,000, or if he did, interest was to be paid on the deficiency; the balance was reduced below £1,000, and interest on the difference paid by the bankrupt, whose assignee afterwards petitioned to expunge Messrs. Ladbroke and Co.'s proof, on the ground of Usury: but the Court of Review was unani mously of opinion, that the balance being bonâ fide left by way of compensation for the trouble of manag ing the banking account, and not as a cover to evade the statute, it was not an usurious transaction, and dis missed the petition. The Chief Judge afterwards observed, “I wish it to be understood, that if the keep ing a balance of £1,000 had formed part of the con tract for lending the £4,000, that it would have been usurious; but my opinion was, and is, that it was a term of arrangement as to the banking account subse quently introduced, and for the benefit of the parties.” [2]

[1] Sir Benj. Hammett v. Sir Wm. Yea. 1 Bos. & Pull. 144, Par. v. Eliason, 2 East Rep. 92.

[2] Exparte Patrick in re Holthouse, 1 Mont, & Ayr. 385. And see Exparte Walker in re Petrie, idem, note.

This, however, must be confined to bankers, brokers, factors, and others, who are at the expense of keeping up establishments for the purpose, and cannot be charged by any one who does not come properly under any of those denominations, and can show no good ground for it, on the score of extraordinary trouble or expense. [1]

A charge of 7s 6d. per cent. commission, by a person (who was not a banker,) and who was put to little trouble and no expense, was held to be usurious by Lord Ellenborough, and confirmed by the Court of King's Bench; they refused however to grant a new trial, which was applied for, it being a qui tam action for penalties, and the jury having found for the defendant. [2]

But a charge by a bill-broker in the country of 10s. per cent. as commission in discounting a bill payable in London, was not deemed usurious. [3]

Where a discounter of a bill took an extra sum beyond legal interest, to guarantee the payment by the acceptor, there being no doubt of his solvency, the jury, in a qui tam action for the penalties, found it usurious. [4]

As to bills and notes not exceeding three months date, or to run, vide Stat. 3 & 4 William IV. c.98, s. 7. The reason assigned for further relaxing the rule in favour of trade is, that as the ordinary rate of in terest is merely a sufficient consideration for the sum lent, when the lender is put to any extra trouble or expense on acconnt of the loan, it is but fair he should be remunerated by the borrower.

[1] 4Taunt. 810. Kent v. Lowen, 1 Camp. 178,

[2] Brooke q. t. v. Middleton, 1 Camp. 445. Exparte Gwyn, 2 Dea. & Chitt. 12.

[3] Exparte Henson, 1 Madd. Rep. 112, Thompson v. Powles, 2 Sim. 195.

[4] Lee q. t. v. Cass, 1 Taunt, 511.

Section 4.

Compound Interest.

To make interest principal and carry interest, on a mortgage security, it is necessary that it should first have grown due, and then an express agreement in writing, signed by the parties, is requisite to convert it into principal.

A covenant in a mortgage deed, with a proviso declared that if the interest was unpaid six months it should be accounted principal and carry interest, was held to be insufficient, Lord Chancellor Cowper stating “that no precedent had ever carried the advance of interest so far.” [1]

[1] Meere's case, cited in Bosanquet and Dashwood Ca. temp. Talbot 40, Brown v. Barkham, 1 Pr. Wms, 653. Lord Ossulston v. Lord Yarmouth, 2 Salk, 449.

And in another case Lord Thurlow said: “My opinion is in favour of interest, because I do not see any reason, if a man does not pay interest when he ought, why he should not pay interest for that also: but I have found the Court in the constant habit of thinking the contrary, and I must overturn all the proceedings of the Court if I give it.” [1]

Lord Eldon also observed in one case—“There is nothing unfair, or perhaps illegal, in taking a cove nant originally, that if interest is not paid at the end of a year it shall be converted into principal, but the Court will not permit that, as tending to Usury, though not Usury.” [2]

These dicta, however, must be understood as applying to mortgages of real property only, as there is a difference between mortgages and agreements for sale.

Where bonds for the amount of purchase money were given payable by instalments, which instalments were composed of principal and interest, it was con tended, as the bonds themselves carried interest, this was interest upon interest and Usury. But Lord Eldon held, that as the obligee, on each instalment becoming due, might have had judgment for the principal and interest due on the bonds, there was no Usury. [3]

[1] Ves. J. 99.

[2] Chambers v. Goldwin, 9 Wes. 271.

[3] Tarlton v. Backhouse, Coo. C. C. 231.

And in a more recent case, where a contract was made for the sale of an estate, situate in the colony of Demerara, where 6 per cent. was the legal interest, at a certain price, and it was agreed that this should be paid at certain future days, with interest calculated at 6 per cent., and promissory notes were given for these sums, compounded of the instalments, and that which was called interest, it was decided by Lord Tenterden and the Court, that the whole must be considered as the purchase-money of the estate, and that the bargain was not usurious. “The agreement being founded partly, said his Lordship, on what was considered the present price of the estate, and partly of what was considered the price of the estate if paid at a future day. [1]

As to personal contracts, it may be matter of agreement, or settled by mercantile usage.

Where bankers struck a balance quarterly, having charged interest and commission on it, and afterwards carried it forward as principal, and charged interest, the Court was not inclined to consider this usurious, presuming that as the balance was adjusted every quarter, it became a fresh agreement to lend the amount then due. [2] But in the absence of any such understanding or agreement compound interest would not be allowed.

[1] Beete v. Bidgood, 4 B. & Cress. 453.

[2] Caliot v. Walker, 2 Anst. 495. Exparte Bevan, 9 Wes. J. 223. 2 Wes. J. 20. Bruce v. Hunter, 3 Camp. 467. Eaton & others v. Bell & others, 5 Barn. & Ald. 40. Newall v. Jones, 1 M. & M.469. 4 C.& P. 124 s. c.

Section 5.

Where the Risk of losing the Principal is slight.

Where the principal is really put in hazard, it is not usurious to receive more than 5 per cent. ; but it is necessary the risk should not be slight, or the con tingency colourable only.

An agreement made by the lender of £100 to receive from the borrower £20 at the end of a year, for the forbearance of the £100, if the lender's son were alive, was held insufficient, and a mere subtlety to avoid the act, for if it should be out of the statute for the uncertainty of the life, the statute would be of little effect. [1]

So the contingency of a young and healthy person dying within three months has been deemed usurious,..or being so slight, it appears an evasion of the statute. [2]

So the chance of one collier out of twenty reaching London, in the summer season, would be deemed a mere disguise to obtain more than legal interest. [3]

And no risk merely of the borrower's insolvency, however great, is such a hazard as will justify the lender's taking more than legal interest on the sum lent.

See more on this subject, title Hazard.

Section 6.

Where the Interest only is risked.

The rule has been thus laid down where the interest only is put in jeopardy.

[1] Per Popham C.J. in Burton's case, 5 Co. Rep. 70. Mason v. Abdy, 3 Salk, 390. Button v. Downham, Cro. Eliz. 642.

[2] Richards q. t. v. Brown, Cowp. 770.

[3] 2 Vernon Rep. 179.

If £100. be lent, to receive £120 at the end of a year, upon a casualty, if the casualty goes to the interest and not to the principal, it is Usury; for the party is to have the principal come what will; but if the principal and interest are both hazarded, it is then not Usury [1]

[1] Roberts v. Trenayne, Cro. Jac. 507.

Section 7.

Retiring Partners.

As long as a partner remains in the concern, or retires leaving his capital therein, if he is still liable to the losses, and to be personally sued for the debts of the firm, he may make what stipulation he pleases, for interest upon any sum he leaves in the trade, although it may exceed 5 per cent. But if he wholly withdraws himself, and is no longer subject to a pro portion of the losses, or liable to be sued as a partner, he cannot receive more than 5 per cent. for his money, without being guilty of Usury; for, although his principal in the latter case would be liable to partner ship creditors, yet it is not such a hazard as will justify the extra interest; this has been clearly established, both at law and in equity.

Where money was lent in consideration that the lender should have part of the profits of a trade, in lieu of interest, bearing a proportion of the losses, though his share of the profits exceeded the amount of legal interest, it was not usurious; because, as Lord Mansfield observed, “The lender might be drawn into bankruptcy, by means of this agreement, which would have been more severe perhaps than the loss of the capital or the penalties of the statute of Usury.” [1]

[1] Morisset v. King, Burr, 891. Anderson v. Maltby, 2 Wes. J. 248.

But where a person was possessed of two shares in a brewery, estimated at £1,000. each, the business of which he carried on in conjunction with two part ners, and which was considered a flourishing concern, borrowed £2,000. of another, and agreed to pay him for the loan, not only 5 per cent. interest, but also the surplus profits of the two shares, which were expected to leave a balance, after paying the interest on the £2,000, and that he would assign the two shares to the lender, as his own property, it was held usurious. And, in answer to the argument of the lender's counsel, that the principal was put in hazard, as it was liable to the partnership creditors, Lord Kenyon observed, “It was no further hazarded than in the case of every other loan, viz., by the risk of the borrower's insolvency; for, as between the plaintiff and the partners in the business, he was not liable to con tribute to the losses in the trade.” Buller, Justice, added that “the lender was only liable to make good the losses of the trade, in the event of the insolvency of the other partners; but as between these parties, if there were any losses, they must be borne by the borrower and the other partners, whilst, if there was any profit, the lender would receive his pro portion of it. [1]

In another case in error, from the Court of Com mon Pleas, Lord Tenterden said, “If there is a partnership there is no loan of money. And where the jury have found a bonâ fide partnership, and no contrivance to cover Usury, the Court will not disturb the verdict. [2]

[1] Morse v. Wilson, 4 T. R. 353.

[2] Gilpin v. Enderby, 5 B. & A. 954.

Section 8.

Where Stock is transferred.

Stock in the public funds is occasionally used as a means of avoiding the statute. And wherever the lender, who transfers the stock, has made such a stipu lation with the borrower, to whose use it is transferred, so as to receive in lieu of it a greater amount of stockor interest at some future period, without the chance of receiving less, it is usurious; but if his receiving more depends on a contingency, such as the rise or fall of stock at the time at which it is to be retrans ferred or paid for, this will alter the case, as risk in the transaction is incompatible with the idea of Usury, in which the principal must be always certain.

Two cases will suffice to shew this:

Where one agreed with another, to whom he owed a sum of money, that he would either repay it at a day certain, or transfer so much stock as the debt would have produced at that time, whichever was preferred by the creditor; this was held to be usurious by Sir William Grant: “For the creditor,” said that eminent Judge, “might elect to take stock when it had risen, whilst his principal and interest being secure, he could sustain no loss.” [1]

But, on the other hand, where the agreement was in consideration of £160, to transfer £400.3 per cent. consols in nine months, or pay the then market-price, though, at the time it was made, the £400. was worth £240, whereby it was alleged the plaintiff both made £80, and the dividends, by the bargain. Lord Ellen borough decided that, though this was a catching bargain, yet, as there was some contingency, and a possibility of the stock declining to that extent, though he admitted it was very remote, the contract was not usurious. [2]

[1] Barnard v. Young, 17 Wes. J. 44. Forrest v. Elwes, 4 Ves. J. 492. Chippendale v. Thurston, 1 Moo. & Malk. 411. White v. Wright, 3 B. & C. 273.

[2] Pike v. Ledwell, 5 Esp. N. P. C. 164. Farquharson v. Barstow, 4 Bli. 560.

This decision is considered as carrying the prin ciple of contingency to a great length, the fall of 20 or 30 per cent, in so short a period, being very improbable.

If, on the negociation for a loan, the lender insists on the borrower's taking stock at a rate exceeding the market-price, it is usurious. [1]

Contracts, called continuation and backadation, known chiefly on the Stock Exchange, and which are the same in principle, are where a premium is given to postpone the actual payment or delivery of stock till a future day, have been held usurious. [2] An arrangement, therefore, to replace stock lent, even if more than the principal and interest be obtained, is not usurious, on account of the contin gency; but if that be removed before-hand, the value defined, and the gain certain, or may be rendered so, it is usurious.

[1] Doe v. Barnard, 1 Esp. N. P. C. 11.

[2] Smedley q. t. v. Roberts, 2 Camp. 607. Vid. also on this subject, Moore v. Battie, Amb. 371. Tate v. Wellings, 3 T. R. 531. Maddock v. Rumball, 8 East, 304. Boldero v. Jackson, 11 East, 612. Davison v. Pitt, Esp. N. P. C. 1.

Section 9.

Where something besides Money is given or charged for.

It matters not how the compensation above the legal interest arises, if the object be to avoid the Statute.

For where a sum of money was lent, and only legal interest charged, but the borrower was obliged to take a house on lease, at double its yearly value, it was held to be Usury. [3]

[3] Shep. Touch, 62, Saunders’ Case.

Again, an agreement that, upon the advance of a sum of money by Chambre to Tristram, the latter shall assign to Chambre the lease of premises of a greater value, with a power of redemption on repay ment of the money, and that in the meantime Chambre shall grant Tristram an under-lease of the premises at a greater rent than the legal interest of the money, Tristram incurring the expences, and paying the ground rent and taxes, it was held usurious, and the assignment executed on such agreement void. [1]

Likewise, where a bankrupt had borrowed £1000. of another, at legal interest, for a quarter of a year, but deposited some silk with the lender as collateral security, and agreed to give him £1.. for every £100. borrowed for that quarter, as warehouse room; this the Judge thought was usurious, though the jury, under the peculiar circumstances of that case, found a verdict for the defendant. [2]

[1] Doe ex dem. Telford v. Chambers, 4 Camp. 1.

[2] Le Blanc v. Harrison, Holt's Rep. 706. Solarte v. Melville, 7 Barn. & Cress. 431.

So where the borrower appointed the lender receiver of his rents, with a salary for his trouble far beyond what was customary or reasonable; and where another allowed the lender a salary as clerk in his brewery, for services which were neither performed nor intended to be, it was held in each case to be a mere contrivance, and usurious. [333] For, according to

[333] Wright v. Wheeler, 1 Camp. 165, note. Scott q.t. v. Brest, 2 T.R. 238.

Lord Mansfield, “where the real truth is a loan of money, the wit of man cannot find a shift to take it out of the statute.”

Nor is it absolutely necessary there should be a loan, for where a surety for a debt gave a sum of money for the forbearance of the debt, the transaction was ruled equivalent to a loan. [1]

Neither is it necessary the compensation for the forbearance should be in money, as the statutes have prohibited the taking above the value: for where one bought two oxen, to be paid for at a certain time, and not being able to pay for them at that time, agreed with the seller that if he would forbear, and give him till a future day, he would give him three quarters of wheat, which, being above the value of the legal interest, was held usurious. [2]

[1] Manners q.t. v. Postan, 3 B. & P. 343. Jestons v. Brooke, Cowper, 793. 3 Barn. & Ald. 664.

[2] Pollard v. Scholey, Cro. Eliz. 20.

Chapter III.

Of agreements and transactions which for the most part have not been deemed usurious.

1.—Where Usury is incurred by mistake.

2.—Where the principal is bonâ fide hazarded.

3.—Post obit bonds.

4.—Loans on contingencies.

5.—Where the transaction is by way of annuity.

6.—Prompt payment and usage of trade.

7.—Where there is a penalty for non-payment.

8.— Foreign interest.

Section 1.

Where Usury is incurred by mistake.

As the intention of the parties is essential to the offence, it necessarily follows Usury cannot be incurred by the mistake of a third person.

Therefore, in cases where the attorney or agent of the contracting parties has by mistake inserted a larger rate of interest than is legal, or made the time of payment of it fall due sooner than was intended, the Courts have invariably held, that as there was no corrupt agreement, the parties shall not be prejudiced, and that the sum really due may be recovered. [1]

Nor is it material that the lender, after he has advanced his money, has taken the security, knowing of the mistake, as his acceptance of it does not make him a party to the corrupt agreement, the security being necessary for the recovery of the money: neither does it signify whether the scrivener's mis take be an error in fact, from ignorance of the law, as the want of a corrupt motive will protect the lender. [2]

However, if the agreement be clearly usurious, it is void, though the parties did not intend it to be so, and were ignorant that such was the result of their contract. [3]

Though it is more than probable, under such cir cumstances, they would not be held liable for the penalties; for it is an universal rule that a corrupt agreement is the ground and foundation of usurious contracts, and that if the intent of the contracting parties be righteous, the contract cannot be within the statutes of Usury.

[1] Ballard v. Oddey, 2 Mod. 307. Buckler v. Millerd, 2 Vent. 108. 1 Free. 264. Murray v. Harding, 3 Wils. 390. Glassfurd v. Laing, 1 Camp. 149.

[2] Bush v. Buckingham, 2 Vent. 83. Buckley v. Guilbank Cro. Jac. 677.

[3] Marsh v. Martindale, 3 B. & P. 154.

Section 2.

Where the Principal is bonâ fide hazarded.

We have before observed that where the risk of the principal is so slight as to afford grounds of belief that it is merely colourable, or where the interest only is in danger, it is not sufficient to warrant the taking of more than 5 per cent.

But where the principal may be entirely lost, as in the case of loans on contingency, bottomry, post obit bonds, annuities, &c., it there cannot be said that the consideration is paid for the forbearance of money, when the day of payment itself may never come.

For where a man advanced money to victual a Newfoundland ship, on condition of receiving so many fish, far exceeding the legal rate of interest, (in value,) with the principal, in case the ship returned to Dartmouth, and the principal only in case she arrived elsewhere, but nothing in case she did not come at all, the Court held it not to be Usury, for the lender ran a hazard of having less than the interest in one case, and of losing both principal and interest in the other. [1]

[1] Sharpley v. Hurrell, Cro, Jac. 208.

So where a bond was given, with a condition if the ship went to sea, or the goods on board or the borrower should return safe, the lender should receive not only his principal and interest, but also a premium for the loan; it was contended that this was an usurious contract, for as the payment depended on so many contingencies, one of them must probably take place; but the Court held it good, as it was according to the usage of merchants, and allowable by reason of the dangers of the sea. [1]

It was, however, stated in the leading case on the subject, by Justice Burnet, “that the true reason why the Court held bottomry bonds good, is because they are not against the statute, as by the hazard a person runs, he may be entitled to neither principal nor interest;” and Lord Chief Justice Lee said, in the same case, “bottomry bonds are held good, not because they are for the benefit of trade, but because the whole is at hazard. [2]

They may, however, be made an evasion of the statute, as where the premium is large and unusual, in proportion to the risk, which is trifling an dim probable, as if a contract were made on a ship's return from Dover to Calais, at a season of the year when there is little or no danger; this would be looked upon as colourable, and a pretence to avoid the statute.

The chance of five daughters being alive at the distance of ten years, was held a sufficient risk; for where one agreed with another, in consideration of £100, paid down, that he would pay £80. a-piece to each of the five daughters that should be living at the end of ten years: the Court held it not usurious, and said, “if it had been that he should pay at the end of

[1] Soome v. Glean, 1 Sid. 27.

[2] In Chesterfield v. Janssen, 2 Wes. 125. 1 Atk, 301 & 1 Wils. 286.

one or two years £300. if any of the said children were alive, that had been Usury, for in probability one of them would continue alive for so short a time, but in ten years are many alterations.” [1]

[1] Bedingfield v. Ashley, Cro. Eliz. 741. Long v. Wharton, 3 Keb. 304. Joy v. Kent, Hardr. 418. Garret v. Foot, Comb. 133.

A post obit bond is a hazardous bargain, and not within the statute, Wid. Post obit Bonds.

It is clear, therefore, that a fair hazard will keep the case out of the statute, but a colourable or slight risk will not.

Section 3.

Post obit Bonds.

Post obit bonds are given in consideration of a certain sum paid down, to receive a much greater sum at the death of some particular person or persons, and are not usurious, however hard the terms on which they may be given, as there is only a chance of survivorship, and the risk of losing both principal and interest.

A person who had the reversion of an estate on the death of two old women, being in want of ready money, borrowed £350. of another, and agreed, in consideration of it, to give the lender £700. on the death of the two old women, and to secure it by mort gage of the reversionary estate. It happened that the two old women died within two years of the agreement, whereupon the borrower was anxious to be off the bargain, on the ground that advantage had been taken of her necessitous situation, and she filed a bill in Chancery for the purpose, which was dismissed. Lord Keeper North, (whose opinion is applicable to all fair cases of this description,) thought it was a fair bargain, and, as to the plaintiff’s necessities, he observed, “it is the same in all other cases, one that is necessitous must sell cheaper than those who are not; if I had a mind to buy of a rich man a piece of ground that lay near mine, for my convenience, he would ask me almost twice the value, so where people are constrained to sell, they must not look to have the fullest price. As in some cases that I have known, where a young lady that had £10,000. portion, payable at the death of an old man, or the like, and she in the mean time becomes marriageable, this portion has been sold for £6,000. present money, and thought a good bargain too. It is the common case, pay me double the interest during my life, and you shall have the principal after my decease.” The principal case upon loans on contingencies and hazardous bargains, where the subject met with the greatest consideration from the most eminent lawyers of the day, and in which all the former decisions were canvassed and the law clearly settled, and which now forms the standard case on these subjects, was the following:

[1] Batty v. Lloyd, 1 Vern. 141. Berny v. Pitt, 2 Vern, 14. 2 Vern. 27.

Sir Abraham Janssen lent Mr. Spencer £5,000. on his post obit bond, on condition that he was to receive for it £10,000. if Mr. Spencer survived the Duchess of Marlborough, but nothing if he died before her; Mr. Spencer was thirty years of age at the time, and the Duchess seventy-eight; his health was impaired and infirm from intemperance; her’s good, considering her age; about six years after this bargain, the Duchess died, and Mr. Spencer, being unable to pay off the £10,000., gave Sir Abraham a new bond for that sum, and, before he died, paid £2,000. on account of it. He bequeathed the residue of his personalty to his son; the bill was filed by the executors and guardians of the son to be relieved against this, as an usurious and unconscionable bargain. It was however dismissed, with costs; the Court having delivered an elaborate opinion that the contract was not usurious, and that the case was free from fraud. [1] But though not usurious, the Court would have relieved against it, as an unconscionable bargain, had not Mr. Spencer confirmed it, in his life-time, by pay ment of the #2,000. in part, on the death of the Duchess.

Post obit bonds do not therefore come within the statutes of Usury, but where undue advantage has been taken of the necessities, or gross imposition has been practised on a reversioner, or expectant heir, a Court of Equity will, on a strong case being made out, afford the same relief as it does in all other unconscionable bargains. [2]

[1] Chesterfield v. Janssen, 2 Wes. 125. 1 Atk. 301. 1 Wils. 286.

[2] Matthews v. Lewis, 1 Anstr. 7. Wharton v. May, 5 Wes. J. 27.

Section 4.

Loans on Contingencies.

Loans on contingencies are not usurious, on account of the risk incurred.

Where a person, in consideration of £30., became bound to another to pay £100. to him on the marriage of his daughter, but, if either of them should die before the marriage, nothing; this was held good, the Court stating, “it was plain bottomree.” [1]

And a wager between other two, to have £40 for £20. if one be alive on a future day agreed on, was not usurious. [2]

[1] Long v. Wharton, 3 Keb. 304. Chesterfield v. Janssen, Atk. 301.

[2] Button v. Downham, Cro. Eliz. 643. Bedingfield v. Ashley, Cro. Eliz. 741. Lamego v. Gould, 2 Burr. 715.

So in a case, lately decided, where the defendant had applied to the plaintiff, in May 1829, to lend him £200.; he consented, and the defendant gave him a warrant of attorney for the payment of £300. by instalments, viz. £100, at Christmas 1829,-#100. at Midsummer 1830,—and £100. at Christmas 1830,—if both should be living on those days respectively. There being a risk of the principal, the Court refused, on application, to interfere, Lord Tenterden observing, “We do not think this a case in which the Court can interfere, there certainly was a risk of the principal; the contingency was, if either of the parties happened to die.” In this case, the plaintiff swore, that his life was bad and uninsurable, that two insurance offices had refused to insure it, and that the defendant was an officer in the army, and liable to be called into active service; and that he believed such transactions were very common in the city of London. [1]

It is on the ground of risk, or contingency, that partners on retiring are allowed to make what arrangements they please as to interest for the capital they either invest, or leave, in the business, during the time they are liable to the engagements of the con cern, though it may exceed 5 per cent. Therefore we see, that although a very slight or colourable contingency will not take a case out of the statute, [2] yet a bonâ fide hazard will have that effect.

[1] Flight v. Chaplin, 3 B. & Adolph. 112.

[2] Richards q. t. v. Brown, Cowp. 770.

Section 5.

Where the Transaction is by way of Annuity.

It is clearly settled that the grant of an annuity for life or lives, if made bonâ fide, is not in its nature usurious, though it may be rendered so by concomitant circumstances.

Mr. Justice Blackstone observed, that every case of Usury must depend on its own circumstances; and added, “That he did not know an instance where the principal was bonâ fide hazarded, that the contract had been held usurious. If the price be inadequate to the hazard, it may be imposition, and, under some circumstances, relievable in equity, but it cannot be legal Usury.” [1]

The reason assigned for grants of annuity not being deemed within the statute, is the hazard run by the purchaser of not receiving an adequate return for his principal; this hazard, however, in the pre sent day, is much diminished by means of life insurance. It was, at one time, considered that if the deed granting the annuity were to contain a clause of redemption or repurchase, it would infect the whole transaction with Usury, as it was thought the principal was not then in reality put in hazard; and while it was so understood, it was customary to provide for such repurchase, either by a separate deed or agreement, or to leave it entirely to the honour of the parties. The Court having observed, in one case, where the question arose how far an annuity granted for three lives was valid,—“That as there was no loan, but a bonâ fide sale, it was good; but if there had been a provision made for repay ment of the principal, although not expressed in the bond, it had been an usurious agreement and lend ing within the statute.” [2] And in accordance with this view of the case, Lord Hardwicke at one time decided, that the grant of an annuity by a person for his life, with a proviso for repurchasing or redeeming

[1] Murray v. Harding, 3 Wils. 390. 2 Blacks. Rep. 859.

[2] Fountain v. Grimes, Cro. Jac. 252. Floyer v. Sherard, Amb. 19.

it, upon giving six months notice to the grantor, was a mere loan, and usurious. [1] Subsequent cases, how ever, have altered the law in this respect, it being now considered that a redemption, at the option of the grantor, was clearly for his benefit, and therefore the Court ought not to consider the transaction within the statute; for where an annuity was sold for the life of the grantor, then aged thirty-two years, with a clause of redemption, at the option of the grantor, after the expiration of five years, for five and a half years purchase, it was, after much consideration, not deemed usurious. De Grey, Chief Justice, observed, “That it was essential to the nature of an usurious contract, that there must be 1st, a loan; 2ndly, that illegal interest is to be paid for such loan; and it is essential to the nature of a loan, that the thing borrowed should, at all events, be restored; if that be bonâ fide put in hazard, it is no loan, but a contract of another kind; so if illegal interest is to be certainly paid, or upon a reasonable possibility, the contract is usurious.” [2]

[1] Lawley v. Hooper, 3 Atk. 280.

[2] Murray v. Harding, Blacks. Rep. 859. 3 Wils, 390.

In another case, where an annuity was sold, and it was agreed and understood at the time, that the grantor was to be allowed to redeem it, but no proviso was introduced into the deed to that effect, under the impression that its introduction would render the deed void, as usurious; the grantor filed his bill in Chancery, to compel the execution of this parol agreement, which Lord Chancellor Thurlow dismissed, on the ground that where there is no fraud, parol evidence shall not be permitted to contradict a deed; and with reference to the omission of the proviso, his Lordship observed, “To sell an annuity, and make it redeemable, is not Usury, because it is not a loan, and this doctrine prevails at the present day.” [1]

Neither does an assurance effected on the life of the grantor of the annuity render it invalid. Lord - Hardwicke, in reference to this mode of insuring the risk, said, “It has been objected that a man must be out of his senses to lend his money upon annuities for life, which may drop the next day, and speaking abstractedly, and merely on the nature of annuities for life, there seems to be weight in this objection, but every person knows that this casualty of losing the principal, is secured by insuring the life upon which the annuity depends; but it is said every life cannot be insured, indeed the insurance office will require different terms, according to the life, but still they may be insured.” [2]

[1] Irnham v. Child, 1 Brown, C. C. 92.

[2] Lawley v. Hooper, 3 Atk. 280.

Therefore, a ready mode of evading the penalties of the Usury Laws, in raising money at more than 5 per cent. presents itself to the borrower, on granting the lender an annuity, proportioned to the rate of interest agreed on, and retaining the power by proviso to repurchase it, at his convenience, while the lender guards himself against ultimate loss, by insur ing the borrower's life, or taking an assignment of a policy already effected; all which is perfectly legal, as it has been decided by a recent case, that a covenant by a grantor of an annuity to insure his life, is the same as if an increased rate of annual payment had been stipulated for by the grantee, in order that he might effect the same insurance; nor would the grantor be personally liable if, after having effected the insurance, the company were not to pay. [1]

Neither where the annuity is granted for lives is it deemed usurious, though it be granted for and during the lives of four persons, and the life of the longest liver of them, though they be all nominated by the grantee, and the deed contains a covenant to insure the last life, within thirty days after the lapse of the third life. [2]

[1] Morris v. Jones, 2 B. & C. 232. Holland v. Pelham, 1 Tyr. 438. 1 C. & J. 575.

[2] Exparte Naish, 7 Bing: 150.

It was formerly held that an annuity for a term of years certain was not usurious. The Courts, however, of late incline to a contrary opinion. Where £566 was given for an annuity of £120. for twenty-three years, it was said by the Court, “This is clearly no Usury, where there was no communication before between them for a loan; the annuity was purchased bonâ fide, and had it been £40 per annum for forty years, for £100, it had been no Usury, no more than if for £100, one purchase lands worth £40 per annum.” [1]

So where one agreed with another to lend him £100., and that for the forbearance thereof he should receive £20. half yearly, till £120. had been paid; Twisden, Justice, said, “The contract was not usurious, but a purchase of an annuity for three years.” [2]

Doubts have, however, in more modern times, been entertained, whether an annuity for a term of years, if it be so granted as to repay the principal and more than legal interest, would not now be deemed usurious.

In a recent case in ejectment, on Sir James Scarlett observing arguendo, “If a person have an annuity secured on a freehold estate, it may clearly be his interest to redeem it, but such a power will not make the bargain usurious.” But per Bayley, Justice, “In that case, the principal is in hazard, from the uncertain duration of human life. Here it is in the nature of an annuity for years, and there is no case in which such an annuity has been held not to be usurious, where, on calculation, it appeared that more than principal, together with legal interest, is to be received.” [3]

[1] Tanfield v. Finch, Cro. Eliz. 27.

[2] Rowe v. Bellasis, 1 Sid. 182, and Dr. Goad's Case, Trin. 19th Eliz. Symonds v. Cockerill, Noy. 151. Cotterell v. Harrington, Brownl. 180. Rex v. Drury, 2 Leon. 7. per Burnett Just. in Chesterfield v. Janssen, 2 Wes. 142.

[3] Doe v. Gooch, 3 Barn, & Ald, 660.

In this dictum the learned Judge must be under stood to mean that there is no modern case in which it has been so decided, as we have already cited several old authorities to the contrary; and this observation has been made, in a later case, before his Honor the Master of the Rolls, who does not appear to have disapproved of it. Where an annuity had been granted for a term of years, to be paid half yearly, and at the time promissory notes were given by the grantor for the payment of each half-year's annuity when it became due, and it appeared that the several half-yearly payments would repay the purchase-money, with interest exceeding the rate of 5 per cent, His Honor observed, “With respect to the question of Usury, I shall not refer to the old cases, which have been cited. This is in effect an agreement to repay the principal sum of £4000. with interest, by twenty-three instalments, and as it appears that the interest thus paid will exceed legal interest, the transaction is plainly usurious.” [1]

[1] Fereday v. Wightwick, 1 R. & M. p. 45.

Section 6.

Prompt Payment and Usage of Trade.

The deducting of more than 5 per cent for prompt payment is not considered usurious at law, when done bonâ fide and according to the usage of trade, as it is considered the debtor has the option at all times of defeating the interest, by payment at the time agreed on. Where the plaintiff, who was a gold refiner, brought an action for goods sold and deli vered to a customer, to be paid for at three months credit, with an agreement that if they were not paid: for at the expiration of that time, the customer was to pay £d an oz. a month, for every month afterwards that the account should remain unsettled, and this mode of dealing was proved on the trial to be customary in that trade, though, on calculation, it exceeded 5 per cent, which the customer alleged in his defence was usurious. Lord Mansfield decided, “That as it was proved to be the custom of that particular trade, and as it was optional with the defendant to have avoided the increased sum, by pay ment at the end of three months, it was not usurious.” [1]

[1] Floyer v. Edwards, 3 Cowp. 112.

In another case, where the defendant, in an action for money had and received, had paid into Court the principal, and 5 per cent, from the time of the bargain, and it appeared the excess was only to be taken in case of delay of payment at the end of three months, the same learned Judge was of opinion, that though it ought not to be considered Usury within the statute, yet that the demand of the surplus was an exorbitant demand, and therefore ought not to be recovered in an action for money had and received, which was an equitable action, and founded in conscience, under the particular circum stances of the case. The defendant had a verdict. [1] There are, however, cases in bankruptcy at vari ance with what has been stated, as well as the former cases, which has thrown some doubt on the subject.

A firm of cotton manufacturers had agreed with bleachers, who were in the habit of bleaching for them, upon the terms of receiving their running account quarterly; and, if paid immediately, they were to be allowed 30+ per cent. discount. This went on for some time, the quarterly accounts were paid, and the discount allowed; when, at length, the cotton manufacturers failed: the bleachers then wished to prove, under the commission, their full account, but the commissioners refused to allow them more than 5 per cent. discount; on this they petitioned to be allowed to prove the surplus discount, according to agreement, and supported their appli cation by an affidavit, setting forth the custom, among bleachers, to allow such large discounts, varying from 20 to 30 per cent.; but Lord Chancellor Rosslyn dismissed the petition, thinking the commis sioners had done right. [2]

[1] Plumbe v. Carter, Cowp. 116.

[2] Exparte Ainsworth, 4 Ves. J. 678. But see Eden's Bankrupt Law, p. 135, where it is said, Mr. Vesey was mistaken in representing that 5 per cent, discount was allowed, and Co. Bankrupt Law, 220, where no notice is taken of the 5 per cent.

This decision has been followed, in a more recent case, by the Vice-Chancellor, in which no discount, not even 5 per cent, was allowed; and it was said that the reporter was mistaken in representing that 5 per cent was allowed in the bleacher's case. The facts were these—some parcels of gunpowder were sold, to be paid for at the end of the year in which they were purchased, but if paid for before the end of the year, 20 per cent. discount was to be allowed; they were not paid for within the year; yet, on the bankruptcy of the debtor, the creditors were not allowed to prove the whole debt without the deduction of the discount. The Vice-Chancellor, Sir John Leach, observing, “That it might be difficult, on legal reasoning, to arrive at the conclusion of Lord Rosslyn, in the former case, as he seemed to have come to that decision, as a rule of expediency, to avoid the frauds which might otherwise be practised; and as that case had ever since been acted upon, he would not depart from it.” [1]

From these later authorities, therefore, one of two consequences must be inferred, viz., either that the prior cases on the subject are overruled by them, or that there is a distinction made between actions at law and commissions of bankruptcy; for it is clear the seller of goods, notwithstanding any agreement he may have made with the buyer as to discount for payment within a stipulated period, cannot, in the event of the latter's bankruptcy, prove for more than the real price, minus the discount.

As to proceedings in Bankruptcy, vid. post, tit. Bankruptcy.

[1] Exparte Pigou in re Harvey, 3 Madd. 136.

Section 7.

Where there is a Penalty for Non-Payment.

These nearly resemble the cases of prompt pay ment, for where the sum reserved is in the nature of a penalty, and the redemption optional, on the part of the borrower, it should seem it is not usurious; but as this would open a wide door to avoid the statute, such contracts are narrowly watched, and if it can be shewn that the penalty was a mere contriv ance, and the forfeiture certain, it will be deemed usurious.

Where one had delivered goods of the value of £100, and took a bond for their re-delivery in a month, or to pay £123., it was held Usury, being considered a mere cloak to avoid the statute. [1]

Holt, Chief Justice, said, in one case, “If I covenant to pay £100. a year hence, and if I do not pay it, to pay £20. more, it is not Usury, but only in the nature of a penalty.” [2]

So if I lend one £100. for two years, at the end of which time he is to pay me £30. for the loan, but if he repays me the principal at the year's end, he shall pay nothing for interest; this is not Usury, for he had his election, and might have discharged himself by repayment before the two years expired. [3]

[1] Beecher's Case, cited in Reynolds v. Clayton, Moore, 397.

[2] Garret v. Foote, Comb. 133. Burton's Case, 5 Co. Rep. 69.

[3] Cro. Jac. 509, per Doddridge Just.

This, at first sight, appears to be at variance with the rule, that where the interest only is risked it is not sufficient to avoid the statute; but we must remember that these cases of penalties are mere executory agreements, and the additional sum may never become a debt, as the borrower may entirely defeat it, by payment before the forfeiture is incurred.

Section 8.

Foreign Interest.

Foreign interest is regulated by different statutes, and it is not usurious to receive, upon a contract made in a foreign country, the rate of interest allowed by such country, though it may exceed 5 per cent.

Therefore, a bill payable in India, and returned to England, protested for non-payment, may law fully bear 12 per cent, the interest allowed in India. [1] But if an action were brought upon such bill in England, and the plaintiff should have judgment in his favour, he would be allowed Indian interest to the signing of the judgment, and afterwards being con sidered principal, he would only be entitled to the

[1] Ekins v. E. I. Company, 1 Peer Wms. 395. Auriol v. Thomas, 2 T. R. 52. Harvey v. Archbold, 5 D. & R. 500, 3 B. & C. 26. Thompson v. Powles, 2 Sim, 194.

English rate, or 5 per cent, from the liquidation of the debt by the judgment. [1]

It was formerly necessary, in order to secure foreign interest on bonds or mortgages in Ireland, and the West Indies, that the bond or mortgage should have been actually executed in the country where the interest was to be calculated. This has, however, been remedied by an express statute, the 14th George III, c. 79, which allows of Irish or West Indian interest being taken on securities of land there, though the deeds or securities may have been executed in Great Britain. This, however, is confined to mortgages and other real securities, and does not extend to personal contracts.

Therefore, where a bond was given for the pur chase-money of land in the West Indies, which was afterwards exchanged in England for another bond, West Indian interest, or 6 per cent, was not allowed on the substituted bond. [2]

[1] Bodily v. Bellamy, 2 Burr, 1094.

[2] Dewar v. Span, 3T. R. 425.

In consequence of doubts being entertained of the correctness of construing the 14th George III, c. 79, not to extend to personal contracts entered into by way of collateral security for the payment of colonial interest, an explanatory Act was passed in the 1st and 2nd George IV, c. 51, to give to bonds and covenants of third parties, which may have been given as collateral security, in Great Britain, for money lent and secured in the manner mentioned in the former Act, the same validity, and put them on the same footing, as the deeds or mortgages they accompanied; this last Act was itself repealed in the next Session, 1822, (except only so far as regarded any mortgages or securities executed before the passing it). By the 3rd George IV, c.47, which declares that all mortgages and other securities executed in Great Britain, respecting lands, &c. in Ireland or the West Indies, and all assurances, &c. entered into by way of collateral security for the payment of such interest, or securing interest on the money bonâ fide advanced, though at a higher or additional rate than the rate which such mortgages, &c. carry; whether in any of the cases aforesaid they may have been entered into or executed at the time of executing such mortgages, &c. or subsequent thereto; and whether they shall have been made with the original parties, or their representatives, trustees or assignees, and though the interest be payable in Great Britain, shall be as good, valid, and effectual as if the same had been entered into and executed, and the interest made payable in the place where the subject-matter of the security lies; and British subjects are not to be liable to the penalties in the statute of Anne for receiving such interest for the money bonâ fide advanced, so as it does not exceed the rate of interest allowed in such place, &c. [1]

It does not appear that any cases have been reported on this Act since its passing.

[1] See these Statutes more at length, Appendix A. post.

Chapter IV.

Consequences of usury.

1.—Of Agreements and Securities which are void.

2.—In what cases renewed or substituted Securities are void.

3.—How Third Parties not privy to the Usury are affected by it.

4.—Sureties.

5.—Consequences of Usury.

Section 1.

Of Agreements and Securities which are void.

Usury (with few exceptions) so far taints every security of which it forms the consideration, as to render it absolutely void, and no payment or subse quent act of the parties can render it available; so if it be good in its inception, no subsequent arrange ment will render it usurious. [1]

[1] Brown v. Fulsbye, 4 Leon. 43. Body r. Tassel, 3 Leon. 205. Fussil r. Brookes, 2 C. & P. 318.

And this holds equally where the consideration for a bond or bill is of a mixed character, as partly good and partly usurious, the latter so far taints the whole as to prevent the holder recovering even the sound part upon that instrument, although he were minded to abandon that part which he knew to be usurious, so all writings whatever for the strengthening an usurious contract are void. [1]

An exception has been made in favor of indorsees of bills of exchange, or promissory notes, founded on Usury, in the hands of third parties, where valuable consideration has been given, without notice of the circumstance. Vid, post. p. 87.

Where a lease was granted to secure a sum really lent, and merely to secure the principal, and another agreement was made at the time, between the same parties, as to usurious interest being received by the lender, the lease was held void, though only taken for the principal. [2] Here it must be observed, the two contracts were contemporaneous.

Where a mortgage deed was given on an usurious consideration, the mortgagor agreeing to take stock at 75, when, at the time of the transaction, the real value was only 73, it was held usurious, and the mortgagee nonsuited in an action of ejectment. [3]

So, if there be an agreement to pay legal interest on a bond, and a premium was paid down, over and above the interest, the bond is void. [4]

[1] White and another v. Wright, 3 B. & C. 273.

[2] Roberts v. Trenayne, Cro. Jac. 507.

[3] Doe v. Barnard, 1 Esp. N. P. C. 11.

[4] Fisher v. Beazley, Doug. 235.

Where three bills of exchange were given to secure, partly an usurious debt, and partly money lent at legal interest, though two of the bills exactly covered the legal debt, yet it was held they were all void, as tainted with Usury. []

A judgment entered up, on a warrant of attorney, where the consideration was infected with Usury, was, on application to the Court, ordered to be set aside; the warrant of attorney, and bond accompanying it, were ordered to be delivered up, and the plaintiff saddled with the costs of the application. [2]

But in another case, upon motion (in the same Court,) to set aside a warrant of attorney, and a judgment entered up thereon, given on an usurious consideration, and why a bill of exchange, given by defendant to procure his release from prison, should not be ordered to be delivered up, and the last case was cited in favor of the motion; the Court thought the rule should be confined to the warrant of attorney and judgment, as they were not to decide the question of Usury in a summary way. [3]

[1] Harrison v. Hannell, 1 Marsh Rep. 349. Barnett v. Tomkins, Skinner's Rep. 348.

[2] Machin v. Delaval, Barnes, 52. 3rd edit. idem 277.

[3] Edmonson v. Popkin, 1 B. & P. Rep. 270.

And where an application was made to the Court of Exchequer, to shew cause why a certain judgment entered up by the plaintiffs should not be set aside on the ground of Usury, that Court refused to interfere, considering it the peculiar office of a Court of Equity, and that although the Court of King's Bench had granted such motions, it did not alter their determination. [1] But this was the case of a post obit transaction, and which was held not to be usurious.

If usurious interest is not contracted for, the security is not invalidated by subsequently taking such in terest. [2]

So where a contract for the principal is good, and a subsequent one for the interest usurious, the latter, though void, does not affect the former; the holder of the first being in the same situation as if the second had never been made. [3]

From the observations of Sir John Strange, in the celebrated case of Chesterfield v. Janssen, it seems there are two ways of determining whether or not an agreement be usurious; 1st, on a verdict of a jury on a plea of the corrupt agreement; 2nd, the Court exercising its own judgment on the particular cir cumstances of the case. [4]

[1] Matthews v. Lewis, 1 Anstr. 7. Roberts v. Goff, 4 B. & A. 92. Hindle v. O’Brien, 1 Taunt. 413.

[2] Exparte Jennings, 1 Mad. 331.

[3] Phillips v. Weague, 3 Camp. 119. Gray v. Fowler, 1 H. Black,462.

[4] 1 Atk. 345. Roberts v. Trenayne, Cro. Jac. 507.

Section 2.

In what cases renewed or substituted Securities are void.

If a security be free from the stain of Usury when it is made, it will continue so, although the lender afterwards take, or contract to take, usurious interest; yet if this formed no part of the original agreement, and was not in contemplation at the time, the security will be good, though the party may have rendered himself liable to the penalties of the act. [1]

Where a bond founded on Usury was destroyed by mutual agreement, and another given on the same terms, the mere substitution of the one for the other was of no avail. [2]

So a fresh security given for the balance of a debt originally usurious, is so likewise. [3]

But where a new security is given in lieu of a former one, which was usurious and void, yet if, in the second security, a deduction be made of all sums paid under the first security, the second is good, and not effected by the Usury of the first. [4]

After an usurious security, given for a loan, has been destroyed by mutual consent, a promise by the borrower to repay the principal and legal interest is binding. [5]

Where a party borrowed money on an usurious agreement, and gave a bond, and afterwards, at the request of the lender, it was arranged that such bond should be destroyed, and a new one given by the borrower to a third person, to whom the lender owed the same amount, and in satisfaction of the lender's debt, this new bond was held good. [6]

[1] Nicholls v. Lee, 3 Anstr. 940. 2 Taunt, 184.

[2] Per Grose, Just in Cuthbert v. Haley, 3 Esp. 22. 8 T. R. 390.

[3] Pickering v. Banks, Forr. 1, 72. Preston v. Jackson, 2 Stark. 237.

[4] Wickes v. Gogerley, 2 C. & P. 397. 1 M. & R. 123. Chapman v. Black, 2 B. & A. 588. Wright v. Wheeler, 1 Camp. 165, n.

[5] Barnes v. Hedley, 1 Camp. 157.

[6] Regina v. Sewell, alias Beaus, 7 Mod. 118.

So where a promissory note, founded on Usury, was given to another, who transferred it for a valuable consideration to a third party, who knew nothing of the circumstances, and the maker of the note after wards gave the third party a bond for it; this was held available, and the usurious consideration of the note no defence to an action on the bond; [1] but if the bond had been given to the original lender, it would have been otherwise.

But if a bill, affected by Usury, in the hands of an innocent holder, who, upon being informed of the Usury, takes a fresh bill in lieu of it, drawn by one of the parties to the original Usury, and accepted by a third person, for the accommodation of the other party, he cannot maintain an action against the acceptor of this substituted bill. [2]

And where a third party, to procure the liberation of another, who had been arrested on a promissory note which had been given on an usurious considera tion, joined in another note for the amount of the debt, Lord Kenyon decided, that unless it could be shewn it was a colourable shift to evade the statute when the money was originally lent, and the first note given, it could not be questioned in the action on the second note. [3]

[1] Cuthbert v. Haley, 8 T. R. 390.

[2] Chapman v. Black, 2 B. & A. 588. Marchant v. Dodgin & others, 2 M. & Sc. 632.

[3] Turner v. Hulme, 4 Esp. N. P. C. 11.

From which we may infer, that where a stranger has become a party to a security founded originally on an usurious consideration of which he was ignorant at the time, he is looked upon more favourably, and will not now be prevented recovering on it in an action, nor will he, on the other hand, be allowed to avail himself of any after-acquired knowledge in his defence. [1]

[1] Daniel v. Cartony, Esp. 274.

Section 3.

How Third Parties, not privy to the Usury, are affected by it.

Agreements and other securities founded on Usury have been held void in the hands of third parties, though ignorant of the fact at the time they took them. Bills of exchange and promissory notes were formerly in like manner considered void. [2]

[2] Lowe v. Waller, Doug. 735. Bowyer v. Bampton, Str. 1155. Goldsmith v. Bunn, 10 Mod.448. Bayley, on Bills, 411. Ackland v. Pearce, 2 Camp. 599. Young v. Wright, 1 Camp. 141.

In two cases, where bills originally good had been endorsed on usurious terms, and at length came into the hands of persons unacquainted with the circum stances, and who had given full value for them, Lord Kenyon held, that if they had been originally given on an usurious transaction, or for an usurious consider ation, they would have been void in the hands of even a bonâ fide holder; but that Usury in an intermediate transaction respecting them, could never make them void in the hands of a bonâ fide indorsee, where there was no Usury in the original transaction. [1]

But in a later case, Lord Ellenborough, and the Court of King's Bench, on deliberate argument, decided that Usury on the part of the payee of a note, who had endorsed it on usurious terms, was a bar to the plaintiff's claim, because they could not bring them selves in connection with the defendant but through the medium of an indorsement tainted with Usury. [2]

The hardship of these decisions, in making innocent holders of bills of exchange, or notes, liable for the Usury of preceding parties, induced the legislature to interfere; for it was said, with much truth, in arguing the last case, that if third parties were thus to suffer, even a bank-post bill might be void in the hands of a stranger, merely because the payee had discounted it on usurious terms.

To remedy this for the future, the 58th George III. c. 93, was passed, which provides, “That no bill or note made after the 10th day of June 1818, shall be void in the hands of an indorsee for valuable con sideration, although such bill or note may have been given for an usurious consideration, or upon an usurious contract, unless such indorsee had at the time of discounting or paying such consideration for the same, actual notice that such bill or note had been originally given for an usurious consideration, or upon an usurious contract.”

[1] Parr v. Eliason, 1 East, 92.

[2] Lowes and another v. Mazaredo, 1 Stark. 385. Kent v. Lowen, 1 Camp. 177, Bayley on Bills, p. 413.

The following case was decided, under this statute, by Lord Tenterden, in 1827:

Campbell, (the defendant,) who was sued on a bill of exchange, proved an usurious bargain respecting the bill between Ford and Sampson, at the time one of them was the holder:—per Lord Tenterden, “As this statute declares that the bill shall not be void in the hands of a bonâ fide holder for valuable con sideration, it was incumbent on the plaintiff to shew, and not the defendant to prove, that the plaintiff was such holder for valuable consideration: and unless the plaintiff adduced such evidence, the prior statute applied, and the plaintiff could not recover;” and in this case, the plaintiff had no notice that the con sideration would be disputed. [1]

[1] Wyatt v. Campbell, N. P. 13th July 1827. 4M. & M. 80. Crook v. Jadis, 6 C. & P. 191. Dagnall v. Wigley, 11 East, 43. 2 Camp. 33.

Section 4.

Sureties, and how affected by Usury.

It seems to be settled that where one joins another in a bond which is usurious, on condition that the other will indemnify him by a counterbond, that such counterbond will be good, and may be recovered on. There does not appear to be any very recent decisions on the subject; those cited are all in the time of Queen Elizabeth.

In one case, Manwood, Chief Baron, held a plea of Usury to be a good bar. [1]

But, in an action brought on a bond of this description, where the plaintiff had been sued upon the original bond, and obliged to pay the amount, had brought his action on the counterbond against the defendant, who pleaded the statute of Usury; Wray, Chief Justice, held that this was no plea, for the statute is that all bonds, &c. made for the pay ment of money lent upon Usury, shall be void, but here the bond was not for the payment of money, but for the indemnity of the surety. [2]

The reason assigned (by the reporter,) in a similar case, for the decision, was, that the surety might be ignorant of the corrupt agreement, and so could not plead it in bar to the action. [3]

And in another case the Court held the plea of no avail, for though the first bond was void, yet the second was forfeited, because the defendant had not saved his surety harmless; the Judges, however, in this case do not appear to have been unanimous, for Glanville, Justice, said it would be a dangerous precedent, as the surety might be a friend of the Usurer's, and so the statute would be of little avail. Judgment, however, was given for the plaintiff, upon which Glanville said, “that that judgment would be quickly carried to Cheapside.” [4]

But if the surety knew the first bond to be usurious, and neglected to plead it, it is probable he would not be allowed to recover, as the case seemed to have presumed he was ignorant of the fact.

[1] Potkin’s Case, 2 Leon. 63, pl. 93.

[2] Bassett v. Prowe, 2 Leon, 166, pl. 200.

[3] Robinson v. May, Cro. Eliz. 588.

[4] Button v. Downham, Cro, Eliz. 642.

Section 5.

Consequences of Usury.

The words of the statute of Usury are “bonds, contracts and assurances,” so that if no security has been given, but merely a verbal contract entered into, it is void. In this respect it varies from the 9th Anne, relative to gaming, for in that act the words are, “all notes, bills, bonds, judgments, mortgages, or other securities, or conveyances whatsoever;” and under this last Act it has been held, that where money has been lent at play, the securities taken for it, but not the contract itself, is void. [1]

Mortgages and leases are rendered void by Usury, and no estate passes either to the mortgagee or lessee. [2] Bills of exchange, and promissory notes, are assurances within the statute; (as to them, vid. ante. p. 87,) so are fines and recoveries. [3]

[1] Barjean v. Walmsley, 2 Str. 1249. Robinson v. Bland, 2 Burr, 1077.

[2] 1 Leon. 307.

[3] 3 Rep. 30.

Though the statutes avoid the securities, they do not destroy a bonâ fide debt; therefore, where one was indebted to another in the sum of £1125, and having requested the indulgence of further time to pay it, the lender refused, unless he would add £150. to the debt instead of interest, to which the borrower acceded, and gave five acceptances for these two sums, payable within fourteen months; it was held the bonâ fide debt remained unimpeached by the Usury. [1]

Lord Mansfield observed in one case, that if the contract were legal, and the lender afterwards took more than 5 per cent, though the party is liable to the penalties of the statute, yet the contract is not void. [2]

So where a bill of exchange was given for a debt, and afterwards another bill was given for the former, with a premium added in lieu of the first, which was not paid, Lord Ellenborough decided, that though the second bill was void, yet the debt was not destroyed, but that the holder of the bill was in the same situation as if no bill had been given. [3]

But if the contract is itself usurious, it follows nothing can be recovered on it: for where one lent another £60., and at the time took a note at three months for £65: 5s., and afterwards brought an action for money lent: it was held he could not recover back the £60 per Lord Mansfield, “This is too plain to be argued. [4]

[1] Gray v. Fowler, 1 H. Blac. Rep. 462.

[2] Abrahams v. Bunn, Burr. 2251.

[3] Phillips v. Cocagne, 3 Camp. 119.

[4] Scott v. Nichol, 4 Doug. 314.

But the Courts will not presume Usury, for in one case Lord Tenterden observed, “where a person has two demands, one recognized by law, the other arising on a matter forbidden by law, and an un appropriated payment is made to him, the law will afterwards appropriate it to the demand which it recognizes, and not to the demand which it prohibits.” [1]

[1] Wright and another v. Laing, 3 B. & C. 171. Stanton v. Knight, 1 Sim. Rep. 483.

Chapter V.

Relief in cases of usury.

1.—Relief from Usury at Law.

2.—Relief from Usury in Equity.

3.—Bankruptcy.

4.—Evidence on Usurious Contracts.

Section 1.

Relief from Usury at Law.

As Usury, (with the exceptions already noticed,) avoids every security into which it enters, it necessarily follows that none such can be enforced at law; and advantage may be taken of such securities, by pleading the statute in bar to actions brought on them to recover the sum secured, [1] or to an action of assumpsit brought on an usurious contract, the general issue may be pleaded, and the Usury given in evidence: [2] but a defendant cannot do both. [3] But now by Reg. Gen. Hilary Term, 4th William IV. 1834, it must be pleaded specially.

[1] 12 Mod. Rep. 493.

[2] Bernard v. Saul, Str. 498.

[3] Bernard v. Fitzhouse, 9 Mod. 359.

A party to an usurious security, who has paid the full amount due on it, may recover back all excess above 5 per cent. in an action for money had and received; as it seems clearly settled, though once doubted, that a party so situated is not to be con sidered as a particeps criminis, but according to Lord Chief Justices Mansfield and Holt, rather as one under duress; [1] and even money paid to compromise a qui tam action, brought by an informer for penalties, may be recovered back in an action for money had and received. [2]

In one case the Court of Common Pleas refused to set aside a judgment and execution, founded on an usurious consideration, until the defendant had paid the legal principal and interest. [3]

But in a later case, the Court of King's Bench expressed their disapprobation of this decision, and set aside a judgment founded on an usurious con sideration, without compelling the defendant to pay the principal and interest. [4]

[1] 1 Salk, 22. Skinn. 411. Clarke v. Shee, Cowp. 200. Regina v. Sewell alias Beaus, 7 Mod. 118. Nevill v. Wilkinson, 1 Br. Ch. Rep. 547. Smith v. Bromley, Doug. 696.

[2] Williams v. Hedley, 8 East Rep. 378.

[3] Edmonson v. Popkin, 1 Bos. & Pull. 270.

[4] Roberts v. Goff, 4 B. & A. 92.

But though the securities are void, the real debt we have seen is not destroyed, if it were originally good and lawful. If the borrower or his surety voluntarily pay the money really lent, with legal interest, he cannot recover them back again, or if he pay more, he can only recover the excess: for it is said, where a man only pays what in conscience he ought to pay, though not compelled so to do, the Court will not assist him to retract such payment. [1]

And where a person brought an action at law against a pawnbroker, to compel him to re-deliver a pledge, or security for the money which had been advanced on an usurious agreement, and afterwards accidentally burnt, she was not allowed to recover on the action, which is of an equitable nature, not having tendered or paid the sum actually received [2]

[1] Astley v. Reynolds, 2 Str. 915. Hodges v. Lovat, Loffts. Rep. 51.

[2] Fitzroy v Gwillim, 1 T. R. 153.

Section 2.

Relief in Equity.

Relief from Usury in Courts of Equity, differs from that afforded by Courts of Law; for in the former it is a maxim, that he who would have equity must do equity. The statutes of Usury precluding the remedy merely, and this Court will only grant relief upon the terms of the party seeking it con senting to pay what is really due.

Lord Eldon thus states the rule:

“At law, (says his Lordship,) you must make out the charge of Usury; and, in equity, you cannot come for relief without offering to pay what is really due, and must either prove Usury by legal evidence, or have the confession of the party.” [1]

Where a borrower is a party to an usurious obligation, on which no legal proceedings have yet been taken, but of which he may be apprehensive, he may file a bill in equity to be relieved from it, on payment. of the sum actually received, and simple interest; [2] but if he omits in his bill to offer to pay what is legally due, it may be demurred to. [3]

Where the defendant supplied the plaintiff with goods, in order to enable him to negociate a note, the Court granted an injunction, until the amount for which the goods sold was ascertained. [4]

So where the defendant, for a loan of £150, had received £60, in cash, a gold watch, and a Cremona fiddle, the Court ordered an enquiry what money was really obtained by the sale, upon payment of which the securities were ordered to be given up. [5]

[1] Exparte Scrivener, 3Ves & Bea. 19. Scott v. Nesbitt, 2 Cox, 183. Dalbiac v. Dalbiac, 16 Ves. J. 124.

[2] Exparte Skip, 2 Wes. 489.

[3] Mason v. Gardiner, 4 Br. Ch. Rep. 436. 1 Fonb. on Eq. 25.

[4] Cecil v. Sutton and another, cited in Barker v. Vansommer, 1 Br. Ch. Ca. 149.

[5] Lord Polwarth v. Cooke, idem.

Or if proceedings at law have actually commenced, or even been threatened, the Court of Chancery will, on application and proof of the Usury, issue an injunction to restrain them; and if part of the con sideration of the security has been goods, it will be referred to the Master to ascertain their real value, on payment of which a perpetual injunction will be awarded. [1]

If, however, a judgment has been obtained at law, the Court, on reference to the Master to see what has been actually advanced, will order the judgment to stand for what is found due, and legal interest; [2] or if the party has submitted to the Usury, and paid more than legal interest, the Court will, on a bill filed for the purpose, order the money paid to be accounted for. [3]

The defendant, however, it seems is not obliged to discover any usurious contract, unless the plaintiff offers to waive the penalty. [4]

Bill, to stay proceedings at law, and discover Usury, charging an agreement to take, but not the actual taking of usurious interest, and not offering to pay the amount, and which by the bill was admitted legally due, is demurrable; the Court held that the demurrer was good. [5] So a bill to set aside an usurious contract, defendant may demur to what interest he agreed to take, for he cannot set forth that, without discovering the very interest he has taken. [6]

[1] King v. Hamlet, June 1831.

[2] Scott v. Nesbitt, 2 Br. Ch. Rep. 641.

[3] Barker v. Vansommer and another, 1 Br. Ch. Ca. 149. Bosanquet v. Dashwood, Ca. Temp. Talb. 38.

[4] Brand v. Cumming, Vin. Abr. tit. Us, 315.

[5] Whitmore v. Francis, 8 Price, 616. Baker v. Mellish, 11 Wes. 68.

[6] Chauncey v. Tahourden, 2 Atk. 393.

A Court of Equity will not relieve against an usurious contract to make the principal lost as well as the interest. [1]

Leases from mortgagor to mortgagee of mortgaged premises at a fixed rent, are transactions at which a Court of Equity will look with great jealousy. But this Court will not presume Usury any more than a Court of Law; for where a testator directed that one of his residuary legatees should be answer able for all debts due to him from the father of the legatee, the Vice-Chancellor held that a debt, though usurious, must be deducted from the legatee's share. [2]

A Court of Equity will also afford protection and relief to cases which, though not exactly usurious, may be considered hard and unconscionable, and where the distresses of the borrower have been taken advantage of to an extreme degree by the cupidity of the lender; this most commonly occurs where expectant heirs are concerned, and post obit bonds given, or reversioners or tenants for life are obliged to raise money to meet their necessities on disadvantageous terms. There must, however, in any of these cases, have been either fraud or gross oppression practised to induce Courts of Equity to interfere, which is not done as a matter of course. [3]

[1] Pitt v. Cholmondely, 2 Wes. 567.

[2] Stanton v. Knight, 1 Sim. Rep. 483. Wright v. Laing, 3 B. & C. 171.

[3] Hylton v. Hylton, 2 Wes. 547. 1 Fonb. 25, 140. Heathcote v. Paignon, 2 Br. Ch. Ca. 167.

SECTION 3.

Bankruptcy.

The proceedings in bankruptcy, where Usury has been alleged, have been considered very oppressive, and repeatedly contrasted by Lord Eldon with analagous proceedings at law and in equity, as going much further than either of the latter. For in bankruptcy, where a party, who has taken usurious interest, attempts to establish his claim under a com mission, it is sufficient to suggest Usury in a peti tion, supported by affidavits, merely upon information and belief, putting the party charged to prove against himself, for the purpose not of giving him his real debt, but of cutting him off from all relief; and unless he can escape through this ordeal, he cannot stand as a creditor, and participate in the dividend. [1]

But if a borrower, on usurious interest, afterwards give a security for the sum really advanced and legal interest, such security has been determined to be valid. [2]

It has been held that no part of a dividend, arising upon an usurious contract, is proveable. [3] And even where a lender, who had taken out execution, delivered

[1] Exparte Scrivener, 3 Wes. & Beames, 14. 1 Rose, 52. Eden's Bankrupt Law, 119.

[2] Barnes v. Hedley, 1 Camp. 157. 2 Taunt. 184, Wright v. Wheeler, 1 Camp. 167, n.

[3] Exparte Thompson, 1 Atk. 125. Exparte Skip, 2 Wes. 489. But as to Bills, &c. Vid, 58 Geo. III. c. 93.

up the proceeds received from the Sheriff, under an agreement with the assignees (who gave him a release,) that he should come in with the other creditors for the balance due to him, it was holden that such agreement meant a proveable balance, and did not let in a debt affected by Usury. [1]

And it was determined in the last case, that a warrant of attorney to secure the repayment of £600. with interest, from a day agreed on, was usurious, unless the whole of the money was actually advanced on that day; but, if it was part of the agreement, that the lender should retain the amount, or any part of it, as a banker for the borrower, who was to be at liberty to draw it out, from time to time, as he wanted it, this would not be usurious, even though the money was not forthcoming when applied for, although it might be a breach of contract. [2]

It has been before observed, that whatever dis count a trader may have agreed to give his debtor for prompt payment, within the time limited for the expiration of the credit, he is not allowed in bank ruptcy to prove for more than the original sum, and cannot add the discount to it. [3]

[1] Exparte Bangley, 1 Rose, 168.

[2] And see, Exparte Patrick, in re Holthouse, 1 Mont. & Ayr. 385. idem note.

[3] Exparte Ainsworth, 4 Ves. J. 678. Exparte Pigou, 3 Madd. 136.

Vid. p. 74.—Where proceedings at law and in bank ruptcy, relative to prompt payment, are contrasted, a debt void by statute, as an usurious contract, ought not to be permitted to be proved. And although the rule of the Court of Chancery is, upon a bill to be relieved against usurious interest, not to make void the whole debt, but to make the party pay what is really due, in a commission of bankruptcy the assignees have a right to insist that the whole is void, as an usurious contract; and unless the assignees and creditors submit to pay what is really due, the Lord Chancellor has not power to order it, and applications of this nature have been frequently refused. [1]

SECTION 4.

Evidence on Usurious Contracts.

The defendant, who has pleaded Usury, must be prepared to prove it, for as he has admitted the debt the onus lies on him. [2]

In one case, Lord Holt refused to permit a person who had been privately intrusted to make an illegal bargain to be examined as a witness. [3]

[1] Co. Bankrupt Law, p.214.

[2] Per Holt, C. J. 12 Mod. Rep. 547.

[3] Anon Raymond, 733.

But in a more recent case, Lord Kenyon decided otherwise. It was an action of debt, on a bond, con ditioned for the payment of £400 and interest, plea that the bond was given on an usurious contract. Defendant called plaintiff's attorney as a witness to prove the consideration on which the bond and the mortgage which accompanied it, were given, was usurious. It was objected by plaintiff's counsel, that this was a case of confidence, and that he could not be examined.

But per Lord Kenyon, “The privilege does not extend as far as this case; where there is anything communicated to an attorney by his client for the purpose of the defence, he ought not to divulge it; but where he himself, is, as it were, a party to the original transaction, that does not come to his know ledge in the character of an attorney, and he is as liable to be examined as any other person. [1]

To debt on bond, plea of Usury. The plaintiff offered a judgment in an action brought by the defendant against him, for the penalties on the same bond in which defendant was defeated; the record in that action was held admissible as evidence by Lenman, Chief Justice. [2]

Where the defence to an action on a note for money lent was that the note was usurious, it was held by Lord Tenterden that a memorandum of agreement, as to the terms, might be given in evidence, without a stamp, for the purpose of proving Usury. [3]

[1] Duffen v. Smith, N. P. C. 108. And see Baugh v. Cradocke, 1 Moo. & Rob. 182. Brard v. Ackerman, 5 Esp. 119.

[2] Cleve v. Powell, 1 M. & Rob. N. P. 228.

[3] Nash v. Duncomb, 2 Moo. & Malk, N. P. 104.

In an action by the indorsee against the acceptor, the drawer, being released by the defendant, is a good witness to prove that he indorsed the bill upon an usurious contract with the plaintiff. [1]

A bankrupt, however, is not a competent witness, though released by a defendant, as such release only operates as a release of his person and future assets, but not of the assets in the hands of his assignees; he is, therefore, an interested party, and cannot be examined, as his testimony, by defeating the claim, would add to the surplus fund, which would come to him after payment of his creditors. [2]

Where Usury is stated to have been committed in discounting the bill on which the action is brought, and another bill in one undivided transaction, no parol evidence is admissible, as to the contents of the latter, unless notice has been given to produce it; nor unless both bills be given in evidence can the charge of taking one sum for the discount of two bills be supported, or it can be distinguished how much was paid for the discount of each particular bill. [3]

In an action by the indorsee of a note against the maker, letters written to the latter by the payee negociating an usurious bargain, are admissible, if shewn by the post-mark, or otherwise, to have been contemporaneous with the note. [4]

[1] Rich v. Topping, Peake, 224. 1 Esp. N. P. C. 177. Brard v. Ackerman, 5 Esp. 119.

[2] Perryman v. Steggall and another, C. P. in Banco, 1 May, 1832. Ashton v. Longes, M. & M. 127. Moody v. King, 4 D. & R. 30, 2 B. & C. 558.

[3] Hattam v. Withers, 1 Esp. 289.

[4] Kent v. Lowen, 1 Camp. 177.

And in an action by the indorsee against the indorser of a bill, where the defendant proves Usury, in the concoction or negociation of the bill, the plain tiff must prove himself a bonâ fide holder, although he may have received no notice to prove the consideration. [1]

[1] Wyatt v. Campbell, Moo. & Malk. 80, cit. ante, p. 88.

Chapter VI.

ON THE PENALTIES OF USURY.

1.—Who are liable to Penalties under the Statute; how and by whom recovered.

2.—Proceedings for Penalties, and Limitation of Actions qui tam.

3.—Where the Action must be brought.

4.—Compounding Actions qui tam.

5.—Evidence in Actions for Penalties.

6.—Indictment.

SECTION 1.

Who are liable to Penalties under the Statute; how and by whom recovered.

If a person contracts to take more than the statute allows, but in reality takes nothing, he is not liable to the penalties, though the security, as we have before observed, is void.

But if he takes any sum, however small (above the legal interest), it is an affirmance of the contract, and renders him liable to treble forfeiture. [1]

But such forfeiture is not incurred till the actual receipt of the interest, for where the defendant had received a premium of £2.2s. for the loan of £100. for six months, on a bond, at the time when he advanced the money, and at the end of six months the principal was repaid with £2.10s. interest for the half-year, it was held the forfeiture was not incurred till the half-year's interest was received. [2]

To constitute Usury, and complete the offence, there must be an actual taking of money or money's worth; therefore the repayment of the sum lent, with usurious interest, either by bill of exchange, promissory note, or banker's cheque, is not com plete until it has been paid, the lender having, in fact, as yet received nothing, for payment may be refused. [3]

[1] Mallory v. Bird, cited in Cro. Eliz. 20. Per Aston, Just. in Fisher q. t. v. Beasley, Doug. 236. 4 Leon. 43. 2 Leon, 38.

[2] Wade q. t. v. Wilson, 1 East, 195.

[3] Maddock q. t. v. Hammett, 7T. R. 184. Brooke q. t.v. Middleton, 1 Camp. 445. Borrodaile q. t. v. Middleton, 2 Camp. 53.

It would seem that it is usurious to receive any amount beyond interest, even without a contract, for where £20. was given for the loan of £100, without any agreement as to interest, at the end of the year, it was deemed within the statute, for the acceptance completes the offence without any previous bargain, as the statute has been held to refer as well to the past as the future forbearance of money. [1]

All the forfeitures under the Act are to be recovered by action of debt, bill, plaint, or information; an action qui tam, for penalties under the statute, may be brought by a stranger, and the borrower produced as a witness to prove the Usury. [2]

But if a borrower himself sue for penalties, he must, it seems, either repay, or at least tender the sum borrowed before he brings the action. [3]

And in all such actions the plaintiff may sue out the writ in his own name, and declare qui tam. [4]

[1] Sir Wollaston Dixies Case, 1 Leon. 96. Rex v. Walker, 1 Sid. 421. Rex v. Rout, Trin. T. 16 Car. B. R. cited in Vin. Abr. tit. Us.

[2] Vid. Evidence, p. 101.

[3] Fitzroy v. Gwillim, 1 T. R. 153.

[4] Lloyd q. t. v. Williams, 2 Blac. Rep. 722.

SECTION 2.

Proceedings for Penalties, and within what time and where brought.

All informations and qui tam actions upon the statute must be brought within twelve calendar months from the commitment of the act of Usury, and indeed this applies to all other penal actions brought by common informers.

But the Crown may sue within two years after the end of the first year. [1]

Nor will the Court assist an informer if he does not bring his action in time. [2]

But a party to an usurious contract is not limited to any time to take advantage of it in his defence, or in his application to the Courts to avail himself of the nullity of the securities he may have given. In general, when bills are discounted, the usurious interest is not to be considered as received till the bill is paid, but there may be exceptions; [3] upon a loan of £500, the borrower agreed to give something more than legal interest as a compensation, but no particu lar sum was agreed on; after the execution of the securities and payment of the money, the parties went to another place, where £50 was given as a compensation, and interest at 5 per cent on the £500. was paid for five years; at the end of which time, an action for the penalties was commenced, such pay ment of interest was judged usurious, inasmuch as the loan could only be deemed a loan for £450, and as interest was received on the full sum of £500. for the previous year, the action was not too late. [4]

[1] 31 Eliz. c. 5.

[2] Rex v. Hendricks, Str. Rep. 1234.

[3] Wright v. Laing, 3 B. & C. 165.

[4] Scurry q. t. v. Freeman, 2 Bos. & Pull, 381.

But where an agreement was made for the loan of £5,000, on mortgage, at 5 per cent. interest, to be paid half-yearly, and the lender subsequently refused. to complete the agreement, unless, by way of bonus, the borrower would purchase certain goods of him, at a rate much beyond the market-price, to which he consented, the goods were paid for on the 10th of January, and the half-yearly payment of interest was made on the 25th of April following, held that the offence of Usury was complete on the first payment; that the subsequent payments of interest were not usurious, and that the action consequently ought to have been brought within one year after such first payment. [1]

Section 3.

Where the Action must be brought.

A qui tam action for treble forfeiture can only be prosecuted in the superior courts at Westminster, and where one was brought in another Court, a writ of error was allowed. [2]

The words of the statute of Anne have rendered this action a local one, and therefore it must be brought in the county where the offence was com pleted, that is where the usurious consideration is received, or the account relating to it settled. [3]

If the cause of action arises in two different counties, the venue may be laid in either of them. [4]

[1] Wood v. Greenwood, 10 B. & C. 689. 1 L. & W. 229. 1 East, 195.

[2] Gardner v. Morefield, 1 Keb. 554. Hardr. 420, anon.

[3] Scott q. t. v. Brest, 2 T. R. 238. Pearson v. Mc.Gowran, 5 D. & R. 616. 3 B. & C. 300. Scurry, q. t. v. Freeman, 2 B. & P. 381. King v. Fraser, 6 East, 348.

[4] Scott q. t. v. Brest, cit, sup.

Section 4.

Compounding Actions Qui Tam.

An action brought to recover penalties for Usury may be compounded, by leave of the Court in which the proceedings are, which, in general, will give this permission, but if compounded without such leave, it is penal; and the party paying the composition, we have seen, may recover it back in an action for money had and received. [1]

If the defendant, on application to the Court, has obtained a rule to stay the proceedings, on payment of the penalties, the Court will grant an attachment against him, if he does not pay them. [2]

But by the new rule of Court, No. 90, signed by the fifteen Judges, and which is applicable to all the Courts, -“Leave to compound a penal action shall not be given in cases where part of the penalty goes to the Crown, unless notice shall have been given to the proper officer, but in other cases it may.” [3]

The Attorney-General may enter a nolle prosequi on behalf of the King, but only for the moiety of the penalty due to the Crown. [4]

[1] 18 Eliz. c. 5. Bland v. Featherstone, Barnes, 118, 3rd edit.

[2] Hart q. t. v. Draper, 2 Marsh, 358. King v. Clifton, 5 T. R. 257.

[3] Regulae Generales, Hil. Term, 2 Wm. IV.

[4] Long’s Case, 1 Ventris, 191.

Section 5.

Evidence in Actions Qui Tam for Forfeitures under the Statute.

In a qui tam action, brought by a common informer, the borrower may prove the whole transaction, whether the principal be paid or not; this, though once doubted, seems now to be settled. [1]

The objection going to the credit, and not to the competency of the witness; [2] for as to the credit due to his testimony, the Jury alone are to judge.

The ground of these decisions appears to be, that the witness is not interested in the event of the suit, nor could he give the judgment against him in evidence on any future occasion for his benefit, as in an action against him for money lent. Lord Kenyon observed, in one case, “That a clear and certain rule had been laid down, that no objection could be made to the competency of a witness, upon the ground of interest, unless he were directly interested in the event of the suit, or could avail himself of the verdict in the cause, so as to give it in evidence on any future occasion for his benefit.” [3]

[1] Abrahams v. Bunn, 4 Burr, 2255. Smith q. t. v. Prager, 2 Esp. 486. 7 T. R. 60.

[2] Bent v. Baker, 3 T. R. 27.

[3] Lord Kenyon in Smith v. Prager, cited sup. Phil, on Ev. 1 v. p. 115.

In such an action an admission by the borrower is not evidence for the defendant, the lender [1]

Where an attorney had brought an action on an usurious security on the part of the holder, and received the debt and costs, and gave a receipt for the same, it was held sufficient to charge the defendant, that the attorney acted as his agent, and that de fendant had received more than legal interest. [2]

Section 6.

Indictment.

The better opinion seems to be, since the statute of Anne, that an indictment for Usury will not lie; and that if an indictment be brought, it must be quashed, as the method which the Acts prescribe must be followed.

[] Maugham q. t.v. Walker, Peake, 163.

[] Owen q. t. v. Barrow, 1 N. Rep. 101; and see Evidence on Usurious Contracts, ante. p. 101.

The authorities, however, are by no means unani mous on the subject; Lord Cokeaffirming that all Usury was prohibited at common law, and Lord Chief Justice Hale, on the contrary, maintaining that Jewish Usury, or 40 per cent. was alone forbidden; whilst amongst modern writers, Mr. Plowden strenuously contends that Usury is still an offence at common law, and that a man may be indicted as a common usurer. Mr. Comyn, on the other hand, inclines to the contrary opinion, and shews the absurdity of the former.

And as there appears to have been no indictment prosecuted since the statute of Queen Anne, while one five years previously to that act was quashed as bad, it seems unnecessary to investigate the subject. [1]

[1] Vid. Plow. on Usury, 220. Comyn on Usury, 220. The Queen v. Dye, 11 Mod. 174. Rex v. Upton, 2 Str. 816. Mr. ORD seems to think, that the Indictments for Usury, of which frequent mention is made in the Books, were grounded on the Stat. of Hen. 8, which makes the Usurer liable to fine and imprisonment at the King's will. On Usury, p. 157.


APPENDIX TO THE HISTORY OF USURY.

A1.

A comparison between the Usurer of the fourth century, as described by St. Basil, with the Usurers of the seventeenth and nineteenth centuries, as described by Molière and Sheridan.

St. Basil.

THE USURER OF THE FOURTH CENTURY.

“The griping Usurer, says St. Basil, sees unmoved his necessitous borrower at his feet, condescending to every humiliation, professing every thing that is vilifying; he feels no compassion for his fellow creature, though reduced to this abject state of supplication; he yields not to his humble prayer; he is inexorable to his entreaties; he melts not at his tears; he holds out obdurate in his refusal; he swears and protests that he has no money, and that he is under the necessity of borrowing himself; he acquires credit to his lies by super-adding an oath, and aggravates his inhuman and iniquitous traffic with the grossest perjury: but when the wretched suppliant enters upon the terms of the loan, his countenance is changed, and he smiles with complacency; he reminds him of his intimacy with his father, and treats him with the most flattering cordiality, 'Let me see', (says he,) if I have not some little cash in store, for I ought to have some belonging to a friend, who lent it me upon very hard terms, to whom I pay most exorbitant interest for it, but I shall not demand any thing like that from you.' By fair words and promises he seduces and completely entangles him in his snares; he then gets his hand to paper, and completes his wretchedness. How so? By dismissing him, bereft of liberty.”


Molière.

THE USURER OF THE SEVENTEENTH CENTURY.

Cléante. Quelle réponse t'a-t-on faite ?

La Flèche. Ma foi, monsieur, ceux qui empruntent sont bien malheureux; et il faut essuyer d'étranges choses lorsqu'on est réduit à passer, comme vous, par les mains des fesse-Matthieu.

Cléante. L'affaire ne se fera point?

La Flèche. Pardonnez-moi, Notre maître Simon, le courtier qu'on nous a donné, homme agissant et plein de zèle, dit qu'il a fait rage pour vous, et il assure que votre seule physionomie lui a gagné le coeur."

Cléante. J'aurai les quinze mille francs que je demande?

La Flèche. Oui, mais à quelques petites conditions qu'il faudra que vous acceptiez, si vous avez dessein que les choses se fassent.

Cléante. T'a-t-il fait parler à celui qui doit prêter l'argent ?

La Flèche. Ah! vraiment, cela ne va pas de la sorte. Il apporte encore plus de soin à se cacher que vous; et ce sont des mystères bien plus grands que vous ne pensez. On ne veut point du tout dire son nom, et l'on doit aujourd'hui l'aboucher avec vous dans une maison empruntée, pour être instruit par votre bouche de votre bien et de votre famille; et je ne doute point que le seul nom de votre père ne rende les choses faciles.

Cléante. Et principalement ma mère étant morte, dont on ne peut m'ôter le bien.

La Flèche. Voici quelques articles qu'il a dictés lui-même à notre entremetteur, pour vous être montrés avant que de rien faire:

"Supposé que le prêteur voie toutes ses sûretés, et que l'emprunteur soit majeur, et d'une famille où le bien soit ample, solide, assuré, clair, et net de tout embarras, on fera une bonne et exacte obligation pardevant un notaire, le plus honnête homme qu'il se pourra, et qui, pour cet effet, sera choisi par le prêteur, auquel il importe le plus que l'acte soit dûment dressé "

Cléante. Il n'y a rien à dire à cela.

La Flèche. "Le préteur, pour ne charger sa conscience d'aucun scrupule, prétend ne donner son argent qu'au denier dix-huit."

Cléante. Au denier dix-huit ? Parbleu! voilà qui est honnête. Il n'y a pas lieu de se plaindre.

La Flèche. Cela est vrai.

“ Mais comme ledit préteur m'a pas chez lui la somme dont il est question, et que, pour faire plaisir à l'emprunteur, il est contraint lui-même de l'emprunter d'un autre sur le pied du denier cinq, il conviendra que ledit premier emprunteur paie cet intérêt, sans préjudice du reste, attendu que ce n'est que pour l'obliger que ledit prêteur s'engage à cet emprunt."

Cléante. Comment diable! quel juif! quel arabe est-ce la! C'est plus qu'au denier quatre.

La Flèche. Il est vrai, c'est ce que j'ai dit. Vous avez à voir là-dessus.

Cléante. Que veux-tu que je voie?j'ai besoin d'argent, et il faut bien que je consente à tout.

La Flèche. C'est la résponse que j'ai faite.

Cléante. Il y a encore quelque chose?

La Flèche. Ce n'est plus qu'un petit article.

"Des quinze mille francs qu'on demande, le prêteur ne pourra compter en argent que douze mille livres; et, pour les mille écus restants, il faudra que l'emprunteur prenne les hardes, nippes et bijoux dont s'ensuit le mémoire, et que ledit prêteur a mis de bonne foi au plus modique prix qu'il lui a été possible."

Cléante. Que veut dire cela?

La Flèche. Ecoutez les mémoire.

"Premièrement, un lit de quatre pieds, à bandes de point de Hongrie, appliquées fort proprement sur un drap de couleur d'olive, avec six chaises et la courte-pointe de même; le tout bien conditionné, et doublé d'un petit taffetas changeant rouge et bleu."

"Plus, un pavillon à queue, d'une bonne serge d'Aumale rose sèche, avec le mollet et les franges de soie."

Cléante. Que veut-il que je fasse de cela?

La Flèche. Attendez.

"Plus, une tenture de tapisserie des amours de Gombaud et de Macé."

"Plus, une grande table de bois de noyer à douze colonnes ou piliers tournés, qui se tire par les deux bouts, et garnie par le dessous de ses six escabelles."

Cléante. Qu'ai-je à faire, morbleu !....

La Flèche. Donnez-vous patience.

"Plus, trois gros mousquets tout garnis de nacre de perle, avec les trois fourchettes assortissantes.

"Plus, un fourneau de brique avec deux cornues et trois récipients fort utiles à ceux qui sont curieux de distiller."

Cléante. J'enrage!

La Flèche. Doucement.

"Plus, un luth de Bologne, garni de toutes ses cordes, ou peu s'en faut."

"Plus, un trou-madame, et un damier, avec un jeu de l'oie renouvelé des Grecs, fort propre à passer le temps lorsque l'on n'a que faire."

"Plus, une peau de lézard de trois pieds et demi, remplie de foin; curiosité agréable pour pendre au plancher d'une chambre."

"Le tout ci-dessus mentionné valant loyalement plus de quatre mille cinq cents livres, et rabaissé à la valeur de mille écus, par la discretion du prèteur."

Cléante. Que la peste l'étouffe avec sa discrétion, le traitre le bourreau qu’il est! A-t-on jamais parlé d'une usure semblable? et n'est-il pas content du furieux intérêt qu'il exige, sans vouloir encore m'obliger a prendre pour trois mille livres les vieux rogatons qu'il ramasse? Je n'aurai pas deux cents écus de tout cela. Et cependant il faut bien me résoudre à consentir à ce qu'il veut; car il est en état de me faire tout accepter, et il me tient, le scélérat, le poignard sur la gorge.

L'avare, Act 2, Scene 1.


Sheridan.

THE USURER OF THE NINETEENTH CENTURY.

Sir Oliver. Well, but how must I talk? there's certainly some cant of Usury, and mode of treating, that I ought to know.

Sir Peter.Oh! there's not much to learn; the great point, as I take it, is to be exorbitant enough in your demands, eh? Moses? -

Moses. Yes; that's a very great point.

Sir Oliver. I’ll answer for it I’ll not be wanting in that; I'll ask him 8 or 10 per cent, on the loan, at least.

Moses. If you ask no more than that, you'll be discovered immediately.

Sir Oliver. Eh! what the plague! how much, then?

Moses. That depends on circumstances. If he appears not very anxious, only 40 or 50 per cent, but if you find him in great distress, and wanting the monies very bad, you may ask him double.

Sir Peter.A good honest trade you're learning, Sir Oliver.

Sir Oliver. Truly I think so, and not unprofitable. Moses. Then, you know, you haven't the monies yourself, but you are forced to borrow them for him of a friend.

Sir Oliver. Oh! I borrow it of a friend, do I?

Moses. Yes; and your friend is an unconscionable dog, but you cannot help that!

Sir Oliver. My friend is an unconscionable dog, is he?

Moses. Yes; and he himself has not the monies by him, but is forced to sell stock at a great loss.

Sir Oliver. He is forced to sell stock at a great loss, is he? Well, that's very kind of him.

Sir Peter.I'faith Sir Oliver, Mr. Premium I mean, you'll soon be master of the trade.

School for Scandal.

Aristotle's Opinion of Usury.

Of all modes of accumulation, (says this celebrated heathen,) the worst and most unnatural is interest. This is the utmost corruption of artificial degeneracy, standing in the same relation to commerce, that commerce does to economy. By commerce, money is perverted from the purpose of exchange, to that of gain: still, however, this gain is occasioned by the mutual transfer of different objects: but interest, by transferring merely the same object from one hand to another, generates money from money; and the product thus generated is therefore called offspring, (Tokos,) as being of precisely the same nature with that from which it proceeds! – De Polit., lib. 2, c. 10.

“Money (sayeth one,) was invented for commutation, but in Usurie is no commutation. Ergo—Usurie is unlawful.”

The execution of Neshec, and the confinement of his kinsman Tarbith.

A3.

Some idea may be formed of the nature of the laws enacted at this time against the Jews, from the following specimen.

“In or about the 37th Year of King Henry III, it was pro vided, that no Jew should remain in England without doing the king some service: that there should be no schools for Jews in England, except in places where such schools were wont to be in the time of king John: that all Jews in their synagogues should celebrate, with a low voice, according to the rite of their religion; and that Christians were not to hear them celebrating. That every Jew should he answerable to the rector of his parish for all parochial dues chargeable upon his house. That no Christian woman should suckle or nurse the child of a Jew, nor any Christian man or woman serve any Jew - or Jewess, or eat with them, or abide in their house. That no Jew or Jewess should eat or buy flesh meat in Lent. That no Jew should detract from the Christian faith, or dispute publicly concerning it. That no Jew should have secret familiarity with any Christian woman, nor any Christian man with a Jewess. That every Jew should wear a badge upon his breast. That no Jew should enter into any church or chapellest haply in passing to and fro, nor should stay there to the dishonour of Christ. That no Jew should hinder another Jew, who was wil ling to embrace the Christian religion. That no Jew should be suffered to abide in any town without the King's special license, save in those towns wherein Jews were formerly wont to reside. These articles were to be observed by the Jews, under pain of forfeiting their goods.”

[Madox Hist. of the Excheq. 1,248.]

When this persecuted people were most favoured, their condition was intolerable, and all that can be said by way of justification for our ancestors is, that they were rather more mildly treated in England than in other Countries of Europe.

[Barr. Obs. on the Stat. de Judaismo.]

A4.

Translation of a Bond or Obligation made to the Caursini for the Repayment of Money upon Loan - Temp. Hen. 3.

To all who shall see this present writing, Thomas the Prior and the Convent of Barnwell wish health in the Lord.

Know ye that we have borrowed and received at London for ourselves, profitably to be expended for the affairs of our Church, from Francisco and Gregorio, from them and their - partners, citizens, and merchants of Milan, an hundred and four marks of lawful money sterling, thirteen shillings and fourpence being counted to every mark; which said one hundred and four marks we promise to pay back on the Feast of St. Peter ad vincula, being the first day of August, at the New Temple in London, in the year 1235, and if the said money be not paid at the time and place aforesaid, we bind ourselves to pay the afore said merchants, or any one of them, or their certain attorney, for every ten marks, forborn two months, one mark of money, for recom pense of damages which the aforesaid merchants may incur by the non-payment of it, so that they may lawfully demand both prin cipal, damages, and expenses of one merchant, for himself, horse, and servant, until such time as the aforesaid money be lawfully satisfied: and for the payment of such principal, damages, and expences, we bind ourself, our church and successors, and all our own goods, and the goods of our Church, moveable or im movable, ecclesiastical or temporal, which we have or shall have, wheresoever they shall be found, to the aforesaid merchants and their heirs: And do further recognize and acknowledge that we possess and hold the said goods from the said merchants, by way of courtesy, until the premises be fully satisfied, renouncing to ourselves and our successors, all help of canon and civil law, and all privileges and clerkship, the Epistle of St. Adrian, all customs, statutes, lectures, indulgences, and privileges obtained for the King of England, from the See Apostolic, as also the benefit of all appeal or inhibition from the King of England, with all other exceptions, whether real or personal which may be objected against the validity of this instrument. All which things we promise faithfully to observe: as in witness whereof we have set hereto the seal of our convent.

Dated London, 24th of April, 1235.

Talibus igitur (indignantly observes Matthew Paris,) inextri cabilibus vinculis debitores suos Caursini constringebant, p. 286.


A5.

A late writer accounts in a great degree for the bitter hatred, and general detestation entertained by the ecclesiastics of old against the Jews, to whom it seems the licentious monks and clergy of former times were in the habit of pawning the sacred property of the Church, as no one but a Jew dared to receive the sacred pledge; and who thus frequently became odious, not only as importunate creditors, but as exposing by clamourous and public demands of payment-–transactions never meant to meet the light. — Mill. Hist. Jews, 4 vol. p. 301.

Quod in laicis reprehenditur, id multo magis in clericis oportet predamnari.—Gratus Bishop of Carthage, quoted in Bolton's Discourse on Usury.

Our wonder, therefore, at the harsh and choleric language of the reverend fathers, when speaking of the Jews as vile infidels, dogs, vipers, monsters, devils!!! &c. &c. must be somewhat abated.

The following is a copy of the order restraining the Jews from taking more than 2d. per week for every 20s. lent to the scholars of Oxford-mentioned ante. p. 10.

Judæi Oxom., non recipient â Scholaribus, pro libra, in Septimana, nisi duos denarios et similiter fiat, in minori summa, secundum suam quantitatem, alioquin prædicti Judæi punianturjuaeta Constitutionem Regni.—Claus. 32 Hen. III. m. 9.

A6.

STATUTES CONCERNING USURY.

3 HENRY VII. c. 5, A.D. 1488.

An Act against Chevizance and Usury.

ITEM, for as much as importable damage loss and impoverishing of this realm is had by damnable bargains grounded in Usury coloured by the name of New Chevisance contrary to the law of natural justice, to the common hurt of this land, and to the great displeasure of God, our Sovereigne Lord the King, for the reformation thereof and of all corrupt and unlawful bargains by the assent of the Lords spiritual and temporal and the commons in his said parliament assembled, and by authority of the same hath ordained and enacted, That if hereafter any bargaine cove nant by buying of any obligation bill or any pledges put into suretie, or by bill or otherwise by the name of dry exchange or otherwise whereby any certain sum shall be lost by any covenant or promise between any person or persons by themselves or any other to their knowledge within this realme or if any bargaine or loan whereby any of the party should lose or pay for any sum certain: that is to say for having an £100, in money or merchan dize or otherwise and therefore to pay six score pounds or more or less, in and for any more or less summe, after any manner or rate, that all such bargains covenants, promise, and sureties therefore made, and all things thereof depending be utterly voyde and of none effect. And over this it is ordained by the same authority that if any merchandize obligations, bills, or plate, be promised to be delivered upon such corrupt bargain, and deli vered, or delivered and had again to him, that ought such mer chandizes, obligation, bills, or plate, or knoweth by any other man, by assent, agreement, or knowledge, in any manner forme of him, or his factor, or broker, that such merchandizes ought, or privie to such bargaines, that all such bargaines, covenants, pro mises, and all sureties therefore made, be utterly voyde. And the seller, owner, bargainer, or promiser of such corrupt bargains or goods, shall lose, for any such bargaine made by him or his factor, £100. And whosever will sue, therefore, to have an action of debt: in which the party shall not wage his lawe, the King to have the one halfe, and he that will sue the other halfe. And forasmuch as these corrupt bargains be most usually had within cities and burroughs having authority to try all matters and causes growen and had within the said cities and boroughes: and if at any such defaults, should there be tryed, perjury by likelinesse thereby should grow, and little of the premises to be founde, therefore it is ordained by the said authoritie, that as well the Chancellour of England, for the time being, have authority and power to examine all manner corrupt bargains, promises, loans, or sales, growen and had of any of the premises, and thereupon by examination to heare and determine the same, and to give like judgment, and make like execution thereof, as the matter were tryed and found at the parties suit, in any such action of debt, by the course of the common law, as the justices of the peace of any shire, next adjoining to any citie or borrough, where such defaultes be of any of the premises. And they to make like process against any man thereof, endyted afore them of any of the premises, as they should or ought to doe against any man that were endyted afore them, of any riot or trespasse, and to determine it. And if any man be found guilty afore them of any of the premises to forfeit the aforesaid peine of £100. reserving to the church (this punishment notwithstanding) the correction of their soulls according to the laws of the same.

3 HENRY VII. c. 6, A.D. 1488.

An Act concerning Exchange and Rechange, Chevizance Usury and Brokers.

ITEM, forasmuch as there hath growen and daily groweth great displeasure of God, and great hurt of the King our Sovereigne Lord, and to this his realme by and for the inordinate changes and rechanges that have been of long time used and yet continued in this saide realme without authoritie given of the King to such changing and rechanging. For remedie whereof many noble statutes against the same made whereof one special statute was in the xv. yere of King Edward the third made for the same remedie and in Henry the fourth Henrie the fifth and in Henry the sixth days;—wherefore the King our Soveraigne Lord will, that all such statutes be put in due execution from hence forth. And that no man make any exchange without the King's license, ne shall make any exchange or re-change of money, to be paid within this land but only such as the King shall depute thereunto to keep make and answer such exchanges and rechanges, upon the peines in the same statute of King Edward conteined. And over that it is ordeined by the King our Soveraigne Lord by the assent of the Lords spiritual and temporall and Commons in his said parliament assembled and by authoritie of the same that all unlawful chevisances and usury be dampned and none to be used, upon peine of forfeiture of the value of the money or goods so chevised or lent the same forfeiture to run on the seller and lender thereof. Also forasmuch as divers English and estrangers brokers, which be named and assigned to occupy lawful brokages be inducers and bargaine makers of unlawful chevisance and usury and in some part of unlawful exchanges to the hurt of our said Soveraigne Lord and this his said realme: therefore it is enacted and established by the said authoritie, that all such brokers dealing unlawfully of any of the premises be put apart and never to occupie as brokers within this his realme as they may be espied and found in cities boroughs and townes, by maiors bayliffs or any of them or their ministers where such bargaine is used. And that every broker that is found defective in making of unlawful brokage, shall forfeite for every defaulte £20. and have imprisonment of half a yere. And furthermore to be punished by the pillorie or other wise to their open rebuke and shame, the King to have the one halfe of every of the said forfeitures, and the parties that will sue, the other halfe of the same, by action of debt by the common lawe and the defendant in the same action bee not admitted to his lawe nor essoine nor protection be for the same defendant allowed.


11 HENRY VII. c. 8, A.D. 1496.

An Act for repealing the 3d of Henry VII. and making more effectual Provision against Usury.

Praien the commons in this present parliament assembled, that wherein the parliament holden at Westminster the third yeere of youre most noble reigne, it was enacted ordained and established that of for and upon bargains grounded in usury coloured by the meanes of new chevesaunce or exchange contrary to the law of natural justice to the great displeasure of God and our said Soveraigne Lord and the common hurt of this his land, that certaine punishments and penalties should runne upon the offenders in that behalf, as in the said act more at large is con tained, which act was and is so obscured dark and defuse, that the true intent of the makers thereof cannot persitely be under stood; wherefore and for the plaine explanation and declaration of usury and penalties to be hereafter executed upon the offenders in the same: the King our Soveraigne Lord by the assent and advice of the Lords spirituall and temporall and the commons in this present parliament assembled and by authoritie of the same ordaineth enacteth and establisheth, that all manner of person or persons lending money to and for a time taking for the same lone any thing more besides or above the money lent by way of con tract of covenant at the time of the same lone, saving lawful penalties for non-paiment of the same money lent, and that all manner of person and persons which heereafter sell any goods cattles or merchandizes to any person or persons being in neces sitie, and the seller himself or by his broker or factor in that behalfe againe buy the same goods cattles or merchandizes of the same person to whome they were sold being in necessity of his broker or factor in that behalf within three months after they be sold for a less sum of money than they were sold for, knowing the same goods so bought again afore by the same buyer or buyers to be sold after the form aforesaid: and that every person and persons lending or taking any money to any person or persons to a certain time, and taketh lands tenements or any hereditaments or other bonds for perfite suretie and sure payment of his or their money lent at the time assigned, without condition or adventure: and also at the time of the same loan or taking of the said money covenanteth appointeth or contracteth, covenanten appointen or contracten, that he or they that lend or take money, shall have the revenues and profits of the lands, tenements or hereditaments of him that so borroweth or taketh money by a certain time: that then every person heereafter upon any of the premisses convicted, forfiete the moiety of the value in money of the said money goods cattles merchandizes, as is above said, so sold or lent after such value as they have been sold or lent for after any forme aforesaid, whereof the King shall have the one moiety of the same forfeiture and the party that will sue the other moiety; and if no man will sue then the King to have the whole. And this suit for the said penalty and forfeiture to be as well at the King's suit as any other, that will sue by information in any of the King's Courts of Record, and such processe to be had in the same as is used in other actions of debt at the common law in the same courts. Provided alwais that in the Court of Chauncerie and Exchequer they shall make such processe as hath been used afore time in informations afore them commenced, wherein the defendant shall not wage his law nor protection ne essoine de service le Roy in the same allowable. And that the same act and ordinance made the third yere and all things therein contained be from hence forth utterly void and of none effect, reserving alway to the spiritual jurisdiction their lawful punishments in every cause of Usury.


37 HENRY VIII. C. 9. A.D. 1545.v

A Bill against Usury.

Where before this time divers and sundry acts statutes and laws have been ordained had and made within this realm, for the avoiding and punishment of Usury, being a thing unlawful, and of other corrupt bargains shifts and chevizances which acts statutes and laws been so obscure and dark in sentences words and terms and upon the same so many doubts ambiguities and questions have arisen and grown and the same acts statutes and laws been of so little force or effect, that by reason thereof little or no punishment hath ensued to the offenders of the same but rather hath encouraged them to use the same, for reformation whereof be it enacted by the King our Soverainge Lord by the assent of the lords spiritual and temporal and of the commons of this present parliament assembled and by authority of the same, that all and every the said acts statutes and laws heretofore made of for or concerning usury shifts corrupt bargains and chevisances and every of them, and all pains forfeitures and penalties con cerning the same and every part thereof shall from henceforth be utterly void and of none effect to all intents constructions and purposes.

II. And be it further enacted by the authority aforesaid, That no person or person of what estate degree, or condition soever he or they be, from and after the last day of January next coming shall by himself factor attorney servant or deputy sell his merchandizes or wares to any person or persons and within three months next after by his factor attorney deputy or by any other person or persons to his use and behoof buy the same merchan dizes or wares or any part or parcel thereof upon a lower price, knowing them to be the same wares or merchandizes, that he before did so bargain and sell upon the pains and forfeitures hereafter limited in this estatute.

III. And be it also enacted by the same authority, That no person or persons of what estate degree quality or condition soever he or they be at any time after the said last day of January next coming by way or mean of any corrupt bargain loan ex change chevisance shift interest of any wares merchandizes or other thing or things whatsoever, or by any other corrupt or deceitful way or mean or by any covin engine or deceitful way or conveyance shall have receive accept or take in lucre or gains for the forbearing or giving day of payment of one whole year of and for his or their money or other things, that shall be due for the same wares merchandizes or other thing or things above the sum of ten pound in the hundred, and so after that rate and not above of and for a more or less sum or for a longer or shorter time, and no more or greater gain or sum thereupon to be had upon the pains and forfeitures hereafter in this act mentioned and contained.

1V. And be it further enacted by the authority aforesaid, That if any person or persons at any time after the said last day of January do bargain and sell, or lay to mortgage by any way or mean any manors lands tenements or hereditaments to any person or persons upon condition of payment or non-payment of any sum or sums of money to be had paid or made at any day certain, or before any such day by him, that shall so bargain sell or lay to mortgage the same manors lands tenements or heredita ments, that the same person or persons, to whom any such manors lands tenements or hereditaments shall be so bargained sold or laid to mortgage, shall not by reason thereof have ne take in lucre or gains of the issues revenues and profits of the same manors lands tenements or hereditaments above the sum of ten pound in the hundred for one whole year, and so after the rate of abovesaid for a more or lesser sum or for a longer or shorter time and no more nor otherwise, upon the pains forfeitures and penalties hereafter in this present estatute limited and expressed. V. And be it further enacted by the authority aforesaid, That if any person or persons, of what estate degree quality or condi tion soever he or they be, at any time after the said last day of January next coming shall do any act or acts thing or things con trary to the tenor form and effect of this estatute, or of any clause article or sentence contained in the same, that then all and every offender and offenders therein or in any part thereof shall forfeit and lose for every such offence the treble value of the wares merchandizes and other thing or things so bargained sold exchanged or shifted, and the treble value of the issues and profits of the said manors lands tenements and hereditaments so had taken or received by reason of any such bargain sale or mortgage, and also shall have and suffer imprisonment of his body, and make fine and ransom at the King's will and pleasure; the moiety of which forfeiture of the said treble value shall be to the King and the other moiety to him or them, that will sue for the same in any of the King's Courts by action of debt bill plaint or information, in which action bill plaint or information no wager of law essoin or protection shall be admitted or allowed.

VI. Provided alway and be it enacted by the authority afore said, That this act nor any thing therein contained shall not in any wise extend to any lawful obligation indorsed with a condi tion, nor to any statute or recognisance made and to be made for the payment of a lesser sum, so that the same obligation statute or recognisance be made for a true just and perfect debt, or for the performance of any other true covenants made or to be made upon a just and true intent had between the parties, other than in cases of usury interest corrupt bargains shifts or chevisance, ne yet shall extend to any recovery fine feoffment release confirma tion or grant made or to be made upon condition with a true intent, other than to such recoveries fines feoffments releases con firmations and grants, as shall be made upon condition extending to usury interest corrupt bargains shifts or chevisance, any thing in this statute contained, or any law statute or ordinance hereto fore had used or made to the contrary notwithstanding.


5 & 6 Edward VI. CH. 20, A.D. 1552.

An Act Against Usury.

WHEREIN the seven and thirtieth year of the reigne of the late King of famous memorie King Henry the Eight father to our Sovereign Lord the King that now is, amongst other acts and statutes then made it was enacted by the authority of parliament, that no person or persons at any time after the last day of January in the said seven and thirtieth year, should have, receive, accept or take in lucre or gains from the loan, forbearing or giving day of payment of any sum of monie for one whole year above the sum of ten pound in the hundred, and so after that rate and not above, of and for a more or less sum or for a larger or shorter time, upon the paines and forfeitures in the said act mentioned and contained. The which act was not ment or intended for the maintenance and allowance of usury as divers persons blinded with inordinate love of themselves have and yet do mistake the same, but rather was made and intended against all sorts and kinds of usurie as a thing unlawful, as by the title and preamble of the said act it doth plainly appear, and yet nevertheless the same was by the said act permitted for the avoiding of a more evil and inconvenience, that before that time was used and exercised. But for as much as usurie is by the word of God utterly prohibited as a vice most odious and detestable, as in divers places of the Holy Scriptures it is evident to be seen, which thing by no godly teaching, and persuasions can sink into the hearts of divers greedie uncharitable and covetous persons of this realme, nor yet by any terrible threatenings of God's wrath and vengeance that justly hangeth over this realme for the great and open usurie therein dayly used and practised, they will forsake such filthy gain and lucre, unless some temporal punishment be provided and ordained in that behalf. For reformation whereof be it enacted by the authoritie of this present parliament, that from the first day of May, which shall be in the yeere of our Lord God 1552, the said act and statute concerning only usury lucre or gains of or for the lone, forbearing, or giving days of any sum or sums of money be utterly abrogated, void, and repealed.—And furthermore be it enacted by the authoritie aforesaid, that from and after the said first day of May next coming no person or persons of what estate, degree, quality or condition soever he or they be by any corrupt color able or deceitful conveyance slight or engine, or by any way or mean shall lend give set out deliver or forbear any sum or summes of monie to any person or persons or to any corporation or body politicke to or for any manner of usurie increase lucre gaine or interest to be had received or hoped for over and above the sum or summes so lent, given set out delivered or forborne upon pain of forfeiture of the value, as well of the sum or sums so lent given set out delivered or forborne, as also of the usury, increase, lucre, gain, or interest thereof. And also upon pain of imprisonment of the body or bodies of every such offender or offenders, and also to make fine and ransom at the King's will and pleasure. The moieties of which forfeiture of the said value shall be to the King, and the other moiety to the party, that will sue for the same in any of the King's Courts of Record by action of debt, bill, plaint, or information, wherein no wager of law, essoine or protection shall be allowed or admitted,


13 ELIZABETH, CAP. 8, A.D. 1571.

An Act against Usury.

WHEREAS in the parliament holden the seven-and-thirtieth year of the reign of our late sovereign Lord King Henry the eighth of famous memory, there was then made and established one good act for the reformation of usury, by which act the vice of usury was well repressed, and specially the corrupt chevisance and bargaining by way of sale of wares, and shifts of interest: And where since that time by one other act made in the fifth and sixth years of the reign of our late soveriegn Lord Edward the sixth, the said former act was repealed, and new provisoes for repress ing of usury devised and enacted; which said latter act hath not done so much good as was hoped it should, but rather the said vice of usury, and especially by way of sale of wares and shifts of interest, hath much more exceedingly abounded, to the utter undoing of many gentlemen, merchants, occupiers, and others, and to the importable hurt of the commonwealth, as well for that in the said latter act there is no provision against such corrupt shifts and sales of wares, as also for that there is no difference of pain, forfeiture or punishment, upon the greater or lesser exactions and oppressions by reason of lones upon usury. Be it therefore enacted, That the said later statute made in the fifth and sixth years of the reign of King Edward the sixth, and every branch and article of the same, from and after the five and-twentieth day of June next coming, shall be utterly abro gated, repealed and made void; and that the said late act made in the said seven-and-thirtieth year of King Henry, the eighth, from and after the said five-and-twentieth day of June next coming shall be revived, and stand in full force strength and effect. And be it further enacted, That all bonds, contracts, and assurances collateral or other to be made for payment of any principal or money to be lent, or covenant to be performed upon or for any usury in lending or doing of any thing against the said act now revived, upon or by which lone or doing there shall be reserved or taken above the rate of xl. for the hundred for one yeare, shall be utterly void.

And be it further enacted, That all brokers, solicitors and drivers of bargains for contracts or other doings against the said statute now revived, whereupon shall be reserved or taken more than after the rate of ten pound for the lone of one hundred pound for a year, shall be to all intents and purposes judged, punished and used as councellors, attornies or advocates, in any case of praemunire.

And forasmuch as all usury, being forbidden by the law of God, is sin and detestable: Be it enacted, that all usury, loan, and forbearing of money, or giving days for forbearing of money by way of loan, chevisance, shifts, sale of wares, contracts or other doings whatsoever, for gain mentioned in the said statute, which is now revived, whereupon is not reserved or taken, or covenanted to be reserved, payed, or given to the lender, con tracter, shifter, forbearer or deliverer, above the sum of ten pound for the lone or forbearing of a hundred pound for one year, or after that rate for a more or lesser sum or time, shall be from the five-and-twentieth day of June next coming, punished in form following: That is to say, that every such offender against this branch of this present statute, shall forfeit so much as shall be reserved by way of usury, above the principal for any money so to be lent or forborn, all such forfeitures to be recovered and employed, as is limited for forfeitures by the said former statute now revived.

And be it further enacted, That justices of oyer and deter miner, and justices of assize in their circuits, justices of peace in their sessions, mayors, sheriffs, and bayliffs of cities shall also have full power and authority to enquire, hear and determine of all and singular offences committed against the said statute now revived.

And be it further enacted, That the said statute now revived shall be most largely and strongly construed for the repressing of usury and against all persons, that shall offend against the true meaning of the said statute by any way or device directly or indirectly.

Provided alway, That this statute doth not extend, nor shall be expounded to extend unto any allowances or payments for the finding of orphans, according to the ancient rates or customs of the city of London, or any other city where like order is for the custody of orphans and their goods, as is in the said city of London.

Provided alwayes, and be it further enacted by the authority aforesaid, That if any person or persons, shall from and after the said five-and-twentieth day of June offend contrary to the said statute revived by this present act made in the seven-and thirtieth year of the reign of the said late King Henry the eighth; that then all and every such offender and offenders shall and may also be punished and corrected according to the ecclesiastical lawes heretofore made against usury.

And that all and every person and persons offending in usury, shifts, or chevisance against this present act, and not taking or receiving, but only after the rate of ten pounds in the hundred or under, for a year, shall be only punished by the pains and for feitures provided and appointed by this act, against such as shall not take or receive over and above the rate of xl. in the hundred for a year, and not otherwise. This act to continue and endure for and during the space of five years next after the end of this present parliament, and from thence unto the end of the first session of the parliament then next ensuing.

And be it further enacted by the authority aforesaid, That if this present act shall not be continued in the first session of the parliament next ensuing the said term of five years, and then in the same session no other statute or provision made against usury or corrupt chevisance: that then all and every the laws and statutes repealed by this act, shall remain and be of such like force and effect, as if this present act had never been had, ne made.

[Made perpetual by 39 Elizabeth, c. 18.]

21 JAC. I. CAP. 17, A.D. 1624.

An Act against Usury.

WHEREAs at this time there is a very great abatement in the value of land and other the merchandizes, wares and commo dities of this kingdom, both at home, and also in foreign parts, whither they are transported; and whereas divers subjects of this kingdom, as well the gentry as merchants, farmers and trades men, both for their urgent and necessary occasions for the fol lowing their trades, maintenance of their stocks and employments have borrowed and do borrow divers sums of money, wares, merchandizes and other commodities; but by reason of the said general fall and abatement of the value of land, and the prices of the said merchandizes wares and commodities, and interest in loan continuing at so high a rate, as ten pounds in the hundred pounds for a year, doth not only make men unable to pay their debts, and continue the maintenance of trade, but their debts daily increasing, they are inforced to sell their lands and stocks at very low rates, to forsake the use of merchandize and trade and to give over their leases and farmes, and so become unpro fitable members of the commonwealth, to the great hurt and hindrance of the same.

Be it therefore enacted by the King's most excellent Majesty, the Lords spiritual and temporal, and the commons in this present parliament assembled, That no person or persons whatsoever from and after the four-and-twentieth day of June, which shall be in the year of our Lord one thousand six hundred twenty-and five, upon any contract to be made after the said four-and twentieth day of June, shall take directly or indirectly, for loan of any monies, wares, merchandize, or other commodities what soever, above the value of eight pounds for the forbearance of one hundred pounds for a year, and so after that rate for a greater or lesser sum, or for a longer or shorter time: and that all bonds, contracts, and assurances whatsoever, made after the time afore said, for payment of any principal, or money to be lent, or covenanted to be performed, upon or for any usury, whereupon, or whereby, there shall be reserved, or taken, above the rate of eight pounds in the hundred as aforesaid, shall be utterly void: and that all and every person and persons whatsoever, which shall after the time aforesaid, upon any contract to be made after the said four-and-twentieth day of June, which shall be in the year of our Lord 1625, take, accept and receive, by way or means of any corrupt bargain, loan, exchange, chevisance, shift or interest of any wares, merchandize or other thing or things whatsoever or by any deceitful way or means, or by any covin, engine, or deceitful conveyance, for the forbearing, or giving day of payment for one whole year of and for their money, or other thing, above the summe of eight pounds for the forbearing of one hundred pounds for a year, and so after that rate for a lesser or greater summe, or for a longer or shorter time, shall forfeit and lose for every such offence, the treble value of the monies, wares, merchandizes, and other things so lent, bargained, sold, exchanged or shifted.

And be it further enacted by the authority aforesaid, That all and every scrivener and scriveners, broker and brokers, solicitor and solicitors, driver and drivers of bargains for contracts, who shall after the said twenty-fourth day of June, which shall be in the year of our Lord 1625, take or receive, directly or indirectly, any summe or summes of money, or other reward or thing for brocage, soliciting, driving or procuring the loan, or forbearing of any sum or sums of money, over or above the rate or value of five shillings for the loan or forbearing of one hundred pounds for a year, and so rateably, or above twelve pence for making or renewing of the bond or bill, for the loan or forbearing thereof, or for any counter-bond or bill concerning the same shall forfeit for every such offence twenty pounds, and have imprisonment for half a year; the one moiety of all which forfeitures to be to the King our sovereign Lord, his heirs and successors; and the other moiety to him or them that will sue for the same, in the same county where the several offences are committed, and not else where, by action of debt, bill, plaint, or information, in which no essoyn, wager of law, or protection to be allowed. This act to continue for the space of seven years, from the said four-and-twentieth day of June, which shall be in the year of our Lord 1625, and so to the end of the first session of parlia ment then next following: Provided, that no words in this law contained, shall be construed or expounded to allow the practice of usury, in point of religion or conscience.

[Made perpetual by 3 Car. I. c. 4, s. 5.]

12 CAR. II. c. 13, A.D. 1660.

An Act for Restraining the taking of Excessive Usury.

FORASMUCH as the abatement of interest from ten in the hun dred in former times, hath been found by notable experience beneficial to the advancement of trade, and improvement of lands by good husbandry, with many other considerable advantages to this nation, especially the reducing of it to a nearer proportion with foreign states with whome we traffique. And whereas in fresh memory the like fall from eight to six in the hundred, by a late constant practice hath found the like successe to the general contentment of this nation, as is visible by several improvements; and whereas it is the endeavour of some at present to reduce it back again in practice to the allowance of the statute, still in force, to eight in the hundred, to the great discouragement of ingenuity and industry in the husbandry, trade and commerce of this nation.

Be it for the reasons aforesaid, enacted by the King's most excellent Majesty, and the Lords and Commons in this present parliament assembled, that no person or persons whatsoever, from and after the twenty-ninth day of September, in the year of our Lord one thousand six hundred and sixty, upon any contract, shall from and after the said twenty-ninth day of September, take directly or indirectly, for loan of any monies, wares, merchandize, or other commodities whatsoever, above the value of six pounds for the forbearance of one hundred pounds for a year, and so after that rate for a greater or lesser sum, or for a longer or shorter time, and that all bonds, contracts, and assurances whatsoever, made after the time aforesaid for payment of any principal or money to be lent or covenanted to be performed upon or for any usury, whereupon or whereby there shall be reserved or taken above the rate of six pounds in the hundred, as aforesaid, shall be utterly void. And that all and every person or persons whatsoever, which shall after the time aforesaid, upon any contract to be made, after the said twenty-ninth day of September, take, accept and receive, by way or means of any corrupt bargain, loan, exchange, chevisance, shift, or interest of any wares, merchandize, or other thing or things whatsoever, or by any deceitful way or means, or by any covin, engine, or deceitful conveyance for the forbearing or giving day of payment for one whole year, of and for their money or other thing, above the sum of six pounds for the forbearing of one hundred pounds for a year, and so after that rate for a greater or lesser sum or for a longer or shorter term, shall forfeit and lose for every such offence the treble value of the monies, wares, merchandize, and other things so lent, bargained, sold, exchanged, or shifted, And be it further enacted by the authority aforesaid, That all and every scrivener and scriveners, broker and brokers, solicitor and solicitors, driver and drivers of bargains for contracts, who shall after the said twenty-ninth day of September, take or receive directly or indirectly, any sum or sums of money, or other reward or thing, for brokage, soliciting, driving or procuring the loan, or forbearing of any sum or sums of money, over and above the rate or value of five shillings for the loan, or for bearing of one hundred pounds for a year and so rateably, or above twelve pence for the making or renewing of the bond or bill for loan, or for forbearing thereof, or for any counter-bond or bill concerning the same, shall forfeit for every such offence twenty pounds, and have imprisonment for half a year: the one moiety of all which forfeitures to be to the King our sovereign Lord, his heirs and successors; and the other moiety to him or them that will sue for the same in the same county where the several offences are committed, and not elsewhere, by action of debt, bill, plaint or information, in which no essoign, wager of law, or protection to be allowed.

12 ANNE, STAT. 2, c. 16, A.D. 1713.

An Act to Reduce the Rate of Interest, without any prejudice to Parliamentary Securities.

WHEREAs the reducing of interest to ten, and from thence to eight, and thence to six in the hundred, hath, from time to time, by experience been found very beneficial to the advancement of trade, and improvement of lands: And whereas the heavy bur then of the late long and expensive war hath been chiefly born by the owners of the land of this kingdom by reason whereof they have been necessitated to contract very large debts, and thereby, and by the abatement in the value of their lands, are become greatly impoverished; and whereas by reason of the great interest and profit which hath been made of money at home, the foreign trade of this nation hath of late years been much neglected, and at this time there is a great abatement in the value of the merchandizes, wares and commodities of this king dom, both at home and in foreign parts, whither they are trans ported: And whereas for the redress of these mischiefs, and the preventing the encrease of the same, it is absolutely neces sary to reduce the high rate of interest of six pounds in the hundred pounds for a year to a nearer proportion with the in terest allowed for money in foreign states: Be it therefore enacted by the Queen's most excellent Majesty, by and with the advice and consent of the Lords spiritual and temporal, and Commons in this present parliament assembled, and by the authority of the same, That no person or persons what soever, from and after the nine-and-twentieth day of September, in the year of our Lord one thousand seven hundred and fourteen, upon any contract, which shall be made from and after the said nine-and-twentieth day of September, take, directly or indirectly, for loan of any monies, wares, merchandize, or other commodities whatsoever, above the value of five pounds for the forbearance of one hundred pounds for a year, and so after that rate for a greater or lesser sum, or for a longer or shorter time; and that all bonds, contracts, and assurances whatsoever, made after the time afore said, for payment of any principal, or money to be lent or covenanted to be performed upon or for any usury, whereupon or whereby there shall be reserved or taken above the rate of five pounds in the hundred, as aforesaid, shall be utterly void; and that all and every person or persons whatsoever, which shall after the time aforesaid, upon any contract to be made after the said nine-and-twentieth day of September, take, accept and receive by way or means of any corrupt bargain, loan, exchange, chevisance, shift, or interest of any wares, merchandize, or other thing or things whatsoever, or by any deceitful way or means, or by any covin, engine, or deceitful conveyance, for the forbearing or giving day of payment for one whole year, of and for their money or other thing, above the sum of five pounds for the for bearing of one hundred pounds for a year, and so after that rate for a greater or lesser sum, or for a longer or shorter term, shall forfeit and lose for every such offence the treble value of the monies, wares, merchandizes, and other things, so lent, bargained, exchanged or shifted.

And be it further enacted by the authority aforesaid, That all and every scrivener and scriveners, broker and brokers, solicitor and solicitors, driver and drivers of bargains for contracts, who shall, after the said nine-and-twentieth day of September, take or receive, directly or indirectly, any sum or sums of money, or other reward or thing for brokage, soliciting, driving, or procur ing the loan, or forbearing of any sum or sums of money over and above the rate or value of five shillings for the loan, or forbearing of one hundred pounds for a year, and so ratably or above twelve pence, over and above the stamp-duties, for making or renewing of the bond, or bill for loan, or forbearing thereof, or for any counter-bond, or bill concerning the same, shall forfeit for every such offence twenty pounds, with costs of suit, and suffer impri sonment for half a year; the one moiety of all which forfeitures to be to the Queen's most excellent Majesty, her heirs and successors, and the other moiety to him or them that will sue for the same in the same county where the several offences are committed, and not elsewhere, by action of debt, bill, plaint, or informa tion, in which no essoign, wager of law, or protection shall be allowed.


Thirty-ninth Section of an Act passed 3 George I. c. 8, A.D. 1717, for redeeming several Funds of the Governor and Company of the Bank of England, and for other Purposes, &c.

AND it is hereby enacted, That the said Governor and Company of the Bank of England or their successors shall have power and authority, and they are hereby enabled, in case they shall think fit from time to time and at any time or times at their own good liking to borrow or take up money upon any contracts bills bonds or obligations under their common seal or upon credit of their capital stock or stocks or any part thereof or otherwise, for any time or to be paid upon demand, and at such rate or rates of interest or upon such terms as they shall think fit, although the same shall happen to exceed the interest allowed by law to be taken, and to give such security for the same, as shall be to the satisfaction of the lenders respectively; any former law statute prohibition restriction clause matter or thing whatsoever to the contrary notwithstanding, and they are hereby authorized at their own good-liking to contract and agree in such manner, as they shall think fit at any time or times with any person or persons, natives or foreigners, bodies politic or corporate, in whose abili ties they shall be well satisfied, for or concerning the furnishing of monies from time to time by such persons or corporations, upon such terms as they shall find necessary for the better enabling the said Governor and Company of the Bank of England to perform such matters and things as they are to do and perform in pursuance of this act, and to take subscriptions from such persons or corporations for that purpose; and it is hereby declared that such contract bills bonds obligations securities or subscriptions shall not be chargeable with any the duties upon stampt vellum parchment or paper, any former law or statute to the contrary notwithstanding.


EAST INDIA INTEREST.

13 GEORGE III. C. 63, s. 30, 31. A. D. 1773.

AND be it further enacted by the authority aforesaid, That no subject of his majesty, his heirs and successors, in the East Indies, shall, upon any contract which shall be made from and after the first day of August, one thousand seven hundred and seventy-four, take, directly or indirectly, for loan of any monies, wares, merchandize, or other commodities whatsoever, above the value of twelve pounds for the forbearance of one hundred pounds for a year; and so after that rate for a greater or lesser sum, or for a longer or shorter time; and that all bonds, contracts, and assurances whatsoever, made after the time aforesaid, for payment of any principal or money to be lent or covenanted to be performed upon, or for any usury whereupon or whereby there shall be reserved or taken above the rate of twelve pounds in the hundred, as aforesaid, shall be utterly void: And all and every such person or persons whatsoever who shall, after the time aforesaid, upon any contract to be made after the said first day of August, one thousand seven hundred and seventy-four, take, accept, and receive, by way or means of any corrupt bargain, loan, exchange, shift, or interest of any wares, merchandizes or other thing or things whatsoever, or by any deceitful way or mean, or by any covin, engine, or deceitful conveyance, for the forbearing or giving day of payment for one whole year, of and for their money or other thing, above the sum of twelve pounds for the forbearing of one hundred pounds for a year, and so after that rate for a greater or lesser sum, or for longer or shorter term, shall forfeit and lose, for every such offence, treble the value of the monies, wares, merchandizes, and other things, so lent, bargained, exchanged, or shifted, with costs of suit, one moiety whereof shall be to the said United Company, and the other moiety to him or them who will sue for the same in the supreme Court of Judicature at Fort William in Calcutta, or in the mayor's court in any other of the said United Company’s settlements where such offence shall have been committed, by action of debt, bill, plaint, or information, in which no essoin, wager of law, or protection shall be allowed; and in case no such action, bill, plaint, or information, shall have been brought and prosecuted with effect within three years, that then it shall and may be lawful to and for the party aggrieved to sue and prosecute for recovery of all sums of money paid over and above such rate of interest.

And be it further enacted, That no informer or plaintiff shall or may compound or agree with any person or persons that shall offend, or shall be surmised to offend, against this act, for any offence committed, or pretended to be committed, before answer made in the said supreme court, under the information or suit in that behalf exhibited or prosecuted, nor after answer, but by the order or consent of the said court, on pain that if any person or persons shall offend in making of any composition or agreement, contrary to the true intent and meaning of this act, or shall by colour or pretence of process, or without process, upon colour or pretence of any matter of offence against this act, make any composition, or take any money, reward, or promise of reward, for himself, or to the use of any other, without order or consent of the said court; that then, he or they so offending, being thereof lawfully convicted, shall, for every such offence, be liable to be fined and imprisoned, at the discretion of the said court.


COLONIAL AND IRISH INTEREST.

14 GEORGE III. C. 79, A.D. 1774.

An Act for explaining an Act made in the twelfth Year of the Reign of Queen Anne, intituled An Act to reduce the Rate of Interest without any Prejudice to Parliamentary Securities.

“WHEREAs large sums of money have been and may be lent by his majesty's subjects in Great Britain upon mortgages, or other securities on estates in the kingdom of Ireland, and also in his majesty’s colonies or plantations in the West Indies; which loans have been found to contribute greatly to the improvement of the said kingdom colonies and plantations. And whereas it has frequently been found convenient to execute such mortgages or securities and the transfers or assignments thereof in Great Britain: And whereas doubts have arisen whether such loans and the mortgages or securities for the same, and the transfers or assignments thereof when made and executed in Great Britain are as valid and effectual as when made and executed in the said kingdom of Ireland, colonies plantations or dominions; and by reason of an act passed in the twelfth year of the reign of her late Majesty Queen Anne, intituled, An Act to reduce the rate of interest without any prejudice to parliamentary securities, whether such mortgages or securities are valid and effectual where the rate of interest thereby reserved or made payable is more than five pounds per centum, though such interest does not exceed the rate of interest allowed and established by the law of the kingdom of Ireland, colony plantation country or place in which the estates comprised in such mortgages or securities respectively are; and whether his Majesty's subjects in Great Britain have not or may not become subject or liable to penal ties or forfeitures by receiving or taking interest for the sums of money really and boná fide advanced or lent on such mortgages or securities at the rate of interest allowed and established by the law of the kingdom, colony, plantation, country, or place wherein the mortgaged estates respectively lie:” for obviating such doubts, be it enacted by the King's most excellent majesty by and with the advice and consent of the Lords spiritual and temporal, and Commons in this present parliament assembled, and by the authority of the same, That all mortgages and securities which by any of his majesty's sub jects, already have been made and executed in Great Britain of or concerning any lands tenements hereditaments slaves cattle or other things lying and being in the kingdom of Ireland, or in any of the said colonies plantations or dominions, or any estate or interest therein, to any of his majesty’s subjects for securing the repayment of the sums of money thereon respectively really and bonâ fide advanced and lent, with interest for the same, and all bonds, covenants, and securities, for payment of the same sums of money and interest respectively, and all transfers or assignments which have been made and executed in Great Britain of such mortgages securities or bonds, to any of his majesty's subjects, shall be as good valid and effectual, to all intents and purposes whatsoever, as such mortgages, securities, bonds, covenants, transfers, or assignments would have been if the same had been made and executed in the kingdom island plantation country or place where the lands tenements hereditaments slaves cattle or other things mentioned and comprised in any such mortgage security transfer or assignment as aforesaid, severally lie or are ; and that none of his majesty’s subjects in Great Britain shall be subject or liable to any of the penalties or forfeitures in the said act, made in the twelfth year of her said late majesty’s reign, by receiving or taking interest for the sum or sums of money really and bonâ fide advanced or lent on any such mortgage security bond covenant transfer or assignment as aforesaid at the rate of interest allowed and established by the law of the kingdom, colony, plantation, country or place wherein the mortgaged premises respectively lie or are.

II. And be it further enacted by the authority aforesaid, That all mortgages and securities which by any of his majesty's subjects, after the passing of this act, shall be made and executed in Great Britain of or concerning any lands tenements hereditaments slaves cattle or other things lying and being in the kingdom of Ireland, or in any of the said colonies plantations or dominions or any estate or interest therein, to any of his majesty's subjects, for securing the repayment of the sums of money thereon respectively to be really and bonáfide advanced and lent with interest for the same, and all bonds covenants and secu rities, for payment of the same sums of money, and interest respectively, and all transfers or assignments which after the passing of this act shall be made and executed in Great Britain of such mortgages securities or bonds to any of his majesty's subjects, shall be as good valid and effectual to all intents and purposes whatsoever as such mortgages securities bonds covenants transfers or assignments would be if the same were made and executed in the kingdom island plantation country or place where the lands tenements hereditaments slaves cattle or other things to be mentioned or comprised in any such mortgage security transfer or assignment as aforesaid, severally lie or are, and that none of his majesty’s subjects in Great Britain shall be subject or liable to any of the penalties or forfeitures in the said act made in the twelfth year of her said late majesty's reign, by receiving or taking interest for the sum or sums of money to be really and boná fide advanced or lent on any such mortgage, security, bond, covenant, transfer, or assignment as aforesaid; so as the interest so to be received or taken do not exceed the rate of six pounds for one hundred pounds for a year, the aforesaid act of parliament or any other law or statute to the contrary notwithstanding.

III. Provided always and it is hereby declared, that this act shall not make good, valid or effectual any such mortgage, security, bond, covenant, transfer, or assignment where the lender or lenders of any sum or sums of money has or have knowingly advanced or lent, or shall knowingly advance or lend thereon. more money than the lands, tenements, hereditaments, slaves, cattle or other things in such mortgages securities transfers or assignments mentioned or comprised, or to be mentioned or com prised, was, were or shall be, at the time or times of advancing or lending such sum or sums of money as aforesaid, really and bonâ fide worth, to be sold.

IV. And be it enacted by the authority aforesaid, that all and every person or persons borrowing any sum or sums of money under the authority of this act upon any such lands tenements hereditaments slaves cattle or other things as aforesaid exceeding the value, which the same shall be at the time of borrowing such sum or sums of money really and boná fide worth, to be sold, over and above all incumbrances, which shall then affect the same, shall forfeit treble the value of the sum borrowed; the one half to be paid to the informer, the other half to the treasurer of the Royal Hospital for seamen at Greenwich in the county of Kent, or to his sufficient deputy or agent, for the use of the said Hospital.

V. Provided also, and be it enacted, that all such mortgages or other securities granted under the authority of this act, by which such lands, tenements, hereditaments, slaves, cattle, or other things are intended to be charged or affected shall be registered within the kingdom island colony plantation country or place where the said lands tenements hereditaments slaves cattle or other things severally lie or are, within the time limited by the laws of such kingdom, island, colony, plantation, country or place; otherwise the same shall be subject to the several provisions and penalties contained in the said act, made in the twelfth year of her late majesty Queen Anne, in such manner as the same would have been if this act had never been passed, unless the mortgagee or other person or persons, for whose behoof such mortgage or other security shall have been made or granted, shall have boná fide used his or their utmost endeavour to cause the same to be registered within the time herein-before limited for that purpose.


COLONIAL INTEREST.

1 & 2 GEORGE IV. C. 51, A.D. 1821.

An Act to explain an Act made in the Fourteenth Year of His late Majesty King George the Third, for explaining an Act made in the Twelfth Year of Queen Anne, intituled, an Act to reduce the rate of Interest, without any prejudice to Parliamentary Securities.

IT IS DECLARED AND ENACTED, that all mortgages and securities which by any of his majesty's subjects already have been, or after the passing of this act shall be made and executed in Great Britain, of or concerning any lands, tenements, here ditaments, slaves, cattle, or other things, lying and being in Ireland, or in any of the colonies, plantations, or dominions in the West Indies, or any estate or interest therein, to any of his majesty's subjects, for securing the repayment of the sums of money thereon respectively really and bonâ fide advanced and lent, with interest for the same, whether payable in Great Britain or in the country, island, plantation, or place where the lands, tenements, hereditaments, slaves, cattle, or other things mentioned and comprised in any such mortgage, security, transfer, or assignment as aforesaid, severally lie or are; and all bonds and covenants which have been, or which, after the passing of this act, shall be made and executed in Great Britain, either by the person borrowing such sums of money, or by any other person or persons, either residing in Great Britain or elsewhere, by way of collateral security for the payment of such interests, and all transfers and assignments which have been, or which, after the passing of this act, shall be made and executed in Great Britain, of such mortgages, securities, or bonds to any of his majesty's subjects, shall be as good, valid and effectual, as such mortgages, securities, bonds, covenants, transfers, or assignments would have been if the same had been made and executed, and the interest thereon had been made payable, and the person or persons entering into such bonds or covenants by way of collateral security, had resided in the country, island, plantation, or place, where the lands, tenements, hereditaments, slaves, cattle, or other things mentioned and comprised in any such mortgage, security, transfer, or assignment as aforesaid, severally lie or are; and that none of his majesty's subjects in Great Britain shall be subject or liable to any of the penalties or forfeitures in the act of 12 Anne, by receiving or taking or having received or taken interest for the sum or sums of money really and bonâ fide advanced or lent, or to be advanced or lent, on any such mortgage, security, bond, covenant, transfer, or assignment as aforesaid, so as the interest so to be received or taken do not exceed the rate of six pounds for one hundred pounds for a year.


COLONIAL INTEREST.

3 GEORGE IV. C. 47, A.D. 1822.

An Act to repeal an Act of His present Majesty, for explaining an Act made in the Twelfth Year of Queen Anne, to reduce the Rate of Interest without Prejudice to Parliamentary Securities, and to substitute other Provisions in lieu thereof.

THE statute 1 & 2 G.4, c. 51, intituled An Act to explain an Act, made in the Fourteenth Year of his late Majesty King George the Third, for explaining an Act made in the Twelfth Year of Queen Anne, intituled “An Act to reduce the rate of Interest without Prejudice to Parliamentary Securities, is hereby repealed; except so far as regards any mortgages or securities executed before the passing of this act. § 1.

And all mortgages and securities which by any of his Majesty's subjects already have been, or after the passing of this act shall be executed in Great Britain, of or concerning any lands, tenements, or hereditaments, slaves, cattle, or other things, lying in Ireland, or in any of his Majesty's colonies, plantations, or dominions in the West Indies, or any estate or interest therein, to any of his Majesty's subjects, for securing the repayment of money bonâ fide advanced, with interest for the same, whether payable in Great Britain, or in the country, island, plantation, or place where the things comprised in any such mortgage or security lie; and also all conveyances, demises, or other assurances of any lands, tenements, hereditaments, slaves, cattle, or other things lying in Ireland, or in any of his Majesty's colonies, plantations, or dominions in the West Indies, or any estate or interest therein; and all bonds and covenants which have been, or which after the passing of this act shall be executed, or entered into, in Great Britain, to or with any of his Majesty's subjects, either by the persons borrowing such money, or by any other persons residing in Great Britain or elsewhere, whether such conveyances, demises, or other assurances, bonds, and covenants, shall be executed, or entered into by way of collateral security for the payment of such interest, or for securing the payment of interest on the money bonâ fide advanced, at any higher rate than the rate of interest which such mortgages or other securities bear or carry, or for securing any additional interest over and above the interest which such mortgages or other securities bear or carry; and whether such collateral or other securities for such interest, or higher rate of interest, or additional interest, in any of the cases aforesaid, have been or shall be respectively executed, or entered into, at the time of executing such mortgages and other securities, for the money bonâ fide advanced, or at any time subsequent thereto; and whether the same have been or shall be executed, or entered into, to or with the persons to whom such mortgages and securities have been or shall be originally made, or their representatives or trustees, or to any persons to whom any transfers or assignments of any such mortgages or other securities have been or shall be made, or their representatives or trustees; and all transfers and assignments which have been, or which after the passing of this act shall be executed in Great Britain, of such mortgages, securities, conveyances, demises, or other assurances, bonds, or covenants as aforesaid, to any of his Majesty's subjects, shall be as good, valid, and effectual, to all intents and purposes whatsoever, as such mortgages, securities, conveyances, demises, or other assurances, bonds, covenants, transfers, or assignments, respectively would have been, if the same had been respectively executed, or entered into, and the interest secured thereby had been made payable, and the persons executing, or entering into such conveyances, demises, or other assurances, bonds, or covenants, had resided in the country, island, plantation, or place where the things comprised in any such mortgage, security, conveyance, demise, or other assurance, transfer, or assignment lie; and that none of his Majesty's subjects in Great Britain shall be subject to any of the penalties or forfeitures in the act of 12 Anne, by receiving or having received interest for the money bonâ fide advanced, on any such mortgage, security, conveyance, demise, or other assurance, bond, covenant, transfer, or assignment as aforesaid; so as the total amount of the interest so to be received do not exceed the rate of interest allowed by the law of the country, island, plantation, or place. $2.


BANK CHARTER ACT.

3 & 4 WILLIAM IV. c. 98, s. 7, A.D. 1833.

Bills and Notes not having more than Three Months to run, not subject to Usury Laws.

No bill of exchange or promissory note payable at or within three months after date, or not having more than three months to run, shall by reason of any interest taken or secured, or any agreement to receive or allow interest, be void, nor shall the liability of any party to any bill be affected by reason of any statute of usury, nor shall any person taking more than the present rate of legal interest on any such bill or note, be subject to any penalty or forfeiture; any thing in any law or statute relating to usury to the contrary notwithstanding.


PART II.

 


 

ON THE POLICY OF THE USURY LAWS.

 

 

 

 

 

 

 

 

 

 

PART II.

AN EXAMINATION OF THE POLICY OF THE PRESENT USURY LAWS,

WITH

Suggestions for their Amendment.

HAVING completed a brief Summary of the History and Law of Usury, we next proceed with the Second Part of our subject, —to examine the reasons and authorities on which the present system is founded and supported, both on the grounds of policy and morality, as well as the arguments advanced by those who object to its continuance, and recommend a change.

It cannot but surprise every one who has attentively considered the subject, that Britain, so long the emporium of commercial enterprise, and the seat of enlightened government, should still pursue the track of antiquated prejudice and precedent, and with blind deference to authority, continue the restrictions on the merchantable commodity, called money, which have long since been removed from every other article of traffic.

By the 12th Anne, c.16. A.D. 1713, now nearly a century and a quarter ago, the rate of interest in England was fixed at 5 per cent. per annum, for the use and forbearance of money, uniformly, and without reference to the nature of the security on which it might be lent, whether it was of the most unimpeach able description of landed property, the yearly rental which equalled the sum advanced, or of the mere personal security of the borrower, guaranteed per haps, in some cases, by a distant reversionary interest, or terminable life estate; while, in most other countries of Europe, where any limitation exists, one rate of interest is allowed upon mortgage on land, and another upon commercial or personal se curity: this is the case in France and Spain, and various other parts of the continent. Even the ancient Romans, when they allowed interest, had different rates, and permitted a higher rate to be taken from merchants and traders, than from landed proprietors. [1]

[1] It is a glorious monument of the enlightened and commercial character of Greece, (says Boek,) that she had no laws on the subject, that her trade in money, like the trade in every thing else, was left wholly without legal restriction. Econ, of Athens.

The alteration, therefore, which is now suggested, is not an untried innovation, it is recommended by the examples both of ancient and modern times.

It appears from the PREAMBLEs of the various statutes concerning Usury, (which generally speak the sentiments of the legislature, on the occasion of their enactment,) that the various reductions of the rate of interest which were effected at different periods, from the reign of James I. to that of Queen Anne, were made, partly for the purpose of relieving the landed proprietors, and partly with a view of improving the trade of the country, by withdrawing some portion of the capital then invested on mortgages at a high rate of interest, and causing it to be thrown into commerce and agriculture, which, it was alleged, were much neglected in consequence of the great and certain advantages enjoyed by mortgagees.

In later times, Dr. Adam Smith, in his “Wealth of Nations,” gave it as his opinion (an opinion which he afterwards changed) that if the legal rate of interest was fixed at 8 or 10 per cent. the greater portion of the money of the country would be lent to prodigals and projectors, who alone would give so much, and thus, instead of being employed to profit and advan tage, as it might be in better hands, it would most likely be wasted and destroyed; and that such an alteration would lessen the value of land.

Dr. Paley thinks that the policy of these regulations is to check the power of accumulating wealth without industry, to give encouragement to trade, by enabling adventurers in it to borrow money at a moderate price, and of late years, to enable the State to borrow the subjects money on better terms.

According to many eminent and learned Judges, these statutes also are designed to prevent the needy and distressed from becoming the victims of the avari cious and the unconscionable, and to protect the thoughtless and the prodigal, or, to use the words of Lord Mansfield, “to protect men who act with their eyes open against themselves.”

Dr. Johnson maintained that these laws were in tended for the protection of lenders no less than of borrowers, that the former were benefitted by the removal of the temptation afforded by the prospect of extravagant interest to lend on insufficient security; and some speakers in Parliament have alleged, that money being an article distinguishable from merchantable commodities generally, is not subject to the same rules which govern them, and that, as these laws are hallowed by the wisdom and experience of our ancestors, they ought not to be abolished. That no other reasons can be assigned for the maintenance of the present system, may be concluded from the enumeration made by Lord Chief Justice Best (now Lord Wynford) as late as the year 1825, in delivering the opinion of the twelve Judges, in the House of Lords, on a question relating to foreign interest.

“The supposed policy of the Usury laws in modern times,” said that learned Judge, “is to protect necessity against avarice; to fix such a rate of interest as will enable industry to employ with advantage a borrowed capital, and thereby to promote labour and increase the national wealth; and to enable the state to borrow on better terms than would be made, if speculators could meet the minister in the money market on equal terms.”

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In what degree these various objects have been or can be attained by the means used for the purpose, it will be our business to enquire, premising that it is not intended to recommend the entire abolition of the Usury laws at once, but only the following modification of them.

That while the law should be allowed to remain as at present, with regard to money advanced as a charge on landed or real property, which affords ample secu rity as well for the return of the principal as the due payment of the interest, the market should be thrown open to those who are disposed to lend their money on contingent, personal, or terminable securities, leaving such market, like every other, to accommodate itself to the relative nature of the supply and the demand. That there should be but one rate of interest permitted by law for every kind of security and at every period (observes an acute and ingenious writer,) [1] is as absurd as if the law were to fix the same price for all horses, as the value of horses differs not more than the value of money on different occasions.

[1] Bentham.

How far the successive statutes have, by the reduction of interest, succeeded in withdrawing much of the capital formerly invested on mortgages, and employing it in commerce, or in the purchase and culture of lands, it would probably, at this time, be difficult to determine; but it is conceived money ever has been, and ever will be, disposed of by its owner, so as to afford him either the greatest return compatible with good security, or the highest remuneration he can obtain, if there be any risk, according to the object he may have in view, without reference to the wishes of Government on the subject. But as every merchant, manufacturer, mine pro prietor, patentee, or agriculturist, is a projector within the meaning of the word (not a very definite one) as used by Dr. Smith, the state of the existing laws must surely be considered as tending to impede enter prise when it is to be conducted with borrowed capital; and if this really be so, what becomes of the benefits which it was the avowed object of these very laws to confer upon trade and commerce: It being stated in the preamble of the statute of Anne as a reason for the further reduction of interest to 5 per cent, that 6 per cent, still operated as an inducement to many to prefer mortgages and other securities on land to mercantile speculations, the discouragement of pro jectors would indeed be a strange object of legislation in a commercial country.

Let it be remembered too, that without the assist ance afforded by capital to the mechanic, the manufacturer, and the merchant, to enable each of them to develope his ingenuity and skill, Great Britain never would have held the distinguished rank she now sustains among the nations of Europe.

As to the danger of capital being lent to prodigals, little fear need be entertained on that head, for it is just as improbable that the monied man (who is not necessarily a simpleton) will lend his cash, without security for its repayment, at an extravagant rate of interest, as that the landowner will let his farms merely at the highest bidding he can obtain, without regard to the responsibility of his tenant; nor that the facilities thus given to trade and commerce will re-act on them, by producing a spirit of gambling in commercial transactions, speculations not bottomed on real capital, over-trading, and a host of other excesses, creating the ruinous consequences which emanated from the unrestrained issue of paper, which was lately permitted, by the want of a metallic standard.

With respect to the efficacy of enacting laws for the purpose of protecting men against themselves, however desirable if it could be accomplished, it must now, it is conceived, be given up as useless and impracticable, since centuries of experience convinces us that such laws tend in a great degree to accelerate the ruin of those very persons for whose special protection they were designed.

For the habitual drunkard, the extravagant and reckless prodigal, there is no preservation short of the adoption of a plan similar to the Roman interdict, which is said to be in operation in some of the North American States, where such characters are classed with the insane, and their persons and property consigned to the guardianship and administration of their friends. But even if the “protection of men “against themselves” were the object of the legislature, it is manifestly inconsistent in allowing a man in want to borrow, by way of an annuity, at 30 or 40 per cent, [1] or, in short, at any rate at which he can get money; or if the borrower belong to the humbler classes, he may pledge the very tools of his trade, and raise money at the rate of from 15 to 20 per cent. [2]

[1] For a confirmation of this, see the Memorials enrolled in Chancery.

[2] Pawnbrokers are allowed, by 36 Geo. III. c. 87, to charge at the rate of 20 per cent. on sums under £2.2s. and 15 per cent, on all sums exceeding that amount, and under £10.

With reference to this legalised Usury, it may fairly be asked, do the needy and distressed, the vicious and the extravagant of mankind, in this country, belong solely to the upper and middle classes of society? or are those classes, from some hitherto inexplicable cause, less gifted with prudence and foresight than their poorer brethren? Unless this be taken to be so, how are we to account for the confidence which the law has placed in the latter, and the preference shown to them by permitting Usury (it must be presumed for their benefit) in the legal sanction given to pawnbroking? And as there is no risk in this business beyond what the pawnbroker chooses to incur, there is the less reason for allowing a rate of interest greatly exceeding the ordinary one, on chattels easily converted into money at the end of a year or fifteen months, the time limited by law for their redemption. If it is to be understood that the excess above 5 per cent. is allowed in lieu of warehouse room and other expences, it must be conceded that this class of persons have been most liberally dealt with, and if it have any reference to the heavy annual tax imposed on them, [1] it savours of the olden times, when the Jews alone enjoyed the exclusive privilege of pillaging the Christians, by lending money at 40 per cent, in order that they in turn might be plundered by the Government; and as every obstacle placed in the way of the free circulation of money must be prejudicial to the borrower, and every charge imposed upon it must eventually fall upon him, this tax is the more un justifiable, seeing it falls exclusively upon the poor.

Pawnbroking must be either beneficial or injurious, if beneficial, why are the merchant, the manufac turer, and the tradesman, virtually excluded from its operation? [2] If injurious, why is it tolerated at all?

[1] £15. per annum in London and Westminster, elsewhere £7, 10s.

[2] Pawnbrokers can only lend to the amount of £10. on one article.

If the Usury laws be founded on morality, and to prevent the evils of which Lord Mansfield com plained, there is no reason why they should not be extended to all classes alike, for the immediate want of twenty pounds may be as keenly felt by one needy man as the want of twenty shillings by another; the importance of the sum must be altogether governed by the relative circumstances of the parties; it may be sought for the purpose of gratifying extravagance in one station of life, as well as in another, and equally soon squandered; gaming-houses, notwith standing legal interference, still exist for the one, and between the pawnbroker's and the gin-shop, alas! Il n'y a qu'un pas.

And it may well be doubted whether, in other respects, they do not lead to greater immoralities than any they repress, by producing perjury, in the temptation held out to unprincipled persons to share in the enormous penalties which these laws inflict, as well as in attempts, by such means, to avoid the payment of debts honestly incurred.

Indeed, so forcibly is this ill-judged preference felt by the upper and middling classes, that a few years since they united for the purpose of establishing for themselves, by the aid of parliament, a monte di pieta, or joint-stock pawnbroking establishment, which it was intended, however, to designate by the more modern and refined appellation of “An Equit “able Loan-Banking Company.” [1]

[1] See an account of a somewhat similar scheme, called “The universal and perpetual princely Contract of Commerce,” in Malynes' Lex Mercatoria, p. 244. “The perpetual Contract,” however, like its more humble imitation of the 19th century, did not long survive its origin.

It was projected with a view of meeting the wants and wishes of the inhabitants of the largest and most commercial city in the world, and perhaps, of participating in the profits of a very lucrative branch of business; be that as it may, the active jealousy and combined opposition of they who bear the arms of the Medici, added, either to the want of union amongst the projectors, or some other untoward event, frus trated the attempt, and caused the scheme to be abandoned; enough, however, was done to shew the inclination of the times, and the want felt by the manufacturer, the merchant, and the tradesman, of some increased facility of meeting an occasional emergency.

Nor does their inconsistency end here, in Bottomry and Respondentia Bonds, a distinction is made between risks by sea and risks by land, as if any good reason could be given for the difference thus created by the law; in both cases, the lender can indemnify him self by insurance and collateral security, which is usually taken into consideration at the time of the contract, and forms an item in the calculation on which it is made. Does any one complain of the injurious tendency or evil consequences which spring from this maritime Usury? on the contrary, is it not universally admitted to be proper and beneficial? Here the captain and the merchant are justly con sidered the best judges of their own several interests. Why not, we ask, the manufacturer and the tradesman?

By the 7th Section of the 3rd & 4th William IV. c. 98, [1] they are now enabled to raise money on bills, which have not more than three months to run, on the best terms they can make, without being liable to the pains and penalties of the statute of Anne; which change having been found, as far as can yet be ascertained, to be, on the whole, very beneficial, and we believe, in practice it is not complained of, has formed a very safe basis for further proceedings to relieve pecuniary transactions from the restraints with which they are still encumbered.

[1] This Act, as might have been anticipated, is daily evaded by the discounters of bills, by the simple device (where the term exceeds three months,) of always discounting two bills at least (one of a short date,) at the same time, and charging 5 per cent. only on the bill exceeding three months, and taking the extra rate agreed for, on the short bill. This, of course, would be held to be usurious, if proved to have been done in fraud of the statute, but evidence of the intention will not be easily obtained.

Before this beneficial alteration, the want of some such institution as has been alluded to, of borrowing on chattel security, to an amount exceeding £10. seemed rather to have increased than diminished, and it is always more sensibly experienced on the occasion of those sudden fluctuations in the value of money, which have too often occurred, to the detriment of comnnerce.

Posterity will scarcely credit the fact announced in a leading journal, [1] that a merchant of the first eminence, was unable to raise a loan to the extent wanted, on the deposit of silver bullion at the Bank of England, that corporate body having, it is said, refused the advance from a disinclination to encrease its issues at that particular period; and as transactions of such magnitude are generally above the means of private individuals, or of banking houses of a limited number of partners, when there is a panic and con sequent scarcity of cash, the evil arising from it is aggravated by the amount which ought to have been so obtained being kept out of circulation.

[1] The ‘Times,’ 17th Feb. 1832.

The hardships and mischiefs of a restrictive system are obvious, for as no one will lend money for less than it is worth, and at such periods it is worth more than legal interest, the borrower, if he obtained it at all, must do so by an evasion of the law; and as the lender runs the risk of forfeiting treble the value of his loan, by accepting more than what the law has deemed the proper compensation for the use of money, the unhappy borrower, if his bill exceed three months, is still obliged, in addition to the remuneration for the loan, to insure his creditor against the penalties of Usury; thus the borrower's difficulties are increased, and his situation rendered worse, by the inexpediency of the very laws made for his protection. The limited period of three months is, in many cases, of little avail to a merchant, who relies on the means of repayment on the arrival of a cargo from a distant shore; and since the China trade is thrown open, the number of those who depend on the forbearance of money for a much longer period must be considerably increased.

If a manufacturer, or a tradesman, must have money for a longer period than three months, (for the renewal of bills cannot, from the contingency of death, and the ever-varying circumstances of the times, be relied on,) he must either borrow it at an unnecessarily increased rate of interest, or, as Lord Bacon observes, “be forced to sell his means (be it land or goods,) far under their value; and as Usury doth but gnaw upon him, bad markets would swallow him quite up.”

Now it is conceived the merchant, or manufacturer, with his eyes open, provided he be neither a minor (which rarely happens) of weak mind, under duress, or circumvented by fraud (and for all such cases be it remembered, the Courts of Westminster afford ample relief), if free from these disqualifications, he is quite as competent as the legislature to judge whether or not it will be to his advantage to borrow at the rate of 10 or 12 per cent.; for if he be deemed incompetent in perfect freedom to borrow on fair terms, and liable to be imposed upon, owing to the pressure and urgency of his necessities, how can he be deemed more competent (the same causes operating) to sell either his goods, his life-estate, his leasehold, or his reversion, to bargain for the giving a post obit bond, or granting an annuity? If borrow ing at 10 per cent. would, at the time, be the means of his making 20 per cent., or three times that sum, by turning his capital frequently in the course of the year, or prevent the loss of 20 or 30 per cent. by a forced sale, or preserve his credit, which may be inva luable and beyond the power of computation, it is difficult to conceive why he should be debarred from doing so; no good reason has yet been assigned, nor is it possible to imagine one. Yet the law, in its kindness, precludes him from borrowing, on what it deems disadvantageous terms, but cannot prevent his selling on any terms, however ruinous, though every one knows that the loss he would sustain in borrowing at an increased rate of interest, may bear but a small proportion to what he might suffer by a forced sale." As to Dr. Paley's belief that the system is retained for embracing the manifold advantages to which he alludes, it may be observed that the law can never effectually check the power of accumulating wealth without industry, while it leaves the disposition of property unfettered, nor can money be obtained by the adventurer in trade at 5 per cent, whose only security depends on the success of his undertaking; it is manifestly injurious to such borrowers, for when the natural rate is above the legal rate of interest it diminishes competition, by driving the capitalist, who either respects the law or dreads the penalties, from the market; and whatever discourages the lend ing of money, must injure commerce, and be a loss to the kingdom, by stopping pro tanto the current of money, which turns the wheels of trade, and thereby limits the productive power of the capital and industry of the country.” Neither are these laws beneficial to trade; traders, who must surely be the best judges, do not so regard them; the Chambers of * See the evidence of Mr. Holland, Mr. Kaye and Mr. Kemble, on this head. Appendix C. * “Shew me,” said Sir Edward Fynes, (afterwards Baron Clinton,) in the House of Lords, “a State without usury, and I will shew you a State without trade.” Commerce, of Dublin, Manchester, Birmingham, and Glasgow, as well as the Merchants of London, have petitioned parliament for their repeal. As far as Government is concerned, it seems to entertain no fear of being less able to borrow the subjects money, on fair terms, for the future, since it has never objected to the repeal or alteration of the Usury laws, or made it a Cabinet question, while its members, whether Whigs or Tories, have indivi dually supported a change. If the supposed benefit to Government were a good reason for limiting the rate of interest by law to 5 per cent, it would be equally good for reducing it still lower. Govern ment, in its recent transactions, has borrowed the subjects money at much under 5 per cent, and can always do so, when there is little trade and advan tageous employment for capital, and money is consequently abundant, while at other times, when commerce is flourishing and money scarce, Govern ment have been obliged to pay as high as 6, 7, and even 8 per cent for it, the rate of interest being wholly dependent on the rate of profit to be made by the employment of capital in trade and manufactures. It would be but just, if the limitation to 5 per cent. be deemed necessary to protect the owner of money from the loss which he sustains in the variation of its value, for as he is forbidden to take more than after the rate of 5 per cent. per annum, for the use of "Save on bills and notes which have not more than three months to run. money, when the market rate is 7 or 8 per cent, he ought never to receive less than 5 per cent. even when it is only worth 3 or 4. That money is not as much a merchantable commodity as any article of which it represents the value is an argument now generally abandoned, even by those who contend for the retention of the present system; nor have we ever been told in what the difference between them consists; and the alleged antiquity of these laws is no more a reason for their being immutable than it is for re-enacting the laws against Witchcraft and Sorcery, and other equally venerable monuments of the wisdom and experience of our forefathers. It is an error to suppose that opinions adverse to the policy of these laws have been entertained only recently; the immortal Locke long since combatted their expediency—“Money,” he observes, “is an universal commodity, and is as necessary to trade as food is to life; and every-body must have it at what rate they can get it, and invariably pay dear when it is scarce; you may as naturally hope to set a fixed price upon the use of houses or of ships as of money. Those who will consider things, (he continues.) beyond their names, will find that money, as well as all other commodities, is liable to the same change and inequality, and the rate of money is no more capable of being regulated than the price of land; because, in addition to the quick changes that happen in trade, this too must be added, that money may be carried in or carried out of the kingdom, which land cannot.” Even long before the time of Locke, the mighty mind of Bacon, which towered far above the prejudices of the times in which he lived, discerned the inconveniences of this system; and, after balancing, as he says, the commodities against the discommodities of Usury, he comes to the con clusion, “that as it is vanity to suppose there can be borrowing without profit, and as great inconve niences would arise if borrowing were cramped, in order to retain the advantages, and avoid the disadvantages of Usury, two rates of interest, a less and a greater, should be adopted, the one to suit the borrower who has good security, and the other to suit the merchant, whose profits being higher will bear a greater rate.” As most lenders, including trustees and executors, would still prefer ample secu rity at the lesser rate, to hazard at the greater, there would be no want of loans upon mortgages or Government security; it must be remembered too that when Lord Bacon wrote the legal rate of interest was 8 per cent. It seems surprising that in the repeated discussions which this subject has undergone in parliament, and when every writer of note has been quoted, from Aristotle to Adam Smith, the opinion of this “Great Oracle of Reason” should have been entirely over looked. * “The greatest characters of the age (said Mr., now Lord, Brougham,) have disapproved of these laws; Sir Francis Baring, more than thirty years ago, strongly denounced them, as injurious to those for whose benefit they were intended.” House of Commons, Feb. 1st, 1816.

The adoption of this plan, or what seems preferable, removing all restrictions upon pecuniary bargains (excepting mortgages and other securities on land), would be attended with the happiest results to the trading part of the community, and avert the hostility of the land-owners, who have hitherto strenuously and successfully opposed in parliament the abolition of the Usury laws, on the grounds that they would unhinge existing mortgages and other contracts, and throw the landed interest, already heavily burthened, into confusion, induce the Bank of England to increase its rate of interest upon mortgages, and, finally, by sacrificing the welfare of the many to the few, would place the country gentleman at the mercy of the capitalist, and give the monied men the preponderance in parliament. Much of the money, they contend, now lent on mortgages (if these laws were abolished) would be called in when cash was scarce, to be employed at a greater interest elsewhere, or if left, would only be so on condition of their paying a higher rate of interest for it, as the competition would then be with the borrowers, and not, as now, with the lenders of money.

These objections, we are bound to confess, are not without weight, as the land is at present subject to Those who have large landed estates have always been envious of the sudden fortunes raised by commerce, and the improvements and increase of personal estates. Treatise on Treatise may be written, to prove that these two interests mutually support and strengthen each other; the prejudice may indeed be somewhat lessened, but cannot be eradicated. Barr. Obs. on the Stat. of Merton. many exclusive burthens, which press heavily upon it; the money raised for the maintenance of the poor (hitherto an increasing weight) is paid entirely by the land, for persons in trade contribute only as far as they are the owners or occupiers of real property; while, on the one hand, the farmer is subject to bad seasons, and the landlord to reduction, or loss of rent, the former is prevented, by the operation of the corn laws, from enjoying the full advantage of a series of abundant harvests, the latter, from the same cause, from raising his rents; and when to these are added the expense and exposure incidental to the renewal of mortgages (for assignments of them without reinvestigation of title are very rare in practice) it will be readily seen how much more the land-owner is at the mercy of his creditor than the merchant or tradesman, who has borrowed on a bill of lading or a dock-warrant, which is capable of being transferred by indorsement, with privacy, and at little or no expense.

These reasons may satisfy us that there exists in this country, at present, good grounds for a bonus or protection to the landed interest, if indeed these restrictions can be considered either a bonus or pro tection to that interest. In stating these objections, however, and giving them their due importance, it must not be overlooked that they apply more to ordinary than to extraordinary times, for when money becomes, as in time of war, worth more than 5 per cent, and Government is obliged to borrow at 6, or even 8 per cent, the situation of the land-owner is rendered worse by the operation of these restrictions now considered so beneficial; for as Government securities will, at that time, be preferred to mort gages at 5 per cent., it will follow, as was the case during the war with Napoleon, that the landholder will be unable to raise money in any other way than by means of an annuity transaction. We have the authority of Mr. now Lord Brougham, (late Lord High Chancellor) for stating, that in 1816 “money could not be borrowed at 5 per cent, and that Insurance Companies, in the employment of their surplus capital, never lent at that rate; some charging 8 per cent. and insurance (and that only to those who effected other insurances with them, and, in fact, were customers), and others charging 12, 13, and even 15 per cent, and the annuity well secured.” Thus the landed interest was reduced (in a great degree by the operation of the Usury laws) to the state Swift describes it was in his day, “when power, which, according to the old maxim, used to follow land, had gone over to money, and the country gentleman was in the condition of a young heir, out of whose estate a scrivener received half the rents for interest, and had a mortgage on the whole, and was therefore always ready to feed his vices and extravagances while there was anything left, so that, if the war had continued some years longer, the land-owner would have been little better than the farmer of a rack rent.”

The objections we have stated, we deem well worthy of consideration, but are more applicable to the question of the total abolition of the Usury laws, than to the modified change in them which has been suggested, and which, it is thought, would be found in practice to benefit the trading, the manufacturing, (including farmers,) and the commercial interest generally, without injuring the landed proprietor. Five per cent. is not inducement sufficient to lend to one who has nothing better than a mere personal or terminable security to offer, for it must be borne in mind that interest is of a mixed character, and par takes of the nature of insurance, as well as of rent, and that all interest charged to a borrower above the market rate is not, justly speaking, profit; part of it is indemnity,–indemnity for the loss of security, which must always vary in amount in proportion to the risk, like every other insurance.

To meet such cases, an extension of pawnbroking, establishing two rates of interest, what we have here proposed, or something similar in effect, has long been earnestly desired by the trading part of the com munity.

Care should undoubtedly be taken, lest in altering the law, and thereby assisting one class of persons, the difficulties of another class be not increased, of which some apprehension might fairly be entertained, more especially if the existing restrictions were at once removed, without the country being thoroughly prepared for the change.

When the legislature reduced the rate of interest on landed security, such as mortgages, &c., it seems to have committed an error in not stopping there, or at least in not increasing it afterwards on mercantile or inferior securities, such as now generally form the consideration for annuities; in order to keep pace with the increasing wants of commerce, which has been wonderfully extended since the last of the statutes relating to Usury. And this error has, it is conceived, been indirectly admitted, by endeavouring to supply the defect, by the legalised sanction given to pawnbroking, by Government deviating from its own principle in loans, and by the statutable pro tection given to borrowing by way of redeemable annuity.

It may be said that life annuities must be con sidered as purchases, and not loans, as the buyer is debarred from calling in his money, a circumstance essential to the nature of a loan; to this it is answered that, let them be called by what name you will, or be allowed to assume what shape you please, every practical man well knows that the great majority of such purchases are, in fact, mere loans, meant to be repaid or repurchased at the convenience of the seller or borrower; that the deed granting the annuity usually contains a clause for that purpose; and that, in order to save the expense of insurance, it is now very common to grant the annuity for the lives of three or four persons, and the life of the survivor, the lives being usually nominated by the grantee of the annuity, who is allowed to insure the last life, when the others have dropped, at the expense of the grantee or seller; and that such transactions, though sanctioned by courts of law, are, most of them, mere legalized evasions of the statutes against Usury, as the reason of their being allowed, viz. the presumed ground of risk, is never contemplated by the buyer or lender, being generally well provided against, by insurance and other collateral security. And although the grantee or lender cannot recall his principal, yet the higher the rate of interest paid by the grantor the greater is the certainty that it is only a loan, and will soon be redeemed.

It has been quaintly observed that the land-owners, who were both the borrowers and makers of those laws, had, in enacting them, an eye to the future wants of their children; this, however, cannot be allowed as a reason for continuing these restrictions wholly unmodified in the nineteenth century. Efforts, however, have not been wanting to pro cure an alteration in them, for they have long been deemed ill-suited to the genius of the present age. Philosophy having already so far triumphed over ancient superstition as to break down the barriers which so long enthralled the human understanding, and prepared the way for further and more beneficial improvement.

If the authority of great men in ancient times and in foreign lands has received its due meed of deference and respect, we see no reason why that of great men of modern times, and in our own country, should not be entitled to the like consideration, seeing they have had the additional advantages of history and experience for their guides.

The names of Bacon, Locke, Bentham, and Brougham, may well grace the same page with Aristotle, Plutarch, Cato the Censor, and Cicero. The opinions of the three first of our illustrious countrymen have been already stated, the latter (Mr. now Lord Brougham) observed in the course of a luminous speech in a committee of supply."

That “the repeal or modification of the Usury laws was a measure, in the present age, all mankind agreed was perfectly safe, calculated to afford the greatest measure of relief, and innoccuous to the borrower, to the lender, and to the state.”

The attention of Parliament was (since the statute of Anne) first specifically called to the subject by Mr. Serjeant Onslow, on the 22nd of May 1816, who moved for leave to bring in a bill to repeal the laws relating to Usury; and as the opinions then and subsequently expressed by able, enlightened, and practical men, must be interesting to those who have thought the repeal or modification of those laws expedient, we have introduced, in an Appendix, a brief analysis of the Debates which have taken place on this question in Parliament, as well as of the opinions given to a Select Committee of the House of Commons, by experienced men, in various pursuits of life.

"In the House of Commons, in 1816. Holland having been frequently alluded to in the Debates of which we are about to give a brief abstract, as illustrative of the advantages derived from the interest of money being wholly unrestricted, it will not be inappropriate to introduce some obser vations, in connexion with that country, by an English writer, as far back as the middle of the seventeenth century. “Plenty of money and few borrowers,” says he, “will make the rate of interest better than any statute for the purpose will do. A famous instance whereof we have in the United Provinces, where it is lawful for a man to take twenty in the hundred, if he can get it; and yet money is commonly to be had there at 6 or 7 per cent, by reason of plenty of money; and now, in 1668, from the like plenty, and not by reason of any law as is unjustly alledged, it is to be borrowed at once asking, at 3 or 4 per cent.; and how vast the difference between the kindly working of nature and the violent acting of a law, when the matter is not prepared for it, I leave every man to judge. I dare avow, (he adds,) interest without a law will be every jot as cheap with us as with them.”

With regard also to the alleged fact, that the increase of the rate of interest creates a fall in the value of land, experience does not show that there is any certain proportion between the interest of money and the value of land; the latter seems to depend principally on peculiar and local causes, which operate far more powerfully than a high or low rate of interest; much must result from the quantity of land in the market, compared with the number of purchasers; for, as in other things, it is only the overplus compared to the demand, that con stitutes the value; and there can be no doubt but that the difficulty of borrowing money on landed security under the present system (during times of scarcity) must tend, at such periods, considerably to depreciate the value of the land itself, and be a bar to improvements.

An effect is always in proportion to its cause; when the rate of interest was 10 per cent, the value of land did not exceed sixteen years purchase; when 8 per cent, eighteen years purchase; and it did not rise higher when the rate was further reduced to 6 per cent, little more than half the original sum.

To support the theory which connects the rate of interest with the price of land, it ought to have risen to twenty-four or twenty-five years purchase, which it has only done since the reduction of interest to 5 per cent. The operation of the corn, tithe and poor laws materially affect the value of land in the present day, by burdening the farmer, causing a reduction of rent, and consequently a less profit to the purchaser on the capital invested in land.

In conclusion, it may be observed, that if the Usury laws cannot be altogether abolished, from the dread of inconvenience to the landed interest, already heavily taxed, they might, at least, be modified in the way proposed, for the benefit of the trading part of the community, an alteration which concurs with the suggestions of those who supported their entire abolition in parliament, viz. “That mortgages might be exempted from the operation of the bill, seeing those most interested in them objected to the change.” The adoption of this plan, it is conceived, would tend, in a great degree, to remedy the mischief and inefficacy of the present system, and operate as an inducement to the capitalist (whose interest the law deigns not to notice, conceiving that he, at least, is capable of taking care of himself) to part more readily with his money when he receives a compensation more in proportion to the risk, or weakness, of the security on which he lends it. While it would also enable the borrower, whose distresses are often of a temporary nature, to escape the pressure of the moment, and retrieve his situation, by raising the sum he may want on securities of an inferior nature, on much better terms than at present, and thereby save him from much occasional oppression.

The rate of interest on mortgage security might remain the same, leaving inferior securities to find their own level in the money market, and it would by no means follow that this rate would be invariably maintained, or mortgagees be always obliged to pay so high an amount, for were the money market thrown open to fair competition, and the odium of infringing the law removed, it would be supplied on lower terms. Mortgagors might provide against the sudden increase in the value of money, by stipulating that the mortgage should not be redeemed (unless by consent) before a future period agreed on, and then only on receiving six months notice, a mode now far from uncommon in practice.

All experience teaches us how impossible it is for the law to fix a maximum of interest applicable to every period, for when there is little demand for money, it can be borrowed (as at the present time,) for less than legal interest, on good security; when the contrary is the case, the law is evaded, and more than the legal interest given; for whatever may be the municipal regulation, there is no axiom better estab lished, than that money, like water, will always find its own level; that it is governed by the same rules, as to production and distribution, which affect all other merchantable commodities; and that the rate of interest for its use is no more capable of being regulated by law than the rate of insurance, or the price of labour; and that “free trade in money is the only way of rendering it abundant,” to say nothing of the advantages that must accrue to the public from having this necessary and confidential branch of business transacted by respectable members of the legal profession, amenable to the Courts for their conduct, instead of the anonymous and irresponsible individuals, who now, for the most part, monopolise it, to their exclusion.

A plan somewhat similar to that which has been proposed, has been already hinted at by a practical and most eminent legal writer of the present day," who wisely considers, that as money may now be borrowed at any rate, however exorbitant, by way of annuity, it would be better to raise the rate of interest on inferior securities, and abolish redeemable annuities, with certain exceptions, altogether. The law ought not to permit that to be done circuitously and indirectly, which it will not allow to be done openly and at once; if borrowing at more than 5 per cent.be pernicious, it ought to be practicable by no means whatever; if beneficial, it should be subjected to no impediment.

Every unprejudiced mind must feel satisfied, that the more the subject is discussed the more certain will be the repeal, or modification, of these laws; for as to their efficacy, it has been well observed, they must produce one or other of two consequences; if wholly successful, they must prevent all loans at a greater rate of interest than 5 per cent, if partially successful, they must raise the terms of the bargain to the borrower; in either case, they do nothing but counteract the intention of the legislature which enacts them.

If it should be objected, that this would authorise . Usury where it was before prohibited, we reply, with Lord Bacon, that “it is better to mitigate Usury by declaration, than to suffer it to rage by connivance.” As to the time of effecting this alteration, it seems * Sir Edward Sugden. clearly to have arrived; periodical parliamentary discussion, for the last eighteen years, has prepared the public mind for a change, and as the questions relative to the currency of the United Kingdom have now been disposed of that ground is wanting for postponing the measure any longer, while a time like the present, when the market rate of interest is under the legal rate, has been admitted, on all hands, the fittest for the adoption of an alteration. The new law itself might be made to come into operation at a period of twelve oreighteen months from its enactment, so that borrowers, as well as lenders, might have time to arrange their affairs, and prepare for the change; and it might be confined to future contracts, so as not to interfere with those already existing. To distinguish what securities may, or may not, be taken at more than 5 per cent, the act might be general, with a clause similar to the last section of the Annuity Act, 53 George III. c. 141, s. 10, in favor of mortgages and other charges on land." And it might also enact, with a view to check frauds and perjuries, that an agreement, in writing, signed by the parties, or their agents properly qualified, See such a provision introduced into an Act, passed by the Commonwealth of Massachusetts, in the United States of America, A.D. 1834, entitled “An Act concerning Usury,” (similar in its pro visions to the 7th Section of the 3 & 4 William IV. c.98, ante, p. 155.) That the provisions of this Act shall not be construed to extend to any note of hand, the payment of which is secured by mortgage of real estate, or to notes of hand payable on demand, or to bills of exchange payable at sight.” 190 ON THE POLICY [PART II. should in all cases be necessary where a greater rate than 5 per cent. is contracted for; and that bills of exchange and promissory notes, not expressing a greater rate on the face of them, should remain as at present; and that, in the absence of a written agree ment or stipulation appearing on the face of a written instrument, the present legal rate only should be recoverable; thus the Courts would, in such cases, still retain a rule, and measure of damages. With a view to guard against under-hand and dis honorable transactions being carried on, by the means of agents and others, the act might require that the real name of the bond-fide lender should, in all cases, appear upon the face of the security, or in default thereof, that every such security, collateral security, &c. &c. should be absolutely null and void, and that the sum so lent should be rccoverable by no means whatever. To restrain oppression, protect infants, and relieve against hard and unconscionable bargains, the Courts of Common Law might be invested with summary jurisdiction and powers of redress, similar to those they now exercise, with so much advantage to the public, under the Annuity Act just stated, (which in other respects, especially as regards infants, might afford an useful model for imitation,) without obliging the complainant to seek relief by the more tedious and expensive application to the Court of Chancery; "The public is indebted for this useful Statute, (among others,) to Sir Edward Sugden. PART II.] OF THE USURY LAWS. 191 while the contemplated measure for the abolition of imprisonment for debt will, by materially diminishing the lender's power over the borrower, free the latter from the oppression to which he may be occasionally liable. After a sufficient trial, and if found to work well in practice, and when due changes shall have been made in the laws more immediately affecting real property, the transfer of it facilitated and rendered cheaper, and the landed interest conciliated to the principle of freedom, it may be further extended, and in the mean time, a cautious and safe experiment will be made of its effects. This would probably be found better than a total abrogation of the present system, which might give too great a shock to existing contracts, “being an untrodden path, (as Sir Thomas Culpeper, jun. has observed,) it must be hewn out by dint of reason.” An alteration in the law never being so well received, as when it has had due consideration, accords with the various interests of the community, and is adapted to the times, and concurring circumstances, when the change is effected. It has been truly said, that the Usury laws are vestiges of the times when the principles of commercial polity were wholly unknown, when the legislature extended its interference with the rights of individuals to almost every act of private life, when the price of bread, cloth, leather, wine, &c. &c. were fixed by statutes; but these were days of political darkness, the wisdom of the people has ever since been increasing, and one after another of these legal abuses have been expunged from our statute book, by succeed ing and more intelligent Parliaments, until scarce a relic remains of the old regime of error, save the Usury laws alone. A still further reform must follow that increase of knowledge, which is now fast enlightening the community; and, we trust, the time is not far distant when these also will disappear. 193 APPENDIX B. AN ANALYSIS OF THE PARLIAMENTARY PROCEEDINGS ON THE Question of the Repeal of the Usury Laws, FROM MAY 1816 To THE PRESENT TIME." 22 MAY 1816. Mr. Serjeant Onslow— Moved for leave to bring in a bill “To repeal the Usury • Laws;” and, in an able speech, reviewed the law in all its bearings, and traced the history of Usury town to the nineteenth century, alluding to most of the ancient and modern writers on the subject; and observed, that Burke "In this brief Analysis of Debates, extending through eleven Sessions of Parliament, several able speeches have been passed over, in order to avoid repetition, the object having been to give a complete but concise view of the arguments adduced in the course of the various discussions. O 194 PARLIAMENTARY PROCEEDINGS [APPx. B. had characterized the Usury Laws as the resource of weak and undeciding minds. * * # * That as limiting the rate of interest was an exception to the general rule, those who contended for it should prove its necessity. * * * * * Annuities were commonly granted on three lives at 15 per cent., or on four lives at 14 per cent. The Chancellor of the Exchequer, (Mr. Vansittart, now Lord Bexley,) Would give no opinion on what it might become Par liament to do on a subsequent occasion, and under different circumstances, but as the question required such time and deliberation before any measure was adopted as could not be bestowed at the present period, he felt it his duty to move the previous question. Motion withdrawn by consent. 1 MAY 1817. Mr. Serjeant Onslow— Again brought forward the Bill. These laws, he observed, had arisen in a wish to open, and not to limit, the rate of interest. The Chancellor of the Exchequer, (Mr. Vansittart, now Lord Bexley,) - Doubted whether the country was yet prepared for the change. Sir John Newport:— Where no fixed rate of interest existed, money was borrowed at a lower rate than where a contrary system pre vailed; instanced on the one hand, Holland and Flanders, APPx. B.] ON THE USURY LAWS. 195 and, on the other, Great Britain and Russia. * * * sk * * * * Government had departed from their own principle by giving persons an opportunity of borrowing on annuity. Sir Frederick Flood:— - The repeal of the Usury Laws would be beneficial to Ireland, into which it would be the means of pouring money, and consequently of encouraging commerce, agricul ture, and manufactures. Leave given to bring in the Bill. 30 JUNE 1817. Sir H. Parnell:— The Usury Laws belonged to those ages when the principles of commercial polity were wholly unknown. The value of capital in extending industry had not been thought of; lending at interest was considered a gross abuse in favour of the rich to the prejudice of the poor. Lord Castlereagh— - Suggested a postponement of the measure, that time might be allowed for its due consideration. eved well, Postponed accordingly. 21 APRIL 1818. Mr. Serjeant Onslow— Concluded his speech, by moving “That a Select Committee be appointed to consider the effects of the laws which regulate or restrain the interest of money, and to report thereon to the House.” o 2 196 PARLIAMENTARY PROCEEDINGS [APPx. B. General Mitchell:— The Bankers of Belfast had petitioned against the repeal of the law. * * * * * Opposed the motion. Mr. I. P. Grant:— Some thought, when the rate of interest was high, jt was not a proper time for the repeal of these laws; others thought the same when it was low. *k * * Approved of the repeal. Referred to a Select Committee. 28 MAY 1818. REPORT OF THE COMMITTEE. Mr. Serjeant Onslow— Presented the Report of the Select Committee; and gave notice that early in the next Session he would renew his Bill. It was as follows:-" 1st. “That the laws regulating or restraining the rate of interest have been extensively evaded, and have failed of the effect of imposing a maximum on such rate; and that of late years, from the constant excess of the market-rate of interest above the rate limited by law, they have added to the expense incurred by borrowers on-real secu rity; that such borrowers have been compelled to resort to the mode of granting annuities on lives, a mode which has been made a cover for obtaining higher interest than the rate limited by law; and has further subjected the borrowers to enormous charges, or forced them to make very disadvantageous sales of their estates. * For a digest of the evidence taken before the Committee, and on which their Report was founded, vide post, p.225. APPx. B.] ON THE USURY LAWS. 197 2nd. “That the construction of such laws, as applicable to commerce, as at present carried on, have been attended with much uncertainty, as to the legality of money trans actions of frequent occurrence, and consequently been productive of much embarrassment and litigation. 3rd. “That the present period, when the market-rate of * “interest is below the legal rate, affords an opportunity pecu “liarly proper for the repeal of the said laws.” 10 FEBRUARY 1819. Mr. Serjeant Onslow— Renewed his Motion. It is remarkable that while taking interest above a certain rate subjects the lender to treble penalties, it does not appear that the law prohibiting the taking of any inte rest had been repealed. Mr. Hume:— Property in houses was left to the discretion of the holder; Why should money, the representative of property, be restricted? Hoped that sounder principles of economy would prevail, and that every restriction would be removed from manufactures and commerce, from the effects of industry and the enterprizes of speculation. Leave given to bring in the Bill; which was brought in, and read a first time. 12 FEBRUARY 1819. Mr Protheroe— and Mr. Calcraft Thought it too bold an experiment—and opposed it. 198 PARLIAMENTARY PROCEEDINGS [APPx. B. Mr. Serjeant Onslow— Said a few words in reply. Bill read a second time. 9 JUNE 1819. Lord Althorp, (late Chancellor of the Exchequer, and now Earl Spencer,) Was friendly to the measure, but suggested its post ponement, on account of the uncertain value of money, owing to the change about to take place in the circulating medium of the country.

Postponed accordingly.


12 APRIL 1821.

Mr. Serjeant Onslow

Renewed his Motion.

Stated that Mr. Kaye, Solicitor to the Bank of England, many monied men from the city, Mr. Ricardo, Mr. Rothschild, Mr. Sugden, the late lamented Sir Samuel Romilly, had been examined before the committee, and, generally speaking, they were of opinion that the Usury Laws answered no good purpose whatever....

The proper time to consider them, without injury to the public creditor, was when the market-rate of interest was under the legal rate.

Mr. Davenport—

Feared the landed interest could not borrow at 5 per cent, if the Bill passed.

Sir Robert Heron:—

It would introduce uncertainty into all mortgages; the measure was a most mischievous one, and if unhappily it was sanctioned by the House, he would move for an alteration of its title, and that it be called “A Bill for the more speedily ruining the young nobility and gentry of the country.”

Lord Althorp, (now Earl Spencer,)—

Did not think the measure would operate injuriously to the landed interest; it had not done so when the legal rate of interest was 8 per cent.

Mr. R. Gordon—

Cautioned the House to beware of theories, from the sad experience of the measure for the resumption of cash payments. This, however, was the age of theories.

Mr. Calcraft—

Was afraid it would unsettle mortgages; there had been a maximum fixed by the assize of bread.

Mr. Ricardo:—

During the late war with Buonaparte money was borrowed at 10, 12, and 15 per cent.

Mr. Baring:—

It would be a safe measure, and came before the House at a seasonable period, when the rate of interest was under the legal rate; instanced Hamburg and Holland.

*****

It would benefit the landed interest even more than the mercantile interest and monied men.

Mr. Monck:—

The Usury Laws were fragments of the olden time, when Government interfered with every thing; there was an assize on cloth, leather, beer, and bread. The repeal of the assize on bread was known to have had the best effect, by procuring better bread, on cheaper terms; the like good result would arise, if the Usury Laws were repealed; and money lenders would become as respectable as any class in trade.

Leave was given to bring in the Bill.

21 APRIL 1823.

Mr. Serjeant Onslow—

Again obtained leave to bring in his Bill.


17 JUNE 1823.

Mr. John Smith—

Mr.

Approved of the Bill.

Was Chairman of a Committee of Bankers, who wished it might not pass, as it would further reduce the rate of interest, and so injure them.

*****

In Holland, where there was no Usury Laws, interest was lighter than here.

*****

Thought it would benefit the country gentlemen.

Thomas Wilson:—

Commerce was well understood in Holland; they had no Usury Laws,

Mr. F. Palmer:—

It would be ruinous to the landed interest.

Mr. Benett (Wilts):—

If ever the rate of interest rose above 5 per cent, the Bill would benefit the landed proprietors.

27 JUNE 1823.

After a short discussion the Bill was lost by a majority of five.

The numbers being, 21 for; 26 against.

16 FEBRUARY 1824.

Again brought forward by Mr Serjeant Onslow.

Mr. Hume–

Thought it a good time to pass the Bill, as money was only at 3 or 4 per cent.

Sir John Wrottesley:—

Government would not be able to borrow as heretofore.

*****

It would injure the landed interest, who would be subjected to every variation in the value of money.

Mr. Grenfell—

Approved of the measure, and instanced Holland; there was no country in Europe where the rate of interest had been and was so low.

zzzz Mr. Huskisson— Was a Member of the Committee, and agreed with Mr. Serjeant Onslow. * * * * * Considered the Usury Laws as only calculated to add to the difficulty of borrowing money, to increase litigation, and to encourage fraud. Mr. John Smith:— The laws against Usury had been done away with all over Europe; and no harm had occurred, either to Govern ment or to individuals; on the contrary, the interest of all were much improved by the repeal. The Chancellor of the Exchequer, (The Right Hon. F. Robinson, now Lord Goderich,) Considered it to be a proper time to alter the law. Mr. Baring:— The agricultural interest might be exempted from the measure, if their prejudices could not be removed. The country gentlemen were, in fact, more interested in the repeal than any class of the community. Bill read a second time. 27 FEBRUARY 1824. Mr. Robertson— Denied there were no Usury Laws in Hamburg—the laws of the German Empire fixed the rate at 6 per cent. Bills might be discounted at Hamburg at any rate, but that was an exception in favour of trade. * * * * Had no objection to its being made legal for merchants to discount at any rate. *k * * * * The virtuous Brutus had borrowed money at 48 per cent, by means of an agent, Sanctius, and quarrelled with Cicero on the subject, who disapproved of it. " * * * Instanced the misery of borrowing without restriction in Central India. * * * * * The evidence of Mr. Preston had shown that, although many millions were borrowed on mortgage, only one million was borrowed annually, by way of annuity. * * * That even Mr. Rothschild doubted its efficacy to the mid dling and lower class of tradesmen. * * * That it would sacrifice the interest of the many to the few. Captain Maberly:— Could Government know the interest of parties in a contract as well as the parties themselves? Mr. Wynn:— Dr. Adam Smith had acknowledged himself mistaken. * * * * * + Was in favor of the Bill. Mr. Calcraft— Strongly opposed the Bill. Mr. Huskisson:— It was well known it was impossible, during the late war, to borrow on mortgage, and the consequence was that the value of land was unduly depreciated. Sir John Sebright, — As a landed proprietor, supported the Bill. Bill committed. 31 MARCH 1824. Mr. Ellis— Presented a Petition from the Chamber of Commerce in Dublin, in favor of the Bill, in which it was stated, that the Petitioners considered the present was a favorable opportunity to effect a change, without incurring the hazard and inconvenience which sometimes attended alteration. 8 APRIL 1824. Mr. Robertson:— The word loan or lending was not contemplated by the Acts. * * * * * It would give the monied interest the upper hand and sway in Parliament. Sir Henry Parnell:— The repeal of Usury Laws would benefit Ireland. Mr. Sykes:— The Landowner raises his rents when times will bear it, why should the holder of money not enjoy the same advantage? Mr. Lockhart:— The country had prospered under the Usury Laws. Mr. Curwen— Preferred the safer course of abiding by experience. * * * sk * * Was afraid the proposed alteration would give rise to an immense deal of money jobbing. Mr. Attwood— Advocated the repeal, in an able address. * * * The law, as regards trade, is in reality a dead letter. * * * # * * Juries could not be found to enforce such monstrous laws. Mr. Davenport:— If the Bill passed, mortgages would be shuffled about like cards. Mr. Alderman H.eygate— Thought the Reports of Committees should be looked at with great circumspection, from the way in which they were usually appointed. Mr. D. Gilbert– Thought the measure would be highly advantageous to the landed interest. Bill lost by a majority of 4. Against the Bill, 67—For it, 63." 26 MAY 1824. Mr. Alderman Heygate— Obtained leave to bring in a Bill to regulate the penalties and forfeitures incurred under the Usury Laws, which however was dropped.” * This is the greatest division that has taken place on this question, though the numbers did not exceed 130, little more (?errata little less) than one-fifth of the whole house !!! * If Parliament should be of opinion that the time has not yet arrived for making even the modified alteration in the Usury Laws which has been suggested, it may deserve consideration whether it be not advisable to substitute, in place of the present enormous penalty of thrice the sum lent, the more reasonable one of thrice the excess of interest received by the lender; for as the law stands at present, the penalty is out of all proportion to the degree of the offence; for instance, if a man take £5. too much interest on an account of £30,000. the penalty would be £90,000. and the £30,000. lent, together £120,000!!! while, if another took £5. too much on a principal of £30, the whole penalty would be only £120.; thus the punishment is in the inverse ratio to the extent of the transgression. 17 FEBRUARY 1825. Mr. Serjeant Onslow— Having again brought forward the measure, now moved the Order of the day for its Second Reading. Mr. John Smith:— Mr. Mill and Mr. M'Culloch were both of opinion that the use of money, like other commodities, should be unrestricted. The Solicitor-General,— (Sir Charles Wetherell,) Opposed the Bill. It was not true that there was no restraint upon raising rents. A maximum was fixed upon rent, by allowing corn to be imported when the price was 80s. * * Capitalists would lend their money at a high rate of interest, and not become partners, to the injury of creditors." Mr. Wynn:— Ministers were in favour of the measure. Mr. Bright— Feared the removal of the Usury Laws would prejudice the middling and lower clases. Bill lost by a majority of 5. The numbers being, 45 against it—and for it 40. 17 APRIL 1826. The consideration of the measure was again postponed by Mr. Serjeant Onslow, at the request of the Chancellor of * This can now be done, and, indeed, is constantly done, by way of annuity. the Exchequer, and Mr. Secretary Peel, on account of the enquiries then going on respecting the Currency in Scotland and Ireland. IN THE House of LoRDs, 1826. Lord Lansdowne — Presented a Petition from the Chamber of Commerce of Manchester, praying for a repeal of the Usury Laws, which he supported in an able speech. * * * To fix a maximum of interest by law, was as vain as to fix the Mercury in the barometer * + * * The best policy of Government was to allow the value of money to adjust itself to the wants of commerce. Lord Liverpool,— (First Lord of the Treasury,) In reply—The question was one of difficulty; obstacles stood in the way of abrogating these laws altogether, on account of their bearing upon a particular interest, but the present state of the law could be defended on no sound principle. IN THE HousE OF CoMMONs. 15 MAY 1828. Mr. Poulett Thomson,— (now the Right Hon. P. Thomson, late President of the Board of Trade,) Presented a Petition from certain Merchants in London, praying for the repeal of the Usury Laws. 20 MAY 1828. Mr. Poulett Thomson— Moved for leave “to bring in a Bill to amend the Usury Laws.” " * * * * * Looking at the evidence taken before the Committee of 1818, it would be seen that twenty-one witnesses were examined; of these, eighteen were of opinion that the Laws as they stood were inoperative, and required alteration, and of the remaining three, two were melancholy instances how far old prejudices could pervert and enchain men's minds; the third, Mr. Gurney, had, with a candour becoming his honourable mind, allowed him to name him as one whose opinion had since suffered a change, after witnessing the occurrences in a period of such difficulty as that of 1825. * * * * * * The firm of Howard and Gibbs, now bankrupts, had made £20,000 or £25,000 a-year by lending money to prodigals. * * * * * + Necessitous men must obtain money upon almost any terms at which it can be got; and if there are laws to be evaded, they must pay for the evasion. * * * * In Hamburg and Mecklenburg, where the landed interest were still more in the habit of mortgaging their estates than here, there was no legal rate of interest fixed, and the consequence was, that it was in general more steady than in other countries. * * * *k It was well known that during the panic in 1825, as much as 50 and 60 per cent. was given for money secured on the public funds." * * + * * * Did not propose to repeal the Usury Laws altogether, but to modify them. * * * * His plan was to do away with that part of the laws which voids the engagements entered into upon any rate of interest 1 This must have been on the Stock Exchange. APPx. B.]
ON THE USURY LAWS. 209 above that which the law permits, and to change the present penalties, allowing persons only to sue for the legal interest of 5 per cent. * * * * There was a precedent for it. The Court of Chancery allowed no usurious interest, but legal interest upon the debt, from the day on which it was contracted. * * * In all foreign countries the Usury Laws, if not formally, were at least virtually repealed. * * * * In France, Holland, and Russia, there was a fixed legal rate of interest, but he believed that in all of them the discount of bills was permitted at a much higher rate of interest; indeed, in the Government Bank of Russia the discount was whatever they could get. * # * * The existing laws had inflicted misery, poverty, and ruin on many opulent and respectable persons in the year of the panic. The Chancellor of the Exchequer, (The Right Honorable Henry Goulburn:) If the honorable member would postpone the agitation of the measure till next session, he would in the interval con sider it deliberately, and be prepared to point out the means by which the evils of the Usury Laws might be avoided, or the laws themselves repealed. Mr. (now Sir Edward) Sugden,— Objected to their total repeal. 20 MAY 1828. s Lord Althorp, (now Earl Spencer,)— Would have preferred a total repeal, but considered the amendment better than the present system. Leave given to bring in the Bill. P 210 PARLIAMENTARY PROCEEDINGs [APPx. B. 19 JUNE 1828. Mr. P. Thomson— - Moved the Second Reading. Mr. Irving— Thought the measure ought to be confined to mercantile concerns, and that real or landed securities should remain untouched. * * * * * The subject was one which ought to be taken up by the Government. The Chancellor of the Exchequer, (The Right Honorable Henry Goulburn,) Wished it to be deferred; not that he was unfriendly to the measure, but that it might be rendered more perfect, and the country prepared for the change. Mr. (now Sir Edward) Sugden:— There was no inconvenience felt from the Usury Laws when the market rate of interest fell below the legal standard. The inconvenience arose when the rate of interest exceeded it. The advantage of the Usury Laws in such a contingency was, that they steadied and controlled the rate of interest. Mr. Robinson:— The country had not flourished under the present Usury Laws, but in spite of them. Lord Palmerston— * Would support the measure. * * * Every man should be left to the care of his own individual interest, and no vexatious impediment should interfere to prevent the fair exercise of mercantile speculation. * * * + * * * * * It would benefit the landed interest. APPx. B.] oN THE UsURY LAws. 211 Mr. D. W. Harvey— Did not think it would benefit the landed interest, it rarely happened that fee simple estates were burthened with annuities. * * * * * If the penalties of the present Usury Laws could be modified, he would wish to see it done. If juries, for instance, instead of being obliged to return their verdicts upon the bare wording of an act of parliament, were allowed to judge not only of the law, but of the fact also, it would, in a great measure, disarm the effects of the penalties which the law inflicted. Mr. P. Thomson— Stated he did not intend to carry the measure further this session, on the understanding that the Chancellor of the Exchequer would introduce some measure on the subject next session. Mr. Herries— Thought the laws should be modified, if not entirely repealed. Hoped some measure would be proposed by the Government next session. The House divided:—For the Second Reading 52 Against it - •- - 40 Majority for the Bill 12 The Bill was read a second time, and the Committee put off for three months. 26 APRIL 1830. Mr. P. Thomson— Again brought forward the Bill. P 2 212 PARLIAMENTARY PROCEEDINGS [APPx. B. Mr. Heathcote— Objected to the Bill. * * * * The lender might call in his money, and saddle the mortgagor with great expences if he would not consent to pay more than 5 per cent. Lord Althorp, (now Earl Spencer,)— Thought it a convenient time to alter the law. Sir Charles Wetherell— Thought it would leave the landed proprietor an easy prey to the capitalist. Mr. O’Connell— The law would be avoided by a bonus. The Attorney General,— (Sir James Scarlett,) Approved of the Bill. The Solicitor General,— (Sir Edward Sugden,) Admitted that an alteration was required in the Usury Laws, but disapproved of the present Bill. The House divided:—For the Second Reading 50 Against it - - - 21 Majority for the Bill 29 6 MAY 1830. Mr. P. Thomson— Moved that the House resolve itself into a Committee of the whole House on the Usury Laws. Mr. G. Heathcote— Opposed the Motion. * * * The Bill was hostile to the landed interest. * * The former laws, it was said, were made by borrowers; this Bill, it was evident, was drawn up by the lenders. The Attorney General,— (Sir James Scarlett,) The old laws he admitted had been made by borrowers; they were unjust as well as injurious to borrowers. * * * * * * He begged to call the attention of his honorable friend to the principle of that legislation from which the country was just emerging, and which was the delight of our ancestors; and of which the Usury Laws were part. * * * It was once supposed that the legislature could regulate the price of articles, but it was now well known that prices were beyond its controul. *k * * * * What would they (the country gentlemen,) think of a law to prohibit letting their land beyond a certain rate, or prohibit them from selling corn beyond a certain price? * * Formerly there was an assize of bread, but this was obliged to be given up. Mr. Sykes:— Under the present system it appeared to him the whole disadvantage was on the side of the borrower, it was he that was made to pay for everything;-–and the only consequence of imposing penalties on the usurious lender was to make the burthen fall still more heavily on the needy borrower. Sir Charles Wetherell— Believed he was not exaggerating the fact when he stated, that half the rental of all England went to pay the mortgages that were existing on that property. * * It would injure the landed proprietor whose estates were mortgaged; as soon as a war, or other unfortunate concurrence of circumstances, should have tended to raise the value of money in the market, he would be entirely at the mercy of the lender, and could have no alternative but that of acceding to his terms, however exorbitant. + * * The great oversight of the Bill was that it forgot that the borrower was not, like the lender, in a free state of agency, for it was not till the debt was already contracted in some other way that he came into the market to raise money on such security as he could offer. Lord Milton, (now Earl Fitzwilliam,) Was happy that this was not a parliamentum indoctum, and that it could not be said hereafter, “that never was a good law made thereat,” for they had the benefit of the learning and talents of lawyers. * * * C He was neither convinced of the immutability nor wisdom of those laws. * * * * * Would support the motion. The House divided:—For the Bill 41 Against it 23 Carried by a majority of - 18

In this year, a dissolution of Parliament took place, and the measure was not again brought forward until May 1832, when Mr. W. A. Mackinnon obtained leave to bring in a Bill for the repeal of these laws, which was read a first time and printed, but then the important measure of Parliamentary Reform, which almost exclusively occupied the attention of the House of Commons, prevented the honorable member from proceeding with it; and it has not since been revived, though several notices of an intention to do so have been given.

The result of the last discussion shews the alteration which has been gradually taking place in public opinion with regard to this subject; and it may not be unamusing to contrast these debates with those which took place on the Bill for reviving the Statute of Henry VIII., which, it will be remembered, was the first Act tolerating interest in England, on which occasion it appears that only two honorable Members had the courage to declare that the taking of moderate interest was not against the law of God, while another honorable and learned member thought, in his conscience, the offence should be judged felony.

13 ELIZABETH, A.D. 1571.

DEBATE ON THE SECOND READING OF THE USURY BILL.

FIRST one Mr. CLARKE spoke to this effect, that the refer ring of the punishment in the bill mentioned being put to the ecclesiastical judges, for so much was nothing; for that they are to punish by the civil law, by the canon law, or by the temporal law. The civil law would not avail them, because by that law there is allowance of Usury. The canon law is abolished; and in that respect the temporal law saith nothing; so that the pretence may seem to be somewhat, but the effect thereby wrought is nothing: yet that it was ill neither Christian or Pagan ever denied. Aristotle being asked what Usury was ? said it was “praeter naturam ” and therefore could not be defined. Plato being asked the same question, answered it was, “Idem ac hominem occidere.” St. Augustine the same, and in the very words of the Psalmist answereth to the question:— “Domine quis habitabit in Tabernaculo tuo?” He said, “Qui curat proximo suo, non decepit eum, et qui pecuniam suam non dabit ad Usuram.”

Mr. MOLLOY, first learnedly and artificially making an intro duction to the matter, showed what it might be thought on for any man to endeavour the defence of that which every preacher, at all times, following the letter of the book, did speak against: yet, saith he, it is convenient, and being in some sort used, is not repugnant to the word of God. Experience hath proved the great mischief which doth grow by reason of excessive taking, to the destruction of young gentlemen, and otherwise infinitely, but the mischief is of the excess, not otherwise; since, to take reasonably, so that both parties might do good, was not hurtful; for to have any man lend his money without any commodity, hardly should you bring that to pass.

And since every man is not an occupier, who hath money, and some which have not money, may yet have skill to use money; except you should take away or hinder good trades, bargaining and contracting cannot be: God did not so hate it, that he did utterly forbid it, but to the Jews amongst themselves only, so that he willed they should lend as brethren together, for unto all others they were at large: and, therefore, to this day they are the greatest usurers in the world; but be it, as indeed it is, evil, and that men are men, no saints, to do all these things perfectly, uprightly, and brotherly, yet ex duobus malis minus malum elegendum; and better may it be borne to permit a little, than utterly to take away and prohibit traffick, which hardly may be maintained generally without this, But it may be said that it is contrary to the express word of God, and therefore an ill law; but if it were to appoint men to take Usury, it were to be disliked; but the difference is great between that, and permitting or allowing or suffering a matter to be unpunished—it may be said that nudum pactum non parit obligationem, but these must be somewhat given in consideration.

Let it be that there is nothing given of the lenders, yet there is somewhat simile, omne bonum exemplum, et omnis lex in se aliquid habet mali, for that somebody shall suffer thereby; we are not, quoth he, so straitned to the word of God, that every transgression should be punished here; every vain word is here for bidden by God, yet the temporal law doth not so utterly con demn it. As for the words of the Scripture, he said the Hebrews soundeth thus in answer of this question:-Qui non dat pecuniam suum ad morsum; so it is the biting and over-sharp dealing which is disliked, and nothing else. And this, he said, was the opinion and interpretation of the most famous learned man, Beza; and in these days of Bellarmine, and divers others, who say that the true interpretation of the Hebrew word is not Usura, but Morsus.

Dr. WILSON (Master of the Requests) said, that in a matter of so great weight he could not shortly speak, and acknowledg ing that he had thoroughly studied the matter, desired the patience of the House; and first he endeavoured to prove that the common state may be without Usury, then he showed how even men that have been ignorant of God and his laws, finding the evils thereof, by their laws redressed it, and utterly prohibited the use thereof, as the Athenians caused all the writings taken for interest money to be burnt: And the like did Lycurgus, by a law which he made, and seeing the fire, he said, he never saw so fair a flame as those books yielded. He then made a definition of Usury, showing it was taking of any reward or price or sum over and above the due debt, to make anything of that which is not mine, it is robbery forthwith upon the delivery of the loan money, it is not mine, and the law is that mutuum ever must be free; and here he showed the difference between location and mutuum, the one implying a contract, the other none, he remembered out of Ezekiel and other prophets sundry places of Scrip ture: and vouched St. Augustine's saying, that to take but a cup of wine is Usury, and damnable. This he seemed to say, in answer to that which had been before pronounced that it was not Usury, except it were morsus 1 A minor Court of Equity, abolished by 17 Car. 1, c. 10. See a quotation from the work on Usury by this honorable and learned member, ante, p. 24. Dr. Johnson mentions him as being celebrated for the extent of his acquirements. He showed that loss may grow by Usury. First to the Queen, then to the commonwealth; to the Queen, in this that men not using their own money, but finding great gain in Usury, do employ the same that way: so that her customs must decrease: to the commonwealth, that whoso shall give hire for money, is to raise the same on the sale of his commodity. All trades shall be taken away, all occupations lost, for most men seeking most ease and gratification, without hazard or adventure, will forth with employ their money to such use.

He shewed it to be hateful in the judgment of the common law, that an usurer was not admitted to be a witness, nor after his death to the common sepulchre of Christians. And for that, his discourse had been long, he inserted (as he said) this tale for recreation of the hearers. “In Italy,” quoth he, “a great known usurer being dead, the curate denied him the common place of burial; his friends made suit, the priest would not hear; in fine the suitors bethought them of a policy to bring it to pass that he might be buried in the church, which was this: the parson of the church did accus tomably use to carry his books daily from his house to the church on his ass; and the ass, by often going, needed not to be driven, but knowing his journey as soon as he was laden, would of himself go to the church door. They desired the parson his ass might carry the dead body, and where it should stay there it should be buried. To so fond a request the priest agreed. The body was laid on the ass, who feeling a greater burthen than he was used to bear, did run towards the town, never staying until he came to the common place of execution.”

This tale right merrily told, he again entered to his matter, and proved the condemnation of Usury and usurers, by the authority of the Nicene and divers other councils. He showed that the divines do call Usury a spider, a canker, an aspis, a serpent, and a devil. He showed how in nature the offences of Homicide and Usury are to be compared, and by examples proved the ruins of divers commonwealths, when such practices for gain are suffered, in that of the commonwealth of Rome, &c.

The manner of exchange now used in London, and how much abuse he showed, a thing in old time not practised but by the King, as in Edward the Third's time, when thereby the King obtained such treasure and such excessive wealth, that it was first wondered at, then guessed that it grew by the science of alchemy. He here showed the practice of the Low Countries of Germany; and namely the doings of Fulchers, to the very beggaring of great and mighty princes; he avouched the authority of Sir John Cheek" in that place, concerning that matter. And the mind of the ancient English law-writers, who say that the offence of Usury in life the bishop is to punish, but after his (the usurer's) death, his executors shall not have his goods, but they appertain ad fiscum. He concluded that in his conscience the offence should be judged felony.

Mr. BELL said, this matter being so ample had occasioned much speech, and was for cunning men a fit theme to show their wits and skills upon. Yet, saith he, it standeth doubtful what Usury is—we have no definition of it. And in our laws we have little written thereon, but this Usura non currat super infantem. And not much more to answer the objections where it is pre tended, that the not punishing of it by the temporal judge may seem to be an approbation of it, or to leave it to the church may seem as if we had no care concerning it; so that to put over an offence to another judge may not be so said, if to the Church it may appertain and they may well correct it.

He further shewed that the privilege of the Church is by statute upon this point to be expressed, namely in the statute de articulis cleri. He said we must not curiously search Cicero's paradoxes, and pronounce that peccata sunt aqualia, hoc est, quod omne peccatum, est peccatum: and no further.

But be every man according to his transgressions to make a reasonable pain, though he who stealeth two-pence doth as well 1 Sir John Cheek, M.P. was a learned Greek Professor, and subsequently Preceptor, Privy Councillor and Secretary of State to Edward VI.

steal as he who stealeth one hundred pounds; yet there are degrees, we have petit larceny and that which is greater; both faults, both to be punished, both to be hated: but difference there is in punish ing, even according to the greatness and smallness of the offence; for the one there is death, for the other not so. In the statute for punishing perjury, of this Queen, there are sundry degrees of perjury; not for that there is less perjury in the one than in the other, but that there is greater hurt occasioned in the one than in the other. In answer of the Scripture he said, the law of God is “If thou be stricken on the one cheek to turn the other; or “if thy cloak be taken away, to give also thy gown.” The literal sense is not to be taken, and as there is cause a reasonable construction must be. So he concluded that though it were a sin, yet it was to be punished here on earth, according to the good or bad, or rather according to the greater or lesser hurt which groweth thereby.

After which, one whose name is not expressed in the said anonymous journal, endeavoured the answer of Dr. Wilson, but with a protestation of his insufficiency; and then he observed how the divines have not agreed what is Usury, but for his own part he was to incline of the learned of these days, whose interpretation of literal sense and skill of the tongues do appear, which took that for no Usury which is without grievance.

He made a difference of the law of God concerning the divine majesty contained in the first table, and what is concerning man in the second table, saying, that nothing is to be said in that degree sin in itself; but by the circumstances; for so it is known whether it be good or bad. To kill is prohibited, yet sometimes not to kill is evil. Phineas killed, and was therefore commended, and thefts at times have been in Scripture approved; so likewise Usury is allowed of in the Scriptures; but that it might be used to strangers only, albeit the chosen children of God amongst themselves might not use it. But let be, whether it be utterly unlawful, or in some sort to be tolerated, it is a question; and until it be determined for the common commodity and main tenance, let it be as hitherto it hath been used.

And for the common sort of bargains of corn for cloth, silk for land, &c. &c. what they be, whether Usury or no, we know not. That all should be well it is to be wished; that all may be done well among men, is beyond hope; for we are no Saints, we are not of perfection to follow the letter of the Gospel, “Who striketh the one cheek, &c.” and this text, “Date nihil inde sperantes.” These are no express commandments, for the first the law of nature doth direct, and for the other also the same law in effect maketh defence. Surely there can be no sin where there is no breach of charity. To do that therefore to another which we would to ourselves, (the state, circumstance and case to ourselves considered,) is commendable or not to be reproved; if we ourselves be to borrow, who is it that would not in extremity give a little to save much money? It is said the Usurer doth or may grow rich who hath disliked in a commonwealth that there should be homines boni frugi? they may be considered and may be good, more than for one purpose. He further stood on this, that God did not absolutely forbid Usury, which surely, if it had been utterly ill, he would have done; and he added that the common laws were cruel in their censures, and wished they should be no more remembered than they are followed.

Serjeant LOVELACE argued to this effect, that Usury was of money only, protesting that he hated all kinds of Usury, but yet the greater the ill was the more and more greatly did he hate the same; but to prohibit it with so sharp and extreme a law as to lose all, he thought it would be the ground of greater covetous ness. Withal, he added, to prohibit the ill of covetousness in generality, were rash, void and frivolous, since that, the speech and the act itself is indefinite, comprehending all our actions and doings, and therefore as utterly vain to prohibit it, in vain words of generality. To prohibit drunkenness, pride, envy, surfeiting, &c. were somewhat in some particular sort, to do it in generality, albeit that we know it is in every way damnable, by the direct and written word of God, it were but folly. Of these great evils, (to the which man of his nature is born and made prone and too apt,) when we may not reach to the best, furthest and uttermost, we must do as we may say by degrees: as to say there shall be no deceit or slight in making of this or that kind of wares; that the husbandman shall till his arable land, and that he shall not keep above such a number of sheep: that there shall be no forestalling, regrating, &c. &c., and this in particularity, whereas otherwise generally amongst sinful men, to prohibit this sin or that sin, on a pain, may not be: but thus rather he that shall so sin shall suffer or lose so much; whereupon he concluded that there should be degrees in punishing Usury; as he that should take so much, to lose or be punished thus; he that shall take more, more deeply.

Mr. FLEETWOOD shewed that all these arguments long since with great skill, and very often, have been opened in this place, he said it was ingenui pudoris fateri per quem profeceris. Mr. Cheek, he said, argued and so far forth explained this matter, as the learner was thereby sufficiently informed, and the learned fully satisfied.

His papers of his speech he said he had not lost, and therefore could shew as much cunning as the cunningest which had bent or endeavoured himself thereunto. He said he had read the civil law, and of the common law somewhat, but how well he did understand it he would not promise ought: what Usury was, he said, he was not to learn; call it, if we list, proxima homicidio, or how else by a description he forced not much, for if there were not civil law it were not much to be accounted of for any certainty in the case thereby to be had: and the most ancient laws of this realm have taught us thereof somewhat, as the laws of.... do make to us mention of Usury; so do the laws made in Lucius' time, and those of Athelred, whereby it was ordained that Witches and Usurers should be banished. King Edward the saint referreth, and appointeth the offenders herein to suffer ordalium.

Then there was a great kind of Usury known, which was called Torus, and a lesser known by the name of. Glanville, in the book de legibus antiquis, maketh mention of an enquiry of Christian Usurers. In the Tower, he said, he had seen a com mission awarded to the Master of the Courts, (he named not what Courts,) to enquire of Usurers, and the punishment of them, he said, was whipping; he said further, by Scripture, he knew it was damnable, and therefore whether it was good or not, it was no good question.

For the matter of implication, whether by the pretence of the law it might be intended that it was in any sort allowed, he said it might be construed and compared there with the statute of tithes, where it is said, that till for seven years after heath-ground is broken up no tithe shall be paid; the construction hereupon is clear. He shewed also that Usury was malum in se, for that if some other transgressions her Majesty may dispense afore with, but for Usury, or to grant that Usury may be used, she possibly cannot. He further said that the words of an Act of Parliament are not ever to be followed, for that sometimes the construction is more contrary to what is written, as in the statute of Magna Charta, nisi prius homagium fecerit: and some statutes are winked at, by non-observation or otherwise, so that they seem to be no laws, even in those things which we practice most, as the statute of Gloucester, for the oath to be taken in debt and damages.

Mr. DALTON endeavoured to prove that Mr. Fleetwood mistook the Bill, but, in fancy, he mistook his arguments. Mr. NORTON shewed that all Usury is biting, as in the word steal is contained all kinds of injurious taking away of a man's goods; and as slandering is said to be murthering or homicide, so is Usury justly ever to be said biting, they being both so correlated and knit together that the one may not be without the other; he concluded, that since it is doubtful what is good, we should be mindful of the old saying, Quod dubitas ne feceris, and for that, Quod non ex fide est, peccatum est, therefore he wished that no allowance should be of it.

After which debate, the Bill was committed to Mr. Treasurer and others, but their names not mentioned.

APPENDIX C.

A DIGEST OF THE EVIDENCE TAKEN BEFORE THE Select Committee of the House of Commons, ON THE USURY LAWS, WITH THE NAMES OF THE WITNESSES EXAMINED, AND REPORT OF THE COMMITTEE, MAY 1818.

David Ricardo, Esq.— (Stock Exchange:) I THINK the Usury Laws are not beneficial; they are constantly evaded on the Stock Exchange, by lending on * * continuation. * * * Persons would be enabled to borrow on better terms but for these laws. * * * * * The abrogation of them, in time of war, would facilitate the negociation of Government loans. Government is not bound by the Usury Laws, for, in allowing discount for prompt payment, they frequently gave considerably more than 5 per cent. # # * * * The price of Government securities does not afford any good criterion of the market-rate of interest; their price is a good deal influenced by speculation, and by the anticipa tion of political and financial events. * * + The rate of interest is regulated by the demand and supply, in the same way as any other commodity. * * * Knows of no disadvantage whatever which could arise to the borrower from the abrogation of these laws; but, on the contrary, it would be to his advantage. * * # Conceives the repeal of the Usury Laws would not be quite so advantageous to the lender, because he may now exact a premium for the risk which the law imposes upon him. * * * * * * * The mercantile interest would be much benefitted by their abolition. George Frere, Esq.— (A Partner in the House of Forster, Cooke, and Frere, Solicitors, Lincoln's Inn,) Considers the Usury Laws injurious to the landed interest. * * * * * Persons frequently obliged to pay from 9 to 12 per cent. by granting annuities, owing to the restrictions on the rate of interest, who otherwise might have borrowed at 6 or 8 per cent. * * * * * The difficulty of raising money upon mortgage certainly renders landed property less desirable, and therefore must have impeded the sales, and reduced the value. * * * Has seen instances of loans of money upon fraudulent and pretended sales of goods. * * + * Knows of no good effects produced by the Usury Laws, except that when the market-rate of interest is about the same as the legal rate, they may be useful as an easy test of extortion; they are, however, of less value in that respect than formerly, because Courts are more in the habit, of late years, of closely investigating cases of fraud and extortion. s * * * * Believes there are many cases in which both respectable landed proprietors and mercantile men, and others, would find it worth while to borrow at double the rate of legal interest. Sir Samuel Romilly, M.P.— (Barrister-at-Law,) As far as my experience goes, I should say that the Laws of Usury are very injurious to the landed interest; the effect of them I think is, that when the proprietors of estates are under the necessity of raising money, at times when money is extremely scarce, they are obliged to raise it by granting of annuities, or in other modes extremely disadvan tageous to themselves. Edward Burtenshaw Sugden, Esq.— (Now Sir Edward B. Sugden, and Lord Chancellor of Ireland:) These laws are decidedly inimical to the interests of the landed proprietor. * * * * Has known annuities granted for three lives at 10 per cent. upon fee-simple estates, unincumbered and of great annual value in a register county. * * * Should not have deemed it wise to repeal the laws during a moment of agitation, but the repeal of them now would scarcely be felt. * * * * * * * The high rate of interest which can now be obtained in France, and which is paid in England, as regularly as our own funds, is a strong argument in favour of the repeal of these laws. * sk * * * In a commercial country like ours, with a large capital, Usury Laws must, I apprehend, always be injurious to the true interests of the community. If such laws merely follow the state of the market, they are at best unnecessary, if they disregard the state of the market they will inevitably them selves be disregarded. * * + * From the fluctuations in the value of money it is impossible to pass a law which shall at all times accord with the state of the market. * * * * The greater the penalty that is imposed on the breach of the law, the less the chance of the law being enforced. * * The Usury Laws are hourly broken, and the penalties rarely recovered. Mr. Thomas Nowlan,— (An Irish Solicitor:) I think the repeal of the Usury Laws would materially contribute to the transferring of British capital to Ireland, because I consider Ireland presents a most favourable field for the employment of capital. * * * * In Ireland, where labour is cheaper, the manufacturer could, in many instances, afford to pay more than the legal rate of interest in that country (6 per cent.) Mr. Anthony Goodeve,— (Solicitor to the Sun Fire Office:) The Sun Fire Office commenced lending money on annuities within the last three years. * * * They lent money upon security to persons upon fee-simple estates. * * * * # There was a great difficulty during the last war of procuring + * * * money on mortgage. The Office lent principally to the landed interest. Mr. Rowland Wimburn,— (Solicitor, London:) Of late years there has been no money to be obtained on mortgage, except trust monies, &c. * + * The Usury Laws, during the times of great pecuniary dis tress, occasioned many annuities to be granted, by persons having estates in fee-simple. AMr. N. M. Rothschild:— There are no Usury Laws in Holland, nor Hamburg, nor Bremen. * • * * * * Believes there is a law in Frankfort limiting the rate of interest to 5 per cent, on real security: but upon the dis count of bills there is no limit. * + + The average rate of discount on the best bills in Holland is from 3 to 4 per cent. * * * * * It does not vary much. * + * + * The Bank of Holland regulates the interest. * * * It never exceeds 5 per cent. * * * * The second and third rate bills are not to be discounted at all, unless by friends or relations. * * * * In commercial transactions the rate of interest is paid accord ing to the risk. * * * * * In France they cannot take more than 5 per cent. on mer cantile transactions, but in practice the law is evaded by giving a bonus before-hand; and there is no law to call upon a man to swear to the truth of such transactions. * - * * * * In the French funds there is no limit to the rate of interest, like the continuations in England, there is no limit, with this exception, that in France they are legal, and in England they are not. * * * * * * The general rate of interest in France is 5 per cent., because the Bank of France keeps everything in check, by lending money upon specie and upon bills, at a rate not exceeding 5 per cent. • * * * + * Thinks interest depends very much upon profits. * * * In France the rate of interest on land is 5 per cent., but it is evaded by a premium privately given. * * * In the commercial towns on the Rhine, as far as Cologne, interest regulates itself by Amsterdam, and further up it is regulated by Frankfort. * * * sk The rate of interest upon landed property and houses in Frankfort is from 4 to 5 per cent., but without any premium, but bills are discounted there at 4, 5, 6, and 7 per cent, according to the risk. % * sk *k * In Prussia the interest on landed property is 5 per cent, but upon bills and other obligations as much can be taken as can be got. * * * * * * In Austria, the Bank gives 6 per cent, and upon private bills it is the same as in Prussia. * * * The mode of raising money, by way of annuity, is unknown in all the preceding places. * * * * I am not aware of any country where the Usury Laws are not evaded. # * * # * * Is of opinion that the Usury Laws are ineffectual in keeping down the rate of interest. The witness here handed in a paper, as containing his opinion of the general operation of the Usury Laws in England.

The purport of which was to state that the subject was one of importance to British tradesmen, where the system is wholly different from that on the Continent. Bills upon such persons there being rarely seen, that he doubted whether the repeal of these laws would not expose the discounters of second and third rate bills in this country, to great oppression, and to a charge of three times the rate of interest charged to first and second rate houses, and that some protection should be afforded to such persons." he competition created by the formation of Joint Stock Banking Companies, and the several branch banks now rapidly spreading themselves throughout the country, must necessarily tend to obviate much of the inconvenience contemplated by the witness. Bills of an inferior description must at all times pay a higher rate of interest than what will be required for those of the first and second class.

Warner Phipps, Esq.— (Secretary to the Albion Fire and Life Insurance Company:) The Company are in the habit of lending money on annuities, confined, however, to persons having a life inte rest or estate in fee-simple. * * * * Terms were, from 1808 to 1816, on fee-simple estates, com monly 10 per cent., including insurance and property tax, on three lives named by the company, as grantees of the annuity. * + * * * For several years during the last war, mortgages were not to be obtained; the term mortgage had almost become obsolete. * * * * * But for the Usury Laws money would be borrowed on terms suited to the actual state of the market, and less burdensome than by way of annuity. Samuel Gurney, Esq.— (Bill Broker:) In 1815 there was very great difficulty in getting bills discounted at 5 per cent. * * * o Bankers and other monied capitalists would have been induced to discount, if it had been legal to take more than 5 per cent. * * * * * * Doubts whether merchants and other traders are fre quently driven to dispose of their goods at very disadvan tageous terms, to any material degree, except in times of such pecuniary pressure as 1815. * * * Does not hear the Usury Laws, complained of in the mer cantile body, with which he is connected. * * * Thinks the repeal of the Usury Laws in the small manufac turing towns in the Kingdom, where money is in fewer hands, might give the monied men great power, and be injurious to the community. * # * * * This witness subsequently changed his opinion, vide ante, p.208. Doubts whether, generally speaking, unrestrained competi tion would have the effect of producing plenty. * * * Considers the evasions of the Usury Laws but partial. * * The abrogation of the Usury Laws would have but little effect in the operations of Government in the money market, as they are not bound by the Usury Laws in their bargains with the public. * * + + & They would have to pay a higher interest. * * * Does not think the Usury Laws operate to prevent a pru dent mercantile man from raising money to an extent pro portioned to his natural means, as he considers no prudent man will borrow it at a high rate of interest to carry on speculations in trade beyond what he has means of his own to conduct. * * * * * * Conceives that if the value of money had been allowed to fluctuate according to its real value, the bankers now would have been forced to discount at 4 per cent. instead of 5, that is, to follow the course of the market; and the Bank likewise. Mr. James Gibbs,— (Attorney, Partner in the Firm of Howard and Gibbs, Cork Street, Burlington Gardens,) Has been principally concerned in transactions by way of annuity; seldom by way of mortgage. * * * Persons occasionally borrow by way of annuity, from deli cacy and other motives, and prefer borrowing by way of annuity, to mortgage through their own solicitors. * * * For the last seven years, has in general been able to make, for persons content with reasonable security, about 10 per cent. Thomas Kemble, Esq.— (West India Broker,) Has had an experience of thirty-two years. * * * The mercantile interest are occasionally exposed to very APPx. C.]
ON THE USURY LAWS. 233 great loss by the sale of their goods being precipitated, as it happens chiefly when there is a dull sale, and owners must make great sacrifices. *k * * * In my opinion there would not be a want of money, if it was not for the 5 per cent. interest. *: *k *k My opinion is, that it would be to the advantage of trade generally, if the Usury Laws were done away, as a little more interest might induce the broker not to press the sale of the goods too prematurely. " * * * Persons would always have the option of borrowing above the rate asked, or selling. Richard Preston, Esq., M.P.— (Barrister and Conveyancer:) As a general proposition, it may be stated that land is encumbered to one half its value, by portions, legacies, jointures, mortgage debts, and other charges. * * * With respect to the landed interest, nothing could be so injurious to them as to have the rate of interest without a limit, the value of land would fluctuate from 10 to 40 years purchase, and even more. * sk # * If there were no protection to the landed interest, the inte rest of money borrowed might become greater than the rental of the estates. *k * * Landed proprietors on mortgages look to permanency, while the trading interest look to fluctuation, and regard general results; if one speculation is unlucky, another may prove more fortunate, so on the balance they may prove gainers, though paying above 5 per cent. * * * * It is a speculative opinion, but I think one-fourth of the landed property of the kingdom is subject to a mortgage, either directly, by way of loan, or indirectly, by way of family charge. *k •k * *k Too much importance is attached to transactions in the metropolis, without regard to what takes place in the country. * * * >k *k On the best calculation I can form, I should conclude that one million of money was never advanced in any one year at annuity interest, and that six millions of money was never owing at one time on annuity transactions. sk * While the annuity laws remain in force there is a complete mode of evading the Usury Laws. * *k * The landed interest would be distressed, if the Usury Laws were done away with, as mortgages would be called in when money was scarce, in the expectation of a larger increased capital, and the landholder could not afford to compete with the funds. * >k # * If annuities could be regulated, the principal mischief to the landed proprietor would be obviated." # * * It is quite clear the system admits of improvement. * * Thinks the abrogation of the present restrictive laws would be most injurious to the great mass of the people. Nicholas Waren, Esq.— (Native of Holland:) Usury Laws certainly raise the rate of interest when it is above the legal rate. * # * Has known it frequently happen that persons possessed of goods are compelled by their necessities to place their goods in the hands of another merchant, borrowing money from him at 5 per oent., and making up an extra advantage to him, by allowing him a commission on the sale of the goods. John Tunno, Esq.— (Merchant:) In my opinion these laws are injurious to the com mercial world, as I think they prevent persons lending * The honourable Member brought in a Bill for the purpose, which, however, he did not proceed with. assistance to one another in times of distress, since they cannot, with safety, claim commission for the management of the business. Swinton C. Holland, Esq.— (Partner in the House of Messrs. Baring, Brothers, and Co.) Has a general knowledge of the various laws relating to interest in the various states of the continent of Europe. # * * *k * sk By the Code Napoleon 5 per cent. was allowed in Holland on mortgages, and 6 per cent. on commercial transactions; believes these laws are not regarded in commercial trans actions, and thinks the rate of interest varies according to the abundance or scarcity of money. * * *: At Leghorn the rate of interest is half per cent. per month, or 6 per cent. per annum; there is no law to prevent the taking of a higher rate of interest in mercantile transactions, and discount averages five-eighths to three-fourths per cent. per month, according to the abundance or scarcity of money. # * * * * At Genoa the legal rate is 4 per cent., but no law exists against taking a higher rate, where there is an agreement between the parties. * * sk *k At Cadiz and Spain the ordinary rate of interest is 6 per cent, but no law exists against taking a higher rate. * * In Portugal and Lisbon the legal rate of interest is 6 per cent., but frequently larger interest is taken, though it is contrary to law. *k * * *k In Russia the legal rate of interest is 6 per cent., but the * sk # *k, law is constantly evaded. At Trieste and Austria the legal rate of interest is 6 per cent., but the interest at Trieste varies from 6 to 12 per cent, according to the abundance or scarcity of money. * * * At Malta the customary rate of interest is 6 per cent., but during the war the interest was according to the demand for capital, from # to 23 per cent. per month, without any evil being experienced from it, as the borrower would not have borrowed, if he could not have made more by the use of the money than he paid for it. * * * In the United States of America the rate of interest is established by law, and varies in different states; ordinary rate is 6 per cent, but bills are constantly in the market, and discounted at the rate of # or 1 per cent. per month. •k *k * * * * The evasion of the Usury Laws are so common in America that, as far as regards mercantile transactions, they may be considered as nugatory. * *k * * A borrower of money has frequent opportunities of gaining 10 or 12 per cent., which opportunities are not known to the lender, so that he can afford to pay a high rate above the legal interest, and still derive a profit from the money he has borrowed; this is advantageous to all parties in a com mercial country like England. * # sk * Men in trade are driven to make forced sales, and by this means raise money at a much greater sacrifice. * * # I conceive the enterprize of this country would be increased by an increased facility in borrowing money. * * I consider the Usury Laws as an inconvenience at all times, and do not refer particularly to times of great difficulty. * * * * * I do not think the abrogation of the Usury Laws would produce great inconvenience to Government in their loans; because, during the war, Government were constantly breaking the Usury Laws themselves. * G In this country, where the abundance of capital is so great, and where the desire of lending money to Government is so conspicuous, Government, in my opinion, would always have the preference as borrowers. * * * As the security of Government is always better than that of individuals, they would still obtain money at a more advan tageous rate of interest than individuals can. * * I do not consider Government has the monopoly of the market; in an old rich country like this, there is a division of capital, as well as of labour, in different branches of trade; one set of capitalists employ their capital almost exclusively in operations of Government securities and with Govern ment, and that capital is not much diverted into other channels. * * * >k * I think the Usury Laws are susceptible of amelioration by change, because when an evil exists in an old country, you cannot do away with it at once, but must remove it by degrees, in order to be beneficial to the country; but if the country was in an earlier stage of progress, I should consider any laws relative to Usury as injurious in their effect. * * * * •k * >k * * I think that a revision could be advantageously made, with regard to the Laws as applicable to real property, and as applicable to commercial and trading transactions. * * * * # * * * * I think merchants, manufacturers, and tradesmen, of small capital, would be more benefitted by the repeal of the Usury Laws than great capitalists; because, I conceive that the small capitalists, and the persons of the description I have mentioned, have larger profits than what the larger capitalists enjoy; and, therefore, that they can afford to borrow money at a higher rate of interest than what the larger capitalist can, because they receive more for the use of their money. * * * * In times of distress, small capitalists are more likely to be affected in their credit by the operation of the Usury Laws than large capitalists; this remark applies to the smaller class of merchants and manufacturers throughout the country. - If the Usury Laws were abolished, that class of persons would obtain relief, which they now cannot do, by the competition of Bankers, or from money lenders, as it would turn more *k * sk * * capital into that channel, if the interest became exorbitant. * * * * * * The minds of commercial and legal men are frequently much distracted by doubts upon what is Usury, and what is not. John Thornton, Esq.-- (Lives and was born at Hamburg,) Hamburg belonged to the former German Empire; the legal rate of interest is 6 per cent. ; 6 per cent. is continued. * + *. * * * The interest is 6 per cent. in France. * * sk The laws are constantly evaded. * * * * But for bill transactions at Hamburg it is not called an evasion. * * * * * Strictly on bond or bills of parcels or merchandize, you cannot legally recover more than 6 per cent. ; in the dis counting of bills it is different. * * * The law is evaded by giving a bonus. * * * 6 per cent. is the legal interest on landed property in Ham burg; yet property of that description, and houses, being considered the best security, money is easily and generally obtained at the rate of from 4 to 5 per cent, per annum. Richard Blanshard, Esq. (Foreign Merchant,) Has been in extensive business since 1809. * * Where a merchant lends money to another upon goods, and also charges commission, the doubts respecting the legality of that commission have occasioned much embarrassment. * * * * *k * The repeal of the Usury Laws would be extremely bene ficial to the borrower, and to the lender. * * sk The borrower would, upon the whole, obtain money upon better terms than he is now obliged to submit to, when money is scarce, and the lender will, in such case, get the value of his money, without being obliged to have recourse to foreign countries for that purpose, or run risks of the extent and even existence of which he is generally un aWare. * * * * * He would then only pay the market-rate of interest, without paying for the risk or the disgrace which is supposed to be attached to modes of evading the statutes. Joseph Kaye, Esq.— (An Eminent Solicitor in the City of London:) The greatest doubts and difference of opinion have been entertained by the most eminent counsel at the Bar, as to the extent of commission given on the sale of goods and merchandise, on which advances have been made. + * * * * * I think the total repeal of the Usury Laws would be most beneficial to the public, both with respect to the commer cial and landed interest. * + * * When, in times of scarcity of money, the Government is obliged to pay much above 5 per cent., it cannot be ex pected that necessitous individuals would be able to borrow at 5 per cent., and the means to which they are driven to supply their necessities are extremely injurious and incon venient. * * * * * Those who are disposed to lend (above legal interest) always take care to be paid for the risk of evading the law, which consequently falls upon the necessitous bor roWer. * * sk * * * In times of great pressure, there is much unemployed money, or money employed in a way that does not pay the full amount of legal interest, which would be lent to neces sitous persons, if the lender could take what he would con sider an adequate rate of interest, commensurate with the risk of taking an insufficient security; for instance, if a man at those times, who has money lying in Exchequer Bills, not producing him more than 3 or 4 per cent., would be in duced to dispose of those Exchequer Bills, and lend the money upon a security, accompanied by some risk, pro vided he were legally paid a rate of interest that would compensate for the risk. * * * * Has known persons in embarrassed circumstances, who might have been prevented from stopping payment by rais ing money on security, not sufficient for the ordinary rate of interest, but adequate to an increased rate. * * Has known instances of commercial men ruined by forced sales. * * * * * * And owners of land and houses have in like manner sus tained severe loss by forced sales. sk * * In times of distress the Usury Laws, in general, are injurious to the landed interest. * * * # The repeal of the Usury Laws would not affect public loans. *k * * * * * My opinion is, there should be no fixed rate of interest at all. * * * * * * If the Usury Laws were abolished, it would be beneficial to those parts of the Empire where the highest rate of interest is paid; persons in Ireland are obliged to have recourse to the expensive mode of borrowing money, by way of annuity, in consequence of their not being able to borrow it on mortgage, even at 6 per cent., and by that means pay a much higher rate than they might obtain it upon, if the rate of interest was open. James Weston, Esq.— (A Solicitor of extensive practice in the City of London,) Thinks the restrictions upon the rate of interest inju rious to persons in trade, and owners of land. * * * Doubts have been entertained by professional men, as to commissions, where money has been lent to merchants. Edward Wakefield, Esq.—. (Land Surveyor,) Money could not be borrowed during the war on mort gage, land-owners were driven to raise money by way of annuities. * * * *k * Land-owners are exposed to severe losses, in many in stances, by not being able to raise money on particular emergencies. * * * * + I think on principle, like all other things, land would be more valuable by being freed from a monopoly price of raising money upon the security of it, but I do not know whether, practically, at this moment, it might add to the value of any one estate. For the Report of the Committee, vide p. 196. The following Petition and Report, relating to this question, extracted from the proceedings of the Legislature of one of the most enlightened States of North America, may not be uninteresting on the present occasion:

A PETITION FOR THE REPEAL OF THE USURY LAWS, FROM CERTAIN CITIZENS OF BOSTON, ADDRESSED TO THE LEGISLATURE OF MASS ACHUSETTS, IN THE UNITED STATES OF NORTH AMERICA.

A. D. 1834.

THE undersigned, citizens of Boston, having long experienced the inconveniences arising from the existing Usury Laws of Massachusetts, and being persuaded that the Honourable Legislature will, whenever the subject is properly brought before them, provide an adequate remedy for the evils complained of, have deemed it suitable and proper to appear as petitioners before that honourable body, setting forth in their petition the inconveniences to which the present laws give rise, and praying such a modification of those laws as will, in their opinion, remove the evil.

We, your petitioners, would therefore respectfully represent, that, in our judgment, the existing Usury Laws, so far as they limit the rate of interest, are founded on erroneous principles, and are at variance with the commercial spirit of the age. We think that every article of human traffic, whether money or any other thing, is alike subject to fluctuation of value, and that consequently the market price of them all is constantly liable to change.

We think that the price of money, or, more properly speaking, the price of its use, not less than the price of lumber, corn, tobacco, cotton, or any other great commercial staple, is, and must be regulated by the extent of the demand in the market, and that every attempt to fix the value and render the price of any of these articles invariable, is not only vain, but wholly unjust; and that it is, in the case of all these commodities, an equal infringement of private rights.

We are of opinion that six per cent. per annum is not the highest value to which money rises in the course of business, any more than it is the limit of profits made by traffic in any other commodity. But, on the contrary, that whenever the use of money, in the regular course of business, produces a large amount of profit, the value of that use is proportionately increased; and that at such times, and at all others, when money is scarce, and the demand for it great, as well as in cases where the risk of lending is very much increased, the real value of monied capital is, and the market price ought to be, vastly more than six per cent, being always in the exact compound proportion of the demand and risk.

We think that the law is wrong in imposing any restraint upon the absolute freedom of commercial transactions,—which, in order to be successful, must be left unfettered. In the case of money, which represents every other commodity, the evil is far greater than it could be in the case of any other article of traffic.

We know that, in former ages, when the laws, by a mistaken policy, forbade the receiving of any interest, condemning it as morally wrong, commerce and the arts were almost completely destroyed; and that, as the opinion of mankind changed on this subject, and the laws became more liberal, commerce revived and extended its transactions, and scattered wider and wider its blessings. And we are firmly persuaded that neither this nor any other department of human industry will attain its perfection, until men of business are as unrestrained in buying and selling the media of exchange, as in buying and selling any other mer chandise whatsover.

We are also of opinion, that while the present restrictions were intended to favour the interest of borrowers, they are even more injurious to borrowers than to lenders. But before demonstrating this proposition, we beg leave respectfully to express our conviction, that any attempt of the law to favour one particular class of citizens to the injury of any other class, is unjust, unconstitutional, and contrary to the spirit of freedom and equal rights; and although in this case the attempt is wholly unsuccessful, yet we cannot regard it, on that account, as less con trary to sound principles; and, both as borrowers and as lenders, we are equally hostile to the laws which sustain the attempt. We will now endeavour to show that, in their practical effect, these laws are injurious to borrowers of money. Whenever the demand for money is such in the market as to render it worth more than the established rate of interest, the borrower, however pressing his want, however strong his necessity, cannot raise the requisite loan; for the money owner is not compelled to part with his money at less than its worth; and he will not be so foolish as to lend, when he can find more profitable modes of investment; and the borrower, although willing to pay any premium for relief, must suffer all the pressure of his emergency without the possibility of obtaining assistance. Cases of this sort we have all experienced and observed very frequently; and we know them to form the most serious obstructions to success ful enterprize. So also we are aware that many instances occur, in which the personal character of the borrower is such as to render the owner of money reluctant to venture on his credit, at the usual rate;—while, did the law allow, the applicant would be glad to pay a premium proportioned to the risk. In this manner borrowers experience a compound evil, being unable to pay for the desired article according to its market value or their own necessities; and many a man is ruined, who, if he could have been allowed to offer seven or eight, or more per cent, would have realized a fortune. Can any reason be assigned why the privilege of charging interest proportionate to the risk, allowed on bottomry loans, should not be extended to every other species of loan'

The inconvenience experienced by money lenders, under the laws, though great, is yet less than that felt by borrowers, although these laws were intended for the borrowers' advantage. For, if the holders of money cannot lend at an interest equivalent to the value of the capital, they can invest that capital in those more profitable modes of traffic, which create the money demand. Thus to them only one avenue of business is closed, while to the borrower every resource is cut off. But it is certainly worthy of legislative attention, that even in a single particular, the pro cess of business is impeded; and legislators, as such, in our opinion, are to be held responsible for the losses that the com munity may suffer in the persons of its citizens, from this impediment.

The law is manifestly wrong in supposing that, if left unrestricted, money lenders would acquire an overgrown influence, and exercise an oppressive power. Nothing of this sort can be reasonably feared, while we have such a host of banks, and other monied corporations, in addition to individual lenders, all in the market, and all engaged in active competition. No inconve nience of this kind is ever complained of in the case of bottomry loans, where the lenders are not restricted by any statute. No evil is found to exist in the matter of insurance premiums, where the risk is uniformly the measure of the rate. Competition, as much in the pecuniary facilities required by business men, as in the facilities of travel by land and sea, determines the price of those facilities. And is there not as much probability that the public will be burthened with exorbitant stage and steam-boat fares, as with extortious charges for the use of money? We are firm in the opinion that all money transactions should be regulated, like those in other articles of trade, only by this spirit of competition; and that no greater evils would or could, in the present age, arise from the traffic in money being thus unrestricted, than are now felt from the perfect freedom allowed to traffic in other commodities. And it passes our understanding to see why that, whether money or goods, which is made the instrument of profit to him who uses it, should not, in all cases, be sold at its real value.

The evils that grow out of our laws are enhanced by the fact, that the rate of interest in a neighbouring State is one per cent. per annum higher than in Massachusetts. In consequence of this difference, by which a constant drain is produced from our market, a vast amount of capital, which, if they were fettered by no law, would remain in circulation amongst our fellow citizens, is drawn into the New York market, and totally lost to our borrowers, whose embarrassments are thereby increased. This evil is constantly and severely felt. But at particular times, as in the present pressure on the money market, its burden is especially heavy, and causes the greatest distress, particularly to those who are least able to sustain it, viz., business young men, whose capital is small, and of whom credit is the support. Were the present laws repealed, our own capital would remain in our own use, and the capital of the neighbouring States would flow in upon us in such a manner that our business would be greatly extended and increased. -

We would respectfully direct the attention of the Legislature to the numerous modes that have been devised for evading the laws; modes of transacting business, which, besides being circuitous and inconvenient, and besides taking away the sanction and protection of the law from those who engage in them, leaving no security but what is termed honour, thus increasing the risk, and, of course, the premium paid besides; these evils, which are loss of time, money, comfort, and security,— produce a fearful disregard of the laws, and establish a precedent of the utmost danger, while they tend to throw pecuniary negociations into the hands of the unprincipled and dangerous men. We need not specify the various methods by which the law is now evaded, and by which interest above six per cent is taken, in defiance of law, under the various names of “premiums,” “exchange,” and “commission;” for these are matters of notoriety, and need only be alluded to in order to secure the attention of the Legislature. So long as our laws remain un changed, it is in vain to hope for a better state of things. Such being the opinion of your petitioners, they respectfully pray that the Usury Laws may be so modified as to leave the rate of interest, like the rate of premiums on insurance, perfectly open to contract,-providing, however, that in all cases where interest accrues, and the particular rate has not been expressly agreed upon between the parties, the present shall remain the legal rate.

And your petitioners will ever pray, &c.

REPORT OF THE COMMITTEE.

In Senate, March 19, 1834.

THE Joint Select Committee, to whom was referred the petition of William Tuckerman and others, for a repeal of the Usury Laws, have considered the same, and respectfully REPORT;—That the petitioners, a large number of the most intelligent and respect able citizens of Boston, set forth in a concise, but distinct form, two principal reasons why the Usury Laws ought to be repealed. The first is, that they are, in themselves, inexpedient and im politic; the second, that they cannot be carried into effect, and by occasioning shifts and evasions of a more or less fraudulent character, create a great positive evil.

1. The value of money, like that of every other article, naturally regulates itself. If the rate of interest upon it, as fixed by law, coincide with the real market value, the law has no operation whatever. If, on the other hand, the rate of interest, as fixed by law, be lower than the real market value of money, then the effect of the law is to check the circulation of money, and thus impede and embarrass the natural course of trade. Thus, in the only case in which it can operate at all, the operation of the law is directly injurious.

2. Were it even admitted that Usury Laws are in themselves expedient and politic, experience shows that they cannot be carried into effect. The most general and pointed provisions that can be devised, are easily eluded by slight changes in the form of the transaction, and the law is accordingly, in practice, constantly evaded. But such evasions are, when strictly considered, of a fraudulent character, and tend to diminish the respect that ought to be entertained by the community for the laws under which they live.

Such are the principal reasons that are urged by the peti tioners as motives for the repeal of the Usury Laws. The Com mittee have no hesitation in saying that they entirely concur in these views of the subject. They might easily be sustained by strong arguments, and names of the highest authority, but at this late period of the session the Committee have thought it inexpedient to submit a long report. It is believed that the general considerations connected with the question are familiar to the public mind, and would gain nothing in force by being recapitulated in detail upon the present occasion.

These considerations apply equally to every branch of this subject, and would lead to a total repeal of the Laws against Usury. Believing, however, that any sudden and extensive changes in the laws are generally inexpedient, the Committee have preferred to recommend, at present, a repeal of the Usury Laws only so far as they apply to Promissory Notes and Bills of Exchange, payable not less than' months after date, and during the time for which they were originally made payable. The evils of the existing system are felt more strongly in refer ence to this class of contracts, than to any other, and it is there fore with them that it appears expedient to begin the reform. The Committee accordingly report a Bill to that effect.

Which is respectfully submitted.

For the Committee,

A. H. EVERETT.

"Three months, vide ante, p. 189, note.

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INDEX.

Action at Law — Actions for penalties may be brought by a stranger, and the borrower produced as a witness - May be brought to recover money paid to an Informer to compromise a qui tam action - - Limitations of actions on the statutes of Usury - Compounding actions qui tam - - - Evidence in - - - - - Can only be prosecuted in the superior Courts - Where it must be tried - - - - Acts of Parliament.—(See Statutes.) Agreement.—(See Contract.) 6. An agreement to pay more than legal interest avoids the security - - - - - Althorp, Lord, M.P., (late Chancellor of the Exchequer, Earl Spencer.) Favourable to a repeal of the Usury Laws 111 110 107 110 111 109 109 80 now 198, 199, 209, 212 Analysis— Of the Debates in Parliament - - - 193 Of ditto in the time of Queen Elizabeth, A.D. 1571 - 215 25() INDEX. Annuity— Page Grant of Annuity for life or lives not Usurious, if bonâ fide - - - - 66 Considered a purchase - - - 67 Clause of redemption does not vitiate - - 68 Nor Insurance - •- •- - 69 Nor if granted for four lives and the life of the longest liver - - • - 70 Annuities for years may be Usurious - - 72 Annuities considered evasions of the Usury Laws 69, 181 Appendices Appendix A. to the History of Usury - - 115 B. Parliamentary Proceedings - 193 - C. Digest of the Evidence taken before a Select Committee of the House of Commons - 225 Aristotle His opinion of Usury •- •- - - 120 Attorney— May be examined as a witness, where he has pre pared an Usurious Security - - 102 His receipt for more than legal interest for his client on an Usurious Security, binds the latter, who may be sued for Penalties - - 112 Attorney-General.—(See Scarlett.) Attwood, Mr. M. P. Supports Mr. Serjeant Onslow's Bill in the House of Commons - - - - - 204 Audita Querela— Not allowed where the party neglects to plead Usury - • - - - - 89 INDEX. 251 Bacon, Lord- Page His objections to the Usury Laws - - 172 In favour of two rates of interest - - - 176 Backadation A Stock Exchange Contract, held illegal - 55 Bank of England— May borrow money at a higher rate of interest than 5 per cent. - - - - - 31 Banishment— The Jews banished for being extortionate Usurers - 14 Banker— May take a reasonable compensation above 5 per cent. for his trouble - - - - 43 Confined, however, to Bankers, Brokers, Factors, &c. 46 Bankruptcy— Proceedings in Bankruptcy, where Usury has been alleged, considered oppressive by Lord Eldon - 99 A debt affected by Usury cannot be proved - 100 Where there is a discount agreed on for prompt payment, a creditor only allowed to prove for the original sum - •- -. 75 Baring, Mr. Alexander, M. P. (now the Right Hon. A. Baring, M. P., President of the Board of Trade.) His observations in Parliament - - 199, 202 Basil, St.— His horror of Usury - - - - 3 Description of the Usurer of the fourth century by - 115 Bennett, Mr.— - Approves of the repeal •- •- - 201 252 INDEX. Bentham, Mr. Jeremy- Page Writes in defence of Usury - - - 5, 163 Best, Lord Chief Justice (now Lord Wynford)– Delivers the opinions of the Twelve Judges in the House of Lords - - - - 162 Bills of Exchange— Once doubted how far legal to discount a Bill of Exchange - - - - – 29 Now clearly established in favour of Trade - 41 Discount, however, confined to Bills of Exchange and Promissory Notes - - - - 41 Acceptor may discount his own acceptance - 43 As to Bills of Exchange in the hands of third par ties, not privy to the Usury - - - 87 Bishops— Complain that the Justices had punished Usurers - 16 How answered - - - - 16 Distinction made between living and dead Usurers - 17 A clause introduced into an Act of Parliament to satisfy them - - - - - 27 Blanshard, Richard, Esq. (Foreign Merchant)— His Evidence before the Select Committee of the House of Commons - - - - 238 Blesens, Paul— His Epistles against Usury - - - 14 Blois, Peter of - His letter to the Bishop of Ely - - - 14 Bond,—(See Contract, Agreement.) - - - 90 INDEX. 253 Bottomry— Page Not Usurious on account of the Hazard - - 65 Otherwise, if the risk be trivial - - 66 No distinction between Loans on Bottomry and other Loans - - - - - 169 Bright, Mr., M. P.— Doubts the expediency of repealing the law - 206 Brokers— May take a Commission above 5 per cent for trouble, &c. above legal interest - - - 44 Of an Usurious Contract liable to a premunire - 144 Liable to fine and imprisonment for taking more than 5s. per cent. procuration money - - 143 Brougham, Mr. (now Lord Brougham, late Lord High Chancellor of Great Britain.) His statement in Parliament, as to the difficulty during the war of borrowing money at the legal rate, even upon good security - - 179 Recommends a change in the Usury Laws as safe and beneficial - - - - 183 - Burke— His opinion of the Usury Laws - - - 193 Canon Law— Usury forbidden by - - - - 2 Calcraft, Mr., M. P.— Opposed to the repeal of the Usury Laws, 197, 199,203 Castlereagh, Lord Suggests a postponement of the Bill - - 195 254 INDEX. Caursini Some account of - - •- - Rival the Jews in Usury - - - Their method of evading the law - • Excommunicated by the Bishop of London • Form of a Bond given to them - - Chancellors of the Exchequer.—(See Goulburn, Robinson, Vansittart, and Lord Althorp) All in favour of an alteration in the Usury Laws. Christian Usurers Page 11 11 12 12 122 Their ingenuity - - •- - 19 Take up the trade of Usury on the banishment of the Jews - - - - - 15 How punished - •- - - 17 Church— Had jurisdiction over Usurers - - 18 Its influence •- - - - 21 Civil Law— How Usury was punished by - - 17 Clergy Reasons for their being severe upon Usurers 16, 123 Their influence - - - - 21 Coke, Sir Edward— His reasons for the Jews being permitted to take Usury from strangers - - - 3 Commerce, Chambers of - Of Dublin, Glasgow, and Manchester, petition Par liament for the repeal of the Usury Laws - 174 INDEX. 255 Common Law– - Page Usury prohibited at common law - - - 1 How punished by - •- •- - - 17 Altered by statute - •- - - - 130 Commission Allowed to Bankers, Brokers, Factors, and others - 44 Committee of the House of Commons— Their report in favour of a repeal of the Usury Laws 196 Digest of Evidence taken before the - - 225 Report of the Committee of the Legislature of Massachusetts, one of the North American States - 247 Compound Interest— May be taken at law, by express agreement after the simple interest has accrued - - - 47 Not allowed in Equity - - •- - 48 Compounding Penal Actions— May be compounded by leave of the Court - 110. If compounded, without leave, it is penal, and com position may be recovered back - - 110. If Defendant obtain a rule to stay proceedings, on payment of Penalty, and neglect to do so, Court will grant attachment against him •- - 110 By a late rule, leave to compound shall not be given without notice to the proper officer - - 110 Construction The Statutes of Usury are to be construed strictly - 136 Contingency.—(See Hazard.) A contingency merely colourable–Usurious - 66 Otherwise, if the risk be bonâ fide - - 65. (And see Hazard.) 256 INDEX. Continuation Contract Page What - •- •- - – 55 Usurious - - - - – 55 Contract Foreign Contract carries interest according to the laws of the country where made - - 32 For more than legal interest avoids the security - 81 A contract good for the principal, and a subsequent Usurious one for the interest, the latter only affected - - - - 83 How to determine whether a contract be Usurious - 83 Perpetual Princely Contract of Commerce—what - 168 Courts— Will not presume Usury - • - 98 In what Courts Penalties for Usury may be reco vered - •- - - - 109 Curwen, Mr., M. P.— Opposed to the repeal of the Usury Laws - 204 Davenport, Mr., M. P.— His observations in Parliament - - 198, 205 Devices— To evade the law - •- *. - 125 Prohibited by Statutes, which are to be construed strictly for repressing Usury - - - 136 Discount.—(See Bills of Exchange.) Divines— Allude with satisfaction to the Clause disgracing Usury - - - - 28 INDEX. 257 Dry Exchange Page Explanation of - - - - 18 An evasion of the Usury Laws - - 18 This and other devices prohibited by ancient Statutes - - - - - 19 East Indies— 12 per cent. interest allowed in - - 32 Ecclesiastical Court Had jurisdiction over Usurers - - 18 Their jurisdiction saved by Statute 11 Henry VII., and by Statute 13 Elizabeth - - 130, 137 Ellis, Mr, M. P.– Presents a Petition from the Chamber of Commerce in Dublin in favour of a repeal of the Usury Laws - 203 Equitable Loan Bank Proposed to be established in London - - 168 Equity, Courts of— Relief in Equity differs from relief at Law -- 95 A Borrower may file a Bill in Equity before pro ceedings have been taken by the lender - - 96 Bill must offer to pay what is really due, otherwise demurrable - - - - 97 Courts will grant an injunction in certain cases - 96 Defendant not obliged to discover any Usurious Contract, unless Plaintiff agrees to waive the penalties - - - - 97 Court of Equity will afford relief and protection in cases not strictly Usurious, where there has been fraud, oppression, &c. - - - 98 Evidence Defendant, who pleads Usury, must prove it -. 101 S 258 INDEX. Evidence continued— Page An Attorney may be examined to prove an Usurious consideration for a Bond which he has prepared - 102 Where Defendant proves Usury in the negociation or concoction of a Bill, Plaintiff must prove him self a bonâ fide holder, without notice - 104 A Bankrupt, in certain cases, not a competent witness, though released by Defendant - - 103 The borrower may prove the whole transaction, though the principal be unpaid - - 111 Digest of the Evidence taken before a Select Commit tee of the House of Commons on the Usury Laws - 225 Exchange.—(See Dry Exchange.) Executor Paying an Usurious Bond of his Testator is a devas tavit, but Usury will not be presumed - - 93 Fathers— St. Basil, Lactantius, St. Chrysostom, Augustin, and most of the holy Fathers inveighed against Usury 4 Penton, Dr.— Writes against Usury - - - 25 His opinion of the distinction between biting and toothless Usury - - - - 7 Fitzwilliam, Earl.—(See Milton.) Flood, Sir Frederick– In favour of a repeal of the Usury Laws - - 195 Foreign Interest Statutes relating to - •- - 32, 145 In what cases it may be taken - - 32, 78 Plaintiff in an action allowed foreign interest to the signing of the judgment, but not after - - 77 INDEX. 259 Forfeiture— Page Usurers forfeit treble the value of the principal - 143 Usurious interest must be received before treble for feiture is incurred - - - 106 How forfeitures are recoverable - - 107 Pecuniary forfeitures go to the King and the Informer 144 Frere, George, Esq., Solicitor— His Evidence before the Select Committee - 226 Gibbs, Mr James, Attorney— His Evidence on the Usury Laws - - 232 Gilbert, Mr. D., M.P.— Thinks the Repeal of the Usury Laws will benefit the Landed Interest - - - - 205 Goodeve, Mr. Anthony, Solicitor to the Sun Fire Office— His Evidence before the Committee - - 228 Goods— Fictitious sales of, to evade the Usury Laws - 19 Where the Borrower is furnished with goods instead of cash •- 5 - - 34 Where the Borrower wishes to have Goods, with a view to gain by them - - - 36 Gordon, Mr. Robert, M.P.-- Cautions the House to beware of theories - 199 Goulburn, The Right Hon. Henry, Chancellor of the Exchequer— His opinion of Mr. Poulett Thomson's Bill - 209, 210 Grant, Mr. I. P., M.P.— Approves of the Repeal of the Usury Laws - - 196 Grenfell, Mr., M.P. Approves of the Repeal •- - - 201 S 2 260 INDEX. Gurney, Samuel, Esq., Bill Broker- Page His Evidence before the Committee - - 231 Candidly admits his change of opinion, after observing the effects of the panic in 1825 •- - 208 Harvey, Mr. D. W., M.P.— Suggests an alteration in the Penalties of the Usury Laws - - - •- - 211 IHazard Where the Interest only is hazarded - - 50 Where both Principal and Interest are risked - 51 Hazard must be real and not colourable - 50, 60, 61 Heathcote, Mr., M.P.– Opposed to the Repeal of the Usury Laws - 212, 213 Heron, Sir Robert, M.P.— Opposed to the Repeal of the Usury Laws - 199 Herries, Mr., M.P.— Thought the Laws should be modified - - 211 Heygate, Mr. Alderman, M.P. Obtains leave to bring in a Bill to alter the forfeitures for Usury •- • - - 205 Holland— Often referred to by speakers in Parliament - 184 Holland, Swinton C., Esq., (partner in the House of Messrs. Baring, Brothers, and Co.) His Evidence before the Committee - - 235 Hume, Mr. Joseph, M.P. Favourable to a Repeal of the Usury Laws - 197,201 Huskisson, Mr., M.P.— In favour of a Repeal - - - 202, 203 INDEX. 261 Irving, Mr., M. P.— Indictment— Page Generally considered an Indictment for Usury will not lie - -- - 112 Informer Receives half the Penalties inflicted by the Usury Laws - - - - - 144 Interest (East Indian)— 12 per cent. Interest allowed in the East Indies - 32 Interest (West Indian)— 6 per cent. Interest allowed in the West Indies - 32 Interest (Irish) 6 per cent. Interest allowed in Ireland - - 32 Interest Definition of - - - - - 2 Comparison of the rate allowed in various countries in ancient times - - - - 20 Rate of Interest reduced in France by Henry the Fourth - - - - 27 Considered by Hume to be the barometer of the State - - - - - - 29 Gradual reduction of the rate of Interest in England 27, 29 Fixed by Statute of 12 Anne, at 5 per cent. - 30 Interest—(See Landed.) Insurance Insuring the life of the granter of an annuity does not render it Usurious - - - 69 Suggestions by, in the House of Commons - 210 262 INDEX. Issue- Page An Action qui tam must be tried in the county where the Usury was completed - - - 109 Jewell (Bishop)— Writes against Usury - - - 26 Jews— Prohibited by the Mosaic Law from lending on Usury to their brethren - - - 2 Permitted to practice Usury with strangers - 2 Opinion of Michaelis on the Mosaic Law - 5 The Talmud and Mosaic Law compared - 7 First practice Usury in England - - 9 Much oppressed in consequence of that and of their religion - - - - 121 Banished for being extortionate Usurers - 14 Sometimes receive at the rate of 50 per cent. per annum interest on their loans - - 10, 124 Rivalled by the Caursini - - - 11 Extortionate conduct of the latter - - 12 Johnson, Dr. His opinion of the Usury Laws - - 162 Judges— Express their abhorrence of Usury - - 26 Differ in opinion as to allowing discount - 29, 41 Their opinions of the policy of the Usury Laws - 162 Kaye, Joseph, Esq. (an eminent Solicitor in the City of London) His Evidence before the Committee - - 239 Kemble, Thomas, Esq. (West India Broker)— His Evidence before the Committee - - 232 INDEX. 263 King (The)— Page Entitled to a Moiety of the Penalties in actions upon the Statutes of Usury - •- - 144 May sue two years after the completion of the offence - - - - 108 Landed Interest— Opposed to the abrogation of the Usury Laws - 177 Where both borrowers and makers of the Usury Laws - - - - - 182 Swift's description of the distress of the - 179 Lansdowne, Marquis of - T’resents a Petition from Manchester in favour of a Repeal of the Usury Laws, and supports it in the House of Lords. - - - - 207 Lease Lease of a House, by the lender to the borrower, at an excessive rent, sometimes a device to evade the Statute - - - • - 56 Limitation— Qui tam actions upon the Statutes of Usury, and in formation, must be brought within twelve calendar months - - - - 107 But the King may sue within two years - - 108 Defendant not limited to time in his defence - 108 Liverpool, Earl of - His observations in the House of Lords - - 207 Loan– Actual receipt of, necessary to render a contract Usurious - - •- - 106 Locke Considers the Usury Laws to be inexpedient - 175 264 INDEX. Lockhart, Mr., M.P.— Page Opposed to the Repeal - - - 204 Lombards— Practice Usury on the banishment of the Jews - 15 Maberly, Captain— Approves of the Repeal - - - 203 Mackinnon, Mr. W. A., M.P.— Introduces a Bill to Repeal the Usury Laws - 214 Mansfield, Earl of (Chief Justice of the Court of King's Bench)— His opinion of the Usury Laws - - 162 Massachusetts (one of the United States of North America)– Proceedings in the Senate of, relative to Usury - 242 Michaelis— His Commentaries on the Laws of Moses - - 6 Milton, Lord, M.P. (now Earl Fitzwilliam)— In favour of a Repeal of the Usury Laws - 214 Mistake— Usury cannot be incurred by mistake of a third person •- - - - 58 Scriveners mistake immaterial - - 58 Molière— His description of the Usurer of the Seventeenth Century - - - - 116 Monk, Mr., M.P. His opinion of the Usury Laws - - 200 Monte de Pieta– A proposal for, on a large scale, in London - 168 INDEX. 265 Mitchell, General- Page His observations in Parliament - - 196 Mortgage— Illegal to charge compound Interest on Mortgage - 47 Moses The Law of - - - - 2 Different opinions on the construction of - 4, 7 How explained by Michaelis - - - 5 Mosse— Writes against Usury - - - 26 Nature, Law of - Usury said to be against the Law of Nature by Aristotle and St. Basil - - - 3, 5 Newport, Sir John, M.P.— Speaks in favour of the Repeal of the Usury Laws - 194 Nolle Prosequi The Attorney-General may enter a nolle prosequi on behalf of the King, but only for the moiety of the penalties due to the Crown - - - 110 Notice— Leave to compound a penal action, now none given without notice to the proper officer - - 110 Nowlan, Mr. Thomas, (an Irish Solicitor)— His Evidence - - - - 228 Observations On the policy of the Usury Laws - - 160 O'Connell, Mr., M.P.— Disapproves of Mr. P. Thomson's Bill - - 212 266 INDEX. Onslow, Mr. Serjeant, M.P.— Page Brings in a Bill to abolish the Usury Laws - 183 His observations - 193, 194, 195, 196, 197, 198, 200,206 Ordinary Was empowered to compel the Usurer to make restitution - - - - 17 Paley, Dr.— His opinion of the policy of the Usury Laws - 161 Palmer, Mr. F.— Opposed to the repeal - - - 201 Palmerston, Lord, M.P.— Supports the repeal of the Usury Laws - – 210 Paris, Matthew— His hatred to the Caursini - - - 12, 123 Parliament— Analysis of proceedings in, relative to Usury - 193 Ditto, in the time of Queen Elizabeth, A.D. 1571, 215 (and see Massachusetts.) Parnell, Sir Henry, M.P.— His observations in Parliament - - 195, 204 Particeps Criminis— Borrower not considered a particeps criminis by Dr. Wilson, and other writers - - 24 Partnership— A retiring partner, who is liable to losses, may stipu late for what interest he pleases on his capital - 51 Otherwise, if merely a pretence - - 52 Pawnbrokers— Allowed to take more than 5 per cent. - - 166 Heavily taxed - - - - 167 INDEX. 267 Peel, Mr. M.P. (now the Right Hon. Sir Robert, First Lord of the Treasury,) Page Suggests a postponement of Mr. Serjeant Onslow’s Bill 207 Peter of Blois (Archdeacon of Bath)— His Letter to the Bishop of Ely - - 14 Penalty Common Informers may sue for Penalties under the Statute - - - - - 107 Difference between Interest and Penalty - 77 Penalties for Non-payment - - - 76 When bonà fide, not Usurious - - - 76 Penalties under the Statute may be recovered by action of debt - - - - 107 Penalties not incurred until Usurious Interest be actually taken - - - - 106 Limitation of actions for Penalties - - 107 Compounding actions for Penalties - – 110 Phipps, Warner, Esq. (Secretary to the Albion Fire and Life Insurance Company.) IHis Evidence before the Select Committee - 231 Post Obit— Post obit Bonds not Usurious - - - 62 Relievable against in Equity - - - 64 Preambles of Statutes.—(See Statutes.) Presidents of the Board of Trade.—(See Huskisson, Thomson and Baring.) All in favour of repealing the Usury Laws. Preston, Richard, Esq., M.P. (Barrister and Conveyancer)— His Evidence before the Committee - - 233 Procuration Money— Must not exceed 5s. per cent, on Loans - - 144 * 268 INDEX. Promissory Notes.—(See Bills of Exchange.) Page Prompt Payment— Discount for prompt payment not Usurious - 73 Not allowed in bankruptcy, seller being obliged to prove for the real price, minus the discount - 75 Proof Who may prove a contract to be Usurious - 102, 111 Protheroe, Mr., M.P.– Doubts the propriety of repealing the Usury Laws 197 Punishment— Usurers, how punished formerly - - 17 Pardon only granted them conditionally - 16 By the Statute of Anne - - - 143 Purchase An annuity considered a purchase - - 67 Redemption— Clause of redemption does not render an annuity Usurious - - •- - 68 Relief, against Usury At law - - - - - 93 In equity •- - - - 95 In bankruptcy - • * - - 99 Rent Excessive rent may be made a cover for Usury - 56 Report— Report of the Select Committee of the House of Commons on the Usury Laws - - 196 Respondentia.—(See Bottomry.) INDEX. 269 Ricardo, Mr., M.P.— Page His opinion in Parliament • - - 199 His evidence before the Committee - - 225 Robertson, Mr., M.P.— Opposed to the repeal of the Usury Laws - 202, 204 Robinson, Mr., M.P. In favour of a repeal of the law - - 210 Robinson, Right Hon. Frederick, (Chancellor of the Exchequer, now Lord Goderich)– Conceived it a proper time to alter the Law - 202 Roman Law— Its severity against Usurers - - - 17 Rate of interest allowed by - - 20 Romilly, Sir Samuel, M.P.— His evidence before the Committee •- - 227 Rothschild, Mr. N. M.— His evidence before the Committee - - 229 St. Basil– His horror of Usury |- - - 3 Description of the Usurer of the fourth century by - 115 Sale.—(See Goods.) Scarlett, Sir James, M.P. (late Attorney-General, now Lord Abinger, and Lord Chief Baron of the Court of Exchequer.)– Approves of Mr. Poulett Thomson's Bill - 212, 213 Scrivener– Mistake by, does not vitiate a security - - 58 Sebright, Sir John— Supports the Bill for repealing the law - • 203 Security.—(See Contract.) Page Founded on Usury, in the hands of third parties - 86 A substituted security for one usurious is void - 84 Otherwise, if what is usurious be deducted - 84 Sheridan– His description of the Usurer of the 19th century - 119 Smith, Mr. John, M.P. Approves of Mr. Serjeant Onslow's Bill 200, 202, 206 Smith, Dr. Adam.— Opposed to the Repeal of the Usury Laws - 161 Subsequently changes his opinion •- - 161 Solicitor-General,—(See Wetherell.) South Sea Company— May borrow at a higher rate than 5 per cent - 32 Spencer, Earl.—(See Althorp.) Statutes.— 3 Hen. 7, c. 5, (Usury) - - - 125 3 Hen. 7, c. 6, (Usury) - - - 127 11 Hen. 7, c.8, (Usury) - - - 128 37 Hen. 8, c 9, (10 per cent.) - - 130 5 & 6 Edw. 6, c. 20, (Usury) - - - 133 13 Eliz. c. 8, (10 per cent) - - - 135 39 Eliz. c. 18, s. 31 & 32, (continues 13 Eliz. c. 8) - 137 21 Jac.1, c. 17, (8 per cent.) - - 138 12 Car. 2, c. 13, (6 per cent.) - - 140 12 Ann. c. 16, (5 per cent.) - - 142 3 Geo. 1, c. 8, s. 39 (Bank) - - - 144 3 Geo. 1, c. 9, (South Sea Company) - - 32 13 Geo.3, c. 63, (East India Company) - - 145 14 Geo.3, c. 79, (West India and Irish Interest) - 147 58 Geo.3, c. 90, (Indorsees) - - 87 Statutes, continued— Page 1 & 2 Geo.4, c.51, (Colonial Interest) - - 151 3 Geo. 4, c. 47, (Colonial Interest) - - 153 3 & 4 Wm. 4, c.98, s. 7, (Discounts) - - 155 How evaded - - - - 169 Stock– Occasionally used as an evasion of the Usury Laws 53 Where the lender may lose, not usurious on account of the contingency - - - 54 Otherwise, if the lender is sure to gain - – 55 Sugden, Mr. (now Sir Edward, M.P. and Lord Chancellor of Ireland,) Objects to the total repeal of the Usury Laws 209,210,212 His Evidence - - - - 227 Author of the Annuity Act, and other useful Statutes 190 Surety A Security for indemnifying a Surety for joining in another Security is good, though the original Security is usurious •- - - 88 Otherwise, if the Surety knows the first Security to be usurious, and neglects to plead it - - 90 Swift– Complains of the distress of the Landed Interest - 179 Sykes, Mr., M. P. In favor of the repeal of the Usury Laws - 204, 213 Thomson, Mr. Poulett, M.P. (now the Rt. Hon. P. Thomson, late President of the Board of Trade.) Presents a Petition from the Merchants in London in favor of the repeal of the Usury Laws - 207 His Speeches in Parliament - 208, 210, 211, 212 Brings in a Bill on the subject - - 209 Thornton, John, Esq. (of Hamburg.) Page His Evidence before the Committee - - 238 Trade—(See Partnership.) Increase of Trade diminishes the complaint of Usury 27 Reducing the rate of interest found beneficial to Trade 27 Discounting Bills of Exchange, &c. allowed in favor of Trade - - - - 41 Present Laws injurious to the Trading Interest - 173 Usage of—(See Prompt Payment.) Treble Value—(See Forfeiture.) Tunno, John, Esq. (Merchant.) Evidence of, before the Committee - - 234 Usurer, His conduct described by St. Basil - - 115 Description of his person by Blaxton •- - 28 Comparison between the Usurers of the 4th, 17th, and 19th centuries, as described by St. Basil, Molière, and Sheridan - - - 115 Usury Derivation of - - - - 1 Definition of - - - - 2 Stigmatized by ecclesiastical writers, as contrary to the divine law - - - - 2 Punished by the canon law, as sinful - - 2 The Jews prohibited taking Usury of their brethren - 2 But permitted to take it of strangers - - 2 Reasons for the distinction - - - 3 Objection, on account of the natural barrenness of money • - - - 3 How answered - •- - - 4 Said to be contrary to the Mosaic Law - - 5 Usury, continued— Page New Testament seems not to forbid it - - 6 Divines differ on the subject - - - 7 Opinion of Grotius - - - 8 Considered by the Romans a crime second only to murder -- - - 17 Judges express their abhorrence of the practice - 26 Forbidden by Statute Law - - 18, 22 Subsequently tolerated by Statutes - - 20 Prejudices against it gradually wear away - 29 Usury Laws always evaded - - - 19 Consequences of Usury - - - 90 Observations upon, and suggestions for their amend ment - - - | - - 160 Digest of the Evidence taken before a Select Com mittee of the House of Commons, with their Report thereon - - - 196, Analysis of Proceedings in Parliament relative to the subject - - -- Wansittart, Mr. (Chancellor of the Exchequer, now Lord Bexley,)— Doubts whether the country be prepared for a change in the Usury Laws - - - Venue The Venue, in Actions on the Statutes of Usury, is local, and must be laid in the county where the offence was completed - - - If cause of Action arise in two different counties, the Venue may be laid in either - - Void–– All Securities founded on an usurious consideration or agreement, are void - - - T 225 193 194 109 109 90 Wakefield, Edward, Esq. (Land Surveyor)— Page His Evidence before the Committee - - 241 Warin, Nicholas, Esq. (Native of Holland.)— His Evidence before the Committee • - 234 Weston, James, Esq. (Solicitor.)— His Evidence before the Committee - - 240 West Indies 6 per cent. Interest allowed in the West Indies on Mortgages, &c. - - - 32 Securities relating to, may now be executed in this country •- - * - 154 Wetherell, Sir Charles, M.P. (late Solicitor-General,)— Opposes the repeal of the Usury Laws - 206, 212, 213 Wilson, Mr. Thomas, M.P.— In favor of repeal - • • - 200 Wilson, Dr.— Opposed to the repeal of the Statute of Edward 6th - • •- - 23, 25, 217 Winburn, Mr. Rowland, (Solicitor,)— His Evidence before the Select Committee - 228 Witness— Who may be a Witness for Defendant in a plea of Usury, when Action brought to recover penalties - 102, 112 Wrottesley, Sir John, M.P.— Opposed to the repeal of the Usury Laws - - 201 Wynn, the Right Honourable W. W., M.P.— In favor of a repeal of the Usury Laws - - 203 States that Ministers are in favor of a repeal - 206 Wynford, Lord,—(See Best.) When Lord Chief Justice of the Common Pleas, delivers the opinion of the Judges, as to the supposed policy of the Usury Laws - - 162 ERRATA. Page 2, note2.jor 20& 21 v. read 19 & 20 v. for Lev. 360, read Lev. 36 & 37. yyy for Psalms 15; 50, read 15, 5.,yyy Page 5, note 2, for Exodus, v.24, read v. 25.yyy Page 6, note 1, for St. Luke, c. 19, v. 22, read v. 23. Page 21, note, for Hayward, p. 218, read 318. page 205, note 2, for £130. read £120. yyy for a little more, read a little less. WESTMINSTER: PRINTED BY GEORGE HAYES, 13, Dartmouth Street.