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And to that I think, generally speaking, one may say, it is manifest it cannot. For since it is impossible to make a law, that shall hinder a man from giving away his money or estate to whom he pleases, it will be impossible, by any contrivance of law, to hinder men, skilled in the power they have over their own goods, and the ways of conveying them to others, to purchase money to be lent them, at what rate soever their occasions shall make it necessary for them to have it; for it is to be remembered, that no man borrows money, or pays use, out of mere pleasure: it is the want of money drives men to that trouble and charge of borrowing; and proportionably to this want, so will every one have it, whatever price it cost him. Wherein the skilful, I say, will always so manage it, as to avoid the prohibition of your law, and keep out of its penalty, do what you can. What then will be the unavoidable consequences of such a law?
1. It will make the difficulty of borrowing and lending much greater, whereby trade (the foundation of riches) will be obstructed.
2. It will be a prejudice to none, but those who most need assistance and help; I mean widows and orphans, and others uninstructed in the arts and management of more skilful men, whose estates lying in money, they will be sure, especially orphans, to have no more profit of their money, than what interest the law barely allows.
3. It will mightily increase the advantage of bankers and scriveners, and other such expert brokers, who, skilled in the arts of putting out money, according to the true and natural value, which the present state of trade, money, and debts, shall always raise interest to, they will infallibly get what the true value of interest shall be above the legal; for men, finding the convenience of lodging their money in hands, where they can be sure of it, at short warning, the ignorant and lazy will be forwardest to put it into these men's hands, who are known willingly to receive it, and where they can readily have the whole, or part, upon any sudden occasion, that may call for it.
4. I fear I may reckon it as one of the probable consequences of such a law, that it is likely to cause great perjury in the nation; a crime, than which nothing is more carefully to be prevented by law-makers, not only by penalties, that shall attend apparent and proved perjury, but by avoiding and lessening, as much as may be, the temptations to it; for where those are strong, (as they are, where men shall swear for their own advantage) there the fear of penalties to follow will have little restraint, especially if the crime be hard 'to be proved: all which, I suppose, will happen in this case, where ways will be found out to receive money upon other pretences than for use, to evade the rule and rigour of the law: and there will be secret trusts and collusions amongst men, that though they may be suspected, can never be proved, without their own confession. I have heard very sober and observing persons complain of the danger men's lives and properties are in, by the frequency and fashionableness of perjury amongst us. Faith and truth, especially in all occasions of attesting it, upon the solemn appeal to heaven by an oath, is the great bond of society. This it becomes the wisdom of magistrates carefully to support, and render as sacred and awful, in the minds of the people, as they can. But, if ever frequency of oaths shall make them be looked on as formalities of law, or the custom of straining of truth, (which men's swearing in their own cases is apt to lead them to) has once dipped men in perjury, and the guilt, with the temptation, has spread itself very wide, and made it almost fashionable in some cases, it will be impossible for the society (these bonds being dissolved) to subsist. All must break in pieces, and run to confusion. That swearing in their own cases is apt by degrees to lead men into as little regard of such oaths, as they have of their ordinary talk, I think there is reason to suspect, from what has been observed, in something of that kind. Masters of ships are a sort of men generally industrious and sober, and I suppose may be thought, for their number and rank, to be equally honest to any other sort of men; and yet, by the discourse I have
had with merchants in other countries, I find that they think, in those parts, they take a great liberty in their custom-house oaths, to that degree, that I remember I was once told, in a trading town beyond sea, of a master of a vessel, there esteemed a sober and fair man, who yet could not hold saying, "God forbid that a custom-house oath should be a sin." I say not this to make any reflection upon a sort of men, that I think as uncorrupt as any other, and who, I am sure, ought in England to be cherished and esteemed, as the most industrious and most beneficial of any of its subjects: but I could not forbear to give this here, as an instance how dangerous a temptation it is to bring men customarily to swear, where they may have any concernment of their own. And it will always be worthy the care and consideration of law-makers to keep up the opinion of an oath high and sacred, as it ought to be, in the minds of the people: which can never be done, where frequency of oaths, biassed by interest, has established a neglect of them; and fashion (which it seldom fails to do) has given countenance to what profit rewards.
But that law cannot keep men from taking more use than you set (the want of money being that alone which regulates its price) will perhaps appear, if we consider how hard it is to set a price upon wine, or silks, or other unnecessary commodities: but how impossible it is to set a rate upon victuals, in a time of famine; for money being an universal commodity, and as necessary to trade as food is to life, every body must have it, at what rate they can get it; and unavoidably pay dear, when it is scarce; and debts, no less than trade, have made borrowing in fashion. The bankers are a clear instance of this: for some years since, the scarcity of money having made it in England worth really more than six per cent. most of those that had not the skill to let it for more than six per cent. and secure themselves from the penalty of the law, put it in the bankers' hands, where it was ready at their call, when they had an opportunity of greater improvement; so that the
rate you set, profits not the lenders; and very few of the borrowers, who are fain to pay the price for money, that commodity would bear, were it left free; and the gain is only to the banker: and should you lessen the use to four per cent., the merchant or tradesman that borrows would not have it one jot cheaper than he has now; but probably these two ill effects would follow: first, that he would pay dearer; and, secondly, that there would be less money left in the country to drive the trade: for the bankers, paying at most but four per cent. and receiving from six to ten per cent. or more, at that low rate could be content to have more money lie dead by them, than now, when it is higher: by which means there would be less money stirring in trade, and a greater scarcity, which would raise it upon the borrower by this monoply; and what a part of our treasure their skill and management, joined with others' laziness, or want of skill, is apt to draw into their hands, is to be known by those vast sums of money they were found to owe, at shutting up of the Exchequer: and though it be very true, yet it is almost beyond belief, that one private goldsmith of London should have credit, upon his single security, (being usually nothing but a note, under one of his servants' hands) for above eleven hundred thousand pounds at once. The same reasons, I suppose, will still keep on the same trade; and when you have taken it down by law to that rate, nobody will think of having more than four per cent. of the banker; though those who have need of money, to employ it in trade, will not then, any more than now, get it under five or six, or as some pay, seven or eight. And if they had then, when the law permitted men to make more profit of their money, so large a proportion of the cash of the nation in their hands, who can think but that, by this law, it should be more driven into Lombard-street now? there being many now, who lend them at four or five per cent. who would not lend to others at six. It would therefore, perhaps, bring down the rate of money to the borrower, and certainly distribute it better to the advan
tage of trade in the country, if the legal use were kept pretty near to the natural; (by natural use, I mean that rate of money, which the present scarcity of it makes it naturally at, upon an equal distribution of it) for then men, being licensed by the law to take near the full natural use, will not be forward to carry it to London, to put it into the banker's hands; but will lend it to their neighbours in the country, where it is convenient for trade it should be. But, if you lessen the rate of use, the lender, whose interest it is to keep up the rate of money, will rather lend it to the banker, at the legal interest, than to the tradesman, or gentleman, who, when the law is broken, shall be sure to pay the full natural interest, or more; because of the engrossing by the banker, as well as the risque in transgressing the law: whereas, were the natural use, suppose seven per cent. and the legal six; first, the owner would not venture the penalty of the law, for the gaining one in seven, that being the utmost his money would yield nor would the banker venture to borrow, where his gains would be but one per cent., nor the monied man lend him what he could make better profit of legally at home. All the danger lies in this; that your trade should suffer, if your being behind hand has made the natural use so high, that your tradesman cannot live upon his labour, but that your rich neighbours will so undersell you, that the return you make will not amount to pay the use, and afford a livelihood. There is no way to recover from this, but by a general frugality and industry; or by being masters of the trade of some commodity, which the world must have from you at your rate, because it cannot be otherwhere supplied.
Now, I think, the natural interest of money is raised two ways: first, When the money of a country is but little, in proportion to the debts of the inhabitants, one amongst another. For, suppose ten thousand pounds were sufficient to manage the trade of Bermudas, and that the ten first planters carried over twenty thousand pounds, which they lent to the several tradesmen and inhabitants of the country, who living above their gains, had spent ten thousand pounds of this money, and it