diff options
Diffstat (limited to 'old/62459-0.txt')
| -rw-r--r-- | old/62459-0.txt | 1053 |
1 files changed, 0 insertions, 1053 deletions
diff --git a/old/62459-0.txt b/old/62459-0.txt deleted file mode 100644 index 921ee85..0000000 --- a/old/62459-0.txt +++ /dev/null @@ -1,1053 +0,0 @@ -The Project Gutenberg EBook of Usury, by S. H. Crittenden - -This eBook is for the use of anyone anywhere in the United States and most -other parts of the world at no cost and with almost no restrictions -whatsoever. You may copy it, give it away or re-use it under the terms of -the Project Gutenberg License included with this eBook or online at -www.gutenberg.org. If you are not located in the United States, you'll have -to check the laws of the country where you are located before using this ebook. - -Title: Usury - Interest, Premium and Discount - -Author: S. H. Crittenden - -Release Date: June 23, 2020 [EBook #62459] - -Language: English - -Character set encoding: UTF-8 - -*** START OF THIS PROJECT GUTENBERG EBOOK USURY *** - - - - -Produced by deaurider, David E. Brown, and the Online -Distributed Proofreading Team at https://www.pgdp.net (This -file was produced from images generously made available -by The Internet Archive) - - - - - - - - - - USURY: - OR - INTEREST, PREMIUM AND DISCOUNT. - - A LECTURE - DELIVERED - BEFORE THE STUDENTS - OF - CRITTENDEN’S - Philadelphia Commercial College, - - BY - S. H. CRITTENDEN, - Attorney at Law, - CONSULTING ACCOUNTANT AND PRINCIPAL. - - PHILADELPHIA: - RINGWALT & BROWN, STEAM-POWER BOOK AND JOB PRINTERS, - Nos. 111 & 113 SOUTH FOURTH STREET. - 1863. - - - - - USURY: - OR - Interest, Premium and Discount. - - A LECTURE[A] - DELIVERED BEFORE THE STUDENTS OF - CRITTENDEN’S PHILADELPHIA COMMERCIAL COLLEGE, - - BY - S. H. CRITTENDEN, ATTORNEY AT LAW, - PRINCIPAL. - - -Our subject to-day is USURY. - - -We will first speak of this subject in its direct relation to -Book-Keeping. That is, as to its treatment under different forms, on -the Ledger, since this is in reality the phase in which it is of most -importance for us to consider it. Afterwards we will glance at the -matter in the view of utility, economy and legality. - -The ledger titles which embrace this subject, are Interest, Discount -and Premium. These are all often, and indeed generally, embodied in one -account, headed Interest, yet they are radically different divisions of -the account, both in their nature and manner of computation; although -all tending to one point, when placed upon the merchant’s books, viz: -to add to his total gains or losses. - -McCullock’s Commercial Dictionary has the following definitions of -Interest and Discount: - -“_Interest_, is the sum paid by the borrower of a sum of money, or of -any sort of valuable produce, to the lender, for its use.” - -“_Discount_, is an allowance made on account of an immediate advance of -a sum of money, not due till some future period.” - -_Premium_, according to Webster’s Dictionary, is “a bounty, or -something offered or given for the loan of money, _usually_ a sum -beyond the interest.” - -These definitions, though not full, will yet serve as a foundation -on which to construct an explanation that may make these terms more -easy of comprehension. You perceive that in order to apply the -definition of Interest, which I have quoted, we must look upon every -person who is indebted to another, as a borrower; that is, as having -in his possession, certain property which belongs of right to that -other person; and for retaining the use of which he must pay him an -equivalent. If you consider in this light all transactions in which -Interest is demanded and paid, this portion of the subject will perhaps -be sufficiently plain without additional comment. - -It is in relation to the second division of the account that most -confusion usually arises. There are not less than three distinct -transactions, which are all included in the usual language of business -men, under the single term _Discount_. They are: - -1st. When a deduction is made for payment of a note or account before -due; 2d. When a per centage is taken off from a sale, in consideration -of ready money; 3d. When money is remitted from one country to another, -at an additional expense or at a loss. - -If at an expense, it is sometimes called Premium. - -For illustration, under the 1st division; suppose A holds a note -against B for $500 due in four months, and B comes to-day and proffers -payment; the custom is, for A to deduct the interest on $500 for four -months, from the face of the note; and to accept the balance as payment -in full: thus considering the use of the remainder of the amount, -sufficient to compensate for the deficiency in the payment of the face -of the bill. But this is manifestly incorrect, if we take the existing -law of this State, which declares the value of the money to be but six -per cent. per annum, to be founded on just principles. For the interest -on the remainder of the note, after deducting the interest on the face -of the note therefrom, is not sufficient at the same rate per cent. to -make up the original sum. So that B, by paying thus in advance, secures -a larger rate of interest than is lawful. Yet this is the usage, and -it is an old adage, and well established, that _usage makes law_. This -is what is termed _Bank Discount_. _True Discount_, is such a sum, as, -when deducted from the original debt, the interest on the balance will -just equal the amount deducted. The method of ascertaining this is by -proportion, or, as it is called in arithmetics, _rule of three_. Thus -we would say, as the amount of $100. and interest for the given time -and rate is to the interest on $100. for the same time and rate, so -is the total sum to the amount of discount to be deducted therefrom. -Stated thus,-- 102.00 : 2.00 :: 500.00 : the answer. - -2d. If C sells goods to D and within a certain limited time, usually -among the jobbing trade of our city 30 days after purchase, D pays for -them in cash, usage again allows him a deduction from the face of the -invoice of say 5 per cent. This is also _called_ Discount, but it is -not properly such. For it is only a deduction of such a proportion or -per centage of the bill, on fulfillment of certain conditions; while -Discount is reckoned with reference to time to run, as well as rate per -cent.; in fine, Discount is simple Interest paid beforehand. - -3d. The term _Discount_ is also applied to that sum which is advanced -beyond or deducted from the amount of a debt, in remitting money from -one country to another. - -Thus, if I wish to remit a sum of money to any foreign country, it is -needful for me to ascertain what is the difference of valuation at the -present time between money of the denominations used and ordinarily -obtainable here, and those in the country to which the remittance is -to be made. This valuation I suppose you all understand is a merely -arbitrary one, fixed at the will of the supreme power in any State, and -varying according to circumstances and the ideas of the law makers. If, -for instance, owing to the different amounts of alloy used in coining -pieces of corresponding value in different countries, there is say 5 -per cent. more precious metal in the coin of that country to which I -wish to remit than in that of our own country, I must necessarily pay -this difference in addition to the original sum, in order to render -the account of my correspondent good according to the valuation in his -country. If on the other hand the intrinsic value of our coin is 5 per -cent. the greater, then one hundred dollars of our coin will pay one -hundred and five dollars of the other. - -The proper term for this is _Exchange_, and if this name were -universally adopted, there would be far less of confusion in the ideas -associated with such transactions, in the minds of most persons. - -We will now turn to a consideration of the peculiar nature of Interest, -or more properly Usury, and the reasons assigned for a limitation of -its rate by law. Formerly, the amount received in payment for the loan -of capital, was denominated Usury; that is to say, rent for its use and -enjoyment. - -This is the correct term, for Interest is only the rent, or price paid -for the enjoyment of an object of value. - -But this word has acquired an odious meaning, and is now understood to -express an illegal and oppressive rate of interest only, the milder but -less expressive term being substituted by common usage. - -In earlier times, before the advantage and utility of a reserve -capital was known and appreciated, the demand of a rent for its use -by lenders, was looked upon as an abuse of power, and an oppression -towards the needy. And, more still, it seems from the accounts handed -down to us by the writers of those days, that even that frugality, -without which capital cannot be amassed, was looked upon as parsimony, -and deemed a public injury, by the populace, who looked upon all sums -not spent by the great proprietors, as lost to themselves. They could -not comprehend that money laid by, as a capital for some profitable -employment, was to all intents equally spent; and that to in a way -far more beneficial to the poor. For a laboring man is never sure of -earning a subsistence save where there is a capital in reserve for -him to work upon. This inability to understand its use gave rise to -strong prejudice against rich individuals, who do not spend their whole -income as it comes in; such a feeling still exists to a great extent: -formerly it was universal. Lenders themselves were infected by it, and -were so much ashamed of the part they were acting as to employ the most -disreputable agents in the collection of profits perfectly just, and -highly useful to society. - -There have been from time to time various species and modifications of -statutes, and enactments for the promotion of public liberty, and the -advancement of happiness, both private and public. - -Yet, though these ordinances have been provided in all good faith, by -the legislators, it is evident to every person who observes closely, -and compares causes and effects, that oftentimes their operation is -inefficient for the end aimed at; and often directly the reverse in -effect from the original intention of their makers. Especially, it -seems to me, is this the case in the matter of those laws relating to -Usury. - -There exists almost universally, a sort of hereditary prejudice against -the very name of _Usury_. Almost every one will plead guilty to such -feelings as these: “Usury is a bad thing, and as such ought to be -prevented; Usurers are a bad sort of men, a _very_ bad sort of men, and -as such ought to be punished and suppressed.” Now, it is not wonderful -that men fall into such opinions, and become firmly grounded in them, -when they hear them handed down and repeated by those to whom they are -in the habit of looking with confidence for correct ideas. - -For it cannot be expected that the mass of mankind should find leisure, -even had they the ability, to examine into the grounds of a hundredth -part of the rules and maxims which they find themselves compelled to -follow and observe. The fact is, that wherever it has been attempted to -limit the rate of Interest, or to abolish it altogether by law, there -the practice of Usury has uniformly revived. And, as might naturally -be expected, the more severe the penalties, and the more rigid their -execution, the higher the rate of interest was sure to rise. Because -the risk being so much greater, the lender must needs have a larger -premium of insurance to tempt him to incur it. It is a matter of -history, that at Rome, during the continuance of the republican form of -government the rates of interest were enormous. The simple and plain -reason of this was, that the debtors who were always plebeians, were -continually threatening their patrician creditors. - -So also, in those Christian countries where Interest on loans has been -forbidden, or what is equivalent, where it has been placed by law -at so low a point as would not suffice to pay the risk of loss to a -lender, the practice has been made over almost entirely to the Jews; -while at the same time so great has been the extortion, oppression, and -humiliation to which this people were exposed that nothing short of a -very heavy rate of Interest could indemnify them for such risks and -repeated losses. - -Thus in any case the ratio of the Premium of insurance, which -frequently forms the greater portion of what is called Interest, will -depend upon the degree of security presented to the lender. The greater -the risk, the higher will be the rate of Interest. When we detach from -the rate of interest all that is paid as a security to the lender -against the risk of partial or total loss of his capital, it remains to -consider that part which is purely and simply Interest: that is to say, -rent paid for the use of capital. - -This is the point upon which many wise legislators have endeavored to -lay down laws as infallible guides, and many learned economists have -advocated such restrictive enactments, as even to this day obtain in -most civilized countries. The Romans seem, according to _Cato_, to -have considered an Usurer, as worse than a thief. For, says he, “Our -Ancestors, enacted in their laws, that a _thief_ should be condemned to -pay _double_, but an _Usurer_, _quadruple_.” - -Even that most learned commentator on law, Sir Henry Blackstone, -pronounces that a legal limit ought to be placed to this branch of -trade. - -I will quote from Blackstone, on this subject. He says, when speaking -of the general points in the contract of hiring and borrowing: [2 Com., -p. 454,] “There is one species of this price or reward, the most usual -of any, but concerning which many good and learned men have in former -times very much perplexed themselves, and other people, by raising -doubts about its legality _in foro conscientie_. - -“That is, when money is lent on a contract, to receive not only the -principal sum again, but also an increase by way of compensation for -the use; which is generally called _Interest_ by those who think it -lawful, and _Usury_ by those who do not so; for those enemies to -Interest, in general, make no distinction between that and Usury, -holding any increase of money to be indefensibly usurious. And this -they ground, as well on the prohibition of it by the law of Moses among -the Jews, as also upon what is said to be laid down by Aristotle, that -money is naturally barren, and to make it breed money is preposterous -and a perversion of the end of its institution, which was only to serve -the purposes of Exchange, and not of increase. Hence the school divines -have branded the practice of taking Interest as being contrary to the -divine law, both natural and revealed: and the canon law has proscribed -the taking any, the least, increase for the loan of money, as a mortal -sin. - -“But in answer to this it hath been observed, that the Mosaical precept -was clearly a political, and not a moral precept. It only prohibited -the Jews from taking Usury from their brethren, the Jews: but in -express words, _permitted_ them to take it of a stranger; which proves -that the taking of moderate Usury, or a reward for the use, for so the -word signifies, is not _malum in se_, (a sin in itself considered,) -since it was allowed where any but an Israelite was concerned. And -as to the reason given by Aristotle, and deduced from the natural -barrenness of money, the same may with equal force be alleged of -houses, which never breed houses; and twenty other things, which nobody -doubts it is lawful to make profit of, by letting them to hire. - -“And though money was originally used only for the purposes of -exchange, yet the laws of any State may be well justified in -permitting it to be turned to the purposes of profit, if the -convenience of society, (the great end for which money was invented,) -shall require it. And that the allowance of moderate Interest tends -greatly to the benefit of the public, especially in a trading country, -will appear from that generally acknowledged principle, that commerce -cannot subsist without mutual and extensive credit. Unless money, -therefore, can be borrowed, trade cannot be carried on: and if no -Premium were allowed for the hire of money, few persons would care to -lend it; or, at least, the ease of borrowing at a short warning, (which -is the life of commerce,) would be entirely at an end. - -“And as to any scruples of conscience, since all other conveniences -of life may be either bought or hired, there seems to be no greater -oppression in taking a recompense or price for the hire of this, than -of any other convenience.” - -For the taking of such recompense we have moreover, the very highest -authority in the words of our Saviour, who, in the parable of the -talents, censures the slothful servant in these words: “Thou wicked -and slothful servant, thou knewest that I reap where I sowed not, and -gather where I have not strewed. Thou oughtest therefore to have put my -money at the exchangers, and then at my coming I should have received -mine own _with Usury_.” - -Dr. Adam Smith, in his work entitled “Wealth of Nations,” [Vol. 1, -p. 429,] published in 1776, and which has been long a text book for -political economists, says: “A capital lent at Interest may, in this -manner, be considered as an assignment from the lender to the borrower -of a certain considerable portion of the annual produce; upon condition -that the borrower in return shall, during the continuance of the loan, -annually assign to the lender a smaller portion, called the Interest; -and at the end of it a portion equally considerable with that which had -originally been assigned to him, called the repayment. Though money, -either coin, or paper, serves generally as the deed of assignment, both -to the smaller and to the more considerable portion, it is of itself -altogether different from what is assigned by it.” And again: “As such -capitals are commonly lent out, and paid back in money, they constitute -what is called the monied interest.” “In some countries the Interest of -money has been prohibited by law. But as something can everywhere be -made by the use of money, something ought everywhere to be paid for the -use of it. This regulation instead of preventing, has been found from -experience, to increase the evil of Usury; the debtor being obliged -to pay, not only for the use of the money, but for the risk which his -creditor runs by accepting a compensation for that use. He is obliged, -if one may say so, to insure his creditor from the penalties of Usury.” - -“In countries where Interest is permitted, the law, in order to prevent -the extortion of Usury, generally fixes the highest rate which can -be taken without incurring a penalty. This rate ought always to be -somewhat above the lowest market price, or the price which is commonly -paid for the use of money by those who can give the most undoubted -security.” - -“If this legal rate should be fixed below the lowest market rate, the -effects of this fixation must be nearly the same as those of a total -prohibition of Interest.” - -“The creditor will not lend his money for less than the use of it -is worth, and the debtor must pay him for the risk which he runs by -accepting the full value of that use. If it is fixed precisely at the -lowest market price, it ruins, with honest people, who respect the laws -of their country, the credit of all those who cannot give the very best -security, and obliges them to have recourse to exorbitant usurers.” - -“The legal rate, it is to be observed, though it ought to be somewhat -above, ought not to be _much_ above the lowest market rate. If the -legal rate of interest in Great Britain, for example, were fixed so -high as eight or ten per cent. the greater part of the money which was -to be lent, would be lent to prodigals and projectors, who alone would -be willing to give this high rate of Interest. Sober people, who will -give for the use of money no more than a part of what they are likely -to make by the use of it, would not venture into the competition. A -great part of the capital of the country, would thus be kept out of the -hands most likely to make a profitable and advantageous use of it, and -thrown into those most likely to waste and destroy it. Where the legal -rate of Interest, on the contrary, is fixed but a very little above the -lowest market rate, sober people are universally preferred as borrowers -to prodigals and projectors. The person who lends money gets nearly as -much Interest from the former, as he dare take from the latter, and -his money is much safer in the hands of the one set of people, than -in those of the other. A great part of the capital of the country is -thus thrown into the hands in which it is most likely to be employed -with advantage. “No law can reduce the common rate of Interest below -the lowest ordinary market rate at the time when that law is made. -Notwithstanding the edict of 1766, by which the French king attempted -to reduce the rate of Interest from five to four per cent., money -continued to be lent in France at five per cent.: the law being evaded -in several different ways.” - -Puffendorf, whose treatise on the “Laws of Nature and of Nations,” was -published in England in 1710, says: “The arguments which are brought -against Usury are easily answered. It is urged that the loan of a -consumable commodity ought to be given gratis, because the loan of all -other things is so. But I answer that I have the power of granting the -use of my goods that are not consumable either gratis, or for rent: -whereof, the one is a _loan_, the other a _letting_. So what should -hinder me from granting the use of my money also, either gratis, or -for a certain recompense? When one man borrows to increase his wealth, -or improve his condition, why should another lend to him for nothing? -Nay, ’tis an unreasonable thing, when you vastly improve your fortune -with my money, not to admit me to some share of the gain. For I, in -the meantime, am debarred from making that advantage which I might -have otherwise expected, by applying it to my own use. Besides, I have -parted with something valuable, which ought therefore to be considered: -for in lieu of my money, I have only an action against your person, -which cannot be prosecuted without some trouble. It may also happen -by some accident that the debt may be lost. Nay, sometimes the debtor -must be courted and caressed, that it be not lost. And some borrow on -purpose to make their creditors dependent on them. As, the Marechal de -Rochelause, when he was taxed by Louis XIII. with taking part with the -Duke of Mayenne, pleaded in excuse, that he did not follow the Duke, -but his money: for his debt would be in a desperate condition if he did -not stick close to his debtor. - -“Besides, it is not seldom that we lend to persons who are utterly -unable to pay; and therefore some are of the opinion that it would be -for the advantage of the public, to allow none but merchants to take -up money at use; for this would make the poor industrious, and force -them to frugality, who, some of them, are not afraid to pay Interest -for money to maintain their extravagancies. And monied men, rather than -let their money lie dead, would either take to merchandise themselves -or would put out their money to those who do: which would make trade -flourish to the great benefit of the commonwealth. - -Grotius is of the opinion, “that the legal interest ought to be stated, -not according to the gains of the borrower, but the loss that thereby -accrues to the lender: as in buying and selling, and other contracts, -no regard is had to what the receiver may make of the commodity, but -what goes away from the seller.” - -“And in this case so much goes away as every man in his own calling -might, and usually does, make of his money; allowance being made for -hazards, which in some cases are more, and in others less. With this, -I so far agree: that no man can complain, if his debtor makes a vast -and unexpected return of his money; but yet there is no doubt but I may -demand higher Interest of him that makes a very gainful trade, than I -can of another who drives a poor one.” - -These are the opinions of men learned in the science of political -economy; and are entitled to weighty consideration; but it seems to me, -they do not, any of them, reach quite far enough into the subject. All -of them appeared to be fettered by the pressure of that same generally -recognized opinion to which I have before adverted. - -The proposition I am inclined to favor on this much mooted point is -aptly expressed in the words of Jeremy Bentham. It is, “that no man of -ripe years, and of sound mind, acting freely, and with his eyes open, -ought to be hindered, with a view to his advantage, from making such a -bargain in the way of obtaining money, as he thinks fit, nor, (what is -a necessary consequence,) anybody hindered from supplying him, upon any -terms he thinks proper to accede to.” - -There are but two definitions which can be given to Usury. One is, -taking a larger rate of Interest than the law allows; this is the -_legal_ or, _political_ definition. The other is taking more Interest -than is usual for other people to give and take; this is the _moral_ -one. And now, in order that the law may touch the point, and actually -prohibit Usury, it is needful first that the law should supercede -morals, or conventional custom, and _fix_ that point. - -One thing is certain, that antecedently to custom, which has grown -to be established conventionally, there could not be such a thing as -Usury. For what rate of interest is more right than another? In one -land ten per cent. is the legal and _therefore_ (as the advocates of -limitation would say) the proper rate; in an another five per cent. is -the utmost which the tender consciences of the legislators will allow. -Even in the same country, from time to time, the rates are and have -been varied as the wants of the community, the exigencies of the times, -or the whims of the legislators prompted. - -It is, then, convenience which has produced whatever there is of -custom in the matter. “And what, (asks Bentham appropriately,) is -there in custom, to make it so much more deserving of observance than -convenience, which first gave it birth?” - -It is convenient for me to give 8 per cent. for money. “No,” says the -law, “you shall not.” Why? “Because it is not convenient for your -neighbor to give more than 6 per cent. for it.” Can anything be more -absurd? - -Then again, as to the opprobrious name. No appellation or particular -stigma of disrepute affixes to a man who being the owner of a house, -gets as high a rent for it as he can. Indeed this is the common -practice with such persons, and nobody is ashamed to do so, or -professes to do otherwise. Now, why a man who possesses money, and -takes as much as he can get for it, say 8, 10 or 12 per cent. should -be loaded with vile epithets, any more than if he had bought a house -with it, and then made the same profit from renting the house, is more -than I can see. - -Another point, in which the good policy of the existing restrictive -laws upon this subject, seems doubtful, is that they operate in only -one direction. If it is wrong, and worthy of punishment, to _take_ more -than the fixed maximum of interest for the use of money, why not make -it a penal offence to _offer less_ than that amount, as well as to -accept more? - -There are divers reasons given by the advocates of the laws restricting -the rates of Interest why they are beneficial and ought to be enforced. -Among these are: that they _prevent_ prodigality, and protect the poor -and simple from extortion and imposition. - -As to preventing prodigality: does not every one know that so long -as a person has money, or property of any sort, with which it is -possible for him to display prodigality, no Usury laws will stop him -from expending it; and, that after his property is gone and he has no -more to expend, none are more ready to _promise_ the largest Interest, -providing he can thereby obtain additional money to spend? for what he -gets is clear gain, he having nothing to lose. This, it would seem is a -hopeless class, for whose protection or advantage to legislate. - -Besides prodigals, there are three other classes, to whose benefit such -restrictive laws are supposed by their authors to insure. They are the -indigent, the rashly enterprising, and the simple. That is to say, -those whose pecuniary necessities are so pressing, as to render them -willing to pay an Interest, above the ordinary rate, rather than not -to have the money; those who from rashness, may be disposed to venture -upon the giving such a rate without duly considering the consequence; -and those whose natural carelessness combined with ignorance would lead -them to acquiesce in it. - -Let us look at the conditions of these classes a few moments. Here -is a small trader we will say, whose stock in trade consists of only -a small amount of property, combined with an, as yet, perfectly -untarnished reputation for punctuality in payments. This last, all -who know anything of business, will at once admit to be the principal, -and most important item of his stock. For with such a character, no -merchant will refuse to credit him for articles needful to carry on his -business; and thus all goes well with him. - -But now his carefully cherished credit is in danger. He has been -disappointed in his expectations of a ready sale for some part of his -goods, or in obtaining money promised him for a debt, and finds himself -without the means to promptly meet an obligation falling due to-morrow. - -His position is such in the matter of property as not to render it -worth anybody’s while to lend him at the legal rate; in short he -cannot raise money to meet this obligation at that rate, and must do -one of two things--either lose his credit, which will ruin utterly -his prospects of making a comfortable subsistence for his family; or -he must obtain the means of saving this cherished treasure intact, by -paying somewhat more for the use of the money. We can at once see what -_he_, who has every motive and means for judging rightly in the matter, -would decide to be the wisest course, and the one nearest the path of -rectitude. As a matter of course, if he could obtain the money at a low -rate, he would not pay the higher one. But now the legislator who knows -nothing of any of these circumstances, but whose heart overflows with -prudence, and loving kindness for the poor man, steps in, and says: “It -signifies nothing; you shall not have the money, for it would be doing -you a mischief to allow you to borrow on such terms.” There might be -worse cruelty, but not easily greater folly. - -Next, in regard to the ignorant and simple, for whose protection from -imposition or fraud, these laws are enacted. First, could any degree -of simplicity or want of tact be greater or more evident than that -displayed in such a case as we have just spoken of; where a legislator -could confine a man under such circumstances, to a given rate of -Interest? - -Second, suppose the wisdom of the legislator to be never so much -greater than that of the individual, no matter how weak that may be, -how useless is the exertion of it in this case only, while there -remains so many other occasions where the simplicity of the sufferer -would make him the victim of injustice, and where the legislator cannot -interpose to protect him. In every day affairs, in the matter of buying -and selling, whether with money, or on credit, such persons are liable -to be overreached; and yet none have thought that for this reason, a -legal price ought to be set upon all goods, of whatever description. -Nor, supposing that even this endless undertaking were accomplished by -the legislator, would it avail anything unless he also should regulate -the exact amount of each article which each man should buy. - -When matters arrive at this point, we find the person in the position -of those for whom the law provides entirely, as not being fit to take -care of themselves: such are usually denominated _idiots_. - -And now, as we have considered at some length the needlessness and -inefficiency of such legislation, let us for a few moments, look at -some of its evil results. - -We will speak at first of those who are by this means virtually -prohibited from obtaining money on loans. Consider for a moment, what -distress and inconvenience it would produce were the privilege of -borrowing denied to everybody. Just that inconvenience is occasioned to -those people whose security would, if they were allowed to add a little -of the rate of Interest, be sufficient to obtain the needed funds, -but is not sufficient for that purpose when such liberty is denied. -Thus the misfortune of not happening to be possessed of that amount of -property which is considered a sufficient security, is made the ground, -under such legislation, of inflicting hardships upon a man, which those -who are so fortunate as to have such security do not suffer. - -The only point of distinction between the two classes, is that the -necessity of one is greater than that of the other. For were this not -the case, they would not be willing, as we have supposed, to pay more -to be rid of it. - -Another ill effect, is that of rendering the terms of obtaining money -so much the worse for many whose circumstances are such that they are -not altogether precluded from obtaining it, at some rate. Those who -cannot borrow, may get what they want, so long as they have anything -to sell. But, while out of loving kindness, or other motive, the law -precludes a man from _borrowing_, upon terms too disadvantageous, it -does not forbid him from _selling_ at any, even the most ruinous rates. - -Everybody knows that forced sales are attended with loss: and to this -loss an amount of Interest, which would at first seem exorbitant, would -bear but a small proportion. - -When a man’s goods are taken, and sold under an execution, it is -considered a good sale if the net amount reaches two-thirds what it -would take to replace them again. In this way the kindness of the law, -costs him directly 33-1/3 per cent. at least; supposing, what is seldom -the case, that no more property was taken than just enough to satisfy -the claim. Now, if he had been permitted to hire the money at, say 12 -per cent. per annum it would require nearly three years for the same -amount to accrue, as interest, while the probabilities are that he -would be able to pay off the whole debt long before the expiration of -that period. - -To the laws prohibiting Usury, too, we may look, as the prime cause -of the establishment, and the strongest supporter of that branch of -business, which is ordinarily looked upon as so disreputable, and at -whose door are laid so many and grievious complaints of oppression, -&c., viz: pawn-broking:--a business based only on the unsatisfied wants -and necessities of that very class for whose protection from imposition -such laws are made. - -So we might multiply cases and arguments, but perhaps sufficient has -already been said to lead those who think, to the conclusion that is -embodied in our proposition: viz: that every man ought to have the -same right to buy and sell money at a profit, as he has to do so with -merchandise or other property. - - -[Illustration: _CRITTENDEN’S PHILADELPHIA_ - -_COMMERCIAL COLLEGE._ - -_Established, 1844. Incorporated, 1855._] - - - - -FOOTNOTE: - -[A] Entered according to Act of Congress, in the year 1863, by S. -H. Crittenden, in the Clerk’s Office of the District Court, for the -Eastern District of Pennsylvania. - - - - -TRANSCRIBER’S NOTES: - - - Italicized text is surrounded by underscores: _italics_. - - Obvious typographical errors have been corrected. - - Archaic or alternate spelling has been retained from the original. - - - - - - -End of the Project Gutenberg EBook of Usury, by S. H. Crittenden - -*** END OF THIS PROJECT GUTENBERG EBOOK USURY *** - -***** This file should be named 62459-0.txt or 62459-0.zip ***** -This and all associated files of various formats will be found in: - http://www.gutenberg.org/6/2/4/5/62459/ - -Produced by deaurider, David E. Brown, and the Online -Distributed Proofreading Team at https://www.pgdp.net (This -file was produced from images generously made available -by The Internet Archive) - -Updated editions will replace the previous one--the old editions will -be renamed. - -Creating the works from print editions not protected by U.S. copyright -law means that no one owns a United States copyright in these works, -so the Foundation (and you!) can copy and distribute it in the United -States without permission and without paying copyright -royalties. Special rules, set forth in the General Terms of Use part -of this license, apply to copying and distributing Project -Gutenberg-tm electronic works to protect the PROJECT GUTENBERG-tm -concept and trademark. Project Gutenberg is a registered trademark, -and may not be used if you charge for the eBooks, unless you receive -specific permission. If you do not charge anything for copies of this -eBook, complying with the rules is very easy. You may use this eBook -for nearly any purpose such as creation of derivative works, reports, -performances and research. They may be modified and printed and given -away--you may do practically ANYTHING in the United States with eBooks -not protected by U.S. copyright law. Redistribution is subject to the -trademark license, especially commercial redistribution. - -START: FULL LICENSE - -THE FULL PROJECT GUTENBERG LICENSE -PLEASE READ THIS BEFORE YOU DISTRIBUTE OR USE THIS WORK - -To protect the Project Gutenberg-tm mission of promoting the free -distribution of electronic works, by using or distributing this work -(or any other work associated in any way with the phrase "Project -Gutenberg"), you agree to comply with all the terms of the Full -Project Gutenberg-tm License available with this file or online at -www.gutenberg.org/license. - -Section 1. General Terms of Use and Redistributing Project -Gutenberg-tm electronic works - -1.A. By reading or using any part of this Project Gutenberg-tm -electronic work, you indicate that you have read, understand, agree to -and accept all the terms of this license and intellectual property -(trademark/copyright) agreement. If you do not agree to abide by all -the terms of this agreement, you must cease using and return or -destroy all copies of Project Gutenberg-tm electronic works in your -possession. If you paid a fee for obtaining a copy of or access to a -Project Gutenberg-tm electronic work and you do not agree to be bound -by the terms of this agreement, you may obtain a refund from the -person or entity to whom you paid the fee as set forth in paragraph -1.E.8. - -1.B. "Project Gutenberg" is a registered trademark. It may only be -used on or associated in any way with an electronic work by people who -agree to be bound by the terms of this agreement. There are a few -things that you can do with most Project Gutenberg-tm electronic works -even without complying with the full terms of this agreement. See -paragraph 1.C below. There are a lot of things you can do with Project -Gutenberg-tm electronic works if you follow the terms of this -agreement and help preserve free future access to Project Gutenberg-tm -electronic works. See paragraph 1.E below. - -1.C. The Project Gutenberg Literary Archive Foundation ("the -Foundation" or PGLAF), owns a compilation copyright in the collection -of Project Gutenberg-tm electronic works. Nearly all the individual -works in the collection are in the public domain in the United -States. If an individual work is unprotected by copyright law in the -United States and you are located in the United States, we do not -claim a right to prevent you from copying, distributing, performing, -displaying or creating derivative works based on the work as long as -all references to Project Gutenberg are removed. Of course, we hope -that you will support the Project Gutenberg-tm mission of promoting -free access to electronic works by freely sharing Project Gutenberg-tm -works in compliance with the terms of this agreement for keeping the -Project Gutenberg-tm name associated with the work. You can easily -comply with the terms of this agreement by keeping this work in the -same format with its attached full Project Gutenberg-tm License when -you share it without charge with others. - -1.D. The copyright laws of the place where you are located also govern -what you can do with this work. Copyright laws in most countries are -in a constant state of change. If you are outside the United States, -check the laws of your country in addition to the terms of this -agreement before downloading, copying, displaying, performing, -distributing or creating derivative works based on this work or any -other Project Gutenberg-tm work. The Foundation makes no -representations concerning the copyright status of any work in any -country outside the United States. - -1.E. Unless you have removed all references to Project Gutenberg: - -1.E.1. The following sentence, with active links to, or other -immediate access to, the full Project Gutenberg-tm License must appear -prominently whenever any copy of a Project Gutenberg-tm work (any work -on which the phrase "Project Gutenberg" appears, or with which the -phrase "Project Gutenberg" is associated) is accessed, displayed, -performed, viewed, copied or distributed: - - This eBook is for the use of anyone anywhere in the United States and - most other parts of the world at no cost and with almost no - restrictions whatsoever. You may copy it, give it away or re-use it - under the terms of the Project Gutenberg License included with this - eBook or online at www.gutenberg.org. If you are not located in the - United States, you'll have to check the laws of the country where you - are located before using this ebook. - -1.E.2. If an individual Project Gutenberg-tm electronic work is -derived from texts not protected by U.S. copyright law (does not -contain a notice indicating that it is posted with permission of the -copyright holder), the work can be copied and distributed to anyone in -the United States without paying any fees or charges. If you are -redistributing or providing access to a work with the phrase "Project -Gutenberg" associated with or appearing on the work, you must comply -either with the requirements of paragraphs 1.E.1 through 1.E.7 or -obtain permission for the use of the work and the Project Gutenberg-tm -trademark as set forth in paragraphs 1.E.8 or 1.E.9. - -1.E.3. If an individual Project Gutenberg-tm electronic work is posted -with the permission of the copyright holder, your use and distribution -must comply with both paragraphs 1.E.1 through 1.E.7 and any -additional terms imposed by the copyright holder. Additional terms -will be linked to the Project Gutenberg-tm License for all works -posted with the permission of the copyright holder found at the -beginning of this work. - -1.E.4. Do not unlink or detach or remove the full Project Gutenberg-tm -License terms from this work, or any files containing a part of this -work or any other work associated with Project Gutenberg-tm. - -1.E.5. Do not copy, display, perform, distribute or redistribute this -electronic work, or any part of this electronic work, without -prominently displaying the sentence set forth in paragraph 1.E.1 with -active links or immediate access to the full terms of the Project -Gutenberg-tm License. - -1.E.6. You may convert to and distribute this work in any binary, -compressed, marked up, nonproprietary or proprietary form, including -any word processing or hypertext form. However, if you provide access -to or distribute copies of a Project Gutenberg-tm work in a format -other than "Plain Vanilla ASCII" or other format used in the official -version posted on the official Project Gutenberg-tm web site -(www.gutenberg.org), you must, at no additional cost, fee or expense -to the user, provide a copy, a means of exporting a copy, or a means -of obtaining a copy upon request, of the work in its original "Plain -Vanilla ASCII" or other form. Any alternate format must include the -full Project Gutenberg-tm License as specified in paragraph 1.E.1. - -1.E.7. Do not charge a fee for access to, viewing, displaying, -performing, copying or distributing any Project Gutenberg-tm works -unless you comply with paragraph 1.E.8 or 1.E.9. - -1.E.8. You may charge a reasonable fee for copies of or providing -access to or distributing Project Gutenberg-tm electronic works -provided that - -* You pay a royalty fee of 20% of the gross profits you derive from - the use of Project Gutenberg-tm works calculated using the method - you already use to calculate your applicable taxes. The fee is owed - to the owner of the Project Gutenberg-tm trademark, but he has - agreed to donate royalties under this paragraph to the Project - Gutenberg Literary Archive Foundation. Royalty payments must be paid - within 60 days following each date on which you prepare (or are - legally required to prepare) your periodic tax returns. Royalty - payments should be clearly marked as such and sent to the Project - Gutenberg Literary Archive Foundation at the address specified in - Section 4, "Information about donations to the Project Gutenberg - Literary Archive Foundation." - -* You provide a full refund of any money paid by a user who notifies - you in writing (or by e-mail) within 30 days of receipt that s/he - does not agree to the terms of the full Project Gutenberg-tm - License. You must require such a user to return or destroy all - copies of the works possessed in a physical medium and discontinue - all use of and all access to other copies of Project Gutenberg-tm - works. - -* You provide, in accordance with paragraph 1.F.3, a full refund of - any money paid for a work or a replacement copy, if a defect in the - electronic work is discovered and reported to you within 90 days of - receipt of the work. - -* You comply with all other terms of this agreement for free - distribution of Project Gutenberg-tm works. - -1.E.9. If you wish to charge a fee or distribute a Project -Gutenberg-tm electronic work or group of works on different terms than -are set forth in this agreement, you must obtain permission in writing -from both the Project Gutenberg Literary Archive Foundation and The -Project Gutenberg Trademark LLC, the owner of the Project Gutenberg-tm -trademark. Contact the Foundation as set forth in Section 3 below. - -1.F. - -1.F.1. Project Gutenberg volunteers and employees expend considerable -effort to identify, do copyright research on, transcribe and proofread -works not protected by U.S. copyright law in creating the Project -Gutenberg-tm collection. Despite these efforts, Project Gutenberg-tm -electronic works, and the medium on which they may be stored, may -contain "Defects," such as, but not limited to, incomplete, inaccurate -or corrupt data, transcription errors, a copyright or other -intellectual property infringement, a defective or damaged disk or -other medium, a computer virus, or computer codes that damage or -cannot be read by your equipment. - -1.F.2. LIMITED WARRANTY, DISCLAIMER OF DAMAGES - Except for the "Right -of Replacement or Refund" described in paragraph 1.F.3, the Project -Gutenberg Literary Archive Foundation, the owner of the Project -Gutenberg-tm trademark, and any other party distributing a Project -Gutenberg-tm electronic work under this agreement, disclaim all -liability to you for damages, costs and expenses, including legal -fees. YOU AGREE THAT YOU HAVE NO REMEDIES FOR NEGLIGENCE, STRICT -LIABILITY, BREACH OF WARRANTY OR BREACH OF CONTRACT EXCEPT THOSE -PROVIDED IN PARAGRAPH 1.F.3. YOU AGREE THAT THE FOUNDATION, THE -TRADEMARK OWNER, AND ANY DISTRIBUTOR UNDER THIS AGREEMENT WILL NOT BE -LIABLE TO YOU FOR ACTUAL, DIRECT, INDIRECT, CONSEQUENTIAL, PUNITIVE OR -INCIDENTAL DAMAGES EVEN IF YOU GIVE NOTICE OF THE POSSIBILITY OF SUCH -DAMAGE. - -1.F.3. LIMITED RIGHT OF REPLACEMENT OR REFUND - If you discover a -defect in this electronic work within 90 days of receiving it, you can -receive a refund of the money (if any) you paid for it by sending a -written explanation to the person you received the work from. If you -received the work on a physical medium, you must return the medium -with your written explanation. The person or entity that provided you -with the defective work may elect to provide a replacement copy in -lieu of a refund. If you received the work electronically, the person -or entity providing it to you may choose to give you a second -opportunity to receive the work electronically in lieu of a refund. If -the second copy is also defective, you may demand a refund in writing -without further opportunities to fix the problem. - -1.F.4. Except for the limited right of replacement or refund set forth -in paragraph 1.F.3, this work is provided to you 'AS-IS', WITH NO -OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT -LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PURPOSE. - -1.F.5. Some states do not allow disclaimers of certain implied -warranties or the exclusion or limitation of certain types of -damages. If any disclaimer or limitation set forth in this agreement -violates the law of the state applicable to this agreement, the -agreement shall be interpreted to make the maximum disclaimer or -limitation permitted by the applicable state law. The invalidity or -unenforceability of any provision of this agreement shall not void the -remaining provisions. - -1.F.6. INDEMNITY - You agree to indemnify and hold the Foundation, the -trademark owner, any agent or employee of the Foundation, anyone -providing copies of Project Gutenberg-tm electronic works in -accordance with this agreement, and any volunteers associated with the -production, promotion and distribution of Project Gutenberg-tm -electronic works, harmless from all liability, costs and expenses, -including legal fees, that arise directly or indirectly from any of -the following which you do or cause to occur: (a) distribution of this -or any Project Gutenberg-tm work, (b) alteration, modification, or -additions or deletions to any Project Gutenberg-tm work, and (c) any -Defect you cause. - -Section 2. Information about the Mission of Project Gutenberg-tm - -Project Gutenberg-tm is synonymous with the free distribution of -electronic works in formats readable by the widest variety of -computers including obsolete, old, middle-aged and new computers. It -exists because of the efforts of hundreds of volunteers and donations -from people in all walks of life. - -Volunteers and financial support to provide volunteers with the -assistance they need are critical to reaching Project Gutenberg-tm's -goals and ensuring that the Project Gutenberg-tm collection will -remain freely available for generations to come. In 2001, the Project -Gutenberg Literary Archive Foundation was created to provide a secure -and permanent future for Project Gutenberg-tm and future -generations. To learn more about the Project Gutenberg Literary -Archive Foundation and how your efforts and donations can help, see -Sections 3 and 4 and the Foundation information page at -www.gutenberg.org - - - -Section 3. Information about the Project Gutenberg Literary Archive Foundation - -The Project Gutenberg Literary Archive Foundation is a non profit -501(c)(3) educational corporation organized under the laws of the -state of Mississippi and granted tax exempt status by the Internal -Revenue Service. The Foundation's EIN or federal tax identification -number is 64-6221541. Contributions to the Project Gutenberg Literary -Archive Foundation are tax deductible to the full extent permitted by -U.S. federal laws and your state's laws. - -The Foundation's principal office is in Fairbanks, Alaska, with the -mailing address: PO Box 750175, Fairbanks, AK 99775, but its -volunteers and employees are scattered throughout numerous -locations. Its business office is located at 809 North 1500 West, Salt -Lake City, UT 84116, (801) 596-1887. Email contact links and up to -date contact information can be found at the Foundation's web site and -official page at www.gutenberg.org/contact - -For additional contact information: - - Dr. Gregory B. Newby - Chief Executive and Director - gbnewby@pglaf.org - -Section 4. Information about Donations to the Project Gutenberg -Literary Archive Foundation - -Project Gutenberg-tm depends upon and cannot survive without wide -spread public support and donations to carry out its mission of -increasing the number of public domain and licensed works that can be -freely distributed in machine readable form accessible by the widest -array of equipment including outdated equipment. Many small donations -($1 to $5,000) are particularly important to maintaining tax exempt -status with the IRS. - -The Foundation is committed to complying with the laws regulating -charities and charitable donations in all 50 states of the United -States. Compliance requirements are not uniform and it takes a -considerable effort, much paperwork and many fees to meet and keep up -with these requirements. We do not solicit donations in locations -where we have not received written confirmation of compliance. To SEND -DONATIONS or determine the status of compliance for any particular -state visit www.gutenberg.org/donate - -While we cannot and do not solicit contributions from states where we -have not met the solicitation requirements, we know of no prohibition -against accepting unsolicited donations from donors in such states who -approach us with offers to donate. - -International donations are gratefully accepted, but we cannot make -any statements concerning tax treatment of donations received from -outside the United States. U.S. laws alone swamp our small staff. - -Please check the Project Gutenberg Web pages for current donation -methods and addresses. Donations are accepted in a number of other -ways including checks, online payments and credit card donations. To -donate, please visit: www.gutenberg.org/donate - -Section 5. General Information About Project Gutenberg-tm electronic works. - -Professor Michael S. Hart was the originator of the Project -Gutenberg-tm concept of a library of electronic works that could be -freely shared with anyone. For forty years, he produced and -distributed Project Gutenberg-tm eBooks with only a loose network of -volunteer support. - -Project Gutenberg-tm eBooks are often created from several printed -editions, all of which are confirmed as not protected by copyright in -the U.S. unless a copyright notice is included. Thus, we do not -necessarily keep eBooks in compliance with any particular paper -edition. - -Most people start at our Web site which has the main PG search -facility: www.gutenberg.org - -This Web site includes information about Project Gutenberg-tm, -including how to make donations to the Project Gutenberg Literary -Archive Foundation, how to help produce our new eBooks, and how to -subscribe to our email newsletter to hear about new eBooks. - |