ment of the United States can obtain loans on better terms than an individual.

4. The relative permanence of the investment is another item of the calculation. The individual of wealth who should be averse to a personal employment of his own capital, would obviously prefer a secure and permanent investment. He would therefore choose government securities, redeemable at a distant period, even though the rate of interest should be less. Were money, on the other hand, required only for a sudden and unforeseen emergency, the borrower would obviously be willing to pay a higher interest than if the loan were for a longer period of duration. He, too, who lends for short periods, as he runs the risk of the solvency of a greater number, and as he is obliged to alter and change his investments frequently, should rightfully receive compensation for the risk and trouble.

5. The government of a country is another item of great importance, for on the government depend the security and protection of individual rights. Thus in Turkey, where these rights are little respected, the rate from this cause alone would be higher than under a more civilized government, where all the rights of person and property are fully guarded and uniformly respected. Thus in times of anarchy and barbarism the rate would be higher than in times of refinement and wealth; in the difficulties and dangers of war than in times of peace and prosperity.

Now upon all these circumstances depend the rate of interest, and these circumstances are subject to perpetual and unceasing fluctuation. A variation in one or in all these circumstances will, in proportion to the extent and importance of that variation, require a correspondent change in the rate of interest. Now what do the legislature in fixing the rate? They say that these causes, in unrestrained operation, either never will or never shall raise the rate above that established by law; if they never will, then, if true, the restriction is unnecessary, a mere prohibition of an event never to happen; if they never shall, then they say, that the citizens shall not take into consideration these various causes, and establish a contract each for himself; or that whenever these causes would raise the rate above that established by law, they shall never borrow. Nobody pretends that there is any one rate proper for all times and places. The whole history of legislative enactments shows the reverse of such

a proposition, for different countries establish different rates, and the rates in the same country vary. During the middle ages, those times of poverty, barbarism, and anarchy, the rate was, as from theoretical reasoning would be inferred, high, compared with the rates at the present time.' Thus, in 1228, at Modena, the rate was twenty per cent.; in France, in the year 1311, in the reign of Henry III. the rate was thirty per cent. Subsequently, in the reign of King John, in 1360, by an edict of that sovereign, money was allowed to be loaned at as high a rate as eighty-six per cent. Since those times the rate has been gradually decreasing; so that in Holland, a rich and opulent country, the common rate was three per cent.; in France the rate has been as low as two and a half and three per cent., though in that case the legal was probably less than

the worth of the money. In Rome the rate was twelve per cent., while according to Cicero, in the provinces it rose even as high as forty-eight per cent. In China the legal rate is seventy-six per cent. In England, in the time of Henry VIII., when laws were first made on the subject in that country, the rate was established at ten per cent., and since, by successive legislative enactments, it has been reduced to five per cent.

Now the usury law says that whether capital be plenty or scarce, whether the borrower be rich or poor, solvent or insolvent, idle or industrious, whether the investment be for days or ages, whether the country be rich, flourishing, and at peace, or whirling in the giddy vortex of revolutionary phrenzy — questions, upon which the very essence of the contract depend, are questions of no practical importance; that under whatever combination of circumstances capital is loaned, there shall be no difference, or at any rate that no combination of any or all these causes shall raise the rate above a given per cent. Now every man, acquainted with business, knows that a prudent man takes into consideration all these circumstances in the investment of his capital. The circumstances of every individual, of every loan, are as diverse as the individuals who are parties to the loan, and are subject, as between place and place, and time and time, to never-ceasing fluctuations. The very circumstances upon which the rate of interest depend, varying as they do in 1 2 Hallam, 281, Say, Smith's Wealth of Nations, 2 Montesquieu, 91. 2 The ordinary rate is less than this.

every loan, prove the utter impossibility of any government's being able to fix the rate of interest, as well as the mutual wants and necessities of the parties. They prove that there is not, cannot be, any one rate, and that to attempt establishing an uniform rate is as wise as it would be to decree that all men should be of uniform height and strength. It is but a weak and servile copy of the legislation of Procrustes without its originality, and equally wise and beneficial. The law, therefore, in attempting to establish a rate proper for every contract, attempts what is impossible. If, therefore, the rate be above what the parties would establish, it is inoperative to any purpose, good or bad. If effectual if less than the rate which the parties would establish-and if it should (as, unless evaded, it would) prevent loans, then it is identical in its effect and to the extent of its operation, with a law prohibiting all interest, and pro tanto equally injurious. The law assumes that some rate is proper, but if interest is right and proper and should be allowed, then money should be loaned, if at all, at its proper rate at its fair value - neither more nor less; and as a general law can never take a proper and equitable cognizance of all the various circumstances connected with a loan, and as the parties can and will, a usury law effective, that is, prohibiting a loan of money at less than its value, is to the highest degree iniquitous, robbing Peter to pay Paul. If, then, as is admitted, money should be loaned at interest, it should be loaned at its value; and if these or any other circumstances not enumerated do affect the contract, then the rate should vary according to these circumstances, and no one rate can be exclusively the proper one. The legislatures, in attempting to establish an invariable rate as the only proper one, attempt what is impossible, and what, if possible, is unnecessary, (as the wants of the respective parties would do it for them,) and accomplish, so far as there is any result to their labors, what is notoriously wrong, a uniform contract for persons differently situated.

Such is the reasoning to show that the legislature cannot, with any reasonable prospect of success, establish a rate, which shall be proper for all times and places. Indeed restrictions are always to be presumed as inexpedient. Any infringement of liberty of action is dangerous and can never be justified but by proof of the most urgent necessity and the most conclusive expe

diency. Were the legislature now to regulate the price of labor, fix the price of every bushel of wheat or corn, and establish an invariable standard of price for all articles, the monstrous absurdity and impolicy of such proceedings would be immediately recognised. Yet in times past, such were the laws in regard to the very necessaries of life, and the source of all wealth, labor; and such laws were for ages supported and approved, while now they would with an equal uniformity be disapproved and condemned. Now where is the difference in principle between fixing the price of corn, or the rate at which land or houses shall be rented, or establishing the rate of interest. Why should not an individual set the price at which he will loan his capital as well as the rate at which he will let his horse, or his farm? The law authorizes the loan of capital in the particular form of cattle, at a rate much exceeding the legal rate; it places no restrictions on wealth in the form of real estate; in all other transactions there is an unlimited liberty to traffic, and this liberty is seen and acknowledged to be advantageous; so evidently so, that to attempt to prove it would be considered a work of supererogation. Why then should the capitalist be under any other or greater restraints when the subject matter of the contract assumes the form of money? Why should he not rightfully profit as well by the scarcity of money or capital, as the farmer by the scarcity of wheat, or the landholder by the scarcity of land, as compared with the demand. I confess I can see no reasons, why this should not be the case; but as there are reasons brought in favor of establishing a fixed rate of interest, we will proceed to consider them.

The most usual and convenient argument in favor of these laws, is, that they have been established for a long time and among all civilized nations, and that a repeal would be a departure from long established precedent. It is remarked, with an air of triumph 'that the same voice against usury has been raised in the laws of China, in the Hindoo Institutes of Menu, in the Koran of Mahomet,' and perhaps in the laws of all nations, Greek and Barbarian.' And from such uniform and universal adoption, the expediency of those laws has been inferred. It is obvious that any prescription, of however long duration or wide extension, will not change the nature of laws. Suppose the

1 16 Johns. 376, Dunham v. Gould.

laws of China, the Institutes of Menu, the Koran of Mahomet, had established any law either useless or injurious, is that any reason why the evil of such bad laws should be still farther extended? This argument, to be of any force, assumes the very question in dispute the expediency of the usury laws and then follows the very obvious inference, that being expedient, they should be continued. The laws of China, the Hindoo Institutes of Menu, and the Koran of Mahomet, all agree in the recognition of the existence of witchcraft and in the reasonableness and propriety of slavery and yet such agreement affords no argument for the existence of the one or the propriety of the other. Bad precedents (the murder of Abel, for instance,) afford no reason why they should be followed; it is only when they are considered good that they should be adopted. To call on us, therefore, to adopt, assumes the question of their goodness. Prescription might be urged with equal force in favor of any abomination, provided it had been a curse of sufficiently long duration. Reasoning like this is merely an evasion; it is the resort of those only who rely for protection on fallacies of some sort. The true argument would be to show the beneficial results of the law; and the longer it has existed and the more extensively it has been observed, the easier it is to point out its benefits and show the utility of its operation. When, instead of resorting to this course, so simple and conclusive, the advocates of any law rely on its antiquity alone, they tacitly admit that its expediency is not susceptible of any proof derived from its fruits; that experience affords no evidence that it deserves to exist or continue; that its benefits neither have been nor can be seen or perceived.

It is likewise said, that there is a certain, I know not whata mysterious, essence in money, which renders it necessary to use restraints here, which in other transactions would be injurious. It is admitted that in the ordinary exchange of commodities, restriction would be improper, but that money, from its peculiar nature, is exempt from those rules. But money, like every thing else, derives its value from its utility; is alike subject to fluctuations of market value, resulting from a change of the relations of supply and demand; is alike affected with every other article by similar causes. Every merchant knows that dollars and doubloons are as much articles of commerce