THE HISTORY OF USURY.

USURY is money given for the use of money for any certain time, and is called (at this day) the interest thereof; the lending or letting out money at interest or upon usury, before stat. 37, Hen. 8, c. 9, was against the canon law, the common law, and the statute of this realm; it was forbidden by the laws of King Alfred. Horn's Mirror, cap. 1. sect. 3. Si quis de usura convictus fuerit, omnes res suas amittat. Custumier de Normandy, cap. 20. Inter leges sancti Edwardi. If any one after his death had been found an usurer, all his goods and chattels were forfeited to the king. Usurarii omnes res, sive testatus sive intestatus decesserit, domini regis sunt. Glanvil, lib. 7, cap. 16.

By the statute of Merton, cap. 5, anno 1235, it was granted by the king, that from henceforth usuries shall not run against any being within age. Lord Coke, in 2 Inst. 89, says, this statute is expounded to extend to the usurious Jews that were then in England; for at that time, and before the conquest also, it was not lawful for Christians to take any usury; and by this act it is manifest that the usury intended by the statute was not unlawful; for the usury due before the death of the ancestor is enacted to be paid, and after the full age of the heir also, and no usury was permitted but by the Jews only.

But by the statute of Judaismo 18 Ed. 1, anno 1290, it is ordained and establishe, that no Jew from thenceforth should take any usury, 2 Inst. 89-506.

And by many authorities and records, it appears that usury was unlawful and punishable in all the reigns until the statute, 37 Hen. 8, c. 9, which seems wonderful, as it appears, that between the fiftieth year of Henry III., and the second of Edward I., which was not above seven years complete, there was paid into the king's coffers four

hundred and twenty thousand pounds of and for the usury of the Jews. 3 Inst. 151.

It appears by the history of Charles V., that in the year 1490 money was borrowed at £40 per cent., in 1511 at £20 per cent., and in 1530 usury was fixed, per Charles V. at £12 per cent. Robertson's History of Spain.

By the statute of 37 Hen. 8, ch. 9, anno 1546, no person, by way of any corrupt bargain, loan, exchange, chevisance, shift or interest of any wares, or other things, or by any other deceitful way, shall take in gains for the forbearing of one year, for his money or other thing that shall be due for the same wares or other things, above £10 in the £100, upon pain of forfeiting treble value of the wares or other things sold, imprisonment, fine and ransom, at the king's pleasure.

There is no mention in this statute of the loan of money; the offence intended to be punished, seems to be the taking in gains for the forbearing of one year for his money or other thing that shall be due for the same wares or other things above £10 in the £100; it is not said for money lent, or the use or interest of money lent, so that it seems as if it was then still penal to take any interest (even £5 per cent. for the loan of money.

But by the statute of 13 Eliz. c. 8, anno 1570, sect. 3, all bonds, &c., 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 statute of 37 Hen. 8, c. 9, upon or by which loan or doing there shall be reserved or taken above the rate of £10 for the £100 for one year, shall be utterly void.

By the 21 James 1, c. 17, anno. 1623, no person shall take for loan of monies, &c., above eight for a hundred, for one year.

By 12 Charles 2, ch. 13, anno 1660, no person shall take for loan of monies, &c., above £6 for the forbearance of £100 for a year. And by the 12 Anne, c. 16, anno 1713, entitled an act to reduce the rate of interest, &c., 1st. No person upon any contract shall take for loan. of any monies, &c., above the value of £5 for the forbearance of £100 for a year. 2d. All bonds and assurances for payment of any money to be lent upon usury, whereupon there shall be reserved or taken above five in the hundred, shall be void. 3d. Every person who shall receive by means of any corrupt bargain, loan, exchange, chevisance, shift or interest, of any wares, or other thing, or by any deceitful way for the forbearing or giving day of payment for one year, for their money or other thing, above £5 for £100 for a year, shall forfeit the treble value of the monies and other things lent.

Chancellor Kent, in 1819, says, If we look back upon history, we shall find that there is scarcely any people, ancient or modern, that have not had usury laws. I believe there is not a nation in Europe at this day without them. In ancient Rome, according to Tacitus, (Ann. lib. 6, ch. 16,) usury was discouraged in the early period of the Republic, by the Twelve Tables, which reduced interest to one per cent. It was afterwards lowered to one half per cent., and finally abolished by the clamours of the people. It was revived in the ages of commerce and luxury, but placed under necessary restrictions. Four or six per cent. was the ordinary interest; eight per cent, was allowed for the convenience of commerce, and twelve per cent. might be taken for maritime hazards, by the laws of Justinian, but the practice of more exorbitant interest was severely restrained.

The Romans, through the greater part of their history, had the deepest abhorrence of usury. They did not derive their objection to usury from the prohibitions in the Mosaic law, nor did they hold it sinful, as the learned Fathers of the early and middle ages of the church have done, for they knew nothing of that law. The Roman lawgivers and jurists acted from views of public policy. They found, by their own experience, that unlimited usury led to unlimited oppression, and that the extortion of the creditor, and the resistance of the debtor, were constantly agitating and disturbing the public peace.

But it is not only the civilized and commercial nations of modern Europe, and the sage lawgivers of ancient Rome, that have regulated the interest of money. It will be deemed a little singular, that the same voice against usury should have been raised in the laws of China, in the Hindu Institutes of Menu, in the Koran of Mahomet, and, perhaps we may say, in the laws of all nations that we know of, whether Greek or barbarian.

There is one exception, however, that I ought to notice, and which is supposed to be found in the laws of Solon, given to the Athenian Republic. This celebrated lawgiver is said to have allowed parties to regulate the rate of interest by their own contracts. When Solon was called to make laws for Athens, the state was in complete anarchy; and when he was asked if he had provided the best of laws for the Athenians, he replied, that he had provided the best that their prejudices would admit of. One of his first steps was, to cancel all existing debts, though, according to Plutarch, (Life of Solon,) it is not certain that he proceeded to this violent measure; for many said that he did not cancel debts, but only moderated the interest. And the result of this law allowing interest to regulate itself, I shall give in the

words of De Pauw, (Recherches Philosophique sur les Grecs, 5 sect. §2.) He says, that usage fixed the rate of interest at 12 per cent. in certain cases, and at 18 per cent. in others, and that "the Athenians regarded all those who did not conform to this usage as usurers, that is, as the most vile and the most ignominious of mankind. The public voice, which cried against them, and the profound contempt to which they were condemned, formed a punishment so great, that the lawgiver did not deem it necessary to add any other punishment." The usage in this case formed the law.

Now, according to this view of the fact, interest was limited at Athens, as effectually and as precisely, by this customary law, as it would have been by any penal statute; and the Athenian commonwealth is not to be cited as a real exception to the general practice of mankind.

The principal error which has prevailed on this subject, is the condemnation of any kind of interest, however small. A host of great names, from Aristotle among the Greeks, to the modern civilians, such as Domat and Pothier, might be cited, who rank all interest of money under the name of usury, and condemn it. But the sense of mutual benefit has, on this point, resisted, with equal firmness, the decrees of the church and the speculations of philosophers, and a regulated and reasonable interest has had the sanction, not only of our own municipal law, but of the most cultivated and enlightened human reason. Grotius, (lib. 2, c. 12. § 20, 22,) after discussing the question, whether usury may be permitted by the natural and divine law, concludes, that a reasonable interest may be permitted; and he cites Holland as an instance, in which eight per cent. is the ordinary, and twelve per cent. the mercantile interest. But he insists, that interest cannot be rightfully permitted beyond a reasonable limit: Non mordaces sed modice, according to Heineccius, in his commentary on this passage, and who admits that it belongs to the discretion of the lawgiver to regulate the quantum of interest. He says further, that in Germany, by imperial ordinances in 1600 and 1654, interest at the rate of five per cent. was allowed, though the canons of the church everywhere condemned it, and higher interest is now permitted. (Heinec. Elem. Jur. Germ. Lib. 2. tit. 13. § 378. Elem. Jur. civ. secund. Ord. Pand. part 4. lib. 22. tit. 1. § 104. Prolec in Grot. ubi sup.) Puffendorf (Le Droit de la nat. et des gens. lib. 5, ch. 7,) examines the subject at great length, and with great learning, and concludes with his approbation of those civil laws which allow and regulate interest, but do not permit individuals to take just what their cupidity would demand. Lord Bacon, in one

of his moral essays, (No. 41,) has also discussed the question, and examined the arguments for and against interest with his usual sagacity, and he concludes, that two things are to be reconciled: “The one," to use his own words, "that the tooth of usury be grinded, that it bite not too much; the other, that there be left open a means to invite moneyed men to lend for the continuing and quickening of trade;" and he recommends a general rate of interest, say five per cent. for ordinary cases, and a higher rate of interest in matters of trade.

Can we suppose, that a principle of moral restraint of such uniform and universal adoption, has no good sense in it? Is it altogether the result of monkish prejudice? Ought we not rather to conclude, that the provision is adapted to the necessities and the wants of our species, and grows out of the natural infirmity of man, and the temptation to abuse inherent in pecuniary loans? The question of interest arises constantly, and intrudes itself into almost every transaction. It stimulates the cupidity for gain, and sensibly affects the heart, and gradually presses upon the relation of debtor and creditor. Civil government is continually placing guards over the weaknesses, and checks upon the passions of men, and many cases might be mentioned, in which there is, equally with usury laws, an interference of the lawgiver, with the natural liberty of mankind to deal as they please with each other. But no person doubts of the necessity and salutary efficacy of such checks. On the same principle, that unlimited usury may be permitted, the law ought to allow the creditor to insert in his bond a provision for compound interest, whenever the stipulated interest becomes due and is not paid. Nay, parties ought to be allowed to agree, that if the condition of a bond be not performed at the day, the penalty shall not only be nominally forfeited, but literally exacted. I should apprehend, that if these things were to be permitted, there would not be strength enough in the government to support the administration of justice. It is an idle dream to suppose that we are wiser and better than the rest of mankind. Such doctrine may be taught by those who find it convenient to flatter popular prejudice; but the records of our courts are daily teaching us a lesson of more humility. And, I apprehend, it would be perilous in the extreme, to throw aside all the existing checks upon usurious extortion, and abolish or traduce a law which is founded on the accumulated experience of every age.

The Roman commonwealth, if we may place reliance upon its ear-lier history, tried every experiment on this interesting subject. The Romans had no law regulating the interest of money, and left the par-