USURY LAWS REPEAL BILL.— (Hansard, 30 June 1817)

§ Mr. Calcraft
considered this proposition one of too great moment to the mercantile and landed interest, to pass into a law, without giving the subject the most elaborate investigation. Where were the reasons on which this bill was founded? The probable effect it would have on the money market, and the different species of government stock, was of too much interest to be sanctioned by the legislature, without scrutinizing into what those consequences or efforts might be. He therefore suggested the propriety of not pressing the bill through the further stages, as he feared that at present neither the House nor the public were prepared to treat the subject as it deserved.

§ Sir H. Parnell
said, the proper question to be asked on this bill was, not that which his hon. friend had put, namely, where were the reasons on which this bill for repealing the usury laws was founded; but this question, where were the reasons upon which the continuance of these laws could be justified? If the reasons upon which these laws were originally considered to be expedient were carefully examined, they would be found to depend upon such doctrines concerning the nature and use of money as belonged to the darkest periods of the most ignorant times; and particularly to those ages when the principles of commercial policy were wholly unknown. The value of capital employed in extending industry among the people, or in adding to the public wealth by the profitable use of it, had not been thought of, when the lending it for a fair remuneration was set down as a gross abuse in favour of the rich, and to the prejudice of the poor. It would be found upon a careful examination of the subject, that there was not one of those grounds on which the usury laws were founded, which is not altogether at variance with all those principles which the wisest authorities have laid down as the true principles of trade. Yet it is no doubt true, that some of those who are the most ready to acknowledge the full value of their principles, cannot bring themselves to apply them to the care of the usury laws. If the taking of interest for money is viewed in its proper light, it consists in a bargain between the lender and the borrower, which is exactly of the same nature as all other bargains. The borrower finds it his advantage to take the lender's money, and to give a fair remuneration for it; and the lender is induced to confer this advantage, if the remuneration is sufficient to repay him for the value of his money, and the risk he incurs in placing it out of his power. It is this circumstance, that he must secure not only a sum which shall be a sufficient one for the actual use of his money, but also for the risk he runs, which renders it quite impossible to fix a rate of interest which shall suit all cases; for both the actual value of money and the risk incurred vary according to so many circumstances, that no fixed rate can ever be devised which shall not operate to the injury of either the borrower or the lender. When the great importance of the free should have been more maturely const circulation of capital to all kinds of trade 1268 is duly attended to, it must be admitted that a law which fixes the maximum of its price, must be productive of a very mischievous restriction upon its natural powers; it was like fixing a price upon a valuable manufacturing machine, which should be too low to pay the person who made it, the expenses he had incurred upon it. It was impossible to conceive how any legislative interference could be more detrimental to the industry and wealth of the country than that which directly checked the natural course of capital, the great mover of all industry, by depriving those of the means of acquiring it, who had sufficient means to pay for it, if those who were willing to lend it, could secure a just and safe remuneration. For these reasons, he thought the House and the public very much indebted to the learned serjeant who had brought in the bill, and he hoped he would persevere in urging his measure, until the good sense of the country should acquiesce in the policy of adopting it.

General Mitchell
contended, that the operation of the bill would shake instead of extend credit, generally speaking. It would serve the purpose of money-lenders admirably, who, he feared, would be the only persons benefited.

Lord Castlereagh
suggested to the learned member, to whom he thought the country indebted, in thus bringing forward the proposition in a tangible form, that it would be more advisable to grant an extension of time for its due consideration.