Lords Sitting of 16 March 1826

USURY LAWS.
The Marquis of Lansdownsaid, he held in his hand a petition from the same body in Manchester from which, a few days before he presented a petition in favour of the bill, for putting an end to the circulation of small notes. The petitioners thought the subject was materially connected with that bill; and he could not but think that it had, if not directly, at least indirectly, a connection with it, as it related to the subject of commercial distress. The object of this petition was, to call their lordships' attention to the Usury Laws. Those laws had certainly greatly aggravated the distress which prevailed among the mercantile classes. Few of their lordships could be aware of the great loss of capital and loss of interest, which had taken place, within the last six months, in consequence of that unfortunate attempt of the law of England to fix the value of capital,—to make that fixed which was in its nature unfixed and variable. This constituted a state of things which had been the ruin of many individuals; but he spoke not now so much with reference to the effect of the law on the landed interest as to its operations on commerce. Such was the state of the law, that if persons found it necessary to borrow money they could not do so on terms above the fixed rate. What was this but saying that they might borrow money when they had no occasion do so; but that when their exigencies required them to borrow, the law should step in and shut them out from that resource? Thus, in times of great pressure, the law compelled persons in difficulty to resort to the most ruinous terms. This was as inconsistent as it would be to say to a person insuring his life, that no insurance should be effected for less than ten years' purchase. The principle was the same as telling such a person, that when he was in good health he might effect his purpose, but that at a moment of sickness or in advanced age, when insurance became the more necessary for the sake of his wife and children, he should then be deprived of the opportunity of taking such a step. He defied any noble lord to show that there was the least difference in principle between a law which would prohibit the insurance of life at such value as might be put upon it, and one which prevented a man from
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placing what value he pleased upon his capital. The profit on capital must, like every thing else, depend on the relation between the supply and demand; and if sound principles of commerce were followed, the interest of money would always readily adjust itself to the state of trade. To try to fix it by law, to impose a maximum, was as vain an attempt as to fix the mercury in the barometer. The most advantageous course for individuals, and the best policy for government, was to allow the value of capital to adjust itself to the wants of commerce. On this subject he concurred with the sentiments expressed in the petition, which was from the Chamber of Commerce of Manchester.
The Earl of Liverpoolsaid, he had had an opportunity of learning the sentiments of the petitioners, at a meeting which took place some time ago, when certain persons belonging to the same body as the petitioners, applied to government to learn whether it could not afford relief to the existing commercial distress. Those persons assured him that they should not have made, nor would they have had pretence for making, application to government for relief, had it not been for the circumstances in which they were placed by the Usury Laws. Now he was aware that obstacles stood in the way of abrogating those laws altogether, in consequence of their bearing on particular interests; but, notwithstanding this, he was of opinion, that at no distant day their lordships must give their best consideration to the state of those laws. The question was one of much difficulty, but the present state of the law could be defended on no sound principle.