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4th. The profits of trade, agriculture, and manufactures. - 4. 1st. If the surplus amount of capital, or labour, be small—as in most new countries, and even some old ones—it is self-evident that interest will be high; for such countries are poor, and there will be borrowers in proportion to poverty; whilst the lenders will be few, and of small resources. A high interest is, therefore, proof demonstrative, that such a country is not affluent. 2d. If the number of capitalists who desire to lend be great, competition will ensue, and interest must suf. fer a reduction—unless, 3d. The demand for borrowing counteracts this competition, by its excess over the ability to lend. This demand is regulated by, 4th. The profits of trade; if they are high, interest will also be high: for the amount paid for the use of capital will always be in proportion to the advantages derived from the investment. . An industrious people make a prosperous country. As the superabundant stock of industry passes a certain medium, and riches commence, interest falls. In all countries advancing to wealth, or satiated with money, interest is low, or at the minimum. When we borrow, we abstract a given amount of labour from another to our own use—the more labour, therefore, the more there is to lend, and the less the interest. In vain do the laws attempt to limit interest, which ebbs and flows with the state of trade, and a thousand circumstances not to be defined. It will always sink below, or rise above the limit. As the interest for the time being, is the interest of equity, it ought to be that of law. • * , As it is the labour that is borrowed, although represented by so many yellow and white pieces of coin, so the owner has a right to obtain for his labour the highest price. If capital is not too much locked up in monopolies, its competition will prevent extortion; and when it will not, it is for the laws to define and punish it. But capital naturally clothed with power, no sooner feels its own strength, than it seeks to increase it under the form of monopoly; which invests it with the privilege of extortion, under the impunity of a charter, which incorporates capital under the denomination of a bank. All INTEREst is paid by those who labour to those who are idle !—Superabundant industry never could accumulate, without receiving the action of labour. Therefore it is, that interest depends on the mass of industry, and the activity of trade and commerce. The principle, therefore, that ought to be allowed to determine and regulate interest, is the same that ought to be granted to determine and regulate the wages of labour, INDUSTRY, and the course of trade and commerce. Unshackled by law, and freed from the impetus of charters and monopolies, interest would become equitably established by competition alone:–For the capitalist being idle, and dependent for the means of subsistence and luxury on the labour of the borrower, would soon come to lend his money on just and reasonable terms. The working man can require nothing more than equal ground to stand on ; and nothing more is necessary, in order to endow him with competence as the reward of industry; and remove those blights on his labour and happiness, which are generated by law, charters, and monopoly. Capital without labour, is of no possible value—it is as if it had not existence. Deriving, therefore, all its value, all its pro
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ductive faculty, from labour, the latteris justly entitled to the greatest benefit. But what ought to be the particular rate of interest, must depend upon other circumstances—such as whether industry be abundant or scarce, or the country be opulent or poor, or trade, and commerce, and manufactures, flourishing or depressed. Where there exists a great accumulation of capital, interest will be low ; the greater the stock of industry, the greater the capital, and the lower the interest. Where the profits of trade are small, interest should be proportionably low. If six per cent. was an equitable rate of interest in 1818–it ought now be reduced to three; for our wealth has doubled, and the profits of trade and commerce have diminished one half at least, since that period. The same principle will regulate rent; the true value of land and the proportion of crops due to the producer. If produce is low and interest low, the rent ought also to be in proportion. This is generally the case, in proportion to the scale or rate of the wages of labour now established; but this scale of the wages of labour is too low : elevate that, and the wrongs and oppressions of the industrious classes will cease. Rent rests precisely on the same principle as interest for capital borrowed—with this adventitious difference, of locality, position, and favourable proximity, to trade. It is the hire paid for the loan of capital, in the form of land, houses, stores, and ships. What ought to constitute the equitable rent of land and farms, presents a question involving the principle of the distribution of labour. Capital will always extort a rent commensurate to the rate of interest; but far above what justice would allot, in relation to the comfort and happiness of the pro
ducer. If industry were adopted as the rule for the distribution of wealth, rent would be proportioned to the comfort of the labourer, as well as the pleasure of the capitalist. Under the present system, it is of course graduated on the rule of avarice and luxury, to the proprietor, and of stint, discomfort, and sometimes of starvation, to the operative, or labourer. t A knowledge of the necessity under which the poorer people lay for habitation, has given to capital a most oppressive monopoly and extortion as to rents, so that lands, houses, &c. generally yield double the current interest of money; and sometimes not a moiety of it. Yet it has never been thought eligible to regulate rents, by law, like interest, lest the want of competition should deprive man of habitation. Both resting on the same principle of capital loaned to use, interest, like rents, should be left to regulate itself.
This is a branch of the same subject—INTEREST ; but merits to be considered separately. Usury and extortion are both different degrees of ILLEGAL INTEREST. They are the children of monopoly and law; and carry in their train pauperism, ebriety, want, wretchedness, and suicide. If law had never interfered with labour, or fortified capital by charters and privileges, usury and extortion, with their concomitants and consequences, would be unknown to this prosperous country. The moment that the monopoly of capital draws a circle of credit, and avarice, a circle of aristocracy, by the institution of banks, usury and extortion are begotten. Here capital becomes a legal tyrant, and a moral oppressor. Those who cannot comply with its forms, or conciliate its favour, must submit to the antagonist principle of usury and extortion. The system of bank credits is a charmed circle: and to multiply them, only multiplies the favour, the exclusion, the affluence, and the beggary. Repeal the laws that generate it, and usury, the child of the laws, will perish. Who ever attempted even in thought to regulate the prices of commodities, and make the excess of the legal limit extortion ?—And yet this would not be more absurd and unjust, than laws regulating the value of labour, when put out on loan, instead of being sold. Credit ought to be, as it is, the offspring of industry, - R