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ESSAY XLI. OF USURY.1
MANY have made witty invectives against usury. They say, that it is pity2 the devil should have God's part, which is the tithe; that the usurer is the greatest Sabbath-breaker, because his plough goeth every Sunday; that the usurer is the drone that Virgil speaketh of:
'Ignavum fucos pecus a prsesepibus arcent ;'*
that the usurer breaketh the first law that was made for mankind after the fall, which was, 'In sudore vultus tui comedes panem tuum," not 'In sudore vultus alieni;'i that usurers should have orange-tawny bonnets, because they do judaize; that it is against nature for money to beget money; and the like. I say this only, that usury is a 'concessum propter duritiem cordis :'6 for since there must be borrowing and lending, and men are so hard of heart as7 they will not lend freely, usury must be permitted. Some others have made suspicious and cunning propositions of banks, discovery of men's estates, and other inventions; but few have spoken of usury usefully. It is good to set before us the incommodities8 and commodities9 of usury, that the good may be either weighed out or culled out; and warily to provide, that, while we make forth to that which is better, we meet not with that which is worse.
1 Usury. Interest on money (not, as now, unlawful interest). 'Thou oughtest, therefore, to have put my money to the exchangers, and then, at my coming, I should have received mine own with usury.'—Matt. xxv. 27- 'Our angles are like money put to usury; they may still thrive,though we sit still, and do nothing.'— Isaak Walton.
1 It is pity. It is a pity.
'That he is mad, 'tis true; 'tis true, 'tis pity;And pity 'tis, 'tis true.'—Shakespere.
3 'They drive from the hive the lazy swarm of drones.'—Georg. iv. 168.
* 'In the sweat of thy face shalt thou eat bread.'—Gen. iii. 19. 6 'In the sweat of another's face.'
6 'A concession on account of hardness of heart.'—See Matt. xix. 8.
7 As. That. See page 23.
8 Incommodity. Inconvenience; disadvantage. 'The uncouth incommodity of my solitary life.'—Bishop Hall. 'What incommodity have you conceived to bo in the common law.'—Spenser.
* Commodities. Advantages.
'I will turn diseases to commodity.'—Shakespere.
The discommodities' of usury are, first, that it makes fewer merchants: for were it not for this lazy trade of usury, money would not lie still, but it would in great part be employed upon merchandising,3 which is the vena porta3 of wealth in a State: the second, that it makes poor merchants; for as a farmer cannot husband his ground so well if he sit at a great rent, so the merchant cannot drive hia trade so well if he sit at great usury: the third is incident to the other two, and that is, the decay of customs of kings, or estates,4 which ebb or flow with merchandising: the fourth, that it bringeth the treasure of a realm or State into a few hands; for the usurer being at certainties, and the other at uncertainties, at the end of the game most of the money will be in the box, and ever a State flourisheth when wealth is more equally spread: the fifth, that it beats down the price of land; for the employment of money is chiefly either merchandising, or purchasing; and usury waylays both: the sixth, that it doth dull and damp all industries, improvements, and new inventions, wherein money would be stirring, if it were not for this slug: the last, that it is the canker and ruin of many men's estates, which in process of time breeds a public poverty.
On the other side, the commodities of usury are, first, that howsoever5 usury in some respects hindereth merchandising, yet in some other it advanceth it; for it is certain that the greatest part of trade is driven by young merchants upon borrowing at interest; so as * if the usurer either call in or keep back his money, there will ensue presently a great stand of trade: the second is, that, were it not for this easy borrowing upon interest, men's necessities would draw upon them a most sudden undoing,7 in that3 they would be forced to sell their means (be it lands or goods) far under foot,1 and so, whereas usury doth but gnaw upon them, bad markets would swallow them quite up. As for mortgaging, or pawning, it will little mend the matter; for either men will not take pawns* without use,3 or if they do, they will look precisely for the forfeiture. I remember a cruel monied man in the country, that would say, 'The devil take this usury, it keeps us from forfeitures of mortgages and bonds.' The third and last is, that it is a vanity to conceive that there would be ordinary borrowing without profit, and it is impossible to conceive the number of inconveniences that will ensue, if borrowing be cramped: therefore to speak of the abolishing of usury is idle; all States have ever had it in one kind or rate or other—so as that opinion must be sent to Utopia.
1 Discommodities. Inconveniences. See page 357.
3 Merchandising. Trading. 'The Phenicians, of whose exceeding merchandising we read so much in ancient histories, were Canaanitett, whose very name signifies merchants.'—Srerewood.
* The great vein. * Estates. States. See page 135.
5 Howsoever. Although. See page 2. "As. That. See page 23.
7 Undoing. See page 300.
s In that. Inasmuch as. 'Things are preached not in that they are taught, but in that they are published.'—Hooker.
To speak now of the reformation and reglement4 of usury, how the discommodities of it may be best avoided, and the commodities retained. It appears by the balance of commodities and discommodities of usury, two things are to be reconciled; the one that the tooth of usury be grinded, that it bite not too much; the other that there be left open a means to invite monied men to lend to the merchants, for the continuing and quickening5 of trade. This cannot be done, except you introduce two several sorts of usury, a less and a greater; for if you reduce usury to one low rate, it will ease the common borrower, but the merchant will be to seek for money; and it is to be noted, that the trade of merchandise being the most lucrative, may bear usury at a good rate—other contracts not so.
To serve both intentions,6 the way would be briefly thus :— that there be two rates of usury; the one free and general for all, the other under licence only to certain persons, and in certain places of merchandising. First, therefore, let usury in general be reduced to five in the hundred, and let that rate be proclaimed to be free and current, and let the State shut itself out to take any penalty for the same. This will preserve borrowing from any general stop or dryness—this will ease infinite borrowers in the country—this will, in good part, raise the price of land, because land purchased at sixteen years' purchase will yield six in the hundred, and somewhat more, whereas this rate of interest yields but five—this, by like reason, will encourage and edge industrious and profitable improvements, because many will rather venture in that kind, than take five in the hundred, especially having been used to greater profit. Secondly, let there be certain persons licenced to lend to known merchants upon usury, at a high rate, and let it be with the cautions following. Let the rate be, even with the merchant himself, somewhat more easy than that he used formerly to pay; for by that means all borrowers shall have some ease by this reformation, be he merchant or whosoever1—let it be no bank, or common stock, but every man be master of his own money; not that I altogether mislike3 banks, but they will hardly be brooked, in regard3 of certain suspicions. Let the State be answered1 some small matter for the licence, and the rest left to the lender; for if the abatement be but small, it will no whit' discourage the lender; for he, for example, that took before ten or nine in the hundred, will sooner descend to eight in the hundred, than give over this trade of usury, and go from certain gains to gains of hazard. Let these licenced lenders be in number indefinite, but restrained to certain principal cities and towns of merchandise; for then they will be hardly able to colour6 other men's monies in the country, so as the licence of nine will not suck away the current rate of five; for no man will lend his monies far off, nor put them into unknown hands. If it be objected that this doth in any sort authorise usury, which before was in some places but permissive, the answer is, that it is better to mitigate usury by declaration than to suffer it to rage by connivance.
1 Under foot. Too low. 'What a stupidness is it, then, that we should deject ourselves to such a sluggish, and underfoot philosophy.'—Millon.
J Pawns. Pledges.
'Her oath for love, her honour's pawn.—Shakespere.
* Use. Interest. * Keglement. Regulatlon.
6 Quicken. To give life to. 'You hath He quieiened, who were dead in trespasses and sins.'—Ephes. ii. i.
t Intention. Object. 'The principal intention (in chronic distempers) is to restore the tone of the solid parts.'—Arbuthnot.
1 Whosoever. Whoever. 'Whosoever should give the blow, the murder would be his. We are guilty of all the evil wo might have hindered.'—Bishop Kail. 1 Mialike. Dislike.
'And Israel, whom I lov'd so dear,
3 In regard. On account. See page 310.
4 Answer. To pay.
'Who studies day and night
• Whit. In the least; in the smallest degree. 'I was not a whit behind the very chiet'est apostles.'—2 Cor. xi. 5.
'We love, and are no whit regarded.'—Sidney.
* Colour. To pats for their own. 'To colour a stranger's goods is, when a freeman allows a foreigner to enter goods at the Custom-house in his name.'— Phillip*.
It is wonderful how late any right notions on this subject were introduced; and not even now have they been universally adopted. I have already remarked, in the notes to the Essay on 'Seditions and Troubles, ' that the error of over-governing always prevails in the earlier stages of civilization, even as the young are more liable to it than the experienced. And that Bacon shared in this error is evident from his advocating sumptuary laws—the regulating of prices—the legislating against engrossers—prohibiting the laying down of land in pasture, &c. All these puerilities are to be found in the earlier laws of all countries. In this Essay on 'Usury, ' he does not go the whole length of the prejudices existing in his time, though he partakes of them in a great degree. In his day, and long before, there were many who held it absolutely sinful to receive any interest for money, on the ground of the prohibition of it to the Israelites in their dealings with each other; though the Mosaic law itself proves the contrary, since it allows lending at interest to a stranger; and certainly the Israelites were not permitted to oppress and defraud strangers.
'Since l/iere must be borrowing and lending, and men are so hard of heart as they will not lend freely'
It seems strange that a man of Bacon's acuteness should not have perceived—but it is far more strange that legislators in the nineteenth century should not have perceived—that there is no essential difference between the use of any other kind of property, and money, which represents, and is equivalent to, any and all kinds. It never occurred to Bacon, seemingly,