"when carried into foreign countries, will only be valued "as bullion; and the precious metals, whether exported in "coins or in bullion, will equally ferve the purpofe of a com"mercial capital; and it is useless and abfurd to impose upon "the public the expence of making coins, increly for the pur"pofe of fending them out of the kingdom. It has been a com"mon artifice, practifed by those who have written on paper

currency, to confound paper credit with paper currency, " and even the higher forts of paper currency with the inferior "forts, fuch as immediately interfere with the ufe of the coins "of the realm. Paper credit is not only highly convenient and beneficial, but is even abfolutely necefiary, in carrying "on the trade of a great commercial kingdom. Paper currency is a very undefined term, as ufed by fpeculative writers. "To find arguments in its fupport, at least to the extent to "which it is at prefent carried, they have been obliged to "connect it with paper credit; fo that the principles, on "which the use of paper credit is truly founded, may be "brought in fupport of a great emiflion of paper currency: "I do not mean to fay, that even the higher orders of paper "currency may not be very convenient, in carrying on many "branches of the trade of a country fo wealthy as Great Bri"tain: the fort of paper currency to which I principally "object, is that which interferes with the ufe of the coins of "the realm, more especially in the payment of labourers and "artificers, of the failor and foldier, and in the fmaller "branches of the retail trade of the kingdom. Many words. " are not neceffary to point out the evils to which his majesty's "fubjects are expofed, by the practice which now prevails, "of iffuing the lower fort of paper currency by country "bankers; the complaints on this head are univerfal. The "notes of these country bankers have credit only within a certain extent or district: if a traveller paffes from one dif❝trict to another, he must provide himself with the notes of "other bankers, which have credit within the diftrict on which "he is entering; and an inconvenience to which travellers "have hitherto been fubject, in paffing from one fmall independent state on the continent to another, is experienced by "thofe who travel through the kingdom, in paffing from one "diftrict to another; fo that the circulating medium of the "different parts is various; an evil which I believe never ex"ifted before in one great united kingdom. But I have not "hitherto defcribed the principal evils refulting from this "paper currency. It was natural to fuppofe, that the precious "metals, being no longer wanted in the fame degree, for the "purpose of being converted into coins, the price of them

46

"would

"would fall in the British market: on the contrary, for a con, "fiderable time, bullion, both of gold and filver, has not been "generally fold, but at a price above the rate at which each of "them is valued at the mint. It would not be proper for me "at prefent to affign the probable caufe of this apparent con"tradiction: in fuch a state of things, whatever may be the "caufe, no bullion, either of gold or filver, will be brought to "the mint to be coined; for it cannot be coined without a lofs "to the person who brings it; and if it were converted into "coins, the moment they were iffued they would be thrown "into the melting pot, and reconverted into bullion, because "it would be of more value in the fhape of bullion than in that "of coins. Till fome remedy is applied to this evil, no new "fyftem of coinage can be adopted, with any reasonable hope "of fuccefs. When the fituation of the bank of England was "under the confideration of the two houfes of Parliament, in the year 1797, it was my opinion, and that of many others, "that the extent to which paper currency had then been carried, "was the first and principal, though not the fole cause of the "many difficulties, to which that corporate body was then, " and had of late years, from time to time, been expofed, in

fupplying the cafh occafionally neceflary to the commerce "of the kingdom; for the bank of England being at the head "of all circulation, and the great repofitory of unemployed

cafh, it neceffarily happens, that whenever a fudden increaf"ed fupply of coins becomes indifpenfable, in confequence of "private failures or general difcredit, by which notes of the "before-mentioned defcription are driven out of circulation, "the bank of England can alone furnish the coins which are "required to make up this deficiency; and this corporate "body is thereby rendered refponfible, not only for the value "of its own notes which it may iffue, but, in a certain degree, «for such as may be iffued by every private banker in the king

dom, let the fubftance, credit, or difcretion of fuch a banker "be what it may and if the price of both the precious metals "in bullion then be above that at which they are rated at the mint, the bank of England have it not in their power to fupply this deficiency, but at a great lofs to its proprietors; " and even if they were to fubmit to this lofs, and iffue new "coins in confequence, it would only be, as has been already "obferved, in order that they might be thrown into the melt"ing pot and converted into bullion; fo that till fome remedy " is applied to this evil the bank of England cannot, I think, "return to the first principles of its inftitution, under which "it has fo long and greatly flourished, and re-affume, without ❝ any restriction, its payments in cash."

INTEREST

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INTEREST AND USURY. Thefe fubjects, though not immediately connected with the public revenue, are placed in this divifion, as naturally incident to the poffeffion and ufe of money. Intereft and Ufury, though now ufed in fenfes as oppofite as those which can be applied to the fame act, in order to denominate it honeft or unjust, feem in ancient times to have been fynonymous, or at least convertible terms. When money

was lent on a contract to receive not only the principal fum again, but also an increase, by way of compenfation for the ufe; it was generally called intereft by thofe who thought it lawful, and ufury by thofe who did not fo. In modern times, the application of thefe terms does not depend on the principles or opinions of him who uses them, but are defined notions of law; intereft meaning the return made by the borrower according to law and custom for the loan, advance, or forbearance of money; ufury the fum extorted by the perfon lending, beyond what the law allows, from the wants, hopes, or weakness of the borrower. An inconvenience refulting from an abfurd notion entertained. in ancient times, that all profit received for the loan of money was unlawful, and even damnable, was, that none would practife the trade of lending, but thofe who were indifferent to cha racter, and hopelefs of esteem; nor could the legislature frame laws for limiting those contracts which they altogether condemned, though they defpaired of preventing them. More enlightened times brought forth a better understanding, and the ftatute 37 Hen. VIII. prohibited the payment of intereft exceeding ten per cent. In the reign of his fucceffor, religious zeal again prevailed fo far as to prohibit all intereft; but the ftatute of Henry VIII. was revived by the 13th of Elizabeth, cap. 8.; and ten per cent. continued to be the legal rate of intereft till the 21ft James I. when it was restricted to eight per cent. It was reduced to fix per cent. foon after the restoration, and by the 12th of queen Anne to five per cent. All these different ftatutory regulations feem to have been made with great propriety. They feem to have followed and not to have gone before the market rate of intereft, or the rate at which people of good credit ufually borrowed. Since the time of queen Anne, five per cent. feems to have been rather above than below the market rate. Before the American war, the government borrowed at three per cent.; and people of good credit in the capital, and in many other parts of the kingdom, at three and a haif, four, and four and a half. The ftatute of Anne against usury is as strong and operative as words can devife, fo much fo that Lord Man feld declared that the wit of man could not evade it; it provides that no perfon on

any

any contract, fhall, directly or indirectly, take for the loan of any money, wares, &c., above the value of five pounds for the forbearance of one hundred pounds for a year; and all bonds and affurances for payment of any money to be lent upon ufury, whereupon or whereby there fhall be referved or taken above five in the hundred, fhall be void; and every perfon who shall receive, by means of any corrupt bargain, loan, exchange, chevizance, fhift, or intereft of any wares, merchandizes, or other things, or by any deceitful way, for the forbearing or giving day of payment for one year, for their money or other things, above five pounds for one hundred pounds for a year, shall forfeit treble the value of the monies or other things lent. The wholefome feverity of this law cannot in all cafes prevent a practice to which avarice prefents ftrong incitements, and neceffity, inconfideratenefs, and hope, offer ready votaries; but it is of general ufe in reftricting the fpeculations of unprincipled men; and as the fecurities given are void, in whose hands, or on what confideration foever, they may be, the danger of such tranfactions, and the odium applied to thofe who engage in them, are greatly enhanced. The law however is not fo ftrict as to prevent the extenfion of compenfation where the rifque, trouble, or inevitable expence of the lender fairly require it. Thus in the contracts known by the names of bottomry and refpondentia, which depend on the arrival and fafety of thips, and in annuities for lives, the receipt of intereft far exceeding five per cent. is allowed, on account of the danger to which the lenders fubmit of a total lofs of their capital. Parunbrokers receive for the loan of money twenty per cent. although without any rifque, but as a compenfation for their care and trouble in registering and fecuring the pledges depofited with them, and the various other reftrictions impofed on their business. There is also one ordinary tranfaction in which, by force of cuftom allowed as law, the receipt of more than five per cent. is permitted; it is in the difcount of bills or notes of hand. In those cafes the lender, deducting the intereft from the whole fum specified, and advancing only the remainder, receives, in fact, a greater intereft than the law fuppofes to be juft. For instance, if a bill were drawn for one hundred pounds to be due in twelve months, the perfon discounting it would give but ninety-five; at the end of the year he would be paid five pounds, not for the loan or forbearance of one hundred pounds, but for the loan of ninety-five pounds, being at least at the rate of five pounds five fhillings per cent.

Some have doubted whether the laws fhould in any ways restrain the rate of intereft, and recommended that money, like

I

other

other articles in a market, fhould find its own level; but it fhould be confidered that the laws againft ufury have always been remedial, the grievance of extortion has been severely felt before the legislature interpofed, and the restrictions have been productive of general benefit, and increased general confidence; the wish to take advantage of individual diftrefs having been fuperfeded by the more honourable and beneficial defire of contributing to general profperity: the former would yield benefits to the temporary fpeculift, the latter alone can promote the honourable views of the whole moneyed or commercial community. Nor is it true that extravagant intereft facilitates leans; millions are lent at and under five per cent., where it would be difficult with lefs approved fecurity to raise even a fmall portion of the fums; and it is invariably found that ne- • gotiations for loans on Weft India, or even Irish fecurities, where the intereft is eight or fix per cent. are extremely difficult, until the redundancy of money in the market has made English fecurities attainable only at a much inferior rate.

ARMED FORCE.

It has already been stated, as a high prerogative of the British monarch, that he alone has the right of declaring war and making peace; but as a check against the abuse of that power, parliament has retained the privilege of limiting the number of perfons to be employed, and the ftill more effential authorities of iffuing monies for paying, and framing laws for regulating them. In this divifion of the work, the navy and the army will be feparately confidered, and fome few fubjects of regulation added which are common to both. In treating of the navy, the royal or warlike fhips will chiefly be confidered, but fome points affecting commercial veffels will occafionally be found infeparably connected; and fome notice must be taken of the offices and institutions formed on fhore for the benefit of the navy, and the local and perfonal regulations, as well as the general laws affecting thofe who follow the maritime profellion, as well as thofe who by confanguinity or property become connected with them. The army will include every department of land force, as regulars, militia, and volunteers; with fimilar additions, as to offices and inftitutions. The topics common to both are principally fome general laws relating to mutiny and desertion, and the form of trial by court martial.

THE