in Latin every day betwixt eleven and twelve hours before noon. Whilk also let be a common writing hour to the haill schule. Let the theme be accurately examined either presently after the making of it, or when they say their lessons. Let every day's lesson be said before they skail, both play-days and others, that it prejudge not the morning prufe. 11. Because nae certain number of lessons can be appointed to them wha learn Scottish, to get it being a thing that depends on the time of the year, the number of scholars, and their proficiency, in respect whereof, some will have mare to say at a lesson, and others less, whilk will take up time accordingly, therefore, in this, let the master do all that possibly may be. And that there be nae neglect therein, let the minister, with the best skilled of the gentlemen, every quarter of the year at least, stand by the master in the schule, till in their presence he have hearkened through all the children learning Scottish, that according to the time spent therein, whilk they shall measure with a glass, they may direct the master how mony lessons he may give them in the morning, before, and after nune; whilk their direction the master shall be bund to fulfil, as if here it were particularly expressed. At whilk time also the said minister and gentlemen shall take inspection of the estate of the school, try the children's proficiency, and the master's diligence and fidelity in fulfilling all the points of his charge, and shall make report to the session, that the master may be commended and encouraged, or rebuked and admonished, according as the matter shall require. And, if it shall be fund that the master uses ony fraud to elude the trial, as that he cause the childer to say longer lessons that day nor they use ordinarlie or ony such, that this shall be ane fault meriting removal from his charge. 12. For the children's better profiting, let those who are farther advanced reading Scottish, whether print or writ, each of them have the charge of a young scholar, wha shall sit beside him, wham he shall mak perfyte of his lesson against the time come he shall be called to say, on the negligent pairty's peril, whilk of the twa soever it shall be fund to have been. And let the elder scholars themselves speer at the master what words they are ignorant of in their awn lesson; it being always provided, that the elder scholar's furdering of the younger hinder not himself in his learning. 13. Let a special care be had of the children writing, who are meet for it. Let the hour named betwixt eleven and twelve be allotted to that exercise every day; and farther to those whase special aim that is. Let the master make or mend their pens, rule their paper, set their copies, take inspection particularly of every ane's writing, point out the faults, and learn them be occular demonstration in his ain practice before them how to mend. The master most lead the hands of young beginners, stand over their head for their direction, and be going through all for their furderance. 14. As the master sould be careful and conscientious to teach his scholars good learning, sae sould he also learn them gude manners, how to carry themselves fashionably towards all; and, for this purpose, sould learn them the forms of courtesy to be used towards himself in the schule, their parents at hame, gentlemen, eldermen, and others of honest fashion, abroad. He sould put in their mouths styles of compellation suitable to ilk ane's place to whom they speak, and how to compose their countenance, hands, feet, when ony speak to them, or they to them. And that they be taught to abandon all uncivil gestures, as shaking of head, arms, etc. 15. And because mony, far less the tender youth, are unable to abide continual bensail of learning, let them have, for preserving and sharpening their ingines, some recreation; on the ordinar days, Tyseday, Thursday, and Saturday, in the afternune, for the space of an hour in the winter, or from October to Februar, and twa hours the rest of the year. But let the master see that they play not at ony unlawful or obscene pastime, or such as may aither readily defile or rend their clothes, or hurt their bodies; and let a convenient place be chosen near by the schule, bot not at all the kirk-yard, nor ony part of it, whilk is dormitorium sanctorum, a place for nae ordinary civil employment, let be ludicrous, it serving for mourning rather than for playing and sporting, whilk sould be kept honestly separate for its awn use. 16. And, finally, as without discipline nae company can be kept in order, sae least of all unbridled youth; therefore it shall be necessary that there shall be in the schule a common censor, wha shall remark all faults, delate them to the master, of which account shall be taken ance a week. And, for mare perfyte understanding of the children's behaviour, there shall be a clandestine censor, of whom nane shall know but the master, that he may secretly acquaint the master with all things, and, according to the quality of the faults, the master shall inflict punishment, striking some on the lufe with a birk wand or pair of taws, others on the hips, as their faults de serve, but none at ony time or in ony case on the head or cheeks. And herein especially is the master to kythe his prudence in taking up the several inclinations of his scholars, and applying himself thereunto, commendations, allurements, fair words, some little rewards, drawing from vice, and provoking to virtue, such as may be won thereby, and others be moderate severity, if that be fund maist convenient for their stubborness. And let the wise master rather by a grave and an authoritative countenance repress insolence, and gain every one to his duty, than by strokes, yet not neglecting the rod when it is needful. CONSIDERATIONS ON THE PROPOSED whatever may be its ultimate advantages; and in doing this, I wish to be understood as rather suggesting doubts as to the expediency of the measure, in hopes of being set right, if I am wrong, than offering any decided opinion on a question so difficult and comprehensive. As the question about repealing the Usury Laws is again before Parlia ment, I hope it may not be thought improper to offer a few plain remarks on so important a subject, and to request the attention of the readers of your Journal to considerations in which most of them cannot fail to take an interest. It is neither my wish, nor have I the ability, to defend these laws on general principles, nor to examine the grounds on which their repeal has been demanded, some of which have been very ably stated and inforced in your Number for August last year. All that I propose is to call the notice of your readers to what appear to me likely to be some of the immediate consequences of this repeal, VOL. IV. Looking at the subject as a man of business, but little conversant with the enlarged views and ingenious reasonings of speculative men, I cannot help thinking that there is something in the nature or functions of money, that takes it out of the common class of commodities, the price and the return for the use of which are left to the private agreement of the parties concerned. The case of land, houses, and other subjects temporarily intrusted to another than their owner, differs, I think, in some essential particulars from a loan in money. One can never be under so pressing a necessity to become the occupier or these subjects, as even responsible indivi duals may be, on particular occasions, for pecuniary accommodation. No prodigal or spendthrift will ever have recourse to a lease of farms or houses, at a rent above their value, as a mode of supplying funds for his extrava gance, or relieving himself from difficulties. The transaction between the owner and occupier of these subjects is therefore regulated by mutual convenience, and though the former may obtain a rent much above the legal rate of interest of the money for which he purchased them, this cannot be said to be extorted from the necessities of the latter, or a premium received for administering to his follies. The law, it has been observed, does not prevent a man from purchasing goods on credit, at more than the mar ket price; and these he may sell again, in order to raise money, at a rate as much below the market price; and, by this double loss, he may be paying for the use of money a much higher rate of interest than if he had been allowed to borrow it directly from the money lender. Since money may be obtained in this circuitous mode, without the terms being liable to challenge, however hard they may be for the debtor, would it not be better to let him go into the money market at once, and find what he wants upon the best terms he can? If there be an error in this conclu sion, it must be sought for, I imagine, in the peculiar character of money, considered not so much in the light of a commodity itself, as the representative of all other commodities, or that for which all other commodities can be readily exchanged. The price of commodities, and the price to be paid for the use of money, may not be so exactly of the same nature as to justify legislators in leaving both to be adjusted by the same means. The demand for commodities is limited by the wants of the consumers, and, in ordinary cases, by their means of paying for them from funds which already exist; except in the extraordinary case just stated, which could not answer the purpose of a borrower to any great extent, or longer than till his object was discovered. The supply of commodities is necessarily regulated by this demand; but the demand for money may not be limited by the real wants of the borrowers, or the funds which they actually possess for repaying it at a stipulated period: Money is not only like commodities wanted for immediate consumption, if I may be allowed the expression, but as the means of speculation, with a view to future profit; and for this last purpose the demand may be out of all proportion greater than for the former. Such projectors or speculators certainly do not always deserve the censure that has been often attached to the name; but there does not seem much reason for complaint on their part, or on the part of the public, if the laws are so framed as to give a preference in the money market to established trades. There is no law to prevent them from risking their own capital; nor is it very probable that any useful project, or any new line of business that was at all promising, has ever been interdicted by the Usury Laws. But it is no part of my present purpose to defend these laws; so far from it, that I am as ready as their warmest opponents to admit, that their operation is in many instances exceedingly injurious. But it is one thing to impose regulations on a state of freedom, and another thing, after these regulations have been submitted to for centuries, and nations have flourished under them, to return all at once to a system of which there has been no experience in the present structure of society. Besides, we know the hardships of our present Usury Laws, but the consequences of their repeal can only be matter of conjecture; some of these, however, are at least probable. One of the first difficulties in the way of repealing the Usury Laws, is the great and sudden fluctuations to which the money market seems to be peculiarly liable. How far this may be owing to the present state of our currency I shall not stop to inquire; but that the power which the Bank of England now possesses of enlarging or diminishing the supply at pleasure, must have some effect in rendering mo ney abundant or scarce at short intervals, is undeniable. It appears from documents recently published, that in a few weeks the issues of the Bank have varied by so large a sum as four or five millions. But as a proof of this fluctuation within short periods, whatever may be the cause, I may refer to the arti cle on Mr Bentham's treatise, in the Edinburgh Review for December 1816, the writer of which, though de cidedly hostile to the Usury Laws, admits, that their repeal would not then be expedient, because the mar ket rate of interest was higher than that fixed by law; whereas the Committee of the House of Commons last year were of opinion that the market rate having then fallen below the legal rate, the measure might be ventured on under peculiar advantages. Thus, in the short period of about a year and a half, a considerable difference must have taken place in the yearly value of an article, by which all others are interchanged and their own value measured. And it deserves to be remarked, that, in the former of these years, the higher interest of money was not the consequence of speculation, nor high profits, but of general distress. The channels in which it had been employed for some years before were shut, and the ordinary channels of peaceful commerce were not yet opened. Money, nevertheless, was so scarce, that many who could give the best security were not able to obtain it but upon annuity interest; that is, at as much or more than the estimated profits of trade, which include both the interest of money and See Magazine for August last. the remuneration of him who employs it. These profits have been supposed not to exceed 10 or 12 per cent.; but in 1816 a great deal of money was borrowed at a higher rate. It will not much affect the question to admit, that the present laws made borrowing more difficult, and obliged the lender to demand a higher premium for the use of it. The fact, however, that a great difference prevailed in the market rate of interest at the two periods is unquestionable. In looking forward to the consequences of repealing the Usury Laws, this fluctuation in the market rate of interest ought not to pass unnoticed. The removal of all restrictions would allow it a wider range, and at shorter intervals than at present. The highest and lowest rates would be farther from one another, and the intermediate fluctuations more frequent and rapid. The time for which money was lent would, therefore, probably, affect the rate of interest. Lenders might not wish to deprive themselves of the power of taking advantage of these fluctuations. Though the publie funds seldom afford an interest of 5 per cent., many prefer them to landed security at that rate, because they can command their money at pleasure. Hence it is probable that a repeal of the Usury Laws would affect the mercantile classes and the agricultural somewhat differently. In a large class of transactions, the discounting of bills at short dates, the rate of interest might vary from time to time, but, at the same time and place, would probably be rendered uniform by an agreement among the bankers. From that rate it would be held rather disreputable in ordinary cases to deviate. Bankers in extensive business cannot obtain so accurate a knowledge of the circumstances of their customers as to establish a graduated scale of discounts adapted to the various degrees of risk they may run. Where the security was not thought quite sufficient, they would decline discounting altogether as at present. This would be the consequence in all large towns at least, where there are several banking estab lishments. It might be otherwise in the country, and in transactions between private individuals everywhere; but these would bear but a small pro portion to the whole sum advanced on bills. A general understanding of this kind, which seems almost unavoidable, would go far to defeat the hopes of those who expect much advantage from the system of liberty. An uni form rate of interest would still be established in practice; none but the most necessitous would be willing to pay more, and few respectable lenders would subject themselves to the odium of exacting more. As I wish to confine myself to those considerations which lie upon the sur face of this important question, I shall not inquire what may be the circumstances that would lead to changes in this rate. That there would be such changes from time to time is unquestionable; and there might possibly be a difference also even at the same time in different parts of the kingdom. One thing, however, is sufficiently obvious,-the rate of interest might rise or fall without any corresponding alteration in the abilities of those who had to pay it. Bankers who invest their capital, or a great part of it, in the public funds, as most of them do, are understood to restrict or enlarge their discounts at present according to the price of these funds, but when the interest of money should become not more fixed than the price of 3 per cent. consols, the latter might operate not so much upon the amount of discounts as upon the terms. When this description of Stock is below 60, it is a pretty clear proof that money is very scarce; but this is just the time when a stock-jobbing banker would exact the highest interest, that is, when the borrower is probably least able to pay it. The rate of interest established by the practice of bankers would, therefore, in all probability, be regulated in some measure by the fluctuation of Government securities, instead of their advances being restricted or enlarged, as at present, according to this fluctuation. In chusing between the one and the other mode of employing their capital, these men act as all other prudent men do, giving the preference to what is or appears to be the most profitable. It would be foolish to blame them. I only mean to suggest a cause for the rise or fall of bankers' interest; and I may add, that, while under the pres sent laws a limited amount of good bills may always be turned into cash at a discount not exceeding 5 per cent., the same bills, even though money was no scarcer than before, might, under a system of perfect freedom as to the rate of interest, be subject to a discount of 6 or 7 per cent. Some might thus be accommodated who would not have been so at the present legal interest, but others who would must now pay more. If Titius, who could not under the present Usury Laws be accommodated at less than 10 per cent., would, by their repeal, get what he needs at 7, Caius may then have to pay 7 for what he can now procure at 5. What might be the effect of this measure upon the prices of the public funds, or the terms on which Government would have to make its loans, I shall not presume to conjecture. When money is scarce, the present laws give Government a sort of monopoly, no borrower but itself being allowed to offer more than 5 per cent. If they were repealed, all other borrowers would be at liberty to bid against the Chancellor of the Exchequer. Whether or no this would be an evil, I pretend not to determine. But in the case of those who are not in trade, or who borrow without any prospect of repaying the money from their own funds, till after the lapse of years, the effects of the liberty contended for would probably be far less uniform than in the transactions already noticed. Landed proprietors, it is well known, form the most numerous portion of this class of borrowers. They have not, like merchants, the means of making large payments on a short notice. To pay off one mortgage, they must generally contract another. The lender must submit to some delay to complete this operation, and the borrower, in every case of this kind, must incur some inconvenience and expence. To compensate these disadvantages, the former will demand, and the latter agrée to pay, a rate of interest higher than what may be called the mercantile rate. A merchant might be accommodated with a great part of his trading capital on bills at three months at the rate of four per cent., while a landed proprietor might not be able to borrow to the extent of one-fourth the value of his property at a lower rate than six, including the law charges on his mortgage. Even those lenders who wish their money to lie on good security for years, would calculate the chances of a fluctuation in the rate of interest during that period in their own favour, and would stipulate for a higher rate at the very outset accordingly. If they did not, their law agents would not fail to point out opportunities of investing their money to more advantage when they occurred; the interest of these people themselves, which does not consist in the infrequency of transactions of this kind, would give a stimulus to their activity. If Such, I imagine, would be some of the consequences of repealing the usury laws on the two great classes of our borrowers. Whether or no they would be positively injurious upon the whole may be doubtful; but that any real advantage to them would result from the measure appears very improbable. I have already alluded to the balance of profit and loss in the case of merchants; the same thing would occur in regard to landed proprietors. one who has lent L. 10,000 to A on mortgage at five per cent., calls it up to lend it again to B at six per cent., the inconvenience which the former suffers may be set against the accommodation of the latter, the lender himself being the only gainer by the transaction. His gain, to be sure, is perfectly fair, but that is not the main argument for repealing the usury laws. Their repeal, it is pretended, would be advantageous to all parties. With regard to other money transactions, various as the wants, and prospects, and dispositions of individuals, it is impossible to compare the effects of the present system with those likely to ensue from the removal of all restraints. But if we consider the relative situation of lender and borrower, that the one is never under the same necessity to lend that the other often is to borrow, the protection which the law affords to the latter against extortion, ought not, I think, to be deemed an impertinent interference with the rights and interests of individuals. 27th February 1819. S. |