Usury Versus Prosperity.

Observer, Volume X, Issue 629, 17 January 1891, Page 9

Usury Versus Prosperity.

HISTORICAL LESSON FOR COLONISTS.

(By Young New Zea-land.)

Amongst the « observations ' by the • O.M. in the Observer of 20th Deo. last, he has noted that the time has arrived f cr a law to be passed in New Zealand concerning usury. Perhaps a short review of the effects of and r«a~ocs for such an Act may be of interest to Liberal readers. The ancient English laws, have declared * unlawful chevisance and usury should be extirpate.' By the 37th of Henry VIII. the rate of interest was first fixed at 10 percent, but; that statute was repeated by the sth and 6th of Edward VI. In the 13th year of Elizabeth, the former statute was revivad, and all contracts whereby above 10 per cent should be received were maw void. By the 21st James I. the rate of interest wa3 iowered to 8 per cent. By 12th Charles 11. it was further iowered to 6 per cent and finally it was fixed at the present rale of 5 per cent by the 12th of Anne. The analogy between the state of affairs in England when those Acts were passed and New Zealand to-day is very striking. In the preamble to the Act of James I. it is stated that ' on account of the very great abatement in the value of land, and all merchandise' and commodities of the Kingdom, both at Home and in foreign parts, that divers subjects of this Kingdom, as well the gentry as merchants, farmers and tradesmen, both for their urgent and necessary occasions for the following their trades, maintenance of their stocks and employments, had borrowed ; but by reason of the said general fall and abatement in the value of land and the prices of the merchandise and interest in loan continue ing at so high a rate as £10 in the £100 for a year, did not make men able to pay their debts and continue. the maintenance of their trade, but their debts daily increasing, they were enforced to sell their lands and stocks at very low rates, to forsake the use of merchandise and trade and give over their leases and farms, and so become unprofitable members of- the Commonwealth- to the great hurt and hindrance of tb.B same." • For as much (states the Act of Charles II.) as the abatement of interest, from ten in tha hundred in former 'oiairifc, hath been found, by notable experience, benHk-uU to the advancement of trade, and improver menc of lands by good husbandry, with many other coosjiierable advantages to this nation, especially the reducing of it to a nearer proportion with foreign States wilh whom we traffic ; and whereas in fresh memory, the like fall from K to 6 in the 100, by a late constant praoiice. hath found the like success, to the general contentment of this nation, as is visible by several improvements, etc' In this preamble it appears that the abatement of interest had not only caused improvements of lauds, and the advancement of trade, but that liit) nici-buse of wealth having caused an abatement of interest to 6 per cent (at which it was fixed by Cromwell) i;, \\ua considered most important to prevent the designs of usurers?; who were attempting to exact, more than the rauo wtiich had been fixed during the Commonwealth. To complete this chain of evidence, we shall find by the Act of Anne that our ancestors at the beginning of the last century reduced the high rate of interest of £6 in tne £100, on account of the abatement in the value of lands and merchandise, no person, therefore, should take above 5 per cent. Although we cannot rely on the religious opinions of an historian we may perhaps place reliance on his statement of facts. Commerce and industry were at a very low ebb previous to the 15th century ; in the time of ytvzivy 111. instances occurred of 50 per cent paid for money. The foreign commerce of England during the reign of Henry VIII. was mostly confined to the Netherlands. Iv the reign of Edward I. the common rate of interesD, notwithstanding the laws against usury, was 14 per cent. The state of English manufactures was in the time of Elizabeth very low, and foreign wares of almost all kinds had the preference. About 1590 there were in London four persons only rated so high as £400. Land was commonly sold in England at ten years' purchase. Interest was reduced to 6 per cent during the Commonwealth, year 1650. Trade with the English was beginning to be a matter of general concern ; but the Dutch with their low rate of interest (3 or 4 per cent), were enabled to under sell them in every market ; anj^ it v»\r--, vA until the two Dutch wars, by disturbing the truuti vi that Republic, that England obtained a share' in the trade of Europe. In these brief extracts from history it may be seen that the increase of commerce and the prosperity of England were not only coeval with the several reduotions in the rate of interest, but were the consequences ; of these wise restrictions.

(To be continued.)

The Indian Government want 1400 or so horses from Australia. We can supply 'em with countless asses. Weather Prophet Egeson, of Sydney still sticks to hia drought prediction. He says so far the rainfall has • been but half the usual average. In England, over 20 in every thousand are paupers ; in the United States only one and one third in the thousand are dependent on eleemosynary aid. In Auckland, how many, Mr Harrow ? The Rolhschilds have become millionaires by a speci >.l up; itude for finance, aa also by securing 1 the confidence . . without whi -h. it would be practically impossible to transact' '. their euu-iu<>us business. The Distiller's Co.. of Edinburgh,/ are the Rothschilds of the wbisty business, and in a similar . way h ye s-'cured the confidence of the world for sending out". realij' high-c'asa quality. They have established an agency in - Auckland.