[Footnote 193-5: _Turgot_ tells of Parisian "usurers" who made weekly advances to the market women of la Halle, and received for 3 livres, 2 sous interest; that is 173 per cent. a year. The premium for insurance may have been very high here. When such loaners were brought before the courts, and they were sentenced to the galleys, the usual punishment for usury, their debtors came and testified their gratitude by begging for mercy to them! (Mémoire sur le Prêt d'Argent, § 14, 31.) Compare _Cantillon_, Nature du Commerce, 276.]
[Footnote 193-6: Thus, _Adam Smith_, Wealth of Nations, II, ch. 4. Similarly, _Roesler_ Grundsätze, 495 ff. Compare, _per contra_, _Jer. Bentham_, Defense of Usury: showing the Impolicy of the present legal Restraints on the Terms of pecuniary Bargains in Letters to a Friend. To which is added a Letter to Adam Smith on the Discouragement imposed by the above Restraints to the Progress of inventive Industry, 1787; 3 ed., 1816.]
[Footnote 193-7: The first steamboat in the United States was, for a long time, called the "Fulton-folly!"]
[Footnote 193-8: It is just as hard to see why only money-capital should have a fixed rate of interest, and not buildings, etc. likewise.]
[Footnote 193-9: In Holland, the legal rate of interest was lowered, in 1640, to 5 per cent., and in 1655 to 4; but not since. (_Sir J. Child_, Discourse of Trade, 151.) Besides, _Locke_, Considerations on the Lowering of Interest, Works, III, 34, assures us that, in his time, a man in England could make contracts for unlimited interest.]
INTEREST-POLICY.--REPEAL OF THE USURY LAWS.
However, the complete repeal of the usury laws[194-1] has not under all circumstances accomplished what it was supposed it would; and the state should take great care, lest by an incautious framing of its laws, it should put judges in such a position that they may be compelled to coöperate in the execution of immoral contracts.[194-2] In the lowest strata, so to speak, of the loaning business, the medieval condition continues to exist (§ 190) after it has disappeared in the upper. Here, the loan is effected scarcely ever for the purposes of production, but most generally because of the most urgent necessity; and the debtor is not in a condition, from want of education, and especially from his ignorance of arithmetic, to estimate the magnitude of the burthen he has undertaken. The business of loaning is, under such circumstances, considered dishonorable, to some extent, by the public. And when a business necessary in itself is held disreputable by public opinion, the usual result is that bad men alone engage in it.[194-3] Real competition which would but fix the natural price is wanting here in proportion as the debtor is anxious for secrecy.[194-4]