A Collection of Essays and Fugitiv Writings

This iz precisely the case in America. Our remittances to Europe and the East Indies require considerable sums in specie to be exported; and the merchant wil not import specie, except to facilitate the purchase of hiz cargoes in America. He will not import it for the purpose of loaning, because hiz stock in trade affords a better profit. The few landholders who hav a little cash abuv their annual expenditures, wil not loan it; for they can make twelv, fifteen, eighteen per cent. on their money by the purchase of certificates, and more on the purchase of lands. There are therefore no motivs, no inducements, for the welthy citizens to loan money, and consequently when a man iz distressed to make a payment, he iz compelled to sacrifice property to perhaps five times the valu of the det; because the law will not permit hiz nabor to take twelv or fifteen per cent. per ann. for the loan of money, a few months; when he haz the money, and would gladly releev hiz frend, if he could receev an adequate compensation.

Thus laws against usury drive cash from a country. They really and continually create a scarcity of an article, and then restrain men from raizing the price, in proportion to that scarcity. They create distresses of the poor, and at the same time, create an impossibility of releef. Were money left, like all kinds of commodities, to command its own price in market; whenever its price should rize abuv the usual cleer profit of other business, men would import specie, or turn their stock into cash, and loan it on good security; for no man would submit to the drudgery of business, if he could make money az fast by lying stil, with hiz money at interest. Had money been permitted to bear its own price according to the demand for it in America since the war, it would hav been kept in the country, or introduced til the rate of interest had fallen, even below the legal standard. Limit the profit on any article of life, and set the price so low that peeple can make more by deeling in other articles, and the articles so fixed wil become scarce and deer. Were the legislatures of the several states to say that our traders should make but one per cent. on salt, they would not bring cargoes of it to the country. It would be az scarce az money iz now. Let the price of wheet be fixed at half a dollar a bushel, and in two years we should not hav a bushel in market. It iz the same case with money. The low profits on the use of money, expel it from the country, and none can be obtained at the legal price. Let the interest rize to any sum which can be obtained, and in two years, it would be az eezy to borrow money at a low interest, az it iz now difficult to command it at any price. The laws of nature wil continue to opperate, in spite of the feeble opposition of human power.

Another consideration demands our notice. The laws against usury increase the distresses of the needy, by enhancing the risk, and consequently the insurance on loans.142 It iz fruitless to attempt to prevent loans of money. When men are pressed for money, they can always find persons to supply them, upon some terms. But az a loan of money at a higher rate of interest than iz allowed by law, exposes the lender to a loss of the money, and a fine or forfiture besides, hiz demand for the use of hiz money wil rize in proportion to that risk. This haz always been one of the most pernicious effects of such laws. So that the law, not only creates a scarcity in the first instance, but actually raizes the demand of interest much abuv the natural demand required by that scarcity. In short, insted of releeving the detter, it multiplies hiz distresses four fold.

Besides, such laws, like all national restrictions on trade, tend to make men dishonest, in particular things, and thus weeken the powers of the moral faculty. There are ten thousand ways of evading such laws, and slight evasions gradually produce a habit of violating law, and harden the mind against the feer of its penalties. Indeed, such laws tend to undermine that confidence which iz the basis of social intercourse. Laws which encourage informations, should be enacted with caution. Such are laws against usury. A man haz often the strongest temptation to be a treecherous rascal, by inducing hiz frend to loan him money, on illegal interest, and then betraying him. This species of villany waz lately carried so far in Massachusetts, az to induce the legislature to repeel a clauze of their law against usury. And a man of morality must shudder, while he reeds the legal prosecutions and adjudications in England upon their statutes of usury.

The absurdity of attempting to fix the valu of money iz another objection to it of no small consequence. The valu of it depends wholly on the quantity in circulation and the demand. In this respect it resembles all other articles of trade; and who ever thought of fixing the price of goods by law?143 It iz almost impossible for a legislature to ascertain exactly the valu of money at any one time; and utterly impossible to say that the valu when ascertained, shall continu the same for six months. Nay, two slates adjoining eech other may estimate the use of money very differently at the same period. In New York the legal interest iz seven per cent. in New England but six. A man may therefore do that legally in one state, which in the others would expoze him to a severe penalty.

In ancient Rome, the interest waz twelv per cent. The emperor Justinian reduced it to four, but allowed higher interest to be taken of merchants, on account of the risk. In Holland, when Grotius wrote, the common interest waz eight per cent.; but twelv to merchants. In England, the statute 37th, Henry VIII, confined interest to ten per cent. By the 21st James I, it waz reduced to eight; by the 12th Charles II, to six; and by 12th Ann, to five, the present legal interest in that country.144

Postlethwaite remarks very justly that theze laws hav not ascertained the real valu or interest of money; for when the legal interest haz been six per cent. the real interest haz sometimes been four; and when the legal interest haz been five, the real interest haz sometimes been seven. Indeed the interest of money depends on such a combination of circumstances, az the scarcity of money, the demand in market, and the hazard, that an attempt to find and fix a permanent rate, iz one of the most visionary schemes that a public body can undertake. To proov the impossibility of such a scheme, I would only mention the continual practice of violating laws against usury; which would not be the case, if the real valu of money had been ascertained and fixed.145 If legislatures had found the tru valu of the use of money, there would hav been fewer violations of their laws: If they hav, in any case, fixed a rate of interest lower than the real valu, they hav violated the rights of their subjects. This iz a serious consideration; and perhaps in no instance are the laws of England and America more strongly marked with the traces of ancient prejudice and barbarity, than in the prohibition which prevents a man from using hiz money az he pleezes, while he may demand any sum whatever for the use of hiz other property.

The only power, I conceev, a legislature haz to determin what interest shall arize on the use of money, or property, iz where the parties hav not determined it by agreement. Thus when a man haz taken up goods upon credit, or where, by any other legal meens, a man becomes possessed of anothers money or estate, without a specific stipulation for interest, the law very properly steps in and ascertains the sum which the detter shall pay for the use of that money. But to make a law that a man shall not take but six per cent. for the use of money, when the borrower iz willing to giv more, and the lender cannot part with hiz money at that rate of interest, iz a daring violation of private rights, an injury often to both parties, and productiv of innumerable embarrassments to commerce.

We are told that such laws are necessary to guard men from the oppression of the rich. What an error! Waz a monied man ever compelled to assist a distressed nabor, by the forfitures incurred by such laws? Iz not hiz money hiz own? Wil he lend it all, if it should not be for hiz benefit? Besides, cannot a man in necessity alienate hiz property for one fourth of its valu? Are not such bona fide contracts made every day to raize money to answer a temporary purpose? Nay, hav not the laws of all commercial states authorized sales by auction, where any man may part with hiz property for a fourth of its valu? Iz there any remedy in law against such a sacrifice of a man's estate? Wherein then consists the security of laws against usury? In the name of common sense and common equity, let legislators be consistent. If men are improvident, lazy and careless, a loss of property wil be their punishment, and no mezures of government wil prevent it.

To what then shall we ascribe the severe laws against high interest, which hav been and stil are existing in most commercial countries? I presume the cause may be easily assigned. The Jewish prohibition, not to take interest, except of strangers, first gave rise to douts in the minds of our pious christian forefathers, with respect to the legality of any interest at all. This produced, in the dark ages, severe ecclesiastical laws against taking any thing for the use of money; and theze laws originated a general prejudice against it, thro the Christian world.

In the twelfth and thirteenth centuries, commerce began to revive; but az there waz but little money, and trade waz lucrativ, because in few hands, money bore a very high interest. In some parts of Europe, the interest waz forty per cent. Even with this interest, certain Italian traders could make an annual profit, and therefore it waz for their benefit to giv it. It however rendered them very unpopular.146

The Jews, for their infidelity, had been considered by the Christians az outcasts on earth. Severe laws were enacted against them in almost every country; depriving them of the rights of citizens, and forbidding them to hold real estates. Proscribed and insulted, the poor Jews were compelled to turn their hand against every man in their own defence. They commenced strolling traders and bankers, and by theze meens commanded a large share of the money in every kingdom.

With this command of cash, the Jews very justly compensated themselves for the injuries they suffered from the tyrannical laws which existed against them. They loaned money at the highest rate of interest they could obtain. Hence the general karacter of the Jews, and the prejudice against them that survives to this enlightened period.

It iz very probable, that before the discovery of the American mines, money waz so scarce in Europe, that a few brokers in eech kingdom might engross such a share, az to hav it in their power to oppress peeple. This waz evidently the case in England, about the reign of Edward I, and the parliament thought proper to interfere and restrain the evil. Laws against usury were doutless necessary and useful at that time. But since the world haz been filled with gold and silver from South America, and nations hav opened an intercourse with eech other, there never can be a want of specie, where a country can supply produce enough to exchange for it. It haz become a mere fluid in the commercial world; and in order to obtain a supply, in a country abounding with produce and manufactures, the legislature haz nothing to do, but let it bear its own price; let it command its own valu, ether at interest, or in exchange for commodities.

Laws against usury therefore I consider az originating ether in the necessity of the times, which long ago ceesed, or in a bigotted prejudice against the Jews, which waz az barbarous formerly, az it iz now infamous. Laws restraining the interest of money I now consider, in the same light, az I do laws against freedom of conscience. And were it not for the force of habit, I should az soon expect to see a modern legislature ordering a pious sectary to the stake for hiz principles, az to see them gravely passing a law, to limit the profit on the use of hiz money. And unless the legislatures of this enlightened age should repeel such laws, and place money on a footing with other property, they will be considered az accessory to a direct violation of the deerest rights of men, and will be answerable for more frauds, perjuries, treechery and expensiv litigations, than proceed from any other single cause in society. I am so firmly persuaded of the truth of theze principles, that I venture to predict, the opinions of men will be changed in less than half a century, and posterity will wonder that their forefathers could think of maintaining a position so absurd and contradictory, az that men hav no right to make more than six per cent. on the loan of money, while they hav an indefeezable right to make unlimited profit on their money in any other manner. They will vew laws against usury in the same light that we do the inquisition in Spain, the execution of gypsies and witches in the last century, or thoze laws of England which make 100l. annual income necessary to qualify a man for killing a partridge, while they allow forty shillings only to qualify him for electing a knight of the shire.

No. XXV

 HARTFORD, OCTOBER, 1789.

On ALLEGIANCE

Writers on law divide allegiance into two kinds, natural and local. "Natural allegiance iz such az iz du from all men born within the kings dominions, immediately upon their berth. For immediately upon their berth, they are under the kings protection; at a time too when (during their infancy) they are incapable of protecting themselves. Natural allegiance iz therefore a det of gratitude, which cannot be forfeited, cancelled or altered, by any change of time, place or circumstances; nor by any thing but the united concurrence of the legislature. An Englishman who remoovs to France or to China, owes the same allegiance to the king of England there az at home, and twenty years hence az wel az now. For it iz a principle of universal law, that the natural born subject of one prince cannot by any act of hiz own, no, not by swearing allegiance to another, put off or discharge hiz natural allegiance to the former; for hiz natural allegiance waz intrinsic and primitiv and antecedent to the other, and cannot be devested, without the concurrent act of that prince to whom it waz first du. Indeed the natural born subject of one prince, to whom he owes allegiance, may be entangled by subjecting himself absolutely to another; but it iz hiz own act that brings him into theze straits and difficulties, of owing service to two masters; and it iz unreezonable that, by such voluntary act of hiz own, he should be able at plezure to unloose thoze bands by which he iz connected to hiz natural prince."147

I mistake much, however, if the natural born subject would be so much entangled with hiz straits and difficulties, az lord Coke, Hale and Blackstone, would be, to support their assertions and obviate the absurdities of their reezoning.

It iz astonishing to observe how slowly men get rid of old prejudices and opinions. The feudal ideas of allegiance, which make fidelity in the subject an obligation or grateful return for the protection of the prince, stil prevail, and are made the basis of all modern reezoning on the subject. Such ideas in the dark ages, and in the days of feudal despotism, are not to be wondered at. Every baron waz a tyrant on hiz manor, and az hiz only safety consisted in hiz castle and hiz vassals, it waz necessary to bind hiz subjects to him by oaths and superstition, az wel az by a demand upon their gratitude. But wil our sage writers on government and law, forever think by tradition? Wil they never examin the grounds of receeved opinions? Let me enquire.

What iz the real ground of allegiance? Iz it not protection? Not at all. We may just az wel invert the proposition, and say, that allegiance iz the ground of protection. A prince iz the representativ of a nation or state, so that allegiance to him, iz merely allegiance to a state or body politic.148 According to our ideas, allegiance to a king, and fidelity to a state, are the same thing; for detach a king from all connection with a nation or state, and he becumes a private man, and entitled only to the rights of such. This at leest iz the opinion of an American, whose mind iz not biassed by personal attachments to a sovereign.

What then iz the ground of fidelity to a state? The answer iz eezy; the moral law, which haz for its object the good of society. This iz the basis of all obligations in a state, whether express or implied; yet writers on this subject hav hardly mentioned it. Blackstone indeed takes notice of an implied, original allegiance, antecedent to any express promis; but seems rather to consider it az a return for the duties of the sovereign, which he owes before coronation, than az an obligation arising from the very constitution of society.

Taking the moral law or the good of society for the ground of all allegiance, we discuver two species of duties to be performed by every man; the moral duties, which exist at all times and in all places; and certain political duties, required by the municipal laws of eech state. The first are the basis of natural or perpetual allegiance; the last, of local allegiance. The first or moral duties create an obligation upon every man, the moment he iz born, which cannot be cancelled or discharged by any act of an individual, or by any agreement between prince and subject; the last, or political duties, impoze an obligation upon every member of a state or body politic, the moment he steps within its jurisdiction, to submit peaceably to such positiv injunctions of that state, az hav been judged necessary for its welfare.

Now to maintain that an oath of allegiance wil bind a man to perform all the last class of duties, or the positiv duties enjoined by a particular state, and not required by the general laws of society, when the man haz perhaps become a member of another state, three thousand miles distant, iz to defend the wildest notions that can possess any man's brain. Every man iz bound always and in all places to do right, and avoid doing rong; and this with, or without taking an oath of fidelity to any state. This iz implied allegiance, universal and perpetual; and I deny that there iz any other ground of this allegiance, except the universal principles of right and rong.

Should it be said, that a man may bind himself by oath to perform the positiv or political duties required by a state, altho he may remoov and become a citizen of another state; I answer, this wil involv him in the straits and difficulties mentioned by Blackstone; for the political duties of the two states may interfere with eech other. The truth iz, a man haz no right to take such an oath, nor haz a state any right to require it. He may swear, when he enters into any kingdom or state, that he wil be a good citizen, and submit to all the laws of the state, while he iz a member of it; and further, that he wil observe the moral law in hiz conduct towards that society, after he haz ceesed to be a member of it. Further than this, he haz no right to swear. Az to every duty, not required by the laws of society in general, but only by the municipal laws of a state, a man's allegiance commences when he enters that state; and ceeses the moment he leeves it.149 The doctrin of a perpetual allegiance iz wholly a feudal idea; inculcated, when every lord waz at war with hiz nabor; and waz compelled by self preservation to attach hiz vassals to himself by oaths, the penalties of perjury and the forfeitures of treezon.

Blackstone says, in the passage already quoted, "that natural allegiance iz a det of gratitude," because the subject iz under the kings protection while an infant. He might just az wel say, protection iz a det of gratitude du from the prince, because the subject iz born in hiz dominions. On this principle of gratitude, a child iz obliged to obey and serve hiz parent, after he haz left hiz family, and while he livs. This det, according to the same author, cannot be cancelled, but by "concurrence of the legislature." How in the name of reezon, can an act of the legislature dissolv a natural tie? How can it cancel a det of gratitude? Common sense looks with disdain on such week and futile reezoning. But if there iz such a thing az natural and perpetual allegiance, an Englishman, who remoovs to France, cannot take arms to defend France against an invasion from England. Is this agreeable to the laws of nature and society, that a man should not protect himself and hiz property? It wil be said that the man iz within the English king's liegeance, and entitled to hiz protection. But the king cannot protect him; it iz beyond hiz power, and the Englishman iz not obliged to leev France and seek protection in England. Hiz estate and hiz family may be in France, and if he chooses to reside there, it iz hiz unalienable right and duty to defend both against any invasion whatever. Every war, except a defensiv one, iz a breech of the moral law; but when a natural born subject of England, haz become a citizen of France, he iz subject to the laws of France, and bound to assist, if required, in defending the kingdom against hiz natural prince.

No. XXVI

 HARTFORD, JULY, 1789.

EXPLANATION of the REEZONS, why MARRIAGE iz PROHIBITED between NATURAL RELATIONS

Much haz been said and written to ascertain between what relations marriage ought to be permitted. The civil, the canon, and the English laws, differ az to the degrees of consanguinity necessary to render this connection improper. A detail of the arguments on this subject, and even a recapitulation of the decrees of ecclesiastical councils, in the erly ages of the church, would be tedious and uninteresting. I shall only offer a few thoughts of my own on the question, with a view to illustrate a single point, which haz been agitated in modern times, and on which the different American states hav passed different decisions. The point iz, whether a man should be permitted to marry hiz former wife's sister. In some states this iz permitted; in others, prohibited.

Thoze who favor the prohibition, ground their reezon on the Levitical law, which says a man shall not marry hiz wife's sister, during the life of hiz wife, to vex her. This prohibition, while it restrains a man from having two sisters for wives at the same time, among a peeple where poligamy waz permitted, iz a negativ pregnant, and a strong argument that a man waz allowed, after the deth of a wife, to marry her sister.

The Jewish law, however divine, waz designed for a particular nation, and iz no farther binding upon other nations, than it respects the natural and social duties. In no one particular, hav men been more mistaken, than in explaining divine commands. It haz been sufficient for them to reseiv a law into the wil of God, without examining into the reezons for which the law waz revealed. They seem to hav inverted the foundation of moral obligation, in supposing the moral law to derive its propriety and fitness originally from the wil of Deity, rather than from the nature of things. They talk about the fitness and unfitness of things, independent, not only of society, but of God himself. Such wild notions, I presume, are not common. There could be no fitness nor unfitness of things, before things were made; nor could right and rong exist without social beings. The moral duties therefore are not right, merely because they are commanded by God; but they are commanded by him, because they are right. The propriety or fitness of them depends on the very nature of society; and this fitness, which waz coeval with creation, waz the ground of the divine command.150

The law of Moses, regulating marriages, waz founded on this propriety or fitness of things. A divine command givs a sanction to the law; but the propriety of it existed prior to the command. The reezons for prohibiting marriage between certain relations are important; yet they seem not to be understood. It haz been sufficient, in discussing this point, to say, such iz the law of God; and few attempts hav been made to find the reezons of it, by which alone its extent and authority can be ascertained.