HB 
 
 547 
 
 A FEW PRACTICAL COMMENTS 
 
 USURY LAW, 
 
 BY 
 
 JOHN WELSH, 
 
 President of the Philadelphia Board of Trade. 
 
 READ BEFORE THE BOARD AT A QUARTERLY MEET- 
 ING, JUNE 1 6, 1873. 
 
 -u> 
 
 ^f 
 
 PHILADELPHIA : 
 
 M'CALLA & STATELY, PEINTEBS, 237-9 DOCK STREET, 
 
 1873. 
 
Class. 
 Book. 
 
Digitized by tine Internet Arcinive 
 in 2010 witii funding from 
 Tine Library of Congress 
 
 JittpV/www.archive.org/details/fewpracticalcommOOwels 
 
A FEW PRACTICAL COMMENTS 
 
 USURY LAW, 
 
 JOHN WELSH, 
 
 President of the Philadelphia Board of T?'ade. 
 
 READ BEFORE THE BOARD AT A QUARTERLY MEET- 
 ING, JUNE 1 6, 1873. 
 
 PHILADELPHIA : 
 M'CALLA * STAVELT, PRINTERS, 237-9 DOCK STREET, 
 
 1873. 
 
^iK 
 
 
 Rooms of the Philadelphia Board of Trade, 
 Jicne i6th, 1873. 
 
 At a meeting of the Board of Trade held this evening, 
 a paper on the Usury Law was read by the President, 
 Mr. John Welsh. After the reading, the following 
 resolution, offered by John Price Wetherill, Esq., was 
 adopted, viz. : 
 
 That in view of the great interest now. felt on this subject, the Sec- 
 retary is hereby requested to have the paper just read, printed in pam- 
 phlet form, and distributed among the members of this Board. 
 
 UL 
 
 N\T. 3c\ 
 

 Gentlemen : 
 
 On the 19th (May) ult.,the following resolution was 
 adopted by the Philadelphia Board of Trade : 
 
 That in the opinion of this Board the following provision, as a 
 part of the Amended Constitution of the State, would be generally- 
 acceptable to the various btisiness interests it represents, viz. : 
 
 The lawful terms for the use of money shall be the rates agreed 
 upon by the parties to the contract, and for loans where no agi-ee- 
 ment is made, the Legislature may from time to time affix a legal 
 rate. 
 
 This resolution met with general approval. In 
 regard to it, there is very little difference of .ojDinion 
 among the mechanics, manufacturers and merchants 
 of the country. What measure of intelligence there 
 is among them and how capable they are to reach a 
 correct conclusion on this subject, others may deter- 
 mine. Their pursuits, and the effect of existing 
 laws which act as a hindrance to their daily opera- 
 tions, make it reasonable that practically they are 
 as well qualified as any other class to form reli- 
 able opinions on the laws which regulate the use of 
 money. The extent of their interests, and the im- 
 portance of those interests in their bearing on the 
 welfare of the community, as well as the respect to 
 which these important classes are entitled, make 
 their opinions, when deliberately expressed, well 
 worthy of consideration by their fellow-citizens, and 
 particularly by that class of them who have been 
 selected to form a new Constitution for this Common- 
 wealth. To that body the resolution recited above 
 
was addressed, that it might have its influence in 
 the consideration of the following proposed article 
 for the new Constitution. 
 
 " In the absence of special contracts the legal rate of 
 interest and discount shall be seven per cent, per 
 annum ; but special contracts for higher or lower rates 
 shall be lawful. All national and other banks of issue 
 shall be restricted to the rate of seven per cent, per 
 annum." 
 
 In the Convention a debate of unusual interest fol- 
 lowed the presentation of the article, and in opposition 
 to it, Henrj C. Carey, Esq., of this city, made a most 
 elaborate and able address. On his address I propose 
 to make a few practical comments. 
 
 Mr. Carey has few superiors as a profound thinker. 
 He is a skillful controversialist, an experienced and 
 polished writer, and enjoys a most extensive and well- 
 deserved reputation. He is an economist whose teach- 
 ings are in sympathy with the best interests of the 
 country, and whose principles, shorn somewhat of the 
 extremes to which he is apt to push them, are sustained 
 by a large proportion of the members of the Philadel- 
 phia Board of Trade. 
 
 Mr. Carey was most earnest and emphatic in his 
 denunciation of all attempts to repeal the usury law 
 and to change the legal rate from 6 to 7 per cent., as 
 provided for in the article under consideration. He 
 expressed, as strongly as our language admits of it, 
 the opinion, which from his aflfectionate and amiable 
 disposition it seems impossible that he can hold, that 
 the merchants, bankers, indeed all who desire its 
 repeal, are "Shy locks, who would gladly take the 
 pound of flesh nearest the heart." In Shy lock, how- 
 
ever, the love of money was subordinate to tlie love of 
 blood. It WSLS, revenge for tlie wrongs done to him by 
 Antonio which caused Shylock to whet his knife and 
 get his scales in readiness for the pound of flesh nearest 
 Antonio's heart. It is probable Mr. Carey, in his 
 application of Shakspeare's language to us offenders, 
 did not desire that it should receive so literal an inter- 
 pretation. I must confess to great disappointment at 
 the manner in which Mr. Carey has treated the subject. 
 It was reasonable to expect from him a philosophical 
 review of it, an explanation of what usury is, a state- 
 men of the causes of the traditional prejudice which pre- 
 vails against it, and a reason why the epithet usury is 
 api^lied to the hire of money and not to the hire of 
 anything else. Moses said, " thou shalt not give thy 
 brother thy money on usury nor lend him thy victuals 
 upon increase." Mr. Carey may not consider the latter 
 an infraction of the law, although Moses did ; but with 
 Moses the prohibition was against ani/ increase or hire 
 if exacted from the jjoor Jew, but it did not apply if 
 the loan was made to a Gentile. It is a matter of 
 sincere regret that a gentleman whose studies so 
 eminently lit him for it, did not avail himself of the 
 opportunity to expose the principle on which "usury" 
 is based. He may be satisfied to regard it as an in- 
 fraction of a statute, but that will not answer the 
 inquiry why it is an offense dependent on arbitrary 
 statutes defined by geographical lines ; nor explain the 
 reason why the code of morals of ISTew Jersey, Ohio, 
 !N"ew York and Pennsylvania — States lying contiguous 
 — are so radically different from each other, in that 
 one bases it on 6 per cent., another on 7 per cent., and 
 another on 8 per cent. There is no explanation 
 
6 
 
 of it, as there is of the law which authorized 
 slavery, where the color of the skin, the conformation 
 of the skull, and the adaptation to peculiar kinds of 
 labor and climate controlled the inductions of the 
 physiologist, and ancient usages, handed down through 
 the traditions of successive ages, combined with them 
 to fasten upon a whole race so grievous a wrong. 
 
 Unfortunately for the free exercise of Mr, Carey's 
 mind on this subject he looks on the effort for the ab- 
 rogation of the usury law as a movement against the 
 system of protection and the existence of paper money. 
 In his study, away from any practical connection with 
 the movements of money, dependent for all that he 
 learns on statistical tables, reports &c., it is that his 
 thoughts take shape, and therefore when he comes forth 
 from it he may well be startled by the pungent truths 
 embodied in the forcible words of Mr. Edward C. 
 Knight and Col. John Price Wetherill, who followed 
 him so ably in the debate — gentlemen whose expe- 
 rience has brought them to just conclusions and led 
 them to know that the usury law is a mere sham, 
 without other force than to increase the cost of money 
 to the borrower, who may lawfully, by indirection, do 
 that which the law forbids to be done directly. It was 
 shown by these gentlemen beyond dispute that the 
 Legislature, with the Usury Statute staring it in the 
 face, had authorized almost every variety of Corpora- 
 tions including Banks, Railroad Companies, Mining 
 and Manufacturing Companies to borrow and to loan 
 money at any rate of interest. Is there any principle 
 involved in the usury law if corporations are exempt 
 from it and individuals are not ? and the question be- 
 comes even less doubtful when, by the intervention of 
 
a third party, individuals, also, are thrown by law 
 beyond its pale? ^Notwithstanding the law against 
 usury which is a prohibition to loan money at a rate 
 beyond six per cent., in accordance with special law, 
 corporations and individuals may loan or borrow at 
 any rate they please. 
 
 Mr. Carey dwelt much on the evil consequences 
 which will follow the repeal of the law, and pictured 
 the distress caused by its repeal in England and else- 
 where. If the law is virtually inoperative here, as it 
 certainly is, then the consequences of the repeal are 
 anticijDated, and we are now amidst the irretrievable 
 ruin he predicts, as unconscious of it ourselves as it is 
 unobserved by others. It is not complained that the 
 etfects of the law are burdens too heavy to be borne, but 
 rather that the law is not in accord with the intel- 
 ligence of the day ; that it entails on the borrower 
 an unnecessary additional cost from the necessity of 
 employing a third party ; that its existence on the 
 statute book is an oifense to the moralist and states- 
 man as a law false in principle, based on n traditional 
 prejudice and shown to be so by other laws justifying 
 that which it condemns ; and that it denies to the 
 laborer of Pennsylvania the intelligence to determine 
 for himself whether be can afford to borrow capital on 
 the same terms as his fellow laborers of JSTew Jerse}", 
 IsTew York and Ohio. Its repeal will not bring a mil- 
 lennium, much less need one fear the sad consequences 
 which Mr. Carey has learned that England is suffering 
 from because of it. In regard to this, stated by him 
 as a fact, possibly he has been misled by some one who 
 has practised on his credulity, or from his standpoint 
 — ^his study — he sees it through books colored by the 
 
ghastly hue of a system of political economy differing 
 from his own. My outlook is through the busy avenues 
 of commerce and industry, which bring before me a 
 picture of England as she is now, possessed of more 
 material wealth than ever before, with all the currents 
 of the world's commerce tributary to her. I do not 
 ascribe her condition to the repeal of the usury law, 
 but her condition shows that its repeal has not checked 
 her onward progress. I do not claim that the repeal 
 of the usury law will be magical in the production of 
 wealth, but that its continuance has no favorable effect 
 on labor, is no protection against the so-called tyranny 
 of capital, is abhorrent to common sense, which, because 
 legal modes are provided for its avoidance, has long 
 since determined it to be an absurdity. 
 
 Mr. Carey, as an economist, well understands the law 
 of supply and demand, and its influence on values, and 
 yet he asserts "that the reduction in the rate of interest 
 indicates a growing power of labor over capital." He 
 quotes from Turgot to support this position: "It is the 
 abundance of capital that animates to effort, and the 
 low rate of interest is at once the effect and the indica- 
 tion of that abundance." Instead of the latter being in 
 support of Mr. Carey's position, Turgot says that when 
 there is a superabundance of capital it is the stimulant 
 of labor ; in other words, when the supply of money is 
 cheap those who can avail themselves of the opportun- 
 ity, buy it. It is like any other article of commerce. 
 The relation between capital and labor is intimate, and . 
 when it is in its normal condition it is reciprocal. An 
 equipoise in the supply of both indicates the happiest 
 condition of that relation. When labor is in profitable 
 employment it is that the value of capital enhances 
 
9 
 
 and ill proportion to the profit resulting from labor is 
 the increase of the hire of money. When the sinews 
 of labor are in repose money has but little value. 
 Therefore the reduction in the rate of interest is most 
 apt to be caused by the paralysis of labor, and conse- 
 quently it is not expressing its true condition to speak 
 of the reduction of interest as indicating a growing 
 power of labor over capital. 
 
 Mr. Carey speaks of money as a commodity, and 
 says " that year after year we see some half a dozen 
 men in the Bank of England combining for raising the 
 price of the commodity they have to sell." This state- 
 ment is suggestive of the question, if money be a com- 
 modity, which Mr. Carey calls it, and in this I agree 
 with him, then why is it the only commodity which 
 the law says shall be sold at a fixed price ? It is true 
 that in one respect money difi'ers from other commodi- 
 ties, in that it has a purchasing power and a paying 
 power. The paying power is fixed ; that power is a 
 creation of law ; the purchasing power is changing, 
 subject to the supply and the demand. Between it and 
 other commodities, so far as the paying power is con- 
 cerned, there is no resemblance, inasmuch as on no 
 other commodity is that power conferred by existing 
 laws, and therefore a commodity cannot be legally used 
 in payment of debt ; but in its purchasing power it is 
 precisely similar to other commodities. Five dollars 
 may to-day buy a barrel of flour or a barrel of flour 
 may purchase five dollars, but to-morrow their relations 
 may be changed, depending on the excess or diminu- 
 tion in the supyjly of either. So that exclusive of its 
 paying power money is precisely likeother commodities. 
 
 But the statement as made by Mr. Carey, conveys 
 
10 
 
 a very incorrect view of the eiiect produced by the 
 action of the Bank of England " in raising the price 
 of the commodity it has to sell." To raise the rate of 
 discount or the price of money is not for the purpose 
 of increasing the profits, but for the very opposite pur- 
 pose of checking the loans, and by reserving the re- 
 ceipts to strengthen the position of the Bank. When- 
 ever there is an indication of a probable disturbance from 
 excess of speculation at home or abroad, or any other 
 cause likely to afl'ect injuriously the material interests 
 of England, the Bank rate is advanced to an extent 
 which in the judgment of the men in the Bank Parlor 
 ma}^ be necessary. Low interest is an indication of 
 tranquillity in financial movements, high interest of a 
 real or threatened disturbance. The variations in the 
 rate are useful admonitions from a central command- 
 ing point for the government of the commerce of Eng- 
 land, and they are largely influential in the commercial 
 and monetary movements of the world. The daily re- 
 ports from the Signal Oflice in Washington, as to the 
 weather, known as "probabilities," which so largely 
 contribute to the public convenience, are an apt illustra- 
 tion of the benefit conferred by the announcement of 
 the changes in the rate of the Bank of England. 
 
 One of the curious features throughout Mr. Carey's 
 argument against the repeal of the usury law, is 
 that the element of hazard, has no place in it, and 
 yet its influence on the rates of interest or hire of 
 money is of the greatest weight. Usury in Pennsyl- 
 vania, it will be borne in mind, is any charge in excess 
 of 6 per cent., irrespective of the character of the loan 
 or of the security which accompanies it. Loans are 
 made on personal and real security, and both equally 
 
11 
 
 cany the responsibility of the borrower. Many personal 
 loans are made on the name of the borrower, others 
 on those of the borrower and endorser, to others, in 
 addition to the names of borrowers, are added collat- 
 erals of United States loans. State loans, City loans. 
 Corporation loans. Stocks, &c., whilst loans on real se- 
 curity carry the names of the borrower with a mort- 
 gage on real property. For all these classes of loans 
 irrespective of the character and means of the borrow- 
 ers or the estimation in which the securities are held, 
 the law prescribes one rate of interest, and this Mr. 
 Carey says is wise and just. ]Lsrotwithstanding this if 
 a trustee invest in either of four-fifths of the loans 
 which are recognized as those of every day transac- 
 tions, the law holds the trustee responsible for the 
 hazard. Mr. Carey must know, as all practical men 
 know, by experience, that the value of money must be 
 measured by the hazard to which its use is exposed, 
 and that the rate of its hire has been, is now, and must 
 continue to be governed by that principle. The high- 
 est class of security will command a loan at the lowest 
 rate of interest. This point being settled by usage, 
 shows that no respect is paid to the usury law. But 
 Mr. Carey has great anxiety lest the borrowers on mort- 
 gage should become a prey to the lenders of money. 
 The rate of interest is dependent on two things, the 
 supplj'- of money and the sufficiency of the security. 
 Of all kinds of security land is the most stable. It can 
 neither be removed nor destroyed. Of all classes of 
 people lenders of money are the most timid. But a 
 small proportion of them in numbers will lend upon 
 any other security than land valued at double the 
 amount loaned. Mortgages are by law a legal invest- 
 
12 
 
 ment. These two are reliable causes for a permanent 
 demand for choice mortgages at rates below the cur- 
 rent price of loans on less approved security. Very 
 many mortgages are sold in Pennsylvania which yield 
 to the lender of money from 7 to 12 per cent, per an- 
 num, bat the rate for most mortgages is 6 per cent, 
 and some are at 5 per cent. As a rule the usury law 
 has no influence on negotiations for borrowing money 
 on mortgages, although there is a small class of lenders 
 who, from conscientious motives, avoid even the ap- 
 pearance of an infi-action of the law, but this class with- 
 out exception belongs to a much larger class who lend 
 money at low rates because they look mainly to the 
 sufficiency of the security. Agriculturalists who are 
 borrowers, borrow on land, and a,griculturalist8 w^ho 
 are lenders, lend upon land, and with all the fluctua- 
 tions in the value of money from causes which are na- 
 tural and based on sound principles, and must always 
 be operative, mortgages on land will continue to be, as 
 they now are, a favorite security. 
 
 Mr. Carey says " that combinations are being every- 
 where formed for raising the price of money, that the 
 long loans of the past are being superseded by the call 
 loans of the present ; that the manufacturer and mer- 
 chant are being more and more fleeced by Shylocks," 
 &c.; and "this," he says, "is because the Treasury oper- 
 ations have tended in the direction of the money 
 lender." He does not show the character of these 
 Treasury operations, nor how these sad efiiects are. 
 brought about ; nor does he seem to have studied what 
 he believes to be their consequences so as to be able to 
 expose their causes. The enlarged commercial facili- 
 ties of the present day, the extension of the fields of 
 
13 
 
 operations, the ease with which those fields are trav- 
 ersed, the varieties of property represented by the in- 
 numerable successful enterprises which the last twenty 
 years have given rise to, whilst they have largely in- 
 creased and widely diffused the wealth of the world, 
 have also tended to the concentration of individual 
 wealth both in Europe and the United States. At no 
 previous period in modern times have there been so 
 many examples of overgrown fortunes, and in most 
 instances their individual possessors have gained their 
 wealth by exceptional force of will or intellect and 
 often of both. It is as unreasonable to expect moral 
 perfection in this phase of genius as in a Napoleon. A 
 victory in old Broad Street or on Wall Street is as 
 alluring as on the fields of Jena and of Austerlitz, and 
 we shall continue to have in every field where genius 
 can have its play, in one shape or another, occurrences 
 which will both startle and disturb. When volcanoes 
 cease or the lion and the lamb lie down together such 
 disturbances will be at an end. 
 
 That long loans have been superseded by short loans, 
 as Mr. Carey represents that they now are, is a most extra- 
 ordinary delusion. In the last ten years more long 
 loans have been negotiated than in any known previous 
 period. That period compasses the vast loans of the 
 United States and of France. 'No State, city, county, or 
 borough, in the United States has failed during it to 
 get what it wanted, and their wants have not been lim- 
 ited. The raiload companies of this country alone 
 owe twelve hundred millions, or thereabouts ; one 
 company is now creating a loan for forty millions. It is 
 difficult to sum up the total amount of long loans which 
 have been made in that time, and yet Mr. Carey says : 
 
14 
 
 " the long loans of the past are being daily more and 
 more superseded by the caU loans of the present ;" and 
 again he says, " The whole tendency of the existing 
 system is in the direction of annihilating the disposi- 
 tion for making those permanent loans of money by 
 means of which the people of other countries are 
 enabled to carry into efiect operations tending to secure 
 to themselves control of the world's commerce. Under 
 that system there is, and there can be, none of that 
 stability in the price of money required for carrying 
 out such operations." Absorbed in his abstruse studies, 
 he knows but little of what is really going on. His 
 theory builds up his facts, and the work is so beauti- 
 fully done by him, that the eye rests only on the su- 
 perstructure. 
 
 Mr. Carey has a tender heart. It is deeply moved 
 with sympathy for "the manufacturers and merchants 
 who are more than fleeced by Shylocks, who would 
 gladly take the pound of flesh nearest the heart." One 
 is melted to tears by his recital of their suiferings. 
 How and when do these sad things occur, that only 
 Mr. Carey hears of them ? There always have been and 
 always will be individual cases of misfortune worthy 
 of men's sympathy, but at no previous period have 
 these classes of the community, enjoyed more general 
 prosperity. l^Tor if one enters the sphere of manual 
 labor exclusively, and takes into view that class which 
 Mr. Carey has always had very near to his heart, can 
 there be found any indications but those of unusual 
 prosperity. There is abundance of employment and at 
 full wages. How the repeal of the usury law can inju- 
 riously afliect labor, I cannot imagine. It is practi- 
 cally null, and may be legally avoided. Those who 
 
15 
 
 work with their hands, are most to be benefited by 
 the rapid circulation of nioney, and every hindrance to 
 that circulation, in whatever shape it may be, operates 
 to their disadvantage. 
 
 Mr. Care}^ says: "the tendency of the precious metals 
 is towards those countries where interest is low, and 
 from those where interest is high." He might have 
 said that accumulated capital draws to it its own 
 earnings, and with the increase of its supply beyond 
 the demand for it, the price of its hire declines. If 
 low rates of interest indicate a growing power of labor 
 over capital, as Mr. Carey says it does, then we find that 
 growing power in England, where interest is low, and 
 where Mr. Carey believes that capital lords it over labor 
 more than in any other part of the world. 
 
 All the evils which theologians ascribe to the fall 
 of man, Mr. Carey attributes to "the sad blunders 
 of our great financiers." Already, he says, "sheriff's 
 sales indicate widespread distress, and should this 
 section be adopted, giving perfect freedom to the Sh}^- 
 locks of the day, the next half-dozen years will wit- 
 ness the transfer under the sheriff's hammer of the 
 larger portion of the real property of both the City 
 and the State. Of all the devices yet invented for the 
 subjugation of labor by capital, there is none that 
 can claim to be entitled to take precedence of that 
 which has been now proposed for our consideration." 
 With what prophetic sadness this is uttered ! Its tone 
 is as earnest as if it were that of inspiration. Coming 
 from lips so matured by reflection and study, how can 
 one disregard it ? Practical experience will, however, 
 override theoretical predictions, and scoffer as one may 
 be called, Mr. Carey is pointed to the States of New 
 
16 
 
 Jersey, l^ew York and Ohio, where no evidence of ruin 
 is to be found, although seven percent, and upwards are 
 the legal rates of interest, and to all of them as well as to 
 Pennsylvania, where the usages of borrowing and lend- 
 ing virtually abrogate the usury law. The widespread 
 distress, which Mr. Carey speaks of, is purely ideal. 
 
 Mr Carey, says that in 1859, Mr. Edward Everett 
 estimated the purely personal debt of the country apart 
 from that of trade, manufactures, or agriculture, at 
 fifteen hundred millions of dollars, and described it as a 
 "■ mountain load, more deadly than fever and plague, 
 more destructive than the frosts of Spring, or the 
 blights of Sammer," and yet Mr. Carey thinks " Mr. 
 Everett failed to appreciate to even a tithe of its real 
 extent the power thereby given to capital, in its con- 
 test with labor." What this purely personal debt was, 
 neither Mr. Everett nor Mr. Carey explains. It was, 
 however, a debt, whatever its character, with very 
 disagreeable consequences. Mr. Carey then says : 
 
 " Every one who parts with property, payment for 
 which is to be made at some future time, by so doing 
 constitutes himself a money-lender to the extent of the 
 amount whose payment is thus postponed. If the 
 property be purely personal, he adds to what would 
 otherwise be the price so much as w^ill cover the charge 
 for the time and for the risk to be incurred. The 
 borrower being regarded as a thoroughly responsible 
 man, the interest thus charged may not exceed ten or 
 twelve per cent, per annum ; but passing downward in 
 the societary scale, the charge rises in the direct ratio 
 of the poverty of the party borrowing, until at length 
 we find the very poor and the very weak, paying in- 
 terest at the rate of sixty, eighty, a hundred, and per- 
 
17 
 
 haps even, as now in England, almost five hundred per 
 cent." 
 
 This is Mr. Carey's explanation of the process by 
 which a dealer becomes a money-lender. It is not 
 diificult for him to draw any class into his service 
 when he needs that service. From the largest dealer 
 to him who scores his charge on the bar-room door, 
 with the sum of all their sales with interest added, he 
 has them at his command, and by a breath converts 
 them into lenders of money. But does he not 
 practise a species of inhumanity of which he should be 
 ashamed in this transformation of the honest dealer 
 into a money-lender — a Shy lock? Having now shown 
 who are the lenders of money, the next step is 
 to create the borrowers and' the amount borrowed. 
 These obscure facts are reached by a summary process. 
 Sixteen millions of people in the United States, Mr. 
 Garey says, are capable of contracting debts. We find 
 that number to be one-half of the then population, and 
 that investigators have ascertained that one-half of 
 the whole population ordinarily is under and one-half 
 over twenty-one years of age. The latter constitute 
 Mr. Carey's subjects ; nineteen-twentieths of whom he 
 believes were really in debt, that is 15,200,000 out of 
 16,000,000, and that they were paying interest on 
 their debts at from 10 to 200 per cent., and the total 
 debt he assumes as greatly exceeding two thousand 
 millions. 
 
 Thus Mr. Carey, on exclusively speculative data., ^proves 
 that at the outbreak of the war there was a personal 
 debt, not so pure probably as that spoken of by Mr. 
 Everett, for Mr. Everett does not speak of the excessive 
 interest his debt was bearing, whilst Mr. Carey assumes 
 
18 
 
 that his two thousand millions were bearing from 10 
 to 200 per cent. If one takes the average rate of in- 
 terest, saj at 100 per cent., the annual payment for in- 
 terest alone is two thousand millions. The ability to 
 pay so much annually proves that the debt was based 
 on a large previously acQ[uired property or the immense 
 productiveness of labor in the use of the capital bor- 
 rowed. Another observation may with propriety be 
 made here, that this large mountain of debt produced 
 neither fever, plague, frost, nor blight, as at that time 
 there was no apparent distress, emigration was flowing 
 into the country, the husbandman was well rewarded 
 and industry found everywhere profitable emplojmient. 
 To illustrate his point, however, Mr. Carey converts 
 this debt into notes of hand, and then represents it as 
 " two thousand millions of uncurrent money, as per- 
 fectly dead so far as regarded all performance of ex- 
 changes, as if it had been buried in the earth." Why, 
 was this conversion into notes of hand needed ? Only 
 to serve Mr. Carey's peculiar mode of argument, for 
 as currency it was useless in its original form, and it 
 was equally useless after its form was changed. In 
 consequence of this buried currency, Mr. Carey says, 
 " that in the first year of the war the societary move- 
 ment was paralysed to a degree greatly exceeding any- 
 thing the country had ever before known." When he 
 has a theoretic point to make, Mr. Carey seems to 
 regard the war as a mere circumstance, unequal to any 
 serious consequences as a disturber. Who else could 
 draw the conclusion he has here stated ? That a war, 
 which no one believed could occur because it was 
 so unnatural, should have startled a nation ; that when 
 it did occur, and our fields full of promise for the bar- 
 
19 
 
 vest were trodden by hostile armies and soaked in 
 fratricidal blood, and our homes were sending forth 
 their fathers and sons in defense.of their dearest rights ; 
 was it other than a natural consequence that all the 
 ordinary pursuits ceased, and all the instruments of 
 commerce and of every industry were paralysed ? It 
 was the war and not the burial of Mr. Carey's imaginary 
 uncurrent currency which produced the paralysis. Such 
 consequences had a real, not an imaginary, cause. 
 
 The paralysis was temporary. As soon as our con- 
 dition was realized by the Government and the people, 
 every instrumentality the nation possessed was put in 
 action, as well as its army and its navy, and when the 
 gold in its treasury was exhausted, its credit was used 
 wisely and to great advantage in the $400,000,000 
 spoken of by Mr Carey. He calls it " live money, free 
 of interest, which took the place of thousands of 
 millions of dead money, for whose use our people had 
 been paying interest at twice, thrice and even twenty 
 times the legal rates." How it takes the place of 
 money which was buried and was purely ideal before 
 it was buried, Mr. Carey does not trouble himself to 
 explain. But Mr. Carey certainly cannot believe that 
 the two thousand millions were Mdped out by this 
 process. He knows too well that unrelenting creditors, 
 his Shylocks, cannot be paid by cither logic or rhetoric. 
 Industry must have toiled, death have aided, and the 
 bankrupt law done its part in cancelling that "moun- 
 tain load ;" and further, he has told us so often in the 
 course of his speech of existing distress, " caused by the 
 sad blunder of our great financiers " and the " moun- 
 tain loads of debt," that he will pardon me for saying to 
 him that by a surer process than that by which he 
 
20 
 
 established the existence of two thousand millions of 
 debt then, he can make it fourfold that sum now. 
 Without looking at debt in the gloomy light in which 
 he has presented it, or speculating in the slightest 
 degree upon its extent, one can sum up very -readily, 
 as existing at the present moment, forty-five hundred 
 millions, excluding all kinds but the debt of the United 
 States, State, City and Railroad loans. The individual 
 and business debt of the country is almost beyond 
 computation, — the debts due the Banks alone being 
 about nine hundred millions. What the purely per- 
 sonal debt is, Mr. Carey may conjecture. But one should 
 not delude one's self by a false estimate of what debt 
 is. Debt is usually a representative of the realized or 
 promised earnings of labor. In the shape of currency 
 it is Mr. Carey's panacea for all diseases. To speak seri- 
 ously, it is one of the most useful instruments of civilized 
 man, and whilst this earth is the home of man its aid is 
 not likely to be dispensed with. Like every other in- 
 strument in the hand of man it may be made destruc- 
 tive, but used as it should be, it is the promoter of 
 industry and largely contributes to its rewards. 
 Archbishop Whately with the power of his logic, 
 proved conclusively that ISTapoleon never lived. Mr. 
 Carey, in his logic, is less forcible but more ambitious. 
 
 Mr. Carey's sympathies are with the borrowers 
 of money. He has none for the lenders, and why 
 one class should be treated with injustice, at least in 
 his description of them, is quite inexplicable. If the 
 products of industry bring more money than they used 
 to do by natural causes, why should not the same 
 causes be allowed to operate on the product of money ? 
 
 Did Mr. Carey move about in the world as the 
 
21 
 
 money of which he writes does, and come in contact 
 with the lenders and borrowers, he would find them 
 made of one blood and possessed of like passions. The 
 tendency to extortion is no more a peculiarity of the 
 money-lender than it is of the vender of merchandise, 
 the landlord, or any other class of men. It is a vice ol 
 humanity. 
 
 I will delay you no longer. I have followed Mr. 
 Carey far enough to show what appear to me to be 
 some of his inconsistencies on the subject of the usury 
 law. I believe that his views in regard to it are en- 
 tirely attributable to the application he makes of the 
 influence of this law on his theory of paper money 
 and the system of protection. I close with an expres- 
 sion of my own conviction, that the usury law is ad- 
 verse to the best interests of the Commonwealth, and 
 being so, that it operates unfavorably to the system of 
 protection.