ties to their own contracts, till the law of the twelve tables, according to Tacitus, or the law of the tribunes, in the year of Rome 398, according to Montesquieu. The consequence was, unceasing quarrels between the patricians and plebeians, and popular secessions to the mons sacer, in which one party pleaded the obligation, and the other the severity of their contracts. Interest was then reduced to the smallest allowance, and finally abolished, which led to a still more frightful usury, until, at last, the emperors were obliged to allow, but regulate and limit, the charge of usury. So true it is, according to the President Montesquieu, (Esprit des Loix, liv. 22, ch. 21, 22,) who has discussed this subject at large, that extreme laws produce extreme evil, les loix extrèmes dans le bien font naitre le mal extrême. The Romans, at one time, had no laws against usury; and, at another time, they allowed no interest; and these are the extreme laws which this celebrated civilian condemns. Dunham v. Gould, 16 Johnson R., 376,

et seq.

The true reason on which the legislature has said, that in bargains for money no more than a certain fixed sum shall be taken by way of interest for the loan, is founded on just principles of public policy. First of all, it is more advantageous to the public that persons who are in possession of money, should use their own industry in the employment of their money, than that they should sit idle and take the benefit of it, through the industry of others; and therefore the loan of money at any large rate of interest, has always been discouraged; and as a state becomes rich, the interest of money is always diminished, with the view that the men who sit idle shall receive as low a rate of interest as can induce them to lend to another. But if a consideration of any description beyond that rate of interest can be had, the profit derived from that is just as injurious to the public as if it were taken in the shape of a reservation of à higher interest. And therefore the policy of the law would be completely defeated, if courts were not to be jealous of such transactions as these, and were not to watch them with severity, and to be sure that they did not permit persons, under cover of ordinary dealings between man and man, to obtain an advantage beyond the legal interest. If every man could obtain for the loan of his money as high a rate of interest, without hazard, as they do who employ it in trade and manufactures, which are hazardous undertakings, the most industrious of the people would be ground down by usurers; they would get the profits of trade; and the enterprising and industrious trader would be ruined. One sees every day, where traders who have been in the habit of borrowing become bankrupts, how

large a share of their property is swallowed up by usurers. Lord Redesdale. 1 Scho. and Lef. 195–312.

By 3 and 4 of Will. 4, c. 98, s. 7, bills and promissory notes made payable at or within three months after the date thereof, or not having more than three months to run, are exempted from the operation of the usury laws. And by the 7 William 4th, and 1 Vict. c. 80, this exemption was extended to bills and notes payable at or within twelve months, or not having more than twelve months to run. And now, by the statute 2 and 3 Vict. c. 37, entitled "An act to amend and extend until the first day of January, 1842, the provisions of an act of the first year of her present Majesty, for exempting certain bills of exchange and promissory notes from the operation of the laws relating to usury," it is enacted, that from and after the passage of this act, (i. e. 29th July, A. D. 1839,) no bill of exchange or promissory note made payable at or within twelve months after the date thereof, or not having more than twelve months to run, nor any contract for the loan or forbearance of money above the sum of £10 sterling, shall, by reason of any interest taken thereon, or secured thereby, or any agreement to pay, or receive, or allow interest in discounting, negotiating, or transferring any such bill of exchange or promissory note, be void, nor shall the liability of any party to any such bill of exchange or promissory note, nor the liability of any person borrowing any sum of money as aforesaid, be affected by reason of any statute or law in force for the prevention of usury; nor shall any person or persons, or body corporate, drawing, accepting, endorsing, or signing any such bill or note, or lending, or advancing, or forbearing any money, as aforesaid, or taking more than the present rate of legal interest in Great Britain and Ireland respectively, for the loan or forbearance of money, as aforesaid, be subject to any penalty or forfeiture, any thing in any law or statute relating to usury, or any other law whatsoever in force in any part of the United Kingdom to the contrary notwithstanding. Provided always, that nothing herein contained shall extend to the loan or forbearance of any money upon security of any lands, tenements, or hereditaments, or any estate or interest therein."

SEC. 2 provides and enacts, "That nothing in this act contained, shall be construed to enable any person or persons to claim in any court of law. or equity more than £5 per cent. interest on any amount, or on any contract or engagement, notwithstanding they may be relieved from the penalties against usury, unless it shall appear to the court that any different rate of interest was agreed to between the parties."

SEC. 3 provides, "That nothing herein contained shall extend or be construed to extend to repeal or affect any statute relating to pawnbrokers; but that all laws touching or concerning pawnbrokers shall remain in full force and effect to all intents and purposes whatsoever, as if this act had not been passed."

It would seem that several of the United States have had in view the above acts of Great Britain, in the recent mcdification of their usury laws.

"By a law of the Colony of Massachusetts, 1641, it is ordered, decreed, and by this court declared; that no man shall be adjudged for the mere forbearance of any debt above eight pounds in the hundred, for one year, and not above that rate proportionably for all sums whatsoever, bills of exchange excepted; neither shall this be a colour or countenance to allow any usury amongst us contrary to the law of God." This appears to have been the law in relation to interest until 1693, when interest was reduced to six per cent., and all contracts reserving more were declared utterly void, and a penalty for receiving more to the full value of the goods, monies, or other things so received, one moiety to the government and the other to the informer that shall sue for the same; with a saving of maritime contracts as before accustomed. This act was in substance re-enacted in 1783, with an additional section directing the mode of proof; which act, with a slight variation in 1788, appears to have continued until the late act now in force. Under this act of 1783, the principal decisions were made, referred to in this work. The present act now in force in Massachusetts was first passed in 1825, and continued through the late revision of the statutes.

The laws of Connecticut, published in 1715, contain in substance the present act now in force, with the exception of the third section, directing the mode of proof.

The laws of Vermont, of October, 1797, fixed the rate of interest in Vermont at six per cent., and added a forfeiture of all over that and twenty-five per cent. in addition, one moiety to the state and the other to the prosecutor. This act continued until 1822.

The present act against usury in New Hampshire was passed in

1791.

The first act of the colonial legislature of New-York against usury, appears to have been that of the third year of King George the First, (Sept. 27, 1717,) which reduced interest to six per cent., and was very similar to the British statute of Queen Anne. This act appears to have been intended as an experiment, as it was to continue only five

years from its publication. It was, however, repealed in 1718, so far as to increase the rate of interest to eight per cent., with the like forfeitures of the former act for taking more. For these acts, see Bradford's Laws of the Colony. The latter act continued until 16th Dec., 1737, when interest was reduced to seven per cent.; which last act has been substantially continued through the act of 1783, and subsequent revisions of the statutes, with slight alterations, until 1830. The act of 1737, went into operation 1st May, 1738.

Under the British statute 12 Anne, bills or notés founded on an usurious consideration were void, even in the hands of a bona fide holder. Lowe v. Waller, Doug. 736-1 Starkie 385-2 B. and Ald. 590-8 Price 228. But by the statute of 58 George 3, c. 93, reciting that to be the law, and that in the course of mercantile transactions negotiable securities often passed into the hands of persons who had discounted the same without any knowledge of the original consideration for which the same were given, and that the avoidance of such securities in the hands of such bona fide endorsers, without notice, was attended with great hardship and injustice, it was enacted that "no bill of exchange or promissory note shall, though it may have been given for an usurious consideration, or upon a usurious contract, be void in the hands of an endorser for valuable consideration, unless such endorser had, at the time of discounting or paying such consideration for the same, actual notice that such bill or note had been originally tainted with usury."

The operation of this latter statute was, that if, in an action on a bill or note, the defendant succeeded in establishing that it was founded on an usurious contract or consideration, the plaintiff was bound to prove that he gave value for it, and then the defendant must have shown that the plaintiff nevertheless had notice of the usury at the time he took the security. Wyatt vs. Campbell, Moody and Maulkin, 80.

This act, however, though evidently intended to repeal so much of the 12 Ann 2, 16, as rendered bills and notes given for an usurious consideration void in the hands of a bona fide indorser for valuable consideration, who had no notice of the usury, but not having in fact repealed any of the provisions of that statute, was held to be confined to parties who had discounted or paid a valuable consideration for the bill or note, and not to extend to a party who had taken it in payment of an antecedent debt.-6 Add. and Ellis 932. 2 N. & P. 78.

Adopting this principle, and perhaps in consequence of the decision of the Court for the Correction of Errors in the case of Powell v

Waters, the Revised Statutes of New York established as follows: Sec. 5. All bonds, bills, notes, assurances, conveyances, all other contracts or securities whatsoever, and all deposits of goods or other things whatsoever, whereupon or whereby there shall be reserved, or taken, or secured, or agreed to be reserved or taken, any greater sum or greater value, for the loan or forbearance of any money, goods, or other things in action, than is above prescribed, shall be void; but this section shall not extend to any bills of exchange or promissory notes, payable to order or bearer, in the hands of an indorser or holder, who shall have received the same in good faith, and for valuable consideration, and who had not, at the time of discounting said bill or note, or paying such consideration for the same, actual notice that such bill or note had been originally given for a usurious consideration, or upon a usurious contract.

This last reservation of the 5th section of the R. S. relating to interest had the effect of throwing the doors wide open to the usurers, and in the years 1834-5-6 there was scarcely any practical restraint upon them. Usury stalked abroad at noonday, and any attempt to describe the disastrous effects of that section would be little short of the history of the times. It could not be written without the pen of a Gibbon. The interior of the state, however, in May 1837, succeeded in rescuing the City of New York from the usurers by their majority in the Legislature, and passed the act now in force, which took effect in the following July. Repeated attempts have been subsequently made by demagogues to effect a repeal, but the countrymen have as yet

remained firm.

The first act against usury in New Jersey was passed at Perth Amboy, 1738, in the twelfth year of King George the Second, which fixed the rate of interest at seven per cent., and áll contracts reserving more were declared utterly void, with a penalty of all received on such contract. This act appears to have been continued, in substance, to the present day, except the reduction to six per cent., which took place in 1823.

On the 27th Nov. 1700, interest was reduced from eight to six per cent. by the act of William Penn, Esq., Proprietary and Governor in Chief of Pennsylvania and Territories, and a forfeiture of the thing so lent, upon conviction of receiving more. This act was repealed 7th Feb. 1705, and re-enacted 2nd March 1723, by William Keith, Governor of Newcastle, Pennsylvania and Territories. This act has been continued in both states until the present day.

The original act against usury in Maryland, has continued, without