ten per cent., and from thence to eight, and thence to six, has, by experience, been found very beneficial to trade and improvement of land," &c.

Some manufactories exist, even in California, where interest is two per cent. the month, and by reflecting on what kinds they are, we may see better the principle by which the rate of interest operates on such pursuits. The manufactures of California are such only as can not be competed with by importation, as, for instance, architectural structures, gas works, railroads, turnpikes, ferries, &c.; but the price charged in California for gas, freight, passage, &c., will exceed the price we charge, in a proportion graduated by the excess of their interest over ours. The like may be said of the rents that will be paid in California for architectural erections, and the principle will manifest itself in all pursuits that require capital. The price of even imported articles becomes enhanced by a high rate of interest, so as to compensate the merchant for the time that must transpire between the purchase of his goods and their conversion into money; hence, after knowing the high rate of interest that exists in California, we need not be surprised at the apparently enormous price of house rent, &c., so long, at least, as the supply of houses, &c., shall not exceed the demand for them.

THE ANTAGONISM BETWEEN LABOR AND CAPITAL.

But the influence of the legal rate of interest extends beyond all the foregoing illustrations. A New-York woolen manufacturer cannot continue his productions unless their sale shall repay him for the cost of the raw material and the labor bestowed thereon, together with the legal rate of interest on the employed capital. Of these three essential ingredients, labor is the most unprotected. The

raw material of nearly all fabrics possesses a price that is independent of the home manufacture, for it can be transported at generally a small expense to every home market, and often to every foreign market; hence its price is kept up by reference to the value of the article in the best market to which it can be sent; so that every manufacturer procures his raw material in an active competition against the world, inveterated by rivalry and speculation. Disadvantages still greater apply to the borrower of money. He must compete, not with manufacturers only, but with all his countrymen; and could the rate of interest be enhanced illimitably by competition, as the raw material is enhanced in price, we can see that whether a manufacturer could compete with foreign fabrics and sustain his business, would depend on the price he pays for labor; and labor is so dependent on local demand that the employer can coerce it to accept the lowest compensation that will sustain man's animal necessities. The operation of the principle is manifested in England. The raw material there, as everywhere else, is protected by the competition of purchasers, while money, unrestrained by usury laws, is protected, as everywhere, by universal competition for it; and nothing is unprotected but labor. It accordingly must be obtained low, or many fabrics which are made for foreign markets could not be manufactured at a salable price; consequently the laborers are taught that marriage and its most natural animal incidents are too expensive a luxury for their condition, and that emigration and poor-houses are a part of their proper resources. A laborer possesses the theoretical power of locomotion, and may, like money and raw material, seek the best market; but, practically, nothing is more difficult to move than labor. Besides feelings of attachment towards the place wherein we are ac

customed to reside, a man cannot remove till he possesses spare capital to support him while he is travelling, and to discharge the expense of carriage, especially if he possess a wife and children. The more a man is oppressed by low wages, the greater will be his desire for removal, but, in the same degree, will be increased the impediments in procuring the means of removal; to say nothing of the uncertainty of finding a better market when all are alike under the same oppressive disadvantages. And labor is further unable to protect itself, by reason that, unlike raw material, which can be aggregated for transportation abroad, every laborer can affect the labor market by only his individual volition, oppressed by a necessity for present sustenance which forbids any prolonged contumacy; and so conscious is the law that labor must continue thus dependent if we would compete with foreign industry, that any attempt of laborers to coerce a concert of action among themselves with a view to control wages, is deemed a conspiracy punishable with fine and imprisonment; a law which is founded on the same public policy as the usury laws, and were one law to be repealed, both ought to be. The antagonism of labor and capital extends, in a modified degree, to the superintendents and clerks of factories, the captains of ships, and the book-keepers of merchants. Lawyers, divines, and physicians are paid for their skill chiefly, and hence are not within the category of persons who can obtain their compensation from only what remains after satisfying the requirements of capital.

AS THE RATE AUGMENTS OF INTEREST, THE MOTIVE OF CAPITALISTS DIMINISHES FOR PERSONAL INDUSTRY.

I will advert to only one more general effect of the rate of interest. The higher we make the raté, the lower will

become the compensation for employing it, and consequently the less will become the inducement for active enterprises, no man being willing to employ his money personally in trade or commerce, if he can obtain, by the loan thereof, all that can be earned in its employment. Such a maximum can, of course, never be realized; but, in the extreme, we can understand the approximations thereto. So, again, if interest were wholly interdicted, every possessor of money would be compelled to actively employ it, or live on his capital, and thus gradually dissipate it. When the Jews of old forbade the taking of interest, the motive may have been to compel all men to labor; and no measure could better produce such an end. In England, however, an opposite policy permits capitalists to receive as much interest for money as can be obtained, encouraging thus the inactivity of capitalists, labor being there superabundant. In our country, a medium between these extremes seems best suited to our condition. We should not make interest so low as to discourage the old, the infirm, and unenterprising from loaning their money to the healthy, the vigorous, and the enterprising; nor should we make interest so high as to invite active money-holders into inactivity, and to so diminish the earnings of mere labor as to check immigration and exclude laborers from domestic enjoyments and the other common comforts of civilization. Our State is prosperous, and all classes of its citizens; thus evincing that our existing laws in relation to the interest of money are adapted to our condition; we may, therefore, well be cautious how we try any change in so pervading an element of prosperity as the legal limitation of interest.

THE PRESENT AND PROSPECTIVE VALUE OF GOLD.*

RISE IN THE PRICE OF SILVER.

OUR laws make 10 dwt. 18 gr. of standard gold, coined into an eagle, equivalent to ten silver dollars; but the dollars will purchase in New-York about 3 per cent. more gold than is contained in an eagle-the silver being in demand for exportation. In England, the appreciation in the value of silver is still more apparent, by reason of her greater intercourse with the continental countries, whose currency is wholly silver. An English sovereign contains 5 dwt. 34 gr. of standard gold; and it has heretofore, in the intercourse between England and Amsterdam, been deemed an equivalent to 11 florins of silver, and 93 centimes; but now a sovereign cannot be exchanged in Amsterdam for more than 11 florins and 17 centimes. The rate of exchange between England and Amsterdam is, therefore, in England below what has heretofore been deemed par; a like fall in London attends the exchange between England and every Continental country which employs silver as its legal currency. This fall is particularly portentous of a rise in the price of silver, by reason that these countries are commercially in debt to England; and, therefore, the rate of exchange ought to be in favor of England.

and

In France the effect of the rise is still more apparent. Hitherto gold has not sought a re-coinage in France-the 8 dwt. 7 gr., which compose a double Napoleon, being more valuable as bullion by 1 per cent. than the forty silver francs which the Napoleon represents; but the premium is fallen to about a quarter of one per cent., while an expectation exists that the forty francs in silver will soon com

* Published February 1, 1851.