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Irifb Parliamentary Intelligence.

(Continued from page 494.) Saturday, February 23, 1988.

EAVE was given on the motion of Sir Edward Crofton, that the evidences on the Police bufinefs, fhould be examined on oath. Before going into the Committee on the bill for reduction of money, Mr. Parfons defired to know whether the loan contra was revocable? If not, he faid no less than 10,000l. yearly were for ever loft to the public. He inftanced, that it appeared like a job for the benefit of cog tractors.

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The Chancellor of the Exchequer replied, that the contract was not revocable. In forming it, government had acted, to the beft of their judg. ment, and with the moft liberal impartiality. In negociations of this nature, which had, for their object the public good; he had no idea of private intereft or tavouring any individual whatever. He defpifed fuch a mean confideration. By the plan 10,000l. yearly had been fecured to the nation, which might be applied to ufeful purposes and this fum had been fecured for nothing. He was not ashamed to avow, that he had acted to the beft of his capacity in the tranfaction if he should merit reprehenfion he would always willingly fubmit to it-in the prefent cale, however, he did not think it could be applied, for the fact is, that it will lower the price of flock, by diminishing the quantity of circulating fpecie.

The House refolved itfelf into a committee on the bill for

REDUCTION of INTEREST.

Mr. Carry in the Chair.

Right Hon. Mr. Clements. I fhall first mention one truth that has been univerfally admitted upon this fabject-that a facility of procuring money at a cheaper rate must be beneficial to any country. Now, I afk, how it is poffible to bring about such a circumftance in this country, unless by a reduction of the interest which money bears ?

I have heard much faid relative to the probability of our linen trade being injuriously attacked, as well as several other manufactures by the reduction of intereft. I do not admit even the ground or shadow of such probability. The premium of all manufactures is money-and if you enable those concerned in them to procure money at a cheap rate, you do them an effential fervice. I have also heard an objection raised to this mea fure, grounded on its probable injury to private' property. I muft iofift, Sir, that private pro perty is out of the question, and that it has no connexion with the present cafe. This is a great nat onal measure for the public good, the progrefs of which ought not to be retarded by the confideration of individual intereft, especially when the circumstances of the country are prepared for it, as can be proved on the oaths of evidence at your bar. From the examination of thefe evidences, it would appear that your currency for the last ten years has received a prodi. gious and progreffive increase,

Gent. Mag. Oa. 1788.

It has been faid, that money will always find its level.Why it has done fo in this country ➡for good laaded fecurity can obtain money at five per cent and as a strong inftance of the fact, I shall mention that the Grand Canal Company have reduced their intereft from fix to five per cent.

Your exports and imports have of late gradually increased, and as the great material of them is money, by rendering it eafy of obta nment, you will adopt a measure that muft ensure them

ftill further increase. The manufactures of velverets, and a variety of other articles will in confequence experience an augmentation of no less than one-fixth of their capital; they therefore cannot be against the meafure, nor can the merchants, as has been falfelv afferted; for our confiderable export and import merchants muft difcover no trivial benefit in the difference of one per cent. which in future will be in their favour.

We are told, and I am perfuaded with truth; that we have riches in the bowels of the earthand what prevents us from availing ourselves of them to the greatest advantage-fave the high price which the ufe of money at prefent bears? We have filver, lead, copper, tin, fuller's earth, and other matters, which lie concealed, and can only be dragged into light and converted to general benefit by the hand of industry.-Without money industry cannot move--and it should therefore be our object to render it attainable on the rafieft terms, in order that it shall come in to action for the univerfal good of the commupity.

I have heard objections raised to this measure, from the idea of its caufing money to be taken out of the kingdom. I do not feriously confider that a folid obje&t on; for I do not think that perfons having money at intereft in this kingdom, would be at the trouble of withdrawing it-of fuffering their money to lie idle-of looking for one who might have occafion to borrow; befide the expence that would inevitably attend the transfer, merely becaufe the intereft of money was lowered one per cent. For what could they expect? not to get more in England, or any other country, than they might continue it here for, where they were fatisfied with punctuality and the fufficiency of fecurity.

Another objection has been made with refpe&t to time. I must observe, that in fome degree the time proper for an adoption of a measure of this nature must be eyer problematical;, but still I will akis it in time of war you should reduce the intereft of money? Certainly not. Is it in a time of dearth and famine? Certainly not. Is it in time of scarcity of money? Certainly not. Is it in time of commotion? or when your pub lic credit is at a low ebb? Certainly not. time then could be more ferviceable than under the prefent circumstances of the nation? When you are in a state of profound peace with all the world--when there are no commotions in the land—when your revenues are rifing, and your public credit high, and when your monied men are by a judicious regulation to lend money st 4h. per cent.

What

The motion and preamble of the bill were poftponed.

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The clerk proceeded in reading the firft claufe, when he wa- interrupted by the"

Solicitor General, who wished, for the fatisfaction of all parties, on this momentous bufinels -that the further confideration of it should be poftponed for a little time.

Mr. Paifons went over his old beaten ground, relative to loan and lottery-flating that a vast fum had been lost to the public by the bargain and that, in the course of the time which it was made for no less than 115,000l. would be divided amongst the contractors. He was repii ed to by

The Chancellor of the Exchequer, who faid the statement made by the Hon. Gentleman was not a fair one, for he flated that lottery tickets would bring the Tubfcribers of the lottery, forty fhillings profit on each ticket, which was taking it at the retail price. He had repeatedly faid, and he now once for all declared, that the most was made for the public in refpect to the loan, that poffibly could be; that the higheft, offers were taken, and the best terms acceded to; as to the operation of the bill now before the committee, on the public funds, he muft obferve, that whenever a country is in a state of riot and difturbance, ftock will be high, for the money is taken out of the land, and vefted in the funds, but when tranquility prevails, money is drawn out of the funds, and laid out in land, which confequently makes ttock low, and fuch is the effect, that the state of a country has upon its public funds. He faid that laft feffions it had been the wish of fome gentlemen then to bring forward a fimilar mealure to the one now about to be adopted, but he then gave notice that the experiment ought to be first made on the private property, before any reduction fhould be made on public funds; that experiment has been now made, and it lays a foundation for the prefent measure.

Prime Serjeant. The fame principle which juftified the reduction of the intereft of money from 7 to 6 per cent. will certainly recommend "the reduction still lower to 5 per cent that is, to benefit our commerce, and place our merchants on a par with foreigners, upon which they are not at prefent. It is a meafure that will enable our perfons, in trade to bring their commodities to foreign markets, and fell them cheaper --it will raile the value of lands, and by rendering the use of money more cheap, will ultimate ly tend to the promotion of our arts, manufactures, and fisheries, from enabling our people to profecute them with vigour and effect.

He defined the clerk to read the preamble of the 5th of George II. chap. 7, which is the act that reduced the intereft of money in this country from 7 to 6 per cent, which was read accordingly. The preamble ftated the utility

and benefit of the measure.

I thought it neceffary to have this preamble read, as a reason for differing with my hon. and learned friends (the Solicitor General) for whole opinions I have the highest reipect. With regard to what has been laid relative to the loan and Jattery, I muil obferve, that I highly approve of the conduct of the Minifter, in not announcing his intention of bringing forward this measure, because if he had, gentlemen-might affert, that

the advantageous terms on which the money had been procured for the public, proceeded from an idea of its taking place, which cannot now be urged.

The first object of a reduction of interest is not trade-it is to put a check to the dealings of the pendthrift, and to prevent him from eacroaching fo far on the circulating specie as to deprive the induftrious of its ufe, who would ap ply it to better purposes. The spendthrift cares not what price he pays for money to answer his neceflities-but the man of business or merchant will give no more for it than will afford him after payment a fufficient proof for his industry— which in fact is a regulation of the intereff.

I fhali beg leave to ftate from a writer whole authority is univerfally admitted, his fentiments upon the prefent fubje&t-he fays, "Low intereft is the foul of trade and basis of public credit; it encreases the value of land, and without it tin impoffible for a commercial nation to subsist."This is the principle of the bill before you, and I afk, whether this country is not at prefent in a better fituation for the reduction of interest from 6 to 5 per cent, than it was in 1731 to reduce it from fix to feven? Who will fay that this country does not labour under great difadvantages in the intereft of money, compared to that which it bears in other countries? In Ireland the intereft of money is 6 per cent. Great Britain it is 5-in France it is 4 h, as appears from Necker's fatement, by the deduc tions made on mortgages-and in England it is a fact of notoriety, that money has also been bad on good landed fecurity for 4 h. per cent.Therefore, the reduction of interest in this country must appear as an obvious matter of neceffity, If you with to trade to France furely you mot wish to have your merchant on a level with the merchant of that country: you are ambitious of trading with Great Britain-and other countries, the ports of which are open in common to but how then can you ever expect to support a competition under the difadvantages of paying one per cent, more for the use of money than your rival ?

Confider the principle of the bill in another light. It will operate as a filent and conflant bounty on your manufacture and augment the capital employed in them-while any other bounty would alarm the jealoufy of every other commercial nation-this, by operating imperceptibly will not.And by improving and frengthening your manufactures, may in future obviate the neceflity of continuing all those other bounties for their fupport, which are to beavily complained of.

As to the argument grounded upon the operation of this bill, in calling money from the kingdom, I must observe, that gentlemen, seem to eltimate too largely the fums at prefent in th kingdom, bearing the intereft of fix per cept.We have no proof for determining that there are the monstrous fums which those who are incal to the mealune would infingate.

It is a tixed and avowed principle that men in trade cannot afford with punctual payments 6 pe: cent. for the ate of money and yet you are 10'4 not to reduce interell!

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It has been faid, that fecurities at prefent bearing 6 per cent. in cafe the bill paffes will be fold for 5. This is a groundiess objection, for it will have no retrospect, and fecurities prior to, will be totally unaffected by it, if they are, 'tis most probable they will bring a premium.

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he deemed a better criterion of the condition of the two countries, the exports and imports. In the year 1714, the exports of England amounted to 7,696,650).—In the year 1786, the exports of this country amounted to 3.729,4811.—la the year 1714, the imports in England were 5,000,000l. which made a balance of trade in I muft mention a confiderable advantage her favour of 2,696,650l.-lo the year 1786, which the lender of money has in this country, the imports in Ireland amounted to 3,000,000l. and which he has not in Great Britain. It is confequently a balance in favour of her trade of the advantage given here by our universal re- 729,4811. fo that the whole exports and imports gistry act. He well knows the value of the of Ireland, in 1786, fell short of the exports fecurity given here by this,-when in England only of England, in 1714, in the value of he has no fecurity at all. The only counties in 7,169. He allo stated, that in the year England in which there are registries, are thofe $714, the home confumption of England was of Yorkshire and Middlesex-in all other counties peltimated at forty-two millions, and the circuthe mode of transacting this business is by refe-lating fpecie at nineteen millions; and this at rences to former deeds-which involves an enquiry in numberlefs difficulties, and caufes it to end in uncertainty. In this country the lender experiences quite the contrary. He cannot be deceived,for by the 7th and 9th of Anne all deeds must be registered, otherwile they are null and void.

In the year 1785, when the Bank bill was introduced one of the advantages which was ftated in its recommendation was, that it would caufe a reduction of the intereft of money, and oblige the bank to discount at 5 per cent. The juftice of the argument has been proved by experiment for the bank discounts at 5 per cent. and this bill realizes what the prophetic fpirit of the minifter forefaw at that period-a reduction of the intereft of money.

Another fecurity which the lender of money has in this kingdom and has not in England, is this:When a year and half's intereft become due, he may petition, without going to any of the expences of a litigation-bring the matter into a court of equity, and get a receiver appointed on the lands until the intereft money fhall be paid.

Punctual payment of the intereft of money I think highly worthy the attention of a statesman and I am happy that it had not elcaped the notice of the right hon. Baronet who brought in this bill. So far as it may be injurious to particular perfons who may have money to lend, I fhall only obferve-that property is the gift of fociety, and fociety can therefore regulate that property in whatever manner it may think proper. After a few more obfervations, he concluded with expreffing his molt hearty approbation of the

bill.

Sir N. Lawlefs fpuke a few words in favour

of the bill.

Mr. Forbes declared, that he never rofe to fpeak with more difficulty on any subject than he did at prefent. He confeffed Le had not made up his opinion, but he wished to receive the fulleft information on the fubject. He fhould, however, take the liberty of making fome obfervations, which in his opinion, would not be totally irrelative to the prefent fubject. The right hon. Baronet who had introduced this bill, has taken up the ftate of tonnage in Great Britain in 1714, when an act was paffed for reducing intereft to five per cent. in that kingdom, and compared it with the tonnage of Ireland at this day; he faid that he fhould refort to what

the conclufion of a most expensive, but a feccefsful and glorious war; therefore he obferved that the argument in favour of the bill founded on the fimilitude in the fituation of the two countries in 1714 and 1786, muft fall to the ground. The principle of the bill feemed to be, to force the money, on the intereft of which a great number live inactive, into trade. He ob. ferved, that might fucceed in England in 1714, when a great monied interest exifted in that country, but here there was no fuch monied lacerest. He contended that where it did not previ oufly exilt, it was impoffible to create or generate a monied interest merely by the talfinanick operation of an act of parliament; that S: Jof. Child had been quoted, in fupport of the prefent measure; and he should alfo quote him, where he fays, fpeaking of England, this country always reduced her intereft when Nature had prepared the matter for fuch an alteration." He asked if Nature had prepared the matter in this country?

He faid, if you establish the rate of intereft at 5 per cent. and that the landed fecurity cannot get money at lefs than 5, in that cafe the commercial intereft would be materially injured; but if it can be proved fatisfactory to him that money can be had at 4 per cent, fufficient to answer the wants of the landed fecurity, there is an end of the question; and he would molt willingly co-operate with the measure: But you are now called upon to reduce your intereft to the fame standard as in Great Britain, who has five times your export, four times your imports, and fifteen times your wealth. In France, he obferved, that Mr. Necker ftates the circulating specie to be 99 millions fterling, befides 24 millions of taxes. In Holland, the most wealthy commer cial country in Europe, there is no law to reftrain the intereft of money, for from the frugal habits of the people of the country, and their attention to commerce, there don't exilt a neceflity for fuch a law. He now took a view, how far this country might be affected by the meature now propofed, in the cafe of a war. In the courie of lalt war England gave 6 per cent. and fome. times more for money, and it is unfair to conjecture that should fuch a circumftance take place, but money would be drawn out of this country and embarked in the English stocks? This was by no means vifionary, on the contrary, it was founded on reafon and good fente, 2222

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and wou'd not this be an injury both to the commercial and landed intereft ? It had been stated, that in confequence of the late tranfaction of the loan, and the consequent reduction of the intereft on the public fund, that 200,000l. had been fent into the market, and that from the promises made of the intended future economy of govern ment, more money might probably be fent floating. For his part, he was one who had no very great regard to promifes made by government on the head of economy: but what would be the confequence, if from any uncommon exigency that 200,000. was to be called in? why Janded property, and it is well known that a il the landed property of this country wa ney, would be molt materially affected. contended it was not in the power of this Hour, nor of any leg flature, to reduce the intereit of money unless the riches of the country wil perimit it. He was willing to admit, that he approved of the principle of the bill, but from every information he had as yet received, and from every attention he paid to the confideration of the subject, thi country was not in a fituation at prefent to reduce the intereft of her money, and in his opinion the measure ought not to be adopted.

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Major Hobart was againft the bill. Although the time was not far distant-when the country might be ripe for the mealure it had not yet arrived. When gentlemen fpoke of guarding aga at the excefles of the fpendthrift-in their action on trade, they were themselves acting like the pendthrift-they were anticipating, which muft diminish the future wealth of their country.

Mr. Holmes was against the bill.

The Attorney General was against the bill. The right honourable the Speaker fad, he rose under fome degree of embarraflment, because be entertained fentiments very different from the many refpectable and learned gentlemen, who argued against the reduction of intereft, profeiled to feel, and becaule he viewed the facts upon which they had grounded their opinion in a direct oppolite light.

They had stated, that no country ever reduced intereft of money by law, except at a time when the market price of money had fallen be Jow the rate propofed; that the legal reduction of interest should always be preceded by an abundance of ipecie, and never was or could be uted as a means to make money cheap; this argument, be faid, was founded entirely on miftake, and to prove it he would ftate to the commitee li me facts, and from thofe facts he would few, that intereft never had been lowered in Great B.jain or Ireland but when money was Jea.ce or its price high, and the reason is, that when money rifes beyond its true value, or the ule that any indytinous man can make of it, it becomes neceflary for the legislature to ftep in for the protection of commerce, to prevent that money which ought to be profitably employed by the merchant and manufacturer, from beJag taken out of the market by the idle and extravagant, who are always ready to give a higher price for it than the industrious man can poffinty abord.

He would not have gone so far back as the

reduction in Charles the Second's reign in Eng land, if the honourable gentleman (Mr. Forbe had not quoted the preamble of the act 1662, for the express purpose of the wing that the s lue of money had fallen previous to that yo The preamble fays" Whereas on fresh me mory, the like fall from 8 to 6 in the hundred by a late conftant practice, had found the ficcefs." The gentleman supposes the fall o luded to was a natural fall of price, and the it induced the paffing of this law. But look he history of thole times: Cromwell's geven ent had made a law in 1651, to reduce the rate of interest from 8 to 6 per cent. this law had operated advantageoufly, and in nine year after, at the Refloration, it was adopted wa ae navigation act, and many other of Crum well's; but as the government did not recog nife for legal the act paffed during the uforge tion, they did pot refer this law in expei words, they re-enacted it by allusion and releence fo strongly marked in this p.camble that it cannot be mistaken. The word, in * freth memory," and by a "late constant practice," refer only to 1651, and the oblervance and ef feet of the law of that day. -Every body must know, that previous to 1651, England bad not for years been in a fituation to sequse wealth.

The preamble quoted fhews us one thing cer tain, that the law of 1651 had the effect of reducing intereft, and that the act of 1660 did not anile from a natural fall of money, but from a legal forced reduction of it.

The next reduction of intereft there took place in 1714, in the reign of Queen Anne, from 6 10 5 per cent. Now what was the fituation of Eng land at that day? She had juft come out of alco and expenfive war, which, from the report of the Commiffioners of Accounts, appeared to have colt the nation fixty millions; the State owed fty millions, bearing an intereft of 2,811,000l. be ing an average of above five and a halt per cent. Here we fee a nation reduce the legal intereft is 5 per cent, at the very moment that the State was paying above and a half. Certainly five could not have been the market price of money then, or the State would not have continued fo high an intereft on their own funds, nor would they have borrowed, as they actually did in that very fesfion, 1,200,000l. by Treafury-bill. at 71. 3. 9. per cent, even the anticipation of the land and inait tax was made at five.

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The preamble to the act of 1714 fhews the

of the kingdom and decay of trade, and fucă was the decided opinion of the good effect to be expected from the forced reduction, that whea leave was moved to introduce a bill, it was refolved, nem. com, that leave be given to bring in bill to reduce interest to 5 per cent. without prejudice to parliamentary lecurity; and thele latter words in the title are strong, and though the nation could not then, from the high price of money, reduce the interctt of the public debt, yet fo ipeedy were the good effects of the law, and to effectually did it answer the general expec tation of the kingdom, that the intereft of the whole debt was reduced in 1716 from 6 to 5 i but it was neceffary to give the law much more time to operate before it could be reduced lower

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a the national intereft, and it was ten years f, to 1726, before the reduction of interest on public debt could be brought from 5 to 4. le then applied to the reductions of Ireland, faid, he would begin with the prefent cen, and produce the most authentic records of fcarcity of honey at each period of reduction, The first was in 1703, from 10 to 8. The refentation of the Commons to the Queen in Lyear lays, "we cannot without the greatest ef of heart reflect upon the vast decay and lofs our trade, and this your Majesty's kingdom ng almost exhaufted of its coin," yet in that y feffion a bill for lowering the rate of intereft s pailed.

In 1721, the next period of reduction appears m the Duke of Graiton's Ipeech, that the fituon of the country was by no means the moft urithing, yet in that year, intereft underwent urther reduction from 8 to 7 per cent. The ake fays, and although your trade may have Tered, and the necellary means used for your urity, have created fome extraordinary experice, yet there is ground to hope that in this fefA of Parliament, fuch remedies will be applied will restore the nation to a flourishing condi

The Commons in their addrefs, reply:

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The great decay of trade occafioned by the blic calamities and misfortunes which have atRed the neighbouring kingdoms, hath reduced is to a very low and impoverished state," He hoped gentlemen would allow him to y fome little attention to the fpeech of a Speak to a Lord Lieutenant upon paffing of bills, for would be a faulty Speaker indeed, who upon ich an occafion would fay, that he did not know to be the tente of the Commons; he would herefore quote the Speaker's words that feffion hen he prefented the money bills for the royal Tent.

"Notwithflanding our poverty through the ilure of trade and carcity of money, yet our tal, &c."

He then adverted to 1731, when the intereft as reduced to the rate it now ftands, at 6 per ent. the poverty of the country was again the aject of complaint. On opening the feffion, je Duke of Dorfet laments the low ftate of the ablic revenue, and the Commons in their reply heation, the great dittress of the nation, by the ublic debts, and the decay of trade. The speak, in his peech to the Lord Lieutenant, fays, notwithffanding all the difficulties under hich this exhaulled kingdom unfortunately lies, y the decay of trade, the scarcity of money, and he univerfal poverty of the country, we have ovided chearfully" &c. &c.

Thus it appears, faid he, throughout, that at, ich period, when a reduction on intereft took ace, the conftant complaint was the poverty of le country, and the word" fcarety of moty," "exhaufted of its coin," &c. &c. are as rphatical, as words can be to denote the very a I flate.

The truth is, that money was fcarce, of course s price high, and that no natural fale of price ecoded each reduction, bui each was made to wer the price by force of law, and each had int happy effe&.

From all these facts we may infer, that Locke' Smith, and other fpeculative writers, who are quoted as having laid down the doctrine relied on by the other ide, are refuted in that doctrine by experience. I quote experience against specalation, and while they reli on fpeculations from theoretic authors, I tand firm in the hiftory and recorded facts of both kingd is. Their miftake ariles from not diftinguithing between the price and the value of money; the price will be affected by the follies of the most extravagant; the value will be ascertained by what the frugal and the induftrious can afford to give for the ufe of it. The price may be, and often is above the value, and a wile Legiflature, therefore, thould endeavour to find that value, and to regulate the price; or in other words, the rate of intereft by it. The preventing of individuals to pay too much, is in tact to protect the induftrious, preferve credit, extend works, and promote the profperity of the ftatea Legislature which neglects this conduct, is an unwary Legislature indeed.

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I omitted to mention two facts: In 1721, when intereft was reduced to 7 per cent. Ireland owed 50,000!. at per cent, and from inability for three years after to reduce it, was obliged to pay that rate of intereft. And in 1731, when intereft was reduced to 6 per cent. the ftate owed 200,000l. at 6 per cent, which it would have reduced long before, had the market price of money allowed it.

If then the fituation of the country, at the three periods at which national intereft was reduced, was a fituation of itarcity of money; and if, as it appear that reduction in no inftance has proved injurious; but on the contrary, the nation has been uniformly benefited by it; what becomes of the affertion, that money will find its level, and ought not to be limited by law. Is it no manifelt, that money does not ftand its level until the legislature first appreciates its value, and then trikes that level. In truth, were money to find its own level as moft other commodities do, laws for regulating intereft would be unneceffary; 'tis only when it is above its value, that there is a neceffity for the interference of the legiflature to prevent schemers and spendthrifts from giving more for it, than that value; and as, upon the fame terms as to price, the fecurity of the fober, honelt merchant, will generally be preferred to that of the profule and idle, money is thus thrown into commerce, at a rate that will afford the merchant a reasonable profit, while he employs it.

Thole who argue, that reduction should not be made by law, until money has fallen of itself, and that no law will keep down the price of money, argue against any legal limitation of intereft; for if money must previously fall, the law is ufelef; and if it cannot prevent the rife, it is ineffectual: therefore the gentlemen tell you, do not make a law, till the object of it has been first attained; do not make it when it can operate and argue, that it is not the proper time, becaufe the law might have effect.

Having I hope demonftrated, that the market price of money is never regulated by its quantity, but must be limited by the leg.flature; and having hewn from your owa records, that no injury has

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