severely in those which possessed the greatest internal resources, and which have settled the most rapidly, in the extreme difficulty with which money could be obtained even upon the best security.

This difficulty has usually been attributed to a scarcity of capital. This is doubtless one cause of the trouble; but another plain and obvious cause has been, that the ordinary net profit on capital has been so far above the legal rates of interest, that those who had capital could do better than to loan it at all at those rates. Another ill effect of fixing the legal rate of interest below the net profit on capital, even if limited to cases in which no agreement has been made between the parties, is, that if one man gets into another's debt by ordinary deal, it furnishes an inducement to the debtor to be slack concerning his promise-to avoid payment as long as possible-because he is paying less interest than he is receiving in profits on the amount due. Business men in the West have seen this principle operate, not always to their satisfaction; and eastern merchants may have suffered some delay, occasionally, from the operation of the same principle, without ever finding out the precise nature of the "misfortune."

Instances have occurred in which men have paid seven per cent. on their debts, and the costs of a law-suit besides, and made money at that. We shall be better prepared to appreciate the impropriety of fixing an uniform rate of interest, (except for cases in which no agreement has been made,) even at the average net profit on capital, if we consider the variations to which those profits are subject.

Although there is a strong tendency to an equilibrium of profits between the different pursuits in which capital is employed, yet they are, by no means, absolutely equal.

1st. At the same place the profits on capital will be greater when it is scarce, than when it is abundant, just as labor will be higher when laborers are few, ceteris paribus, than when they are many. That competition has a tendency to reduce profits, is so far within the scope of observation, and so generally admitted, that the mere statement of the proposition is sufficient.

2nd. They are different at different places, at the same time. This follows in part, from the first proposition, as capital may be more abundant, at the same time, in one place than another, but not from that circumstance alone.

The resources of our country, or a particular section of the same country, may offer a larger reward, both to labor and capital, than another, while the hardships, privations and risks to be encountered in reaping those advantages, are such as to prevent for some time, if not permanently, a sufficient competition, either in labor or capital, to reduce the profits of either to the common level. The rapid settlement of the new western states, and the cultivation of their millions of acres of rich soil, and the consequent rapid growth of towns and cities, and the prodigious strides by which the value of real estate, both in town and country, has advanced towards maturity, have afforded returns, and, in some of the more recently settled states, still afford returns to both labor and capital, which could not be realized in a country which had acquired a greater degree of maturity.

Certain latitudes also afford greater remunerating profits, both to industry and capital, than others. The great productiveness of the lower latitudes, and the high estimation in which the products of those regions are held, afford greater natural inducements to both labor and capital,

than are usually found in the higher latitudes; and yet such is the risk of life and health by exposure to those climates, that neither capital nor labor flows to them in sufficient abundance to reduce profits to the common level in more healthful climes.

3rd. The profits on capital differ, under different circumstances, at the same time and place. Investments which afford but temporary employment for capital, must offer larger profits than those which give permanent employment, or capital will not be diverted to them. The reason for this is found in the inconveniences and loss of time incident to frequent changes in the modes of employing capital, or repeated acts of investment. Employments which call for capital in small amounts must, in general, offer larger inducements, per centum, than those which call for it in larger quantities. The reason of this is, that he who has any considerable amount of capital will be content with a somewhat smaller income from it if he can keep it together, than he will if it is to be divided and scattered. The various employments which occupy capital must, in order to attract it equally, afford profits proportioned to the risk incurred. An employment which is attended with extraordinary risk, must afford extraordinary profits, or it will be abandoned. So potent is this principle, that an attentive observer will find it, in nice gradations, pervading all the business affairs of men.

The foregoing are among the most prominent and permanent influences which vary the net profits of capital. When all the influences which tend to raise profits combine, they produce the maximum rate; and when those combine which tend to reduce profits, the minimum rate is the result. We find, then, that the rule or criterion by which alone the equitable rate of interest can be determined, varies widely, at different places, at different times, and under different circumstances. If the net profit on capital is the only criterion by which we can determine what is and what is not an equitable rate of interest, and those profits are subject to the variations which have been pointed out, it would seem to be a logical conclusion that the equitable rate of interest must be as variable as the criterion by which it is determined,-in other words, that an equitable uniform rate of interest is impossible. The same influences which have been enumerated operate equally upon capital in the loan market, as upon capital seeking an investment in any other way. If the peculiarities of a particular section of country, or a particular period of time, afford extraordinary net profits, they will as certainly demand extraordinary rates of interest. And there is no injustice in the demand; for the net profit, whatever it may be, is the reward naturally due to capital for the agency it exerts in production. Labor and capital are partners in the production of wealth. The proportion of the product which belongs to labor is determined by the operation of principles which cannot be elucidated in the present essay. It is sufficient for the present argument to arrive at a clear perception of the truth; whatever that proportion may be, or however it may fluctuate, it is just as equitable in the case of capital loaned, as it is in any other case; and that the same freedom must exist in relation to it, or capital will leave the loan market and seek investment elsewhere. The legislature might as well enact that one man should not labor for a certain man for more than fifty cents per day, and leave him at liberty to work for a hundred other men at any price he and they could agree upon, any one of whom would give him a dollar a day, as to enact that capital

loaned shall receive a profit of only six per cent., while there are a hundred other ways in which it may be employed at a net profit of twelve per cent. The effect of every such attempt, if it has any effect at all, must inevitably be to drive capital from the loan market. It will have the same profit then, legally or illegally, that it can get elsewhere, or elsewhere it will go. What then shall we think of Mr. Whipple, when in reply to Mr. Bentham, he says:-"I believe it was never before pretended that Usury Laws lessened the quantity of money, or prevented any one from borrowing!" The author seems to suppose that there is just so much money which must be loaned, or lie idle! He does not seem to comprehend the simple truth, that it is capital which is loaned, and that in being loaned it only assumes, for the moment, the form of money, in order that the borrower may, by a single act of exchange, get the borrowed capital in the precise form in which he wants it, and that the ordinary quantity of money in circulation has really nothing to do with determining the quantity of capital in the loan market.

The intelligent reader must by this time be convinced, that of two supposable average rates of interest, the higher one is not necessarily inju rious to the public, and that an uniform rate of interest, however nicely adjusted to average net profits, cannot be equitable in all cases. But the law of supply and demand, acting on the loan market, determines the actual average rate of interest, and produces extremes extending both above and below the equitable point, even under the varying influences I have pointed out, and a little attention to this law, may enable us the better to estimate the validity of those objections to the free principles which are drawn from the extreme highest rate. The general operation of this law is concisely stated by Mr. Mill as follows:

"The rate of interest will be such as to equalize the demand for loans with the supply of them. It will be such, that exactly as much as some people are desirous to borrow at that rate, others shall be willing to lend. If there is more offered than demanded, interest will fall; if more is demanded than offered, interest will rise; and in both cases, to the point at which the equation of supply and demand is established."(Mill's Pol. Economy, vol. ii., chap. 23.)

The average rate of interest thus established cannot vary very widely from an average equitable rate, because both the motive which prompts the chief demand, and that which induces the chief supply, are regulated by the actual net profit on capital. The borrower cannot afford to pay more than the net profit, and will not, except in extreme cases of necessity arising out of embarrassed circumstances, which cases are rare, and constitute but a small portion of the demand; and the lender cannot afford to take less than the ordinary net profit, and will not, except in extreme cases of indolence or inability to employ his own capital, which cases are also rare, and furnish but a small portion of the supply. Still these extremes do exist, and affect in some degree the average rate of interest, and to prevent the higher extreme, is one of the main objects of Usury Laws, which will be examined in reply to Mr. Whipple's second inquiry.

The limits I have assigned to this essay will not permit me to follow Mr. Whipple through all the errors and absurdities he has evolved under this head. I will only quote his own summary of them, and remark briefly upon the points he supposes he has established. He says:

"I have attempted to show that it (money) is unlike merchandise in the following essential features:

"1st. That money is the creation of government-merchandise of individual industry. Its origin is therefore different."

Money, I must be permitted to say, is not the creation of government in any sense which should or can exempt it from the operation of the same laws of trade which affect other commodities. Gold and silver are dug out of the earth by the labor of individuals, just like iron and copper, and for many ages they were used by common consent, as money, and passed by weight. Abimelech gave Abraham a thousand pieces of silver as damages for detaining his wife. In payment for a certain field, "Abraham weighed to Ephron four hundred shekels of silver, current money with the merchant," at a time when governments did not exist, except in the patriarchal form. The coinage of money was of comparative late date among the Persians, Greeks and Romans. "The Persians had none coined before the reign of Darius, the son of Hystaspes; nor had the Greeks (whom the Romans most probably imitated) any before the time of Alexander. We have no certain vestiges of the existence of coined money among the Egyptians, before the Ptolemies; nor had the Hebrews any coinage until the government of Judas Maccabeus, to whom Antiochus Sidetes, King of Syria, granted the privilege of coining his own money in Judea. Before these respective times, all payments were made by weight."-(Horne's Int., vol. iii., part 4, chap. 7.)

Yet money existed long before these periods, as the product of private industry, and by the spontaneous laws of trade. In coining money, the government has created nothing. It has only taken the currency as it was, and reduced it to a more convenient form; and the only advantage in having even this done by the government instead of private individuals, is, that every one may have the faith of the government to rely upon, that a coin bearing its stamp is, in weight and purity, what it purports to be.

Bullion possesses all the essential qualities of money, and possesses about the same value by weight, and is subject to the same laws of trade as coin, and no sane man will pretend that the owner has not as absolute a right over the one as the other; for with the slight difference of the expense of coining, they are alike the product of individual industry, as much so as iron or anything else.

"2nd. That the object of the government in creating money was a currency for the convenience of all; whereas the object of the product of individual industry is the advantage of the individual alone.”

It has already been shown that gold and silver are as really the product of individual industry as iron or wheat.

As value is the essential property of money, and as that exists in the metal before the government touches it, it is unnecessary to discuss the object of government in doing what it never has done, and never can do. "3d. That the title of an individual to merchandise is absolute, the public having no interest in it. But that his title to a portion of the currency is qualified, he having no legal, at least no moral right to prevent the object of its creation."

[To be continued.

THE CONDOR.

FROM THE GERMAN OF A. STIEFTER.

I.

A NIGHT PICTURE.

ABOUT two o'clock, on a beautiful June night, a cat walked along the ridge of the roof and looked up at the moon.

One of his eyes, upon which the beams of the starry night struck obliquely, glistened like a green will-'o-the-wisp, the other was jet-black; and so coming, at length, to the end of the roof, he stared in at a windowand I out of it. Raising the great, friendly orbs of his eyes to me, he seemed oddly enough to wish to inquire: "How comes it, thou dear old play-and-room-fellow, that, at this time, in the late night, thou holdest out of the window thy face, which usually lies, ever blooming and healthy, upon the white pillow, and slumbers so peacefully, when, in my nightwalk, I come past occasionally and look in ?"

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Ay, friend," I replied to the silent question, "The times have altered very much of late, as thou seest. The white pillow lies yonder upon the bed unruffled, and the full moon paints the sweetly glittering pane thereupon, instead of shining in my slumbering face,-which face I must hold out here upon the window-sill this night, in order that, during threefourths of it, I may look out upon the sky; for on this same night there will rise the strangest and craziest star which was ever seen. It will indeed not shine, but if judged according to its real worth, there is that within it which is richer in beams than the moon and all the stars taken together, thy sparkling eyes not excepted, most honored Sir!"

Nearly thus I replied to the cat, and, as if he understood my words, he turned once more towards me his large, friendly eyes, which shone like the glittering pane, and bending he pressed the side of his soft fur against my hand, and began forthwith his familiar purring, while I proceeded to talk with him:

"One sees many things in a long moonlight night, as thou well knowest, dear one, if thou only hast the spirit of observation; but I knew it not, when I had no time to notice one so honest-hearted, until in this waiting and looking into the sky, while the expected heavenly body came not, I had sufficient leisure to study the course of a summer-night.

"But since all is true, which I disclosed to my dear friend Hinze, therefore I see no reason why I should not reveal it also to a much dearer human friend, to whom, some day, this leaf may come; nor why I should. conceal that truly a singular and unhappy fate chained me to this window, and, by a strange fascination, kept my glance in the air during the whole night. It might have been very foolish, but any one who had witnessed beforehand what I had, would gladly have set up there with me. "The time hung heavily as lead.