study, in the place of the humble rea- son of individuals, binding itself down with all its force to that very object \vhich he pretends to have in view? — Nor let it be forgotten, that, on the side of the individual in this strange com- petition, there is the most perfect and minute knowledge and information, which interest, the whole interest of a man's reputation and fortune, can en- sure: on the side of the legislator, the most perfect ignorance. All that he knows, all that he can know, is, that the enterprize is aproject, which, mere- ly because it is susceptible of that ob- noxious name, he looks upon as a sort of cock, for him, in childish wanton- ness, to shie at. — Shall the blind lead the blind? is a question that has been put of old to indicate the height of folly: but what then shall we say of him who, being necessarily blind, in- 'sists on Projects in Arts, fife. 165 sists on leading, in paths he never trod in, those who can see?
It must be by some distinction too fine for my conception, if you clear yourself from the having taken, on another occasion, but on the very point in question, the side, on which it would be my ambition to see you fix.
" What is the species of domestic " industry which his capital can em- " ploy, and of which the produce is " likely to be of the greatest value, " every individual" (you say*), " it " is evident, can, in his local situation, " judge much better than any states- " man or lawgiver can do for him. " The statesman, who should attempt " to direct private people in what x< manner they ought to employ their * B. IV. ch. ii. vol. ii. p. 182, edit. 8vo.
" capitals, 166 LETT. XIII. To Dr. Smith, (t capitals, would not only load him- " self with a most unnecessary atten- " tion, but assume an authority which * could safely be trusted, not only to " no single person, but to no council " or senate whatsoever, and which " would no where be so dangerous as " in the hands of a man who had folly " and presumption enough to fancy " himself fit to exercise it.
" To give the monopoly of the " home market to the produce of do- " mestic industry, in any particular " art or manufacture, is in some mea- " sure to direct private people in what " manner they ought to employ their " capitals, and must in almost all cases " be either a useless or a hurtful regu- " lation." — Thus far you: and I add, to limit the legal interest to a rate at which the carriers on of the oldest and best-established and least hazardous trades on Projects in Arts, Sfc. 167 trades are always glad to borrow, is to give the monopoly of the money-mar- ket to those traders, as against the pro- jectors of new-imagined trades, not one of which but, were it only from the circumstance of its novelty, must, as I have already observed, appear more hazardous than the old.
These, in comparison are but in- conclusive topics. I touched upon them merely as affording, what ap- peared to me the only shadow of a plea, that could be brought, in defence of the policy I am contending against. I come back therefore to my first ground, and beg you once more to consider, whether, of all that host of manufactures, which we both exult in as the causes and ingredients of na- tional prosperity, there be a single one, that could have existed at first but in the shape of a project. But, if a re- gulation, 168 LETT. XIII. To Dr. Smith, gulation, the tendency and effect of which is merely to check projects, in as far as they are projects, without any sort of tendency, as I have shewn, to weed out the bad ones, is defensible in its present state of imperfect effica- cy, it should not only have been de- fensible, but much more worthy of our approbation, could the efficacy of it have been so far strengthened and compleated as to have opposed, from the beginning, an unsurmountable bar to all sorts of projects whatsoever: that is to say, if, stretching forth its hand over the first rudiments of soci- ety, it had confined us, from the be- ginning, to mud for our habitations, to skins for our cloathing, and to acorns for our food.
I hope you may by this time be disposed to allow me, that we have not been ill served by the projects of time vn Projects in Arts, Kc. 169 time past. I have already intimated, that I could not see any reason why we should apprehend our being worse served by the projects of time future. I will now venture to add, that I think I do see reason, why we should expect to be still better and better served by these projects, than by those. I mean better upon the whole, in vir- tue of the reduction which experience, if experience be worth any thing, should make in the proportion of the number of the ill-grounded and unsuc- cessful, to that of the well-grounded and successful ones.
The career of art, the great road which receives the footsteps of pro- jectors, may be considered as a vast, and perhaps unbounded, plain, be- strewed with gulphs, such as Curtius was swallowed up in. Each requires I an 170 LETT. XIII. To Dr. Smith, an human victim to fall into it ere it can close; but when it once closes, it closes to open no more, and so much of the path is safe to those who fol- low. If the want of perfect informa- tion of former miscarriages renders the reality of human life less happy than this picture, still the similitude must be acknowledged: and we see at once the only plain and effectual method for bringing that similitude still nearer and nearer to perfection; I mean, the framing the history of the projects of time past, and (what may be executed in much greater perfection, were but a finger held up by the hand of govern- ment) the making provision for re- cording, and collecting, and publishing as they are brought forth, the race of those with which the womb of futuri- ty is still pregnant. But to pursue this vn Projects in Arts, tfc. 171 this idea, the execution of which is not within my competence, would lead me too far from the purpose.
Comfortable it is to reflect, that this state of continually-improving secu- rity, is the natural state not only of the road to opulence, but of every other track of human life. In the war which industry and ingenuity main- tain with fortune, past ages of igno- rance and barbarism form the forlorn hope, which has been detached in ad- vance, and made a sacrifice of for the sake of future. The golden age, it is>, but too true, is not the lot of the ge- neration in which we live: but, if it is to be found in any part of the track ', marked out for human existence, it will be found, I trust, not in any part which is past, but in some part which j is to come.
But to return to the laws against I 2 usury, 172 LETT. XIII. To Dr. Smith, usury, and their restraining influence on projectors. I have made it, I hope, pretty apparent, that these restraints have no power or tendency to pick out bad projects from the good. Is it worth while to add, which I think I may do with some truth, that the ten- dency of them is rather to pick the good out from the bad? Thus much at least may be said, and it comes to the same thing, that there is one case in which, be the project what it may, they may have the effect of checking it, and another in which they can have no such effect; and that the first has for its accompaniment, and that a necessary one, a circumstance which has a strong tendency to sepa- rate and discard every project of the injudicious stamp, but which is want- ing in the other case. I mean, in a word, the benefit of discussion.
It on Projects in Arts, Sfc.
It is evident enough, that upon all such projects, whatever be their na- ture, as find funds sufficient to carry them on, in the hands of him whose invention gave them birth, these laws are perfectly, and if by this time you will allow me to say so, very happily, without power. But for these there has not necessarily been any other judge, prior to experience, than the inventor's own partial affection. It is not only not necessary that they should have had, but it is natural enough that they should not have had, any such judge: since in most cases the advantage to be expected from the project depends upon the exclusive property in it, and consequently upon the concealment of the princi- ple. Think, on the other hand, how different is the lot of that enterprize which depends upon the good opinion of 174 LETT. XIII. To Dr. Smith, of another man; that other, a man pos- sessed of the wealth which the projec- tor wants, and before whom necessity forces him to appear in the character of a suppliant at least: happy if, in the imagination of his judge, he adds not to that degrading character, that of a visionary enthusiast or an impostor! At any rate, there are, in this case, two wits, set to sift into the merits of the project, for one, which was employed upon that same task in the other case: and of these two there is one, whose prejudices are certainly not most like- ly to be on the favourable side. True it is, that in the jumble of occurrences, an over-sanguine projector may stum- ble upon a patron as over-sanguine as himself; and the wishes may bribe the judgment of the one, as they did of the other. The opposite case, how- ever, you will allow, I think, to be by much on Projects in Arts, 8fc. 175 much the more natural. Whatever a man's wishes may be for the success of an enterprize not yet his own, his fears are likely to be still stronger. That same pretty generally implanted prin- ciple of vanity and self-conceit, which disposes most of us to over-value each of us his own conceptions, disposes us, in a proportionable degree, to under- value those of other men.
Is it worth adding, though it be undeniably true, that could it even be proved, by ever so uncontrovertible evidence, that, from the beginning of time to the present day, there never was a project that did not terminate in the ruin of its author; not even from such a fact as this, could the legislator derive any sufficient warrant, so much as for wishing to see the spirit of pro- jects in any degree repressed? — The discouraging motto, Sic vos non vobisy may 176 LETT. XIII. To Dr: Smith, may be matter of serious consideration to the individual, but what is it to the legislator? What general, let him at- tack with ever so superior an army, but knows that hundreds, or perhaps thousands, must perish at the first on- set? Shall he, for that consideration alone, lie inactive in his lines? « Every " man for himself — but God," adds the proverb (and it might have added the general, and the legislator, and all other public servants), " for us all." Those sacrifices of individual to gene- ral welfare, which, on so many occa- sions, are made by third persons against men's wills, shall the parties them- selves be restrained from making, when they do it of their own choice? To tie men neck and heels, and throw them into the gulphs I have been speaking of, is altogether out of the question: but if at every gulph a Curtius stands mounted on Projects in Arts, Sfc. 177 mounted and caparisoned, ready to take the leap, is it for the legislator, in a fit of old-womanish tenderness, to pull him away? Laying even public interest out of the question, and considering nothing but the feelings of the indivi- duals immediately concerned, a legis- lator would scarcely do so, who knew the value of hope, " the most precious " gift of heaven.'* Consider, Sir, that it is not with the invention-lottery (that great branch of the project lottery, for the sake of which I am defending the whole, and must continue so to do until you or somebody else can shew me how to defend it on better terms), it is not I say with the invention-lottery, as with the mine-lottery, the privateering- lottery, and so many other lotteries, which you speak of, and in no instance, I think, very much to their advantage.
178 LETT. XIII. To Dr. Smith, In these lines, success does not, as in this, arise out of the embers of ill suc- cess, and thence propagate itself, by a happy contagion, perhaps to all eter- nity. Let Titius have found a mine, it is not the more easy, but by so much the less easy, for Sempronius to find one too: let Titius have made a cap- ture, it is not the more easy, but by so much the less easy, for Sempronius to do the like. But let Titius have found out a new dye, more brilliant or more durable than those in use, let him have invented a new and more convenient machine, or a new and more profitable mode of husbandry; a thousand dyers, ten thousand mechanics, a hundred thousand husbandmen, may repeat and multiply his success: and then, what is it to the public, though the for- tune of Titius, or of his usurer, should should on Projects in Arts, fife. 179 should have sunk under the expe- riment?
Birmingham and Sheffield are pitch- ed upon by you as examples, the one of a projecting town, the other of an unprojecting one*. Can you forgive my saying, I rather wonder that this comparison of your own choosing, did not suggest some suspicions of the jus- tice of the conceptions you had taken up, to the disadvantage of projectors. Sheffield is an old oak: Birmingham, but a mushroom. What if we should find the mushroom still vaster and more vigorous than the oak? Not but the one as well as the other, at what time soever planted, must equally have been planted by projectors: for though Tubal Cain himself were to be 180' LETT. XIII. To Dr. Smith, be brought post from Armenia to plant Sheffield, Tubal Cain himself was as arrant a projector in his day, as ever Sir Thomas Lombe was, or bishop Blaise: but Birmingham, it seems, claims in common parlance the title of a projecting town, to the exclusion of the other, because, being but of yesterday, the spirit of project smells fresher and stronger there than elsewhere.
When the odious sound of the word projector no longer tingles in your ears, the race of men thus stig- matized do not always find you their enemy. Projects, even under the name of " dangerous and expensive experi- (f ments," are represented as not unfit to be encouraged, even though mon- opoly be the means: and the monopoly is defended in that instance, by its si- milarity on Projects in Arts, Xc. 181 milarity to other instances in which the like means are employed to the like purpose.
" When a company of merchants " undertake at their own risk and ex- " pense to establish a new trade with " some remote and barbarous nation, " it may not be unreasonable" (you observe) " to incorporate them into " a joint-stock company, and to grant " them, in case of their success, a " monopoly of the trade for a certain " number of years. It is the easiest " and most natural way, in which the " state can recompense them, for ha- " zarding a dangerous and expensive " experiment, of which the public is " afterwards to reap the benefit. A " temporary monopoly of this kind •' may be vindicated, upon the same " principles, upon which a like mon- " opoly of a new machine is granted to " its 182 LETT. XIII. To Dr. Smith, " its inventor, and that of a new book " to its author."
Private respect must not stop me from embracing this occasion of giv- ing a warning, which is so much need- ed by mankind. If so original and independent a spirit has not been al- ways able to save itself from being drawn aside by the fascination of sounds, into the paths of vulgar pre- judice, how strict a watch ought not men of common mould to set over their judgments, to save themselves from being led astray by similar de- lusions?
I have sometimes been tempted to think, that were it in the power of Jaws to put words under proscription, as it is to put men, the cause of inventive in- dustry might perhaps derive scarcely less assistance from a bill of attainder against the words project and projectors, than on Projects in Arts, Xc. 183 than it has derived from the act au- thorizing the grant of patents. I should add, however, for a time: for even then the envy, and vanity, and wounded pride, of the uningenious herd, would sooner or later infuse their venom into some other word, and set it up as a new tyrant, to hover, like its predecessor, over the birth of infant genius, and crush it in its cra- dle.
Will not you accuse me of pushing malice beyond all bounds, if I bring down against you so numerous and re- spectable a body of men, as the mem- bers of the Society for the Encourage- ment of Arts? I do not, must not, care: for you command too much re- spect to have any claim to mercy. At least you will not accuse me of spirit- ing up against you barbarian enemies, and 184 LETT. XIII. To Dr. Smith, and devoting you to the vengeance of Cherokees and Chicasaws.
Of that popular institution, the very professed and capital object is the encouragement of projects, and the propagating of that obnoxious breed, the crushing of which you commend as a fit exercise for the arm of power. But if it be right to crush the acting malefactors, it would be downright inconsistency not to crush, at the same time, or rather not to begin with crushing, these their hirers and abet- tors. Thank then their inadvertence, or their generosity, or their prudence, if their beadle has not yet received orders to burn in ceremony, as a libel on the society, a book that does ho- nour to the age.
After having had the boldness to accuse so great a master of having fallen on Projects in Arts, Sfc. 185 fallen unawares into an error, may I take the still farther liberty, of setting conjecture to work to account for it? Scarce any man, perhaps no man, can push the work of creation, in any line, to such a pitch of compleatness, as to have gone through the task of examin- ing with his own eyes into the grounds of every position, without exception, which he has had occasion to employ. You heard the public voice, strength- ened by that of law, proclaiming all round you, that usury was a sad thing, and usurers a wicked and pernicious set of men: you heard from one at least of those quarters, that projectors were either a foolish and contemptible race, or a knavish and destructive one: Hurried away by the throng, and tak- ing, very naturally, for granted, that what every body said must have some ground for it, you have joined the cry, and 186 LETT. XIII. To Dr. Smith, and added your suffrage to the rest. Possibly too, among the crowd of pro- jectors which the lottery of occurrences happened to present to your observa- tion, the prejudicial sort may have borne such a proportion to the bene- ficial, or shewn themselves in so much stronger colours, as to have given the popular notion a firmer hold in your judgment, than it would have had, had the contrary proportion happened to present itself to your notice. To al- low no more weight to examples that fall close under our eyes, than to those which have fallen at ever so great a distance — to suffer the judgment on no occasion to indulge itself in the licence of a too hasty and extensive generali- zation— not to give any proposition footing there, till after all such defal- cations have been made, as are neces- sary to reduce it within the limits of rigid on Projects in Artst tfc. 187 rigid truth — these are laws, the cotn- pleat observance whereof forms the ul- timate, and hitherto, perhaps for ever, ideal term of human wisdom.
You have defended against unmerit- ed obloquy two classes of men, the one innocent at least, the other highly use- ful j the spreaders of English arts in foreign climes*, and those whose in- dustry exerts itself in distributing that necessary commodity which is called by the way of eminence the staff of life. May I flatter myself with having succeeded at last in my endeavours, to recommend to the same powerful protection, two other highly useful and equally persecuted sets of men, usurers and projectors.— Yes — I will, for the moment at least, indulge so » B. IV. ch. viii. vol. ii. p. 514. ct alibi, edit.
flattering 188 LETT. XIII. To Dr. Smith, flattering an idea: and, in pursuance of it, leaving usurers, for whom I have said enough already, I will consider myself as joined now with you in the same commission, and thinking with you of the best means of relieving the projector from the load of discourage- ment laid on him by these laws, in so far as the pressure of them falls parti- cularly upon him. In my own view of the matter, indeed, no tempera- ment, no middle course, is either ne- cessary or proper: the only perfectly effectual, is the only perfectly proper remedy, — a spunge. But, as nothing is more common with mankind, than to give opposite receptions, to con- clusions flowing with equal necessity from the same principle, let us ac- commodate our views to that con- tingency.
According to this idea, the object, as on Projects in Arts, ffc. 189 as far as confined to the present case, should be, to provide, in favour of projectors only, a dispensation from the rigour of the anti-usurious laws: such, for instance, as is enjoyed by persons engaged in the carrying trade, in virtue of the indulgence given to loans made on the footing of respon- dentia or bottomry. As to abuse, I see not why the danger of it should be greater in this case than in those. Whe- ther a sum of money be embarked, or not embarked, in such or such a new manufacture on land, should not, in its own nature, be a fact much more dif- ficult to ascertain, than whether it be embarked, or not embarked, in such or such a trading adventure by sea: and, in the one case as in the other, the payment of the interest, as well as the repayment of the principal, might be made to depend upon the success of 190 LETT. XIII. To Dr. Smith, of the adventure. To confine the indulgence to new undertakings, the having obtained a patent for some in- vention, and the continuance of the term of the patent, might be made conditions of the allowance given to the bargain: to this might be added affidavits, expressive of the intended application, and bonds, with sureties, conditioned for the performance of the intention so declared; to be regis- tered in one of the patent-offices, or elsewhere. After this, affidavits once a year, or oftener, during the subsist- ence of the contract, declaring what has been done in execution of it.
If the leading-string is not yet thought tight enough, boards of con- troul might be instituted to draw it tighter. Then opens a scene of vexa- tion and intrigue: waste of timevcon- sumed in courting the favour of the members on Projects in Arts, Kc. 191 members of the board: waste of time, in opening their understandings* clenched perhaps by ignorance, at any rate by disdain and self-sumciency, and vanity, and pride: the favour (for pride will make it a favour) granted to skill in the arts of self-recommen- dation and cabal, devoid of inventive merit, and refused to naked merit un- adorned by practice in those arts: waste of time on the part of the per- sons themselves engaged in this imper- tinent inquiry: waste of somebody's money in paying them for this waste of time. All these may be necessary evils, where the money to be bestowed is public money: how idle where it is the party's own! — I will not plague you, nor myself, with enquiring of whom shall be composed this board of nurses to grown gentlemen: were it only to cut the matter short, one might name at 192 LETT. XIII. To Dr. Smith.
at once the committees of the Society of Arts. There you have a body of men ready trained in the conduct of inquiries^ which resemble that in ques- tion, in every circumstance, but that which renders it ridiculous: the mem- bers or representatives of this demo- cratic body would be as likely, I take it, to discharge such a trust with fide- lity and skill, as any aristocracy that could be substituted in their room.
Crichoff, in White Russia, LETTERS Iff DEFENCE OF USURY, &c.
CONTENTS.
LETT. I. Introduction.
THE liberty of bargaining in money-matters, a species of liberty which has never yet found an advocate, p. 1 Fixing the rate of interest, being a coercive measure, and an exception to the general rule in favour of the enforcement of contracts, it lies upon the advocates of the measure to produce reasons for it p. 3 List of the reasons which may be supposed to have operated in favour of it, p. 4 LETT. II. Reasons for Restraint. — 1. Prevention of Usury. Argument* in favour of the restraint l.Pre- 194 Letters in Defence of Usury.
vention of Usury. This begs the ques- No one rate of interest is naturally more proper than another, p. 9 No idea of propriety could have been formed on this head, but for custom, ibid.
But the rate indicated by custom, varies from age to age, and from place to place,.. p. 11 Custom, being generated by convenience, evi- denced by consent, should submit to it throughout, p. 12 No more reason for fixing the price of the use of money than the price of goods,...p. 13 — nor for fixing the rate on one side more than on the other — excepting a weak and distant LETT. III. Reasons for Restraint. — 2. Prevention of Prodigality.
Interposing at all, to prevent prodigality, is not necessary to the existence of society,. p. 17 — though it may be of use, choosing proper methods, p. 18 This not of the number: 1. Because borrowing at extraordinary rates CONTENTS. 195 is not a natural course for prodigals to It is out of the question with regard to, a. Those who have money of their own,. p. 19 6. Those who have real or good security to offer,...* ibid.
c. Or any thing to sell, though it be but a contingency, p. 22 ^. Those who have no sufficient security to offer, are not more likely to get money at an extra- ordinary, than at the ordinary rate,.. p. 24 What they do get, they get at the ordinary rate, of their friends, p. 25 3. Preventing their getting what they want at a high rate, in the way of borrowing, prevents not their getting it in the way of taking up goods on credit, p. 26 Conclusion, that the effect of these laws with regard to prodigality, as far as it has any, i> to increase it, p. 30 The only effectual check to prodigality, an infrrdict, as under the Roman law,.. p. 31 K 2 LETT.
1 96 Letters in Defence of Usury.
LETT. IV. Reasons for Restraint. — 3. Protection of Indigence.
The advantage it may be of to a man to borrow money, and the need he may have of it, ad- mitting of an undetermined number of de- grees, so may the consideration he pays for No legislator can judge, so well as each indivi- dual for himself, whether money is worth to him any thing, and how much, beyond the ordinary interest, p. 37 Repression of projectors. — This subject referred to the letter to Dr. Smith, p. 38 LETT. V. Reasons for Restraint. — 4. Protection of Simplicity.
No simplicity short of idiotism can render an individual so bad a judge in this case as the legislator,. p. 39 It would be to no purpose to prevent a man from being imposed upon in this way, unless he was prevented from being imposed upon in pur- chases and sales, ibid.
A man CONTENTS. 197 A man is not so liable to imposition in this way as in those, p. 41 And in this way imprudence admits of a re- medy, which it does not in those others; viz. borrowing at a lower rate to pay off the first loan, p. 44 LETT. VI. Mischiefs of the anti-usu- rious Laws.
Various ways in which the laws against usury may do mischief: 1. By precluding many from assistance altoge- 2. Forcing men upon more disadvantageous ways of obtaining it, p. 47 Detriment suffered in this way by many during the war, p. 49 3. Or upon more disadvantageous terms in the very way forbidden, p. 53 In as far as the law appears open to evasion, it is either nugatory, or else mischievous, in any one of those three ways, accord- ing to circumstances, p. 56 4. Exposing an useful class of men to unmerited suffering and disgrace, '...• •' '.' p. 57 5. Encou- 1 98 Letters in Defence of Usury.
5. Encouraging and protecting treachery and ingratitude, p. 60 Difference in this respect between the rewards held out to informers in this case, and those held out to informers at large,...ibid.
— or even to real criminals informing against accomplices, ibid.
Caution against extending to those cases the cen- sure passed on this occasion,...p. 61 LETT. VII. Efficacy of the anti-usu- rious Laws.
Position of Dr. Smith's, that a law attempting to reduce interest below a certain rate must be inefficacious, p. 62 The position not warranted by the fact alleged in support of it, p. 63 Nothing can destroy the efficacy of such restraint in regard to one rate of interest, that does not in regard to others, p. 65 Why such destruction would be more apparent with regard to one rate than another,. p. 66 Conjecture concerning the real state of the fact, in the instance alluded to by Dr. Smith,. p. 68 The CONTENTS. 199 The English laws on this head how far open to evasion, p. 70 Russian laws, their perfect ineffieacy on this LETT. VIII. Virtual Usury allowed.
Cases where interest above the ordinary rate has been taken by evasion of the law: 2. Selling bills of exchange at under price, p. 75 Cases where it is taken by allowance of the law: 2. Bottomry and respondentia,...p. 80 Other cases more indirectly related to usury, such as insurance, buying annuities, &c.. p. 82 LETT. IX. Blackstone considered.
In Blackstone's opinion, the harm of making too hard a bargain stands on the same footing in the hire of a hone as of money, p. 84 If 200 Letters in Defence of Usury.
If so, consistency requires the subjecting both businesses to the same restraints,.. p. 85