7 FEBRUARY 1835, Page 18

KELLY'S USURY.

BEARING in mind, that bills of exchange not having more than three months to run are entirely free from its operation, the general outline of the law of usury is as follows. If by the terms of tin. contract the sum lent is undertaken to be returned (no matter liov great the real risk of losing it may be), all inte- rest above live per cent. subjects the parties to the penalties of "damnable usurie," whether the interest be taken directly, or by such circuitous means as warrant an inference that they are merely colourable. Should the principal, however secure in re- ality, be risked by the terms of the contract, the lender is safe from the law, let his interest be ever so " unconscionable." Thus, if mo- ney be advanced on bond to enable a person to pursue the most ha- zardous speculation, and a fraction beyond five per cent, be any how paid, the security is void, or the usurer liable to treble penalties. A "post obit,' or an annuity, may be safely taken at ten, fifteen, or twenty per cent.; for although the practice of life insurance secures the return of the principal, yet the law, looking neither to the right nor to the left, but directly at its nose, professes to consider that the principal is lost when the parties named in the annuity die, and in a post obit there is the riskful contingent that the spend- thrift granter may not outlive the person upon whose death ha

promises to pay : "-the perfection of reason" thus refusing to en- force an open debt, but giving every encouragement to gaming. And be it remembered, that this is not an absurdity which the judges merely introduced to evade the shackles of the law : the "sages" struggled manfully against any mitigation of the statutes by construction. They even held a bill of exchange to be void in the hands of an innocent third party, till the Legislature reversed their judgment.

The volume which has reminded us of the law of Usury, is use- ful, and for its class not without amusement. It contains a well- arranged and popular view of the law, quite sufficient for general and for common professional purposes. There is a very good his- tory of usury ; in which the opinions upon the subject are clearly traced, and told in the language of the age; whilst some of the principal documents are given at length in an appendix. We have also an examination of the policy of' these laws, and sugges- tions for their amendment, with an abstract of the opinions of the leading Parliamentary speakers, and of the witnesses before Com- mittees.

The recommendation of Mr. KELLY is not very hazardous. He would except from the penalties of usury every transaction except "money advanced as a charge on landed or real property." If practically this will propitiate the squirearchy, be it so; but we cannot admit the validity of the reason which seems to have weighed with Mr. KELLY—that otherwise mortgagees would call in their mortgages, and thus distress the landed gentry. At pre- sent, where the security is good, money may be borrowed at four per cent.; where it is unexceptionable, and the payment of the interest will clearly be punctual, for three and a half per cent., or less, though five might legally be taken. The conclusion, there- fore, would seem to be, that now there is no danger of this catas- trophe; but should any circumstances render money more valu- able, every lender will demand his capital, to invest it in those securities which will pay him better. Should the Funds fall below par—should money be lent to the nation at more than five per cent. (as it frequently has been) utter—destruction will impend over the deeply mortgaged landlord. More than five per cent, he cannot undertake to pay ; but when the capitalist can get more from the nation, and much more from individuals, he will at once foreclose, force a sale, and the class for whom Corn-laws have been enacted and kept up will be swamped.