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tional faith is pledged. On the contrary, every measure which places the country in the most prosperous state, and gives it the most effectual and permanent means of paying to the public creditor the annuity to which he is entitled, and finally redeeming the annuity, is the best performance of the obligation which has been created; and the most complete and honorable discharge of public faith and national honor!! and it may perhaps be insisted on, that, without this measure, he is in danger of not receiving his annuity.
But it will be urged, that it is against good faith to reduce the rate of interest of money as to those to whom money is now owing; or that it is impolitic to reduce the rate of interest of money before the market price shall have attained the point at which the reduction is to be fixed. Neither of these objections is felt to be of any consider able weight. It is infinitely more unjust that portions, &c., should bear an interest, which exhausts the rental, as reduced. And as to mortgagees, it will be optional with them, to call in their money or to leave it on the security, at the reduced rate of interest: but each of these objections, as far as they have weight, may be obviated by proper regulations.
1st. The reduction may be confined to future contracts, as was done in the existing statute against usury.
2nd. The operation of the act may be suspended until the three per cent. annuities shall attain the price of seventy-five per cent., and consequently it shall be evidenced by means of this political barometer, that the value of money is reduced to that scale.
At the same time it is felt to be a great hardship, that annuities granted by the public, as affording a fixed rate of interest, should, by financial manoeuvre, or by the enormity of their amount, become the measure of the value through their sale price, of all the other property of the country.
To many who may not have formed accurate notions of the benefits of the reduction of the legal interest, by entering into the calculations which the subject suggests, it may be useful to give a more detailed view of the consequences which the change of system would operate. The state of the agricultural interest imperiously requires that rent should be reduced. The manufacturing and mercantile interests consider, that it is important to our foreign trade that the price of bread and provisions should be kept low, as the means of reducing the wages of manufacturers, and consequently the price of manufacture for foreign markets. Before you can expect the landed interest, as a body, to consent to a measure, by which their interest will be so materially sacrificed, and their incomes reduced, and without proper precautions, one-third, or at least one-fourth part of the
value of their property be annihilated, you must satisfy them that the public at large are willing to participate in the sacrifice.
To discover the mode in which this might most effectually be accomplished, consistently with sound policy and with justice, and with the least possible sacrifice to any class of the community, has been the object of anxious care, and of very extensive reflec
At. present, 1001. a year of permanent well. secured rent is worth, at 25 years purchase,
This sum would, at 60 per cent. buy
2500 0 0
4166 13 4
of 3 per cent. Annuities, yielding an income of 1251. a year. So that 1001. of rent is equal to 1251. a year in the 3 Annuities.
The proportions are as 4 to 5; and the funded creditor receives one per cent. more than the landed proprietor.
Reduce the rate of interest to 4 per cent. and the funds would advance to 75 per cent.; and 1001. of rent would sell for 33 years purchase, or
and 41661. 13s. 4d. 3 per cent. Annuities, would sell for about
3125 0 h
Thus the two proprietors are kept as near as may be on a par in point of property, though one may retain his original income in annuities, while the other has an abridged income in rent.
But if you reduce the rent from 41. to 31., without reducing the -rate of interest, then the land proprietor has not only a reduced income, but till the 3 per cent. Annuities shall advance in price, you - would have reduced the value of his fee-simple from 2500 0 0
and instead of purchasing
3 per cent annuities he could of these annuities
4166 13 4
And this difference or loss of comparative value would recur on every successive war, or the depreciation of the funds; nor would -the advance of the funds give the landed proprietor, who had reduced his rents, a just proportion of value from the rise of the funds-for example :
41661. 13s. 4d. 8 per cent. annuities, at 60, is equal to 1001. rent. The annuities are worth 25001. Os. Od.-the land 25001. Os. Od.
And the landed proprietors, as a body, deserve every execration, if they stand by to see themselves thus reduced in their property, by a system so destructive of their interest.
But how is the capitalist in money, and general creditor, to be affected by this plan? Their incomes will be reduced from 1001. to 801. a year.
In the first place, general creditors will be very anxious to obtain their general debts-their demands on open accounts from their debtors, without looking to the questior. of interest. Prompt payment is their object; they can make more profit in trade than by legal interest.
And as to bankers, they in general trade on the capital of other persons, lending the money deposited with them, and have no right or reason to interpose their wishes, or the question of their profits, in this measure.
It is more expedient to regulate the rapacity of many of this class, than to consider how any extraordinary advantage shall be given to them.
Jointresses and annuitants cannot reasonably be affected, because they took their provisions on the one hand, with all the advantages, and on the other hand, with all the disadvantages of a fixed income.
Portionists have no other right than to receive their principal with the stipulated interest. Their principal is to be paid in full, and unless their interest shall be reduced, the principal, if pay able, may be discharged.
Mortgagees will also receive their principal money without any diminution. The benefit of existing contracts for interest at 5 per cent. may, without any important injury to the measure, be preserved. Thus no faith, no contract, will be broken.
But then the owner of money, or rather of the debt, or currency, (for there is no such thing as money in this view of things!!) will say, I am injured: though I receive my 1001. the value of it is depreciated. The 1001 are with reference to interest worth only 801., since 4 per cent. for 1001. is only equivalent to 5 per cent, for 801. He will add, my income is reduced from 1001. to 801. or . How am I to live?
The answers are-1st. The proprietor of the land is to give up of his income, while you give up only 3.
You are to expect bread and provisions, and it is to be hoped taxes at a lower rate by or; so that 801. will buy as many of the comforts and luxuries of life as 1001.
But he will then urge, I want to go into trade. Then the answer is you are to have your 1001. for all the benefits of trade; and merchants and others contend, that rents should be lowered, and provisions rendered cheap for the benefit of trade, &c,
He will then insist, that he wishes to buy funded property, and the price is advanced, and the rate of interest for his money will be reduced. Hitherto, it may be said, you have shown your partiality for mortgage security, rather than funded property; and the advance of the funds by that prosperity of the country, at which all aim, would have placed you, in reference to the funds, in the same condition, as this measure, And if he should still further insist, that he would have purchased in the funds before they advanced, if he could have had his money, it may in answer be truly said, this is the only plan by which he can obtain the pay. ment of his money in any reasonable time! But he may turn round and say, he would have used the process of the law; he would have kept his debtor in prison, and foreclosed the mortgage.-That would be oppressive conduct. Besides, a mortgagor, who chose to remain in prison, would easily protect his property, by waiting for a change of times. He might also be discharged from prison under the Insolvent Debtors' Act, and the property be sold, or rather given away; and even if this hard-hearted mortgagee should purchase the property for the amount of the mortgage money, is he quite sure he would have gained an advantage.
Finally he may object, that he would invest his money in the purchase of land! See how the account will then stand.
1001. will now purchase 41. rent.
1001, will then purchase 31. rent.
and this 31. of rent will be worth the same money as the 41. of rent is now worth.
You wanted land, and you may have land—and you may have the same identical land, in quantity and quality, as you could now pur chase for your 1001.
You wanted an income from land, and you will have it; you will have 31. a year income, well paid, and well secured, and rendered equal to 41. in relative value, instead of having 41. of rent, badly paid, and in truth worth only 31.; and you are sacrificed only in being deprived of the vanity of talking of an income of 40001. a year, instead of one of 3000l.:: both incomes are really the same in value. But if the land proprietors submit to reduce
their incomes for the good of the country, and to allow 5 per cent. to remain the legal rate of interest, then you stand thus ; your property producing 100
income is equal to
the rent of 1001. from land is worth
in money. The difference in the land owner's favor is
and your 20001. will buy his estate and leave you .with
in your pocket, thus gaining
If these tables do not prove the justice and policy of the plan, then there is a fallacy which the author has not been able to detect!!
Besides, the state or government, and the extent of the national debt, and the national establishments, require that the great body of land owners of the country should not be the only sufferers by so unexpected a change in the relative value of property and no system could be more lamentable, though some of the minions of power think differently, than that the ancient proprietors of the soil, the country gentlemen, and the race of yeomen, should be reduced to a state of beggary or comparative insignificance. No change would be more injurious to the public creditor, or more completely endanger the constitution!!
It will be asked, are rents on existing leases to be left at the present amount for the whole period of the continuance of these leases? Are rapacious landlords to avail themselves of high rents merely because they have found tenants who have property to answer those rents? The answer is short. A general system of regeneration and restitution should embrace those cases, which would amply protect tenants of this description from oppression. Two regulations called for by all the principles of commutative justice will afford the necessary relief.
1st. Authority should be given to trustees of charities, and other trustees, and to persons who have the right of leasing under powers to reduce the rent to the probable scale of future prices; and to accept surrenders and grant new leases to the tenants at such reduced rents. Great injustice is now felt to arise from the