he had been throwing away. Private representations proving, as it may be imagined, ineffectual, he applied to a court of equity. The suit was in some forwardness: the opinion of the ablest counsel highly encouraging: but money there remained none. We all know but too well, that, in spite of the unimpeachable integrity of the bench, that branch of justice, which is particularly dignified with the name of equity, is only for those who can afford to throw away one fortune for the chance of recovering another. Two persons, however, were found, who, between them, were content to defray the expense of the ticket for this lottery, on condition of receiving half the prize. The prospect now became encouraging: when unfortunately one of the adventurers, in exploring the recesses of the bottomless pit, happenand Champerty. 121 ed to dig up one of the old statutes against Champerty. This blew up the whole project: however the defendant, understanding that, some how or other, his antagonist had found support, had thought fit in the mean time to propose terms, which the plaintiff, after his support had thus dropped from under him, was very glad to close with. He received, I think it was, 30001.; and for that he gave up the estate, which was worth about as much yearly, together with the arrears, which were worth about as much as the estate.
Whether, in the barbarous age which gave birth to these barbarous precautions, whether, even under the zenith of feudal anarchy, such fettering regulations could have had reason on their side, is a question of curiosity rather than use. My notion is, that G there 1&2 LETT. XII. Maintenance there never was a time, that there never could have been, or can be a time, when the pushing of suitors away from court with one hand, while they are beckoned into it with another, would not be a policy equally faithless, inconsistent, and absurd. But, what every body must acknowledge, is, that, to the times which called forth these laws, and in which alone they could have started up, the present are as opposite as light to darkness. A mischief, in those times, it seems, but too common, though a mischief not to be cured by such laws, was, that a man would buy a weak claim, in hopes that power might convert it into a strong one, and that the sword of a baron, stalking into court with a rabble of retainers at his heels, might strike terror into the eyes of a judge upon the bench. At present, what cares and Champerty. 123 cares an English judge for the swords of an hundred barons? — Neither fearing nor hoping, hating nor loving, the judge of our days is ready with, equal phlegm to administer, upon all occasions, that system, whatever it be, of justice, or injustice, which the law has put into his hands. A disposition so consonant to duty could not have then been hoped for: one more consonant is hardly to be wished. Wealth has indeed the monopoly of justice against poverty: and such monopoly it is the direct tendency and necessary effect of regulations like these to strengthen and confirm. But with this monopoly no judge that lives now is at all chargeable. The law created this monopoly: the law, when ever it pleases, may dissolve it.
I will not however so far wander from my subject as to inquire what G 2 measure 124 LETT. XII. Maintenance measure might have been necessary to afford a full relief to the case of that unfortunate gentleman, any more than to the cases of so many other gentlemen who might be found, as unfortunate as he. I will not insist upon so strange and so inconceivable an arrangement, as that of the judge's seeing both parties face to face in the first instance, observing what the facts are in dispute, and declaring, that as the facts should turn out this way or that way, such or such would be his decree. At present, I confine myself to the removal of such part of the mischief, as may arise from the general conceit of keeping men out of difficulties, by cutting them off from such means of relief as each man's situation may afford. A spunge in this, as in so many other cases, is the only needful, and only availing remedy: one stroke of it and Champerty. 125 it for the musty laws against maintenance and champerty: another for the more recent ones against usury. Consider, for example, what would have respectively been the effect of two such strokes, in the case of the unfortunate gentlemen I have been speaking of. By the first, if what is called equity has any claim to confidence, he would have got, even after paying off his champerty-usurers, 15001. a year in land, and about as much in money: instead of getting, and that only by an accident, 30001. once told. By the other, there is no saying to what a degree he might have been benefited. May I be allowed to stretch so far in favour of the law as to suppose, that so small a sum as 5001. would have carried him through his suit, in the course of about three years? I am sensible, that may be thought but a short sum, 126 LETT. XII. Maintenance sum, and this but a short term, for a suit in equity: but, for the purpose of illustration, it may serve as well as a longer. Suppose he had sought this necessary sum in the way of borrowing 5 and had been so fortunate, or, as the laws against the sin of usury would style it, so unfortunate, as to get it at 200 per cent. He would then have purchased his 60001. a year at the price of half as much once paid, viz. 30001.; instead of selling it at that price. Whether, if no such laws against usury had been in being, he could have got the money, even at that rate, I will not pretend to say: perhaps he might not have got it under ten times that rate, perhaps he might have got it at the tenth part of that rate. Thus far, I think, we may say, that he might, and probably would, have been the better for the repeal of those laws: but thus far and Champerty. 127 far we must say, that it is impossible he should have been the worse. The terms, upon which he met with adventurers willing to relieve him, though they come not within that scanty field, which the law, in the narrowness of its views, calls usury, do, in the present case, at twenty years purchase of the 30001. a year he was content to have sacrificed for such assistance, amount, in effect, to 4000 per cent. Whether it was likely that any man, who was disposed to venture his money, at all, upon such a chance, would have thought of insisting upon such a rate of interest, I will leave you to imagine: but thus much may be said with confidence, because the fact demonstrates it, that, at a rate not exceeding this, the sum would actually have been supplied. Whatever becomes then of the laws against maintenance and champerty, 128 LETT. XII. Maintenance, Kc.
champerty, the example in question, when applied to the laws against usury, ought, I think, to be sufficient to convince us, that so long as the expense of seeking relief at law stands on its present footing, the purpose of seeking that relief will, of itself, independently of every other, afford a sufficient ground for allowing any man, or every man, to borrow money on any terms on which he can obtain it.
Crichoff, in White Russia, LETT. XIII. To Dr. Smith. 1*9 LETTER XIII.
To Dr. Smithy on Projects in Arts, Xc.
SIR, I Forget what son of controversy it was, among the Greeks, who having put himself to school to a professor of eminence, to learn what, in those days, went by the name of wisdom, chose an attack upon his master for the first public specimen of his proficiency. This specimen, whatever entertainment it might have afforded to the audience, afforded, it may be supposed, no great satisfaction to the master: for the thesis was, that the pupil G 3 owed ISO LETT. XIII. To Dr. Smith, owed him nothing for his pains. For my part, being about to shew myself in one respect as ungrateful as the Greek, it may be a matter of prudence for me to look out for something like candour, by way of covering to my ingratitude: instead therefore of pretending to owe you nothing, I shall begin with acknowledging, that, as far as your track coincides with mine, I should come much nearer the truth, were I to say I owed you every thing. Should it be my fortune to gain any advantage over you, it must be with weapons which you have taught me to wield, and with which you yourself have furnished me: for, as all the great standards of truth, which can be appealed to in this line, owe, as far as I can understand, their establishment to you, I can see scarce any other way of convicting you of any error or oversight, on Projects in Arts, Kc. 131 sight, than by judging you out of your own mouth.
In the series of letters to which this will form a sequel, I had travelled nearly thus far in my researches into the policy of the laws fixing the rate of interest, combating such arguments as fancy rather than observation had suggested to my view, when, on a sudden, recollection presented me with your formidable image, bestriding the ground over which I was travelling pretty much at my ease, and opposing the shield of your authority to any arguments I could produce.
It was a reHection mentioned by Cicero as affording him some comfort, that the employment his talents till that time had met with, had been chiefly on the defending side. How little soever blest, on any occasion, with any portion of his eloquence, I may, 132 LETT. XIII. To Dr. Smith, may, on the present occasion, however, indulge myself with a portion of what constituted his comfort: for, if I presume to contend with you, it is only in defence of what I look upon as, not only an innocent, but a most meritorious race of men, who are so unfortunate as to have fallen under the rod of your displeasure. I mean projectors: under which invidious name I understand you to comprehend, in particular, all such persons as, in the pursuit of wealth, strike out into any new channel, and more especially into any channel of invention.
It is with the professed view of checking, or rather of crushing, these adventurous spirits, whom you rank with " prodigals," that you approve of the laws which limit the rate of interest, grounding yourself on the tendency, they appear to you to have, to keep mi Projects in Arts, Kc. 133 keep the capital of the country oat of two such different sets of hands.
The passage, I am speaking of, is in the fourth chapter of your second book, volume the second of the 8vo. edition of 1784. <c The legal rate" (you say) " it is to be observed, though " it ought to be somewhat above, " ought not to be much above, the <c lowest market rate. If the legal rate " of interest in Great Britain, for ex- " ample, was fixed so high as eight or <c ten per cent, the greater part of the " money which was to be lent, would " be lent to prodigals and projectors, " who alone would be willing to give " this high interest. Sober people, " who will give for the use of money " no more than a part of what they " are likely to make by the use of it, " would not venture into the compe- " tition. A great part of the capital "of 134 LETT. XIII. To Dr. Smith, " of the country would thus be kept <c out of the hands which were most " likely to make a profitable and ad- " vantageous use of it, and thrown " into those which were most likely to " waste and destroy it. Where the " legal interest on the contrary, is tf fixed but a very little above the " lowest market rate, sober people are " universally preferred as borrowers, " to prodigals and projectors. The " person who lends money, gets near- '* ly as much interest from the former, " as he dares to take from the latter, " and his money is much safer in the " hands of the one set of people than " in those of the other. A great part "of the capital of the country is thus " thrown into the hands in which it " is most likely to be employed with " advantage."
It happens fortunately for the side you on Projects in Arts, Sfc. 135 you appear to have taken, and as unfortunately for mine, that the appellative, which the custom of the language has authorised you, and which the poverty and perversity of the language has in a manner forced you, to make use of, is one, which, along with the idea of the sort of persons in question, conveys the idea of reprobation, as indiscriminately and deservedly applied to them. With what justice or consistency, or by the influence of what causes, this stamp of indiscriminate reprobation has been thus affixed, it is not immediately necessary to inquire. But, that it does stand thus affixed, you and every body else, I imagine, will be ready enough to allow. This being the case, the question stands already decided, in the first instance at least, if not irrevocably, in the judgments of all those, who, unable or unwilling 136 LETT. XIII. To Dr. Smith, willing to be at the pains of analysing their ideas, suffer their minds to be led captive by the tyranny of sounds: that is, I doubt, of by far the greater proportion of those whom we are likely to have to judge us. In the conceptions of all such persons, to ask whether it be fit to restrain projects and projectors, will be as much as to ask, whether it be fit to restrain rashness, and folly, and absurdity, and knavery, and waste.
Of prodigals I shall say no more at present. I have already stated my reasons for thinking, that it is not among them that we are to look for the natural customers for money at high rates of interest. As far as those reasons are conclusive, it will follow, that, of the two sorts of men you mention as proper objects of the burthen of these restraints, prodigals and projectors, on Projects in Arts, Sfc. 137 ors, that burthen falls exclusively on the latter. As to these, what your definition is of projectors, and what descriptions of persons you meant to include under the censure conveyed by that name, might be material for the purpose of judging of the propriety of that censure, but makes no difference in judging of the propriety of the law, which that censure is employed to justify. Whether you yourself, were the several classes of persons made to pass before you in review, would be disposed to pick out this or that class, or this and that individual, in order to exempt them from such censure, is what for that purpose we have no need to inquire. The law, it is certain, makes no such distinctions: it falls with equal weight, and with all its weight, upon all those persons, without distinction, to whom the term projectors, in the most unpartial and extensive 138 LETT. XIII. To Dr. Smith, extensive signification of which it is capable, can be applied. It falls at any rate (to repeat some of the words of my former definition), upon all such persons, as, in the pursuit of wealth, or even of any other object, endeavour, by the assistance of wealth, to strike into any channel of invention. It falls upon all such persons, as, in the cultivation of any of those arts which have been by way of eminence termed useful, direct their endeavours to any of those departments in which their utility shines most conspicuous and indubitable; upon all such persons as, in the line of any of their pursuits, aim at any thing that can be called improvement j whether it consist in the production of any new article adapted to man's use, or in the meliorating the quality, or diminishing the expense, of any of those which are already known to us. It falls, in short^ on Projects in Arts, Kc. 139 short, upon every application of the human powers, in which ingenuity stands in need of wealth for its assistant.
High and extraordinary rates of interest, how little soever adapted to the situation of the prodigal, are certainly, as you very justly observe, particularly adapted to the situation of the projector: not however to that of the imprudent projector only, nor even to his case more than another's, but to that of the prudent and well-grounded projector, if the existence of such a being were to be supposed. Whatever be the prudence or other qualities of the project, in whatever circumstance the novelty of it may lie, it has this circumstance against it, viz. that it is new. But the rates of interest, the highest rates allowed, are, as you expressly say they are, and as you would have them to be, adjusted to the situation 140 LETT. XIII. To Dr. Smith, tion which the sort of trader is in, whose trade runs in the old channels, and to the best security which such channels can afford. But in the nature of things, no new trade, no trade carried on in any new channel, can afford a security equal to that which may be afforded by a trade carried on in any of the old ones: in whatever light the matter might appear to perfect intelligence, in the eye of every prudent person, exerting the best powers of judging which the fallible condition of the human faculties affords, the novelty of any commercial adventure will oppose a chance of ill success, superadded to every one which could attend the same, or any other, adventure, already tried, and proved to be profitable by experience.
The limitation of the profit that is to be made, by lending money to persons on Projects in Arts, Sfc. 141 sons embarked in trade, will render the monied man more anxious, you may say, about the goodness of his security, and accordingly more anxious to satisfy himself respecting the prudence of a project in the carrying on of which the money is to be employed, than he would be otherwise: and in this way it may be thought that these laws have a tendency to pick out the good projects from the bad, and favour the former at the expense of the latter. The first of these positions I admit: but I can never admit the consequence to follow. A prudent man, (I mean nothing more than a man of ordinary prudence) a prudent man acting under the sole governance of prudential motives, I still say, will not, in these circumstances, pick out the good projects from the bad, for he will not meddle with projects at all. He will pick out oldestablished 142 LETT. XIII. To Dr. Smith, established trades from all sorts of projects, good and bad; for with a new project, be it ever so promising, he never will have any thing to do. By every man that has money, five per cent, or whatever be the highest legal rate, is at all times, and always will be, to be had upon the very best security, that the best and most prosperous oldestablished trade can afford. Traders in general, I believe, it is commonly understood, are well enough inclined to enlarge their capital, as far as all the money they can borrow at the highest legal rate, while that rate is so low as 5 per cent, will enlarge it. How it is possible therefore for a project, be it ever so promising, to afford, to a lender at any such rate of interest, terms equally advantageous, upon the whole, with those he might be sure of obtaining from an old-established business, is more on Projects in Arts, Sfc. 143 more than I can conceive. Loans of money may certainly chance, now and then, to find their way into the pockets of projectors as well as of other men: but when this happens, it must be through incautiousness, or friendship, or the expectation of some collateral benefit, and not through any idea of the advantageousness of the transaction, in the light of a pecuniary bargain.
I should not expect to see it alleged, that there is any thing, that should render the number of well-grounded projects, in comparison of the illgrounded, less in time future, than it has been in time past. I am sure at least that I know of no reasons why it should be so, though I know of some reasons, which I shall beg leave to submit to you by and by, which appear to me 144 LETT. XIII. To Dr. Smith, me pretty good ones, why the advantage should be on the side of futurity. But, unless the stock of well-grounded projects is already spent, and the whole stock of ill-grounded projects that ever were possible, are to be looked for exclusively in the time to come, the censure you have passed on projectors, measuring still the extent of it by that of the operation of the laws in the defence of which it is employed, looks as far backward as forward: it condemns as rash and ill-grounded, all those projects, by which our species have been successively advanced from that state in which acorns were their food, and raw hides their cloathing, to the state in which it stands at present: for think, Sir, let me beg of you, whether whatever is now the routine of trade was not, at its commencement, on Projects in Arts, fife. 145 ment, project? whether whatever is now establishment, was not, at one time, innovation?
How it is that the tribe of wellgrounded projects, and of prudent projectors (if by this time I may have your leave for applying this epithet to some at least among the projectors of time past), have managed to struggle through the obstacles which the laws in question have been holding in their way, it is neither easy to know, nor necessary to inquire. Manifest enough, I think, it must be by this time, that difficulties, and those not inconsiderable ones, those laws must have been holding up, in the way of projects of all sorts, of improvement (if I may say so) in every line, so long as they have had existence: reasonable therefore it must be to conclude, that, had it not been for these discouragements, pro-" H jects 146 LETT. XIII. To Dr. Smith, jects of all sorts, well-grounded and successful ones, as well as others, would have been more numerous than they have been: and that accordingly, on the other hand, as soon, if ever, as these discouragements shall be removed, projects of all sorts, and among the rest, well-grounded and successful ones, will be more numerous than they would otherwise have been: in short, that, as, without these discouragements, the progress of mankind in the career of prosperity, would have been greater than it has been under them in time past; so, were they to be removed, it would be at least proportionably greater in time future.
That I had done you no injustice, in assigning to your idea of projectors so great a latitude, and that the unfavourable opinion you have professed to entertain of them is not confined to the on Projects in Arts, fife. 147 the above passage, might be made, I think, pretty apparent, if it be material, by another passage in the tenth chapter of your first book*. " The " establishment of any new manufac-" ture, of any new branch of com-" merce, or of any new practice in " agriculture," all these you comprehend by name under the list of " pro-"jects:" of everyone of them you observe, that " it is a speculation from " which the projector promises himself " extraordinary profits. These pro-" fits (you add) are sometimes very " great, and sometimes, more frequently " perhaps, they are quite otherwise: but " in general they bear no regular pro- " portion to those of other old trades " in the neighbourhood. If the pro- " ject succeeds, they are commonly 148 LETT. XIII. To Dr. Smith, " at first very high. When the trade " or practice becomes thoroughly es* " tablished and well known, the com- " petition reduces them to the level of " other trades." But on this head I forbear to insist: nor should I have taken this liberty of giving you back your own words, but in the hope of seeing some alteration made in them in your next edition, should I be fortunate enough to find my sentiments confirmed by your's. In other respects, what is essential to the public, is, what the error is in the sentiments entertained, not who it is that entertains them.
I know not whether the observations \vhich I have been troubling you with, will be thought to need, or whether they will be thought to receive, any additional support from those comfortable positions, of which you have made such good and such frequent en Projects in Arts, Xc. 149 quent use, concerning the constant tendency of mankind to get forward in the career of prosperity, the prevalence of prudence over imprudence, in the sum of private conduct at least, and the superior fitness of individuals for managing their own pecuniary concerns, of which they know the particulars and the circumstances, in comparison of the legislator, who can have no such knowledge. I will make the experiment: for, so long as I havo the mortification to see you on the opposite side, I can never think the ground I have taken strong enough, while any thing remains that appears capable of rendering it still stronger.
" With regard to misconduct, the " number of prudent and successful " undertakings" (you observe*) " is » B. II. cb. iii. edit. 8vo. 1784. vol. ii. p. 20.
" every 150 LETT. XIII. To Dr. Smith, " every where much greater than that " of injudicious and unsuccessful ones. " After all our complaints of the fre- " quency of bankruptcies, the unhap- *' py men who fall into this misfor- " tune make but a very small part of " the whole number engaged in trade, " and all other sorts of business j not " much more perhaps than one in a "thousand."
'Tis in support of this position that you appeal to history for the constant and uninterrupted progress of mankind, in our island at least, in the career of prosperity: calling upon any one who should entertain a doubt of the fact, to divide the history into any number of periods, from the time of Caesar's visit down to the present: proposing for instance the respective aeras of the Restoration, the Accession of Elizabeth, that of Henry VII. the Norman on Projects in Arts, 8fc. 1.51 Norman Conquest, and the Heptarchy; and putting it to the sceptic to find out, if he can, among all these periods, any one at which the condition of the country was not more prosperous than at the period immediately preceding it: spite of so many wars, and fires, and plagues, and all other public calamities, with which it has been at different times afflicted, whether by the hand of God, or by the misconduct of the sovereign. No very easy task, I believe: the fact is too manifest for the most jaundiced eye to escape seeing it: — But what and whom are we to thank for it, but projects, and projectors?
" No," I think 1 hear you saying, " I will not thank projectors for it, I " will rather thank the laws, which " by fixing the rates of interest, have " been exercising their vigilance in " repressing 152 LETT. XIII. To Dr. Smith, " repressing the temerity of projectors, " and preventing their imprudence " from making those defalcations from " the sum of national prosperity, which " it would not have failed to make, " had it been left free. If, during all *e these periods, that adventurous race " of men had been left at liberty by " the laws to give full scope to their " rash enterprizes, the increase of " national prosperity during these (e periods might have afforded some " ground for regarding them in a " more favourable point of view. But " the fact is, that their activity has " had these laws to check it; without t( which checks you must give me " leave to suppose, that the current " of prosperity, if not totally stopt, or " turned the other way, would at any " rate have been more or less retard- *c ed. Here then" (you conclude) " lies on Projects in Arts, 5fc. 153 " lies the difference between us. What " you look upon as the cause of the " increase about which we are both " agreed, I look upon as an obstacle " to it: and what you look upon as the <f obstacle, I look upon as the cause."
Instead of starting this as a sort of plea that might be urged by you, I ought, perhaps, rather to have mentioned it as what might be urged by some people in your place: for as I do not imagine your penetration would suffer you to rest satisfied with it, still less can I suppose that, if you were not, your candour would allow you to make use of it as if you were.
To prevent your resting satisfied with it, the following considerations would, I think, be sufficient.
In the first place, of the seven periods which you have pitched upon, as so many stages for the eye to rest H3 at 154 LETT. XIII. To Dr. Smith, at in viewing the progress of prosperity, it is only during the three last, that the country has had the benefit, if such we are to call it, of these laws: for it is to the reign of Henry VIII. that we owe the first of them.
Here a multitude of questions might be started: Whether the curbing of projectors formed any part of the design of that first statute, or whether the views of it were not wholly confined to the reducing the gains of that obnoxious and envied class of men, the money-lenders? Whether projectors have been most abundant before that statute, or since that statute? And •whether the nation has suffered, as you might say — benefited, as I should say, most by them, upon the whole, during the former period or the latter? All these discussions, and many more that might be started, I decline engaging on Projects in Arts, Kc. 155 ing in, as more likely to retard, than to forward, our coming to any agreement concerning the main question.
In the next place, I must here take the liberty of referring you to the proof, which I think I have already given, of the proposition, that the restraints in question could never have had the effect, in any degree, of lessening the proportion of bad projects to good ones, but only of diminishing, as far as their influence may have extended, the total number of projects, good and bad together. Whatever therefore was the general tendency of the projecting spirit previously to the first of these laws, such it must have remained ever since, for any effect which they could have had in purifying and correcting it.
But what may appear more satisfactory perhaps than both the above considerations, 156 LETT. XIII. To Dr. Smith, siderations, and may afford us the best help towards extricating ourselves from the perplexity, which the plea I have been combating (and which I thought it necessary to bring to view, as the best that could be urged) seems much better calculated to plunge us into, than bring us out of, is, the consideration of the small effect which the greatest waste that can be conceived to have been made within any compass of time, by injudicious projects, can have had on the sum of prosperity, even in the estimation of those whose opinion is most unfavourable to projectors, in comparison of the effect which within the same compass of time must have been produced by prodigality.
Of the two causes, and only two causes, which you mention, as contributing to retard the accumulation of national wealth, as far as the conduct of on Projects in Arts, &c. 157