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Having lately met with a little Tract, Intituled A Letter to a Friend concerning Usury. Printed this present year 1690 ; which gives in short, the Arguments of some Treatises Printed many years since, for the lowering of Interest ; It may not be amiss, briefly to consider them.

1. High Interest decays Trade. The advantage from Interest is greater than the Profit from Trade, which makes the rich Merchants give over, and put out their Stock to Interest, and the lesser Merchants Break.

Answ. This was Printed in 1621, when Interest was at 10 per Cent. And whether England had ever a more flourishing Trade, than at that time, must be left to the judgment of those, who have consider'd the growing Strength and Riches of this Kingdom in Q.E. and King J. the 1st Reigns. Not that I impute it to high Interest, but to other Causes I have mention'd, wherein Usury had nothing to do. But if this be thought an Argument now in 1690, when the legal Interest is 6 per Cent. I desire those, who think fit to make use of it, to [131] name those rich Merchants, who have given over and put out their Stocks to Interest.

2. Interest being at 10 per Cent. and in Holland at 6 ; our Neighbour Merchants undersel us.

Answ. The legal Interest being here now at 6 per Cent. and in Holland not limited by Law, our Neighbour Merchants undersel us, because they live more frugally, and are content with less profit.

3. Interest being lower in Holland than in England, their Contributions to War, works of Piety, and all Charges of the State, are cheaper to them than to us.

Answ. This needs a little Explication. Contributions greater or less, I understand : but Contributions cheaper or dearer, I confess I do not. If they manage their Wars and Charges cheaper than we, the blame is not to be laid on high, or low Interest.

4. Interest being so high, prevents the building of Shipping, which is the strength and safety of our Island, most Merchant Ships being built in Holland.

Answ. Though this Argument be now gone, such Ships being Prohibited by a Law, I will help the Author to one as good. The Dutch buy our Rape-seed, make it into Oil, bring it back to us, and sell it with advantage. This may be as well said to be from high Interest here, and [132] low there. But the Truth is, the Industry and Frugality of that People, makes them content to work cheaper, and sell at less profit than their Neighbours, and so get the Trade from them.

5. The high Rate of Usury makes Land sell so cheap, being not worth more than 14 or 15 Years Purchase ; whereas in Holland, where Interest is at 6, it is worth above 25. So that a low Interest raises the Price of Land. Where Money is dear Land is cheap.

Answ. This Argument plainly confesses, That there is something else regulates the Price of Land, besides the Rate of Interest. else when Money was at 10 per Cent. here, Land should have been at 10 Years Purchase, whereas he confesses it then to have been at 14 or 15. One may suppose, to favour his Hypothesis, he was not forward to speak the most of it. And Interest, as he says, being at 6 per Cent. in Holland, Land there should have Sold by that Rule for Sixteen and an half Years Purchase, whereas he says it was worth above Twenty five. And Mr. Manly says, (p. 33) That Money in France being at 7 per Cent. Noble Land sells for 34 and 35 Years Purchase, and ordinary Land for 25. So that the true Conclusion from hence is, not what our Author makes, but this ; That 'tis not the legal Interest, but something else, that go-[133]verns the Rate of Land. I grant his Position, That where Money is dear, Land is cheap, and vice versà. But it must be so by the natural, not legal Interest. For where Money will be lent on good Security at 4 or 5 per Cent. 'tis a Demonstration, that there is more than will be ventured on ordinary Credit in Trade. And when this Plenty becomes general, 'tis a sign, there is more Money, than can be Employed in Trade ; which cannot but put many upon seeking Purchases, to lay it out in Land, and so raise the Price of Land, by making more Buyers, than Sellers.

6. 'Tis not probable Lenders will call in their Money, when they cannot make greater Interest any where. Besides, their Security upon Land will be better.

Answ. Some unskilful and timorous Men will call in their Money ; others put it into the Banker's Hands. But the Bankers and Skilful will keep it up, and not lend it, but at the natural Use, as we have shewn. But how Securities will be mended by lowering of Interest, is, I confess, beyond my Comprehension.