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4 cts. per lb.-but assuming the duty only
30 bolts Russia duck at $2
10 do. half duck
15 do. Ravens
2500 lbs. copper
1500 lbs. copper spikes
6 cwt. white lead and other paints at $4... 26 00 Ship-chandlery-sundry articles, more than
The price of such a ship, when equipped, is about sixteen thousand dollars. What would our cotton manufacturers say to a tax of eight and a half per cent. on the cost of their machinery? It is of no consequence to the ship-builder, whether he pay this tax to the government in the form of a duty on imported articles, or as an additional profit to the person of whom he buys them. A ship then, if well equipped, will cost nearly one thousand three hundred and fifty dollars more, than if the duties were not imposed. But while the price is thus increased, the demand for ships and of course the profit of their employment is by the operation of the tariff diminished. The effect of this upon the numerous and valuable classes of men-mechanics and manufacturers who are engaged in building, fitting out, and repairing ships, may easily be conjectured.
But if ships should continue to be employed as heretofore, another effect will be produced by the tariff, no less disastrous to our mechanics. The owners of vessels will
expend as little as possible upon them in our own ports, and depend upon getting their equipments in the foreign ports to which they may be destined. For instance, a new ship intended for a voyage to Russia will be fitted for sea with old sails and cordage, and on her arrival at St. Petersburg will be rigged anew. Another vessel will be spiked and coppered in London, or obtain her anchors at Liverpool; while a third will be painted in Holland. In other words, foreign mechanics will be employed, in preference to our own, for the obvious reason, that the stock with which they work can be procured cheaper in foreign ports, than at home.
And this is the bill for the encouragement of national industry!
We have other remarks to offer on this subject, which must be, for the present, deferred.
Jan. 31, 1824.
RATE OF INTEREST.
DURING the present session of the New York legislature, a committee was appointed by the Senate to consider the expediency of reducing the rate of interest, which in that state is seven per cent. In the report of the committee, which was made on the 8th of March, the right of the legislature to fix the standard of interest is defended by the example of all civilized nations, and the expediency of a reduction is inferred from the existing state of trade. It is to be regretted that the committee did not take a wider view of the subject, and examine the principle upon which the right of establishing a standard of interest is founded; for we apprehend that some erroneous opinions respecting it are very generally entertained.
When a man receives a loan from his neighbour, a portion of the aggregate capital of the community is transferred to him; he borrows, in fact, not money, but capital. Take an example, which, at first view, would seem inconsistent with this assertion, the loan of money by a bank on accommodation paper. The borrower pledges the credit of two or three of his friends, who promise for him that five hnn
dred dollars shall be returned to the bank in sixty days; and on the faith of this promise he receives certain pieces of paper, which may at any time be exchanged for five hundred ounces of silver. This convertibility of paper into silver, makes the paper as useful to him as silver would be, and as effective for all the purposes of trade. But in fact he wishes for neither paper nor silver. His object in making the loan is to enable him to purchase one hundred barrels of flour, and he would be as well satisfied, to receive the one hundred barrels of flour from the bank, without the intervention of paper, or silver, at all. In receiving bank bills, or specie, from the bank, he simply receives a ticket entitling him to a certain quantity of the aggregate capital of the community. It is like receiving the key of a store, containing the goods which he wishes to possess. The money is merely the instrument of transfer. It is not, in itself, the subject of the loan, any more than the key of the store would be.
Capital consists of positive value vested in some material object; and the aggregate capital of the community is of course the sum of all the values possessed by every individual, whatever the object may be in which these values are vested, whether houses, lands, merchandise, or furniture. When a man parts with the possession of capital for a limited time, he is entitled to an equitable compensation for the use of it, and this compensation is properly denominated rent. If the capital parted with be a specific object, the rent is usually settled by a specific contract. Thus houses are rented, and books loaned from a circulating library, and
horses let to hire from a livery stable, for a certain sum previously agreed on. In all these cases, the sum to be paid is adjusted by mutual convenience. But when the capital transferred is not a specific object, but only a portion of the aggregate property of the community, there seems to be no reason why the rent should not be in like manner adjusted by the mutual convenience of the borrower and lender. It is as unreasonable to fix by law the rent of merchandise, as the rent of a farm; for the merchandise and the farm are equally capital, that is, vested values, parted with for a limited time. As money is merely the measure of these values, it is as absurd to talk of the interest of money, as of the interest of a yard-stick. The one measures the value, precisely as the other measures the quantity. Interest is composed of the rent of capital and of the price of insurance against the hazard of losing it. The risk of losing it depends upon the manner in which it is to be employed, and upon the personal character of the borrower. But the rent of capital is subject to constant fluctuations, and the price of insurance must vary in every succesHow then is it possible to fix by law an equitable standard of interest? And upon what principles can the right of the legislature to fix the rent of floating capital and the premium of insurance against bad debts, be defended, which would not equally give it the right to fix the rent of land, the wages of labor, and the premium of insurance against the perils of the sea?
Nor is it necessary that the law should fix a standard of interest for parties who do not agree upon one themselves.