Front Page Titles (by Subject) LETTER IX.: Blackstone considered. - Defence of Usury
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LETTER IX.: Blackstone considered. - Jeremy Bentham, Defence of Usury 
Defence of Usury; shewing the Impolicy of the Present Legal Restraints on the Terms of Pecuniary Bargains; in Letters to a Friend. To which is added A Letter to Adam Smith, Esq. LL.D. on the Discouragements opposed by the above Restraints to the Progress of Inventive Industry; and to which is also added, A Protest against Law-Taxes (London: Payne and Foss, 1818).
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I hope you are, by this time, at least, pretty much of my opinion, that there is just the same sort of harm, and no other, in making the best terms one can for one's self in a money loan, as there is in any other sort of bargain. If you are not, Blackstone however is, whose opinion I hope you will allow to be worth something. In speaking of the rate of interest,3 he starts a parallel between a bargain for the loan of money, and a bargain about a horse, and pronounces, without hesitation, that the harm of making too good a bargain, is just as great in the one case, as in the other. As money-lending, and not horse-dealing, was, what you lawyers call, the principal case, he drops the horse-business, as soon as it has answered the purpose of illustration, which it was brought to serve. But as, in my conception, as well the reasoning by which he supports the decision, as that by which any body else could have supported it, is just as applicable to the one sort of bargain as to the other, I will carry on the parallel a little farther, and give the same extent to the reasoning, as to the position which it is made use of to support. This extension will not be without its use; for if the position, when thus extended, should be found just, a practical inference will arise; which is, that the benefits of these restraints ought to be extended from the money-trade to the horse-trade. That my own opinion is not favourable to such restraints in either case, has been sufficiently declared; but if more respectable opinions than mine are still to prevail, they will not be the less respectable for being consistent.
The sort of bargain which the learned commentator has happened to pitch upon for the illustration, is indeed, in the case illustrating, as in the case illustrated, a loan: but as, to my apprehension, loan or sale makes, in point of reasoning, no sort of difference, and as the utility of the conclusion will, in the latter case, be more extensive. I shall adapt the reasoning to the more important business of selling horses, instead of the less important one of lending them.
A circumstance, that would render the extension of these restraints to the horse-trade more smooth and easy, is, that in the one track, as well as in the other, the public has already got the length of calling names. Jockey-ship, a term of reproach not less frequently applied to the arts of those who sell horses than to the arts of those who ride them, sounds, I take it, to the ear of many a worthy gentleman, nearly as bad as usury: and it is well known to all those who put their trust in proverbs, and not less to those who put their trust in party, that when we have got a dog to hang, who is troublesome and keeps us at bay, whoever can contrive to fasten a bad name to his tail, has gained more than half the battle. I now proceed with my application. The words in italics are my own: all the rest are Sir William Blackstone's: and I restore, at bottom, the words I was obliged to discard, in order to make room for mine.
"To demand an exorbitant price is equally contrary to conscience, for the loan of a horse, or for the loan of a sum of money: but a reasonable equivalent for the temporary inconvenience, which the owner may feel by the want of it, and for the hazard of his losing it entirely, is not more immoral in one case than in the other....
"As to selling horses, a capital distinction must be made, between a moderate and an exorbitant profit: to the former of which we give the name of horse-dealing,4 to the latter the truly odious appellation of jockey-ship:5 the former is necessary in every civil state, if it were but to exclude the latter. For, as the whole of this matter is well summed up by Grotius, if the compensation allowed by law does not exceed the proportion of the inconvenience which it is to the seller of the horse to part with it,6 or the want which the buyer has of it,7 its allowance is neither repugnant to the revealed law, nor to the natural law: but if it exceeds these bounds, it is then an oppressive jockey-ship:8 and though the municipal laws may give it impunity, they never can make it just.
"We see, that the exorbitance or moderation of the price given for a horse9 depends upon two circumstances: upon the inconvenience of parting with the horse one has,10 and the hazard of not being able to meet with such another.11 The inconvenience to individual sellers of horses,12 can never be estimated by laws; the general price for horses13 must depend therefore upon the usual or general inconvenience. This results entirely from the quantity of horses14 in the kingdom: for the more horses15 there are running about16 in any nation, the greater superfluity there will be beyond what is necessary to carry on the business of the mail coaches17 and the common concerns of life. In every nation or public community there is a certain quantity of horses18 then necessary, which a person well skilled in political arithmetic might perhaps calculate as exactly as a private horse-dealer19 can the demand for running horses in his own stables:20 all above this necessary quantity may be spared, or lent, or sold, without much inconvenience to the respective lenders or sellers: and the greater the national superfluity is, the more numerous will be the sellers,21 and the lower ought the national price of horseflesh22 to be: but where there are not enough, or barely enough spare horses23 to answer the ordinary uses of the public, horse-flesh24 will be proportionably high: for sellers25 will be but few, as few can submit to the inconvenience of selling."26 —So far the learned commentator.
I hope by this time you are worked up to a proper pitch of indignation, at the neglect and inconsistency betrayed by the law, in not suppressing this species of jockey-ship, which it would be so easy to do, only by fixing the price of horses. Nobody is less disposed than I am to be uncharitable: but when one thinks of the 1500l. taken for Eclipse, and 2000l. for Rockingham, and so on, who can avoid being shocked, to think how little regard those who took such enormous prices must have had for "the law of revelation and the law of nature?" Whoever it is that is to move for the municipal law, not long ago talked of, for reducing the rate of interest, whenever that motion is made, then would be the rime for one of the Yorkshire members to get up, and move, by way of addition, for a clause for fixing and reducing the price of horses. I need not expatiate on the usefulness of that valuable species of cattle, which might have been as cheap as asses before now, if our lawgivers had been as mindful of their duty in the suppression of jockey-ship, as they have been in the suppression of usury.
It may be said, against fixing the price of horse-flesh, that different horses may be of different values. I answer—and I think I shall shew you as much, when I come to touch upon the subject of champerty—not more different than the values which the use of the same sum of money may be of to different persons, on different occasions.
[3.]B. ii, ch. 30.
[7.]felt by the loan.
[9.]interest for the money lent.
[10.]it for the present.
[11.]losing it entirely.
[13.]rate of general interest.
[20.]cash in his own shop.
[22.]the rate of the national interest.