to the law, as soon as property arrived at this point of value, loans would instantly and universally cease. But as some persons are willing to evade the law, they will loan at illegal interest; and, as the capital of those who are conscientious, is withdrawn from the market, and an arti ficial scarcity is thus produced, those who are not conscientious have it in their power to charge whatever they choose. Again, when we pay for money loaned, we pay, first, for the use, and, second, for the risk; that is, we pay literally a premium of insurance. As both of these vary with dif ference of time, and with different individuals, there is a double reason for variation in the rate of interest. When we have a house insured, we pay only for the risk; and, hence, there is here only a single cause of variation. But while all governments have fixed the rate of interest by law, they have never fixed the rate of insurance; which, being less variable, is more properly subject to a fixed rule. This is surely inconsistent; is it not also unjust?

Nevertheless, for the sake of avoiding disputes, and errors of ignorance, it might be wise for society to enact, by law, what shall be the rate of interest, in cases where no rate is otherwise specified. This is the extent of its proper jurisdiction; and doing any thing further is, I think, not only injurious to the interests of the community, but also a violation of the right of property. While, however, I hold this to be true, I by no means hold that, tne laws remaining as they are, any individual is justified in taking or giving more than the legal rate of interest. When conscience does not forbid, it is the business of a good citizen to obey the laws; and the faithful obedience to an unwise law, is generally the surest way of working its overthrow.

We shall now proceed to consider the laws which govern this mode of transfer of property.

The loan of money.

1. The lender is bound to demand no more than a fair remuneration for the use of his capital, and for the risk to which it is exposed.

2. He is bound to make use of no unlawful means to influence the decision of the borrower. The principles here are the same as those which should govern the per

manent exchange of property All rumors and false alarms, and all combinations of capitalists to raise by a monopoly the price of money, are manifestly dishonest; nor are they the less so, because many persons may enter into them, or because they have the skill or the power to evade the laws of the land.

3. The borrower is bound to pay a just equivalent, as I have stated above; and he is equally forbidden to use any dishonest motives to influence the decision of the lender.

4. Inasmuch as the risk of the property is one part of the consideration for which the owner receives remunera tion, and as this is in every case supposed to be a specified quantity, the borrower has no right to expose the property of another to any risk not contemplated in the contract. Hence, he has no right to invest it in a more hazardous trade, or to employ it in a more hazardous speculation, than that for which he borrowed it; and if he do, he is using it in a manner for which he has paid no equivalent. He is also under obligation to take all the care to avoid losses which he would take if the property were his own, and to use the same skill to conduct his affairs successfully.

5. He is also bound to repay the loan exactly according to the terms specified in the contract. This requires that he pay the full sum promised, and that he pay it precisely at the time promised. A failure, in either case, is a breach of the contract.

The question is often asked, whether a debtor is morally liberated by an act of insolvency. I think not, if he ever afterwards have the means of repayment. It may be said, this is oppressive to debtors; but, we ask, is not the contrary principle oppressive to creditors; and are not the rights of one party just as valuable, and just as much rights, as those of the other? It may also be remarked, that, were this principle acted upon, there would be fewer debtors, and vastly fewer insolvents. The amount of money actually lost by insolvency, is absolutely enormous; and it is generally lost by causeless, reckless speculation, by childish and inexcusable extravagance, or by gambling and profligacy, which are all stimulated into activity hy

the fac lity o. credit, and the facility with which debts may be cancelled by acts of insolvency. The more rigidly contracts are observed, the more rapidly will the capital of a country increase, the greater will be the inducements to industry, and the stronger will be the barriers against extravagance and vice.

Of the loan of other property.

The principles which apply in this case are very similar to those which have been already stated.

1. The lender is bound to furnish an article, which, so far as he knows, is adapted to the purposes of the borrower. That is, if the thing borrowed has any internal defect, he is bound to reveal it. If I loan a horse to a man who wishes to ride forty miles to-day, which I know is able to go but thirty, it is a fraud. If I let to a man a house which I know to be in the neighborhood of a nuisance, or to be, in part, uninhabitable from smoky chimneys, and do not inform him, it is fraud. The loss in the value of the property is mine, and I have no right to transfer it to another.

2. So the lender has a right to charge the market price arising from the considerations of use, risk, and variation in supply and demand. This depends upon the same principles as those already explained.

3. The borrower is bound to take the same care of the property of another, as he would of his own; to put it to no risk different from that specified or understood in the contract; and to pay the price, upon the principle stated above. Neither party has any right to influence the other by any motives extraneous to the simple business of the transfer.

4. The borrower is bound to return the property loaned, precisely according to the contract. This includes both time and condition. He must return it at the time speci fied, and 'n the condition in which he received it, ordinary wear and tear only excepted. if I hire a house for a year, and so damage its paper and paint, that, before it can be let again, it will cost half the price of the rent to put it in repair, it is a gross fraud. I have, by negligence, or other cause, defrauded the owner of half his rent. It is just as

unmoral as to pay him the whole, and then pick his pocket of the half of what he had received.

The important question arises here, If a loss happer while the property is in the hands of the borrower, on whom shall it fall? The principle I suppose to be this:

1. If it happen while the property is subject to the use specified in the contract, the owner bears it; because it is to be supposed that he foresaw the risk, and received remuneration for it. As he was paid for the risk, he, of course, has assumed it, and justly suffers it.

2. If the loss happen in consequence of any use not contemplated in the contract, then the borrower suffers it. He having paid nothing for insurance against this risk, there is nobody but himself to sustain it, and he sustains it accordingly. Besides, were any other principle adopted, it must put an end to the whole business of loaning; for no one would part with his property temporarily, to be used in any manner the borrower pleased, and be himself responsible for all the loss. If a horse die while I am using it well, and for the purpose specified, the owner suffers. If it die by careless driving, I suffer the loss. He is bound to furnish a good horse, and I a competent driver.

3. So, on the contrary, if a gain arise unexpectedly. If this gain was one which was contemplated in the contract, it belongs to the borrower. If not, he has no equitable claim to it. If I hire a farm, I am entitled, without any additional charge for rent, to all the advantages arising from the rise in the price of wheat, or from my own skill in agriculture. But if a mine of coal be discovered on the farm, I have no right to the benefit of working it; for I did not hire the farm for this purpose.

The case of insurance.

Here no transfer of property is made, and, of course, nothing is paid for use. But the owner chooses to transfer the risk of use from himself to others, and to pay, for their assuming this risk, a stipulated equivalent. The loss to society, of property insured, is just the same as when it is uninsured. A town is just as much poorer when property is destroyed that is insured, provided it be insured in the town as though no insurance were effected. The only

difference is, that the loss is equalized. Ten men can more easily replace one hundred dollars apiece, who have nine hundred remaining, than the eleventh can replace his whole property of one thousand.

The rule in this case is simple. The insured is bound fully to reveal to the insurer every circumstance within his knowledge, which could in any measure affect the value of the risk; that is to say, the property must be, so far as he knows, what it purports to be, and the risks none other than such as he reveals them. If he expose the property to other risks, the insurance is void; and the underwriter, if the property be lost, refuses to remunerate him; and if it be safe, he returns the premium. If the loss occur within the terms of the policy, the insurer is bound fully and faithfully to make remuneration, precisely according to the terms of the contract.

As to the rate of insurance, very little need be said. It varies with every risk, and is made up of so many conflicting circumstances, that it must be agreed upon by the parties themselves. When the market in this species of traffic is unrestrained by monopolies, the price of insurance, like that of any other commodity, will regulate itself.

II. Next, where the equivalent is IMMATERIAL, as where one party pays remuneration for some service rendered by

the other.

The principal cases here are these: That of master and servant, and that of principal and agent.

1. Of master and servant.

1. The master is bound to allow to the servant a fair remuneration. This is justly estimated by uniting the considerations of labor, skill, and fidelity, varied by the rise and fall of the price of such labor in the market. As this, however, would be liable to inconvenient fluctuation, it is generally adjusted by a rate agreed upon by the parties.

2. He is bound to allow him all the privileges to which moral law or established usage entitles him, unless something different from the latter has been stipulated in the contract; and he is at liberty to require of him service upon the same principles.

3 The servant is hound to perform the labor assigned