Note 192-3 — Chapter IV

Fixed rates of interest of this kind are to be accounted for in part by a still continuing aversion of the legislator for interest in general; in part, by the opinion which prevails that precisely the most useful and most productive classes might be elevated by an artificial lowness of the rate of interest. (But most especially the government itself, which borrows more than it lends.) When Louis XIV. about 1665, lowered the rate of interest to 5 per cent., he claimed in the preamble to his decree that it would have the effect of promoting the welfare of landowners and business men, and of preventing idleness. Similarly Sully, Economies royales, L, XII. And so J. Child, Discourse of Trade, 69 ff., says that every lowering of the rate of interest, by law, produced a completely corresponding increase of the national wealth. He says, since the first reduction (?) of interest in 1545, the national wealth increased six fold; since the last, in 1651, the number of coaches increased a hundred fold; chamber-maids wore now better clothes than ladies formerly; on 'Change there were more persons with a fortune of £10,000 than before with £1,000. Similarly Culpeper: compare Roscher, Z. Geschichte der eng. Volkswirthsch., 57 ff. Later, the French generally thought that a lowering of the rate of interest would prove injurious to the noblesse de la robe; hence even in 1634, parliament was opposed to it. (Forbonnais, Recherches et Considérations, I, 48, 226.) Darjes says that information of all loans of capital should be made to the police authorities, and that the authorities might compel payment and the loaning of the principal over again to parties in need of capital. (Erste Gründe, 426 seq.) Something analogous[TN 25] practically provided for by the Würtemberg Landesordnungen of the 16th century. (Compare also von Schröder, F. Schatz- und Rentkammer, XXV, 3.)