CREDIT

PERNICIOUS.

BY

ARCHIBALD ROSSER

SECOND EDITION

LONDON:
PUBLISHED BY JOHN HATCHARD AND SON, No. 187, PICCADILLY;
AND EFFINGHAM WILSON, ROYAL EXCHANGE,

1834,

LONDON

Printed by J. S. Hodson, Cross Street, Hatton Garden.

PREFACE TO T H E SECOND EDITION.

AFTER a lapse of ten years this pamphlet is
again presented to the public,, and without alteration. In an appendix will be found the notices with which it has been favored by the
press, Prom these it will be seen that, although
the remedy proposed is almost universally condemned., the evil to be remedied is universally
acknowledged, and is recognised in all its magnitude.

The condemnation of the remedy has arisen,
probably, in a great degree, from a supposition
of its impracticability. f ' I t is impossible/'
some will say, " that the public shall be brought
to a ready money system/' But the word fC impossible/' has, though once a short objection to
almost every great and novel attempt in science
or art, in speaking of projects not altogether
contrary to the nature of things now much fallen
into disuse. It has, during the last half of a
century, become more and more faint in the
vocabulary, till it is at length scarcely legible.
a2

iv

PREFACE,

Not many years have elapsed since, to rule the
unfortunate inmates of our lunatic asylums, without the aid of stripes and chains, was deemed
impossible. A few strong and benevolent minds
overleaped the impossibility, and proved, by the
fact, that these poor objects of commiseration
might be controled by mere linked firmness
and mildness, and punished by nothing more severe than short temporary separation from their
fellow sufferers. If the impossibility-men had
been listened to, our capital would not have been
veined with conduits of gas, and our public ways
would have remained cheerless and insecure; the
power of steam in baffling the elements at sea,
would have been lost to us; and many noble
contrivances, producing by their promulgation,
others equally beneficial, and teeming with still
more, effective to an extent, in all human probability, hardly dreamed of t c in our philosophy/5
would have been utterly thrown away; while
their inventors would have been left to pine
away in obscurity and in mortification of spirit.
Where would have been our steam engine—
suspension bridge—hydraulic press—block machine—calculating machine;—if Watt, and Babbage, and Brunei, and Bramah, and Telford,
had been impossibility-men ? What say the
impossibility-men to one well known periodical
that sends out 160,000 copies, weekly; thus
diffusing, at the cheapest rate, and to an immense extent, useful knowledge among the

PREEACE.

V

people?—what to the journals that supply us
with the proceedings of a protracted sitting of
the House of Commons within two hours after its
close ? Let them examine all that is now done
in surgery, in optics, in astronomy, in exploratory navigation,, in means of intercommunication of all kinds, of chemistry,—in short, in all
the sciences and arts—and their combinations—
and their mutual assistance,—and then let the
objectors talk of impossibility.
W i t h these reflections, and considering that
his plan is not an impossibility, the author of
the pamphlet, even though he should be forced,
in deference to a general, though, as he surmises, a somewhat hastily-formed, opinion, to
admit that it may be difficult of execution,
presumes to pitch his aim as high as he did ten
years ago.
T h i s presumption is encouraged by the prospect of a measure about to be proposed, and
which he fervently hopes will be carried,, abolishing all imprisonment for debt. T h e measure
will distinctly recognise the evil of a credit
system in minor transactions, and will be a great
approach, perhaps as great as the temper of the
times is yet prepared to permit, to the thorough
remedy suggested by the pamphlet.
It may
even be anticipated, as an event not very improbable, that the abolition of imprisonment for

vi

PREFACE.

debt will not only remove the evil in matters
within the limits mentioned in the pamphlet (and,,
be it remembered, these limits are put only for
instance sake), but also adjust itself as a preventive against the giving and taking of credit
unadvisedly to every extent, and under all circumstances. The only objections the author
has to the abolition are. that it does not, as a
remedial measure, strike deep enough ; and that,
though there is no reason to fear its ultimate
effects will not be incalculably beneficial, it may,
at first, prove a snare to both creditor and
debtor. It may leave the one to go on giving
credit too freely, trusting to his power to take
from the debtor his all (a barbarous power bythe bye, when stated in these words), and induce
the other to take credit too freely, under the
delusive notion that, his person being secure, he
may, by some possible means, which, however,
he cannot very well define, withdraw his property
from seizure. Again, till men are tired of giving
and taking credit idly, it may occasion an increase of protracted litigation; for the fact is
well known, that very many debts are paid upon
arrest, or from fear of it, that would not otherwise be paid until the action had run its ruinous
course. Upon the whole, however, and looking
to the general and ultimate operation of the
measure, it ought to be strongly supported.
There is a passage in one of the notices in the

PREFACE.

vii

appendix which deserves great attention.
It
runs thus: " Many inexperienced and well-mean" ing beginners in housekeeping, with incomes
" quite sufficient for every reasonable wish or
"legitimate necessity, are entrapped gradually
" into expenses beyond their means by the faCi
cility of obtaining credit. New wants, bad
" habits, silly rivalries, are often created and
"indulged, which would otherwise have been
" unthought of, and, in a social view, were better
"suppressed. The means for exciting envy and
" uncharitableness, pampering self, or exciting
cc
other little passions, are easily procured—the
" clay of payment is distant. Thus bad proceeds
" to worse, the freeman slips gradually into
" bonds, and the silken meshes of the spider-web
" of credit at last close, in inextricable folds, on
" t h e fluttering victim." These remarks, which
are lamentably true, afford matter for deep reflection, and might be advantageously dilated
on. If we look at papers appended to the report
of the committee of the House of Commons on
manufactures, commerce, and shipping, made
last year, we shall find that most of the cases of
distress there mentioned, were occasioned by
over-living. When men talk of being distressed,
as tradesmen will generally complain they are,
more or less, at the present day, it is fair to inquire what they mean by distress. If the real
truth of every case were known, it is not greatly
improbable we should find that distress very

Vlll

PREFACE.

frequently means a difficulty of gratifying false
wants, created during speculative times, when
money was made by chance and not by mere
skill in trade, and industry. Some lost and were
ruined unheeded. Others acquired wealth and
lived luxuriously and above their stations. This
brought on the silly rivalries spoken of in the
passage above quoted., and induced a general
habit of extravagance, much fostered by the
credit system, and now no longer supportable,
The author is old enough to remember when
persons in retail trade kept early hours, attended
to their business themselves, were seldom absent
from it, entertained moderately and rarely, were
content with unexpensive recreations, and were
comparatively happy. Subsequently, however,
men of precisely the same standing, have given
late entertainments, choice and various viands and
wines have covered their boards, the apron has
been discarded, and handed over to a deputy, the
country-house and the gig have been indispensable, any day could be set aside for pleasure,
and they have become anxious, discontented, unhappy,—and, as they must return to their frugal
habits, distressed. If this is not a true picture
of what has been in general happening, it is certainly true as to particular cases which have been
observed.
Abolition of imprisonment for debt, with the
plan suggested by the Spectator (see Appendix),

PREFACE.

IX

of very much diminishing the period at the end
of which simple contract debts expire if not
kept alive by suit or fresh promise, and the allowing of interest on all such debts, would go
nearly the whole length desired.
The author did intend to examine and endeavour to refute the particular objections to the
remedy proposed, contained in the appendix, one
by one, and at large; but he thinks he has anticipated them, and that the attentive reader of the
pamphlet, who has first discharged from his
mind the overwhelming idea of impossibility,
will be able to answer them satisfactorily for
himself. They are not all to be easily seized and
defined, and not one of them has convinced the
author that he is in error. It would be tedious
to repeat that he does not profess to be able,
alone, to point out in what cases credit should be
altogether forbidden, and in what cases permitted under modification. In some places, he
is told, debts, such as for board and s hooling,
which are growing due from day to Jay, are
paid for by anticipation. T o settle t h ^ e things
would be the business of a body of ractical
men. He may be wrong, and though he remains unconvinced, and ventures again o bring
forward his views, he is not bold enoirA± to insist that those views are right. He I !5 however, to express his sense of gratituc 3 for the
b

X

PREFACE.

kind manner in which his very humble effort
has, in general, been received; and he will add,
in justification, if any be needed, of his putting
forth a new edition, that he does it at the suggestion of one whose name, if it might be mentioned, would amply authorize the act.
As a member of the legal profession the author desires particularly to render to his professional brethren a tribute of justice. That they
are in general enemies of reform in the law he
positively denies. To one organ of the expression of their feelings on this subject, that
which comes most under his notice—The Legal
Observer,—to the pages of that well-conducted
periodical he confidently appeals for indisputable evidence that they are the advocates of all
well-digested and beneficial alterations in the
laws and in the practice relating to the laws.
One main object of ce Credit Pernicious" was
to diminish litigation: coupling that with the
fact that, according to the newspapers, in the
year ending on the 3rd of November, 1833,
no fewer than 88,000 writs were issued out Qf
the three common law courts at Westminster, the
public may judge, from the appendix, with how
little of ill feeling the essay has been received by
the profession. Not a reproach has, to \m
knowledge, been breathed against the author
"for his attempt. Taxed as we are, and with our

PREFACE.

XI

incomes pared down by recent changes, to an
extent not inflicted upon any other class of the
community, we have, without a murmur, aided in
making amendments. If the professors and
practitioners of the law have watched projected
changes, it has been with a view to make them
most beneficial by making them capable of working well. And who so fit to do this as those who
are in the constant habit of witnessing the workings of all legal measures ? Not to speak of new
measures only, who can so well judge of the
errors, the loss of time, the invalidity of legal
instruments, and the other numerous evils, arising from, for instance, the Stamp Acts ? If
some misguided men have made attacks upon
the active promoters of law reform, for inadvertences, if such there be, which are likely enough
to attend all great changes involving a multitude of new cases and of interests, let it not be
supposed that the profession in general approve
of these attacks. No : it is confidently asserted
that the legal practitioners of the present time
have always been ready to afford their assistance,
and have afforded it, to point out where remedies were required, and to provide remedies—
and they are not impossibility-men.
In conclusion, the author, adverting to the
steps that have been taken, by Insolvent Acts,
by raising the amount under which uo arrest

xn

PREFACE.

could take place, and by alterations in the bankrupt laws—and the great stride that is in contemplation, by abolishing imprisonment for debt
—towards the end he points to,—does not flinch
from still maintaining his proposal that, "in a
great variety of cases, simple contract debts, between forty shillings and one hundred pounds,
shall not be recoverable by any suit or process
whatsoever/'

CREDIT

PERNICIOUS.

CONSIDERABLE difficulty attends the introduction
of any plan which may have an important operation in political economy. If perfectly new it is
viewed with jealousy; for until a novel scheme is
put to the test of experiment, though the good it
will produce may be foreseen, yet ill results, of
which it may at the same time be the parent, are
not so readily anticipated. Supposing it to benew,
and simple also, suspicions will arise that it would
have been earlier promulgated, were it not encumbered with some insurmountable difficulty, or
teeming with some inevitable evil, which would
neutralize, or else overbalance, its good effects.
In making the proposition, therefore, that in a
great variety of cases, iC simple contract debts between forty shillings and one hundred pounds shall
not be recoverable by any suit or process whatsoever/' 1 must bespeak patient examination of
the observations that will be made to support it;
and deprecate a hasty condemnation of the plan
on the ground of either its powerful and extensive operation, its novelty, or its simplicity.
B

2
Our great political economists have unaccountably omitted to treat of credit at the
length, and with the minuteness, to which the
subject is surely entitled. It cannot be unimportant to the wealth, nor to the welfare, of a country, whether a considerable portion of its inhabitants, merely consumers, accustom themselves to
pay for what they purchase, at a distant, rather
than at the present, time. Such a practice may
have some effect upon the price of provisions ; it
may give spirit to commerce, or enfeeble it; it
may produce the former effect under some circumstances, and the latter under others ; lastly,
it may tend much to increase the growth of individual prodigality and immorality. The possibility of such consequences one would have
thought not unworthy the consideration of general economists. But the word credit is so
seldom mentioned by any one of them, and when
it is, then so loosely*, that but little useful information on the subject of this particular inquiry, is, I fear, to be derived from their invaluable labours. Some auxiliary arguments, and
those not feeble, may, however, be founded on
their conclusions. There will not be space,
within the limits to which it is intended to con* Dr. Paley, in treating of the general and particular consequences
of the actions of men, says, " The particular consequence of giving
credit, is the loss of the goods sold, or money lent: the general, the
nourishment of extravagance, dissipation, and vices of all kinds/'
Mor. and Polit. Phil. vol. i. p. 77.—And there is very little more on
the subject of credit in the whole work.

3
fine this essay, for the examination of all those
positions of the economists which may be quoted
in favour of the proposition in question. F o r
those who are versed in the science,, or who are
disposed to enter deeply into the present question, it will be unnecessary to make long extracts ; they will refer to the works themselves.
As to those who are not, it is presumed the argument will be convincing upon the face of it.

Credit is that confidence of one individual in
another,, under the influence of which the former
parts with goods, money, or other things of real
or accepted value, upon condition of receiving a
future compensation.
Credit is, under some circumstances, necessary,
under others convenient, and, in the remaining
eases neither necessary nor convenient.
Credit probably originated about the same
time with the division of labour and the accumulation of stock. u In that rude state of society,
in which there is no division of labour, in which
exchanges are seldom made, and in which every
man provides every thing for himself, it is not
necessary that any stock should be accumulated,
or stored up beforehand, in order to carry on the
business of the society. Every man endeavours
to supply by his own industry, his own occasional
B 2

4
wants as they occur—when he is hungry he goes
to the forest to hunt, when his coat is worn out
he clothes himself with the skin of the first large
animal he kills, and when his hut begins to go
to ruin, he repairs it as well as he can with the
trees and turf that are nearest it."* In such a
state credit is unknown. T h e stronger and more
active may sometimes labour for the weak and
sick, or spare to them a portion of their own acquisitions. T h e provident may assist those who
have less foresight, in time of need, when the
rigour of the season renders instant provision,
except from a store, difficult or impossible But
these and similar assistances are rather acts of
charity to be repaid in kind, when opportunity
offers, than advances on credit.
W h e n civilization commences, and men become acquainted with the comforts, as well as
the necessaries, of life, it is found convenient to
divide labour. Individuals devote themselves to
particular occupations; one becomes a smith,
another a carpenter, and so on, as discoveries
and improvements in the mechanical arts proceed. But while the smith is employed in his
avocation he cannot go out to hunt for food, or
clothing: he must therefore be supplied with
those necessaries by some one whose time is not
engaged otherwise than in hunting, T h e latter
affords the supply, upon condition of being re* Wealth of Nations, vol, ii. p. 1.

5
paid with, or out of, the produce of the
labour of the smith, which produce is not
yet complete, and for the completion of which,
the party affording the supply must wait. Here
is an instance of credit, not, indeed, such as we
see it now, but by the way of barter, and in its
rudest and most simple form.
T h e hunter, the smith, and the carpenter will,
however, soon learn to despise the ill-fashioned
huts in which they dwell.
T h e y will build
houses, and furnish them with every convenience
which improvement can point out. T h e labour
of each will become more valuable to h i m ; he
will make it as productive as possible; and in
parting with his produce, he will stipulate to
have a compensation beyond the value of that
produce, for the risk he runs of losing it altogether, by the death, future incapacity, or improbity of the person to whom he entrusts it.
He will also stipulate that the compensation for
the whole shall be paid within a given time, a
time in this stage of society rarely very distant.
T h u s far we have supposed the society to confine its traffic to its own immediate neighbourhood. A superabundance of produce for vtfhich
there is no demand in the neighbourhood, the
result of a favourable soil or situation or some
other fortuitous circumstance, now leads the

6
society to extend its connections.
Goods
are transported to distant parts of the same
country, and a new necessity for credit arises.
Either the seller must give credit to the buyer
from the moment of parting with his goods, till
the receipt of a return for them, or the buyer
must trust the seller with the price until the
goods come into his possession. The seller is
usually considered the party most benefitted, and
therefore it is the custom for that party, and not
the buyer, to afford the credit. Credit thus assumes a more important shape. The transactions into which it enters are increased in magnitude, and itself becomes of longer duration. In^
stead of a small advance to a neighbour, of the
provision for a day or something of as little
value,, to be paid for within a short period, a
man now entrusts to the inhabitant of a distant
district the produce of the labour of a long period perhaps, and of many labourers. He does
this too with the certainty of not being recompensed till the goods have made their slow transit to the consignee; and the money, or the equivalent for money, has made its transit, almost,
or perhaps quite as slow, back to the consignor.
The seller considers the probity and wealth of
the buyer, and the time within which the latter
may conveniently discharge the debt; and binds
him as far as he can, in honour at least, to do so
on a given day. If the buyer require a time of

fj

credit beyond the usual course of dealing, the
seller will learn to sell that extended credit also.,
that isj to make a profit on it.
At last, trade with foreign countries renders it
necessary for merchants to become thoroughly
acquainted with the nature of credit; under what
circumstances it ought to be afforded, at what
price., and for what length of time. It is become
universal and indispensable, and a subject of the
highest importance.
Injudiciously given, credit not unfrequently
brings ruin on him who receives, as well as on
him who confers it. On the other hand, when
well regulated it gives room for an extention
of commerce which would be unattainable
without it.
To keep commerce in a healthy and active state,
the duration of credit should always be as short
as possible. Its protraction increases risk, and,
consequently, anxiety, which renders the minds
of men less able to direct labour with the best
effect. Add to this, the price of all commodities
is increased by it. Whenever credit is sold, as
it almost invariably is, the consumer ultimately
pays the profit upon it. The price most favorable to general labour, of every commodity, is
that which is nearest to the natural price, or a
fair market price. In such a country as ours, a

8
very watchful eye should be kept upon the
operations of credit. There is scarcely an individual, however humble his rank, who does not
occasionally give and receive it. This must have
some political effect, and that effect must be
very general. It should therefore be ascertained
whether it be good or evil.
In the foregoing sketch of the probable rise
and progress of credit, no circumstances arise in
which it does not appear to be necessary, indispensable without the intervention of agents.
And if agents are employed, confidence, though
of a different nature, must be reposed. Credit
is, however, under other circumstances, not absolutely necessary, though highly convenient.
It is not necessary that an apothecary, for
instance, should give credit; he may be paid for
his attendance, as the physician is, on every
visit; and every dose of medicine supplied by
him may be paid for on delivery. But this practice would, it is evident, be somewhat troublesome. 1 know of no mode by which schoolmasters, who take pupils to board, can avoid
giving credit. Their remuneration is, as to the
boarding, like a rent, constantly growing due.
Those of some other professions may, perhaps,
be in the same predicament.
But to come to our immediate subject.

There

9
are cases without number, in which credit is
hourly given, where it is neither necessary, nor
convenient, but most extensively and decidedly
pernicious. If it be doubtful whether in some
of these latter cases it is not convenient, in the
most common acceptation of the word, it may
yet be insisted that the quantity of evil it
produces is by far greater than the quantity of
good.
A large proportion of the population of England consists of salaried clerks, officers employed
by government, and other stipendiaries, annuitants, and proprietors, whose incomes are small,
and either without prospect of increase, or increasing slowly, and by no fixed degrees. Sup*
posing one of these persons to have always in
hand a sufficiency of money to purchase what he
wants from time to time, until the next portion
of his income is due and paid, there can be no
necessity for his taking credit. For the present
we can only presume the possession of this sufficiency; though the general power to possess it
is scarcely doubtful. Such a person would experience no further inconvenience in the practice
of paying ready money, than the trifling one of
putting his hand into his pocket several times
instead of once only. It may be said that credit
would not be convenient to him; that is, that it
would be more beneficial to him, and fitting for
him, to pay ready money than to take credit. I
C

10

cannot imagine any plausible reason why persons of this class should pay at a future time
rather than at the present: whether their expenditure equal their income or not, they make no
use of any small sums they may have by them,
beyond laying them out in commodities to be
consumed by themselves and their families; they
do not put them out to interest; but I can perceive most lamentable evils, and such as daily
arise, springing from this prevalent practice.*
* We must be cautious not to put such persons upon the same
footing with traders or merchants. " The laws of England, cautious
of encouraging prodigality and extravagance, allow the benefit of the
bankrupt statutes to none but actual traders; but as trade cannot be
carried on without mutual credit, the contracting of debts to facilitate
commerce, is not only justifiable, but necessary; and if, by accidental
calamities, a merchant or trader becomes incapable of discharging his
debts, it is his misfortune and not his fault. To the misfortunes,
therefore, of debtors, the law has given a compassionate remedy, but
denied it to their faults; since, at the same time that it provides for
the security of commerce, by enacting that every trader may be declared a bankrupt, for the benefit of his creditors as well as himself, it
has also, to discourage extravagance, declared that no one shall be
capable of being made a bankrupt but a trader; nor capable of receiving the full benefit of the statutes, but an honest trader." Blackstone's Comm. vol. ii. p. 474. " Solon made a law that the Athenians
should no longer seize the body for civil debts. This kw is extremely
good, with respect to the generality of civil affairs; but there is sufficient reason for its not being observed in those of commerce. For as
merchants are obliged to intrust large sums, frequently requiring payment of them within a very short time, and to pay money as well as
receive it, there is a necessity that the debtor should punctually fulfil
his engagement at the time prefixed; and from hence it becomes necessary to lay a constraint on his person. Tn affairs relating to common
civil contracts, the law ought not to permit the seizure of the person;
because the liberty of one citizen is of greater importance to the
public than the ease or prosperity of another. But in convention*

11
At this present moment any individual may live
at a cheaper rate than he could a few years ago.
But, for a long series of years before, the value
of money, or the price of commodities, had been
continually fluctuating; the fluctuations tending
upon the whole to the diminution of the former,
and the enhancement of the latter. We may
fairly presume, from former experience, that
similar fluctuations of the like tendency will
again take place. Now those of the class we
have in view, are not always speculative judges
of the diminution in the value of their incomes
No doubt many of them provide against probable
changes; but however large we can admit the
number of these to be, there are still enough of
the improvident, ignorant, and uncalculating description, to deserve the attention of our legislators.^—A man who retired from business twenty
years ago, with a limited income, would, till
very lately, have found, and will probably again,
ere long, find it impossible to maintain himself,
with the same income, in as much ease as he did
then. The mischief is, such a man does not
perceive that money is only the representative of
what it will procure. He is still worth the same
nominal income as when he retired, though,
comparing what he can now procure for it, with
what it would buy when he first completed it, he
derived from commerce, the law ought to consider the public prosperity
as of greater importance than the liberty of a citizen \ which however
does not hinder the restrictions and limitations that humanity and
good policy demand." Montesquieu Esp. de L. vol. ii. b. 20. c. 14,

c2

IS
is in fact worth considerably less. But if he had
twenty years ago, and ever since, been unable to
obtain credit, he would have had no need of calculating powers. He never could have suffered
his expenditure to exceed his revenue, without
experiencing such deprivations as would, once
for all, have taught him a lesson never to be forgotten. He would have been forced, under the
severest penalties, to measure his expenses by
his income. He would have been compelled
either to return to business for the purpose of
increasing his means with the advance of price,
and cease to be a mere idle consumer, or to gratify his love of indolence at the expense of some
conveniences. But by the facility with which
credit is obtained, he is kept unaware of his
danger. He has agreed with himself to live up
to his income; he soon finds he has exceeded it.
The next year he must retrench enough not only
to pay for the excess of that preceding, but also
to meet a further rise of price. He provides, however, only for the former necessity. It is unaccountable to him how the excess happened ; and
he is made no wiser by experience of the effect,
because he still wants a knowledge of the cause.
If his retrenchment be not fully sufficient, even
for his limited view of the matter, he goes on
from bad to worse, his finances become more
and more embarrassed, he breaks in upon his
capital, gradually consumes it, and finishes in
want. Once more I admit there are many whose

13
habitual circumspection will guard them against
this catastrophe; but the possibility of any becoming its victims should be prevented.
If one who has been for years engaged in
trade, and who has been in the habit of calculating, may be thus deluded, how much do
these need protection who have not that advantage ? The fixed income of the retired tradesman, begins generally when he is advanced in
years, when his family has ceased to increase,
and when, but for the fluctuation of price, he
may foresee the probable demand upon his
means. But clerks in public offices, and others
similarly circumstanced, usually begin their career young, with increasing families, and consequent increasing expenses, and under the additional disadvantage of that want of circumspection
generally met with in youth. They are also too
apt to rely upon some possible advance of salary,
to enable them to make up for the excess of their
expenditure; and consider it more efficient for
that purpose than it proves to be when made.
They proceed more rapidly to a state of distress
than the retired tradesman. If one of them have
prudence enough to confine his own wants within
bounds, sickness, perhaps, or some other unforeseen cause of extra expense, or even the improvident contracting of debts by his family, upon
his responsibility, would disconcert his scheme
and embarrass him.

14
But besides those who are merely improvident
or uncalculating, there are many with small and
fixed incomes who are wilfully blind to the value
of money, and squander what they have upon
superfluities, supplying themselves with necessaries upon credit. It has been a common practice, for several years, to place younger sons in
government offices, which have abounded in
situations where small salaries are given ; salaries
commencing most usually at about eighty pounds
per annum. These young men are generally so
placed almost immediately upon leaving school.
The hours which they are obliged to pass in
business are but few, and they are left with much
vacant time on their hands. They are fortunate
if they are not compelled to associate daily with
others who poison their minds with a relish for
dress, expensive amusements, or sensual pleasures. Very strict economy is necessary to enable a youth to live comfortably, and wear a
respectable appearance upon the salary before
mentioned. A single act of dissipation willsuffice to render his income unequal to his expenditure ; but he can save himself from temporary and salutary want by resorting to credit.
Buoyed up with the prospect of the customary
occasional advance of a ten pounds per annum,
he shuts his eyes to the danger he is in, or drowns
the remorse of the first act of imprudence in a
repetition of it. It is quite unnecessary here to
pursue the consequences of this mad conduct

15
further; they are sufficiently obvious. Nor can it
be doubted that this course has been frequently
run. One would willingly indulge in the belief
that it is not general; but there are few who
cannot bear testimony to individual cases such as
is here described.
I cannot deny myself the pleasure of quoting
an account of the system of domestic economy
adopted by Mr. Peregrine Langton, uncle of
Mr. Bennet Langton, the intimate friend and
companion of Dr. Johnson. After dwelling upon
the evils of unnecessary credit, this account,
shewing what may be done by avoiding it, is particularly refreshing, and nothing can be more apt
to our purpose. Well may it be said, C( Magnum
vectigal parsimonia."
Mr. Langton's income was two hundred and
eighteen pounds a year. His family consisted of
a sister and a niece. The servants were two
maids, and two men in livery. His common way
of living, at his own table, was three or four
dishes; the appurtenances to his table were neat
and handsome; he frequently entertained company at dinner, and then his table was well
served with as many dishes as were usual at the
tables of the other gentlemen in the neighbourhood. His own appearance, as to clothes, was
generally neat and plain. He had always a
post chaise, and kept three horses. The tenth

16
part of his income was set apart for charity. He
had always money by him for extraordinary ex<
penses that might arise. Some money he put
into the funds. He did not practise any extraordinary degree of parsimony, but took care that in
his family there should be plenty without waste.
Mr. Langton was enabled thus to render an income of small amount sufficient for his wants,
and even comforts, by various means. " But the
main particular/' says Mr. Bennet Langton, who
communicated the account to Mr. Boswell, Dr.
Johnson's biographer, " that seems to have enabled him to do so much with his income, was,
that he paid for every thing as soon as he had it,
except, alone, what were current accounts, such
as rent for his house, and servants' wages; and
these he paid at the stated times with the utmost
exactness. He gave notice to the tradesmen of
the neighbouring market towns, that they should
no longer have his custom, if they let any of his
servants have anything without their paying for
it. Thus he put it out of his power to commit
those imprudences to which those are liable, that
defer their payments by using their money some
other way than where it ought to go. And whatever money he had by him, he knew that it was
not demanded elsewhere, but that he might
safely employ it as he pleased "
It is painful to return and pursue the mischievous consequences of unnecessarily taking credit.

17
T h e next evil which presents itself is the multiplication of petty lawsuits. In all cases where
the sum sought to be recovered is small, the expenses of obtaining justice are lamentably large
and disproportionate. In attempting the recovery of a debt of five pounds, the very first step,
namely, the service of the process, costs one of
the parties as much as half of the debt. T h e next
stage of the proceedings carries the costs beyond
the debt, and the debtor has his own costs to pay
also. If the suit runs its full possible course, the
debt does not bear the proportion of one-tenth
to the whole costs. Even supposing the debt to
be one hundred pounds, the sum expended in litigating it, is, at the very lowest, large beyond all
reason and policy.
As to the number of actions now commenced
annually for small sums I have not made inquiry;
but I am able to state some particulars of actions
instituted in Middlesex alone in 1793*, which will
shew that if their number be now less, even by
one-half, than it was at that time, the evil under
our immediate consideration is yet enormous.
. In 1793 the number of bailable writs
(writs on which the parties were to be
arrested) issued in Middlesex was
-

11,105

* In the year 1792, a Committee of the House of Commons re-

D

18
Among these are not, of course,, included the
writs issued for sums under ten pounds, upon
which there could be no arrest; and these unbailable writs as they are called, are computed to
be as numerous as all the bailable writs.
Of the first-mentioned number of
bailable writs, there were issued for
debts under twenty pounds
-

4,965

Of actions that went to execution,
through the most expensive part of the
proceedings at least in all cases, and in
some through all the proceedings, there
were debts under twenty pounds, no
fewer than
-

753

In this number are not included those actions
that were settled on the eve of issuing the execution.
At least half of these 753 executions
were for debts under ten pounds, viz.

376

In the same year were issued bailable
writs for debts of between twenty and
thirty pounds
-

1,878

ported that a woman had beenJmprisoned in one of the county gaols^
forty-five years for a debt of nineteen pounds.

19
And executions for debts within the
same limits
-

389

The number of actions now commenced is
much reduced by the operations of various Insolvent Acts, by experience of their comparative
inadequacy to effect the purpose of their institution,, and by other causes. But yet a very
large sum of money is still annually spent upon
actions for the recovery of debts under one
hundred pounds, the only part of which that can
in general, even plausibly, be said to be well
spent, is that which is applied to the increase of
the revenue. The rest assists in the maintenance
of the lowest members of the profession of the
law; and of gaolers, bailiffs, brokers, and others,
whose occupations are of such a nature, that we
shall hardly feel disposed to retain an evil like
this, for their benefit. Indeed the opposition
which was manifested by many attorneys to a
recent project for establishing cheap courts for
the recovery of debts not exceeding fifteen
pounds, would almost have warranted a suspicion that they mainly depended for their livelihood, upon actions for sums as small.*
* Mr. Montague relates a ludicrous instance of anxiety in an attorney,
on a great diminution in the number of actions. " In November last,
upon my return to London, I was informed by a very respectable attorney, that the Insolvent Debtor's Bill would be productive of incalculable evil. The riots by which this country was disgraced, and the
prisons opened, in the year 1780, could not have produced a more

»2

20
T h e mischievous consequences of this extensive and unnecessary litigation,, are too obvious
to require tracing out. T h e misery actions frequently heap upon the already miserable debtor,
or perhaps upon the equally miserable creditor,
or even, in many cases, upon both, surely demands prevention, if possible.
There is one bad concomitant of unnecessary
credit, which I cannot refrain from noticing here.
I mean the giving of bills of exchange by little
dealers and professional men. Persons of these
classes ought really to have nothing to do with
bills of exchange.
Bills have effect by the
custom of merchants; and, without resorting to
any learned research, I mean to say that by the
word c merchant/ was originally intended a character very different from either of those I speak
of. W e should not, even now in common parlance, describe a retail linen-draper or hosier, or
a shoe-maker, still less a surveyor, an apothecary,
or a solicitor, as a merchant. Among merchants,
properly so called, a bill of exchange constitutes
a contract to be inviolably observed. T h e real
merchant, therefore, keeps a regular account of
all his engagements of this description. His
earnest communication. Upon expressing my anxiety to know the
cause of his alarm, he assured me that since the bill had been passed,
there had not been so many writs issued by 6000, as had been issued
in the same period of time in the preceding" -year."—Inquiries respecting the Insolvent Debtor's Bill, 1816.

21
credit, that is, his existence as a merchant,, depends upon the scrupulous observance of them.
But the retailer and the professional man, is
frequently embarrassed by such dealings. He
does not keep a clear account of the times at
which the bills respectively become due; or he
does not feel that his character in business stands
upon them. They pass through several hands;
an action, in case of dishonour, may be brought
against every indorsee and the acceptor may be
made, if he be able, to pay the costs of every
action. There might at this moment be pointed
out, an attorney who has arrived at great affluence, by collecting bills of this description, and
bringing actions upon them. Many to whom
he is known are in the practice of handing over
to him doubtful bills, and bills passed to them
by persons with whom they are immediately connected, and whom they do not like personally
to sue; and, taking the amount of the bill from
him, without becoming personally responsible
for either that or the costs, they leave him to exercise his detestable practice : thus surrendering
their consciences into the hands of a man whom
honest society rejects.* If an instance were to be
cited of a bill drawn by a green-grocer upon a
baker, and indorsed by two or three of the lowest
description of working tradesmen, and that as
many actions as the bill bore names were
* Since the publication of the first edition, in 1823, the individual
here alluded to, is dead.

22
brought upon it; the possibility of such an
occurrence would hardly be credited. And yet
cases as gross as this are possible,, nay more,
have existed.
If bills of exchange in general among these
persons are bad, accommodation bills in particular
are infinitely worse. They are the surest indications of ruin possible, in those who interchange
them. Even among large dealers they are symptoms to be dreaded; but among the class we are
speaking of, they are ruinous to absolute certainty, unless some fortuitous circumstance
arises to defeat the tendency. Accommodation
bills are so well understood, and so common,
that it is wonderful some legislative measure has
not long since been levelled at them.
By the practice of giving credit where it is not
expedient, the prices of the necessaries of life
are raised*, and kept higher than they ought
to be.
Credit is sold, and a profit is made of it. The
first importer, or producer, of the raw material
* Puffendorff, in detailing the causes by which common price is
raised or depressed, mentions credit as productive of the former effect.
" Maxime autem potest et solet imputari illud lucrum cessans, aut
crescens, quod ex pretii solutione dilata aut anticipata nascitur, Nam
sane et dies est pars pretii, et plus est statiin aliquid dare, quam post
intervallum ; quippe cum interim ex isto pretio aliud lucrum possit
comparand—De Jure Nat, et Gent* lib. 5, cap. 1, sec. 10.

23
charges a profit upon the credit he gives to the
manufacturer, for which the consumer must ultimately pay. It may and commonly does happen
that an article, before it is fit for its final market,
either wholly or partially passes through many
stages of improvement, and at each stage acquires
an additional price from credit, and the profit
upon credit. This is beyond all doubt highly
disadvantageous to the consumer. It is true that
I may now be thought to trespass upon necessary credit, credit for large sums, without which
this country would never have attained the commercial importance which it possesses. But I
have no such intention. Within the limits 1
propose for ready money transactions only, credit given without necessity, certainly operates
prejudicially in the manner I have described.
It is well known that tradesmen commonly
make an undue profit upon the credit they give
to the ultimate consumer also; in plain terms,
that they put an extravagant price on the goods
upon which to some they give a long day of
payment, while they do not proportionably diminish it to others who are more prompt. T o
put a familiar case. A. pays his tailor ready
money, and for this the tailor allows him five
per cent. But the tailor gives credit upon the
average to the extent, in point of time,, of something between a year and a half and two years :
he makes, besides, bad debts; yet, after all, his

24
profits are., upon the whole,, large. He takes a
long credit from his draper, who also takes a
profit upon that. His profit upon what he sells
to A.,, besides the allowance of five per cent, discount for ready money,, is rather more than
twenty per cent. So that the ready money customer contributes to pay the draper's profit upon
credit, that of the tailor, and the bad debts of the
latter. The facility which the preterice of being
obliged to give long credit, affords to the imposition of unfair prices, is indeed generally known
and felt.
Dr. Johnson says, <e He that once owes more
than he can pay, is often obliged to bribe his
creditor to patience by increasing his debt.
Worse and worse commodities at a higher and
higher price are forced upon him; he is impoverished by compulsive traffic; and at last overwhelmed in the common receptacles of misery
by debts, which, without his own consent, were
accumulated on his head." Whether imprisonment does or does not commonly result from
getting into a tradesman's books, certain it is that
the indebted customer, being by no means independent of his tradesman, is frequently, without
any visible coercion, compelled to take more
goods than he really wants, or goods of a worse
quality*, or at a higher price, than if he could
* One who is not a bad judge of marketing1, for eatables at least,

85
previously pay his bill. The consumer who pays
ready money,, sometimes feels the ill consequences of improper credit in the badness of the
article with which he is supplied by the manufacturer,, who takes the raw material upon credit,
and is forced to put up with such bad stuff as the
wholesale dealer chooses to thrust upon him.
The article of beer completely elucidates what
is here advanced. Its high price and generally
bad quality, in the metropolis, are undeniable;
and the cause of the mischief is equally acknowledged. Very large fortunes have been made in
the brewing trade, by a regular system of forcing
credit upon the retailer; and indeed are still,
notwithstanding the efforts that have been made
to check the abuse. It is said also that some
retail tradesmen, at the west end of the town,
will not sell for ready money.
Adam Smith tells us (Wealth of Nations, i.
67), that in every society, the price of every
commodity resolves into some one or other, or
all, of three parts, namely, rent, wages, and
profit: and, in every improved society, all the
three enter, more or less, as component parts,
into the price of the far greater part of commodities : and the economist illustrates this position with so much perspicuity, as to leave upon
the mind conviction that it is correct. Now, of
says, " The best rule for marketing is to pay ready money for every
thing."—Apic'ius Redivivus, Preface, 41.

E

26
commodities sold upon credit, that part of the
price which is made by credit, comes under the
head, or denomination, or division, of rent. There
is, in fact, a rent put upon the ready money price
of the commodity sold upon credit, for the space
of time intervening between the sale and the
payment of that price: and this rent is paid at
the same moment with that price. This rent
ought to be proportioned to the time for which
the credit is given, and, if the time of payment
be punctually observed by the buyer, the rent
may be calculated accurately. But owing to
the prevailing practice of leaving the time of
payment, in retail dealings, unfixed or unattended to, the rent becomes uncertain in its
measure ; and of this uncertainty the seller takes
an unfair advantage. Sometimes, upon book
debts for retail commodities, where the time of
payment is eventually unusually protracted, the
rent is increased by a direct charge of interest.
Between wholesale dealers and the retailers, the
rent is frequently charged in advance, but redeemable in part by early payment of the price,
a reduction being then made under the name of
discount. In an essay intended to be popular,
and the limits of which will not admit of a
lengthened examination of the constituent parts
of price, I feel reluctant to go further into the
analysis; but thus much will be easily understood, viz. that price is greatly enhanced by rent,
or interest, or, in another word, by credit. The

27
rent is generally at a rate far exceeding the legal
interest of money, that is, five per cent, per annum. The retailer, with due caution, seldom
loses by paying it, because he can employ the
money he would otherwise pay to the wholesale
dealer, to greater advantage, than he would derive from so paying it. But to those who make
no profitable use of their money, it is evident
an advantage would be gained by payment simultaneous with purchase, because they would,
or ought, to save in price all the rent. And
even if, to pay ready money for their purchases,
they were forced to borrow it at legal interest,
they would gain, upon every purchase, the difference between five per cent, and that part of
the price consisting of rent. Much might be
quoted from the economists in support of this
line of argument, but it is altogether unnecessary.
By these various means in which, taken together, credit affects the prices of necessary provisions, the poor man and the punctual man are
made to suffer for the folly, weakness, or imprudence of those who are richer or less punctual : and the sellers are enabled, not by fair
trading, but by a system very unconscientious
though quite common, to accumulate fortunes
which a healthy state of trade really would not
admit of.
E2

28
By raising the price of provisions, credit increases the price of labour, which circumstance
is highly unfavourable to us in our trading with
our own manufactures^ and with foreign countries. The lower that part of the price which is
created by labour, the cheaper we can afford to
sell our manufactures to our neighbours. And
not only is this an immediate advantage to u§ in
enabling foreigners to consume more of our manufactured produce than they otherwise would;
but they are less likely also to attempt to manufacture for themselves
It has now been fairly proved that the practice
of giving credit for sums between forty shillings
and one hundred pounds, is fraught with evil.
" We have now learned that rashness and imprudence will not be deterred from taking credit;
let \m try whether fraud and avarice may be more
easily restrained from giving it/'* " T h e end
of all civil regulations is to secure private happiness from private malignity; to keep individuals
from the power of one another/'f The proposition with which we set out ce that, in a great
variety of cases, simple contract debts between
forty shillings and one hundred pounds, shall not
be recoverable by any suit or process whatsoever/'
offers an expedient easily to restrain fraud and
avarice from giving credit within those limits (and
out of those limits credit will do little harm)
* Johnson.

f

Id.

29
and to keep (in this respect) individuals from the
power of one another.
Restrictions should certainly not be laid upon
trade without the greatest caution. " Perhaps/'
says Dr. Paley*, ee the only way in which the interposition of law is salutary in trade is in the
prevention of frauds.3' That is one of the main
objects of our project, and that will be one of its
surest effects if it is acted upon. cc Civil liberty/'
says the same economistf, cc is the not being restrained by any law, but what conduces in a
greater degree to the public welfare." We are
not without a precedent for an interposition of
law in restraint of trade, in a manner something
resembling that now proposed. The stat. 24
Geo. 2. c. 40. s. 12. enacts, " that no person, or
persons, whatsoever, shall be intitled unto, or
maintain, any cause, action, or suit, for, or recover, either in law or equity, any sum or sums of
money, debt or demand whatsoever, for, or on
account of, any spiritous liquors, unless such
debts shall have really been, and bona fide, contracted at one time, to the amount of twenty
shillings or upwards; nor shall any particular article or item in any account or demand for distilled spirituous liquor, be allowed or maintained,
where the liquors delivered at one time and mentioned in such article, or item, shall not amount
* MOT. and Polit. Phil. vol. ii. p. 402.
f Ibid* vol. ii. p. 164.

30

to the full value of twenty shillings, at the least,
and that without fraud or covin ; and where no
part of the liquors so sold or delivered shall have
been returned, or agreed to be returned, directly
or indirectly." I quote the act thus fully because it affords, in some measure, a guide in
framing an act for our present purpose. It goes
on to say that if any retailer of spirituous liquors, with or without a licence, shall receive a
pledge he shall forfeit forty shillings, and the
owner may recover back the pledge, or the value
of it, as if it had never been pledged. The object of the act appears from the preamble, which
recites that ec the immoderate drinking of spirituous liquors by persons of the meanest and lowest sort, had of late years increased to the great
detriment of the health and morals of the common
people."
The statute of limitations, that rendering invalid processes against ambassadors and their
suites, and many others that could be mentioned,
are restraints upon trade.
The laws have likewise particularly protected
infants, married women, and some others, against
improper credit.
So that our proposal should not be rejected
merely as operating to restrain the natural right
of every man to part with his property on credit

31
if he pleases, even for want of precedent And if
there were no precedent, there are abundance of
sound opinions that the rights of every man individually are secondary to the weal of the community in general. The facility of obtaining
credit is as injurious to many people as the facility of obtaining spirituous liquors is to others.
Again there are many so rash and improvident
that they require restraint, in this respect, as much
as infants, or madmen, or natural fools. And,
surely, it is better, in the first instance, to prevent,
than merely to follow the disease, when it has
taken hold, with palliatives in the shape of insolvent acts, acts of grace, acts restraining arrests,
and acts mitigating the severity of the terms on
which traders may avail themselves of the benefits of the bankrupt laws. And, after all, these
measures are merely so many approaches, though
very distant, to the destruction of credit in cases
where it ought never to exist.
The next point for consideration is, whether
there is any well founded objection to the
measure.
The first difficulty that will naturally suggest
itself is, that, supposing a law were now suddenly promulgated, making all sums, between
forty shillings and one hundred pounds, not recoverable, those who receive their incomes at stated
periods only, and are without ready money suffi-

32
cient to provide them necessaries till the time of
their next receipts coming round, would be
unable to live unless they were supported by the
bounty of others. If it were necessary to pass
such an act suddenly, this might constitute an insurmountable difficulty. But it is not, and, in
the first place, the act ought not to be made operative until a period sufficiently distant from its
passing, to give ample time to each individual on
whom it would operate, for saving and accumulating ready money enough to protect him from
being inconvenienced by it. And, secondly, its
operation should not at once be to the full extent
proposed. Taking forty shillings as the lower
limit, the higher should grow gradually from,
perhaps, five pounds, up to the one hundred
pounds. T h e most careless and indiscriminating man would thus be led by easy degrees to
the necessity of watching his expenditure, and
would accustom himself to keep by him sufficient
ready money for procuring such articles as he
could not dispense with, and the law would prevent his procuring on credit. These would at
first be few: and they would increase in number
so imperceptibly, that the transition from a credit
system to a ready money system would scarcely
produce any inconvenience or confusion ; though
its effects on the moral character of the community would, as I think, be incalculably beneficial.
It will perhaps be objected that, at all events,

33
some individual cases of inconvenience would
arise from the adoption of this plan. But, without stopping to hear them detailed, it must be
borne in mind that it is only upon debts of that
class which are called simple contract debts, that
the proposition bears. Therefore, no tradesman,
where but a small capital is necessary, is altogether precluded from borrowing. He may
borrow upon bond or other security under seal;
and the expense, and even the solemnity, of the
security will prevent his incurring debt hastily,
and without the probable means of paying. Besides, if he can command credit for more than
one hundred pounds, he may borrow without
any expense; and the amount of the sum will
render the lender circumspect in advancing his
money. The borrower will also be carrying
on a ready money trade, and therefore not be
liable to suffer by bad debts. So that, in every
point of view, the probability of repayment will
be far greater than it is under the present system.
Indeed, there would be much greater safety in
lending to persons even out of trade, sums
for necessary occasions, such as for advancing
children, and for other family emergencies, than
there is at present. There would be in general
a more intimate acquaintance with the value of
money, fewer examples of extravagance and dissipation, less of that want of determination to be
punctual bordering closely upon dishonesty, less
disposition to borrow upon trivial, or any other
P

34
than laudable and pressing, occasions, than now
exist.
There are certain classes of debts which it
might be necessary to except from the operation
of the measure. Take for instances the cases of
masters of vessels sailing to foreign countries,
and carrying out with them small investments on
their own account; and of certain debts con*
tracted in the coal trade, other than those contracted by consumers. Credit in these cases is
highly useful, though not absolutely necessary;
but as the pre-eminence of this country, as a
commercial nation, has been attained, and is preserved through credit of this description, care
must be taken not to injure the credit usefully
entering into real trade. The object of these
pages is to arrest that spurious credit that infects transactions which cannot properly be
called trading transactions, and, which spurious
credit adds nothing to the prosperity of the
country, and the destruction of which would take
nothing from it.
It may be inquired what provision is to be
made for such debts as it would be extremely
inconvenient to pay as they grow due; such as
those contracted with apothecaries, attorneys,
schoolmasters, and others similarly circumstanced ? To this it is answered, that though it
may be difficult for a single individual to propose

35
Satisfactory arrangements to meet the cases of
all professions, yet a few men of judgment, possessed of sound practical knowledge, would be
able to provide for each class of cases as it came
under consideration. It would, however,, be
highly desirable that the ready money system
should be adhered to, wherever circumstances
would admit of it without an unreasonable
degree of inconvenience. Wherever it could
not, without so much inconvenience, be pursued,
it should be approached as nearly as possible.
If it should be found that the apothecary's
charges (for instance) could not be paid from day
to day, they should be made not recoverable,
unless, after amounting to a certain sum, they
were sued for within a certain short space of
time. The great point is so to change the present
system, as that the contracting of a debt and the
discharge of it, shall form one idea; that it shall
become habitual to consider a debt contracted,
and a debt paid, as one and the same thing.
At present there are too many chances of something happening, which may ultimately cancel
the debt, either wholly or in part, without payment. Death, failure, fire, want of means to
procure justice, the statute of limitations, will, I
fear, pass in idea between contracting and paying.
Indeed, some have been almost proverbial among
tradesmen for not paying until compelled; which
proves at once the propensity in buyers to look
F 2

36
at payment as doubtful, and the practice of
sellers to convert credit into a source of undue
profit.* The skill and judgment of apothecaries
and schoolmasters are among the things most
necessary to heads of families,, and at the same
time the charges for them bear most heavily
upon those of moderate and limited incomes.
If, therefore, these cannot be put upon the same
footing with other simple contract debts, any
inconveniences, arising from the first operation
of the proposed measure, would be diminished
by their being made payable punctually only by
the quarter or half-year. Rent and interest
should be made payable with punctuality; that
is to say, if not paid when due, and no steps
taken within a given short time to enforce payment by course of law, they should not be
recoverable. In short, this beneficial system
should be insisted upon fully, wherever practi* " Those who have made the laws* have apparently supposed that
every deficiency of payment is the crime of the debtor. But the truth
is, that the creditor always shares the act, and often more than shares
the guilt, of improper trust. It seldom happens that any man imprisons another but for debts which he suffered to be contracted in hope
of advantage to himself, and for bargains in which he proportioned his
profit to his own opinion of the hazard; and there is no reason why
one should punish the other for a contract in which both concurred,"
—Johnson.
" There are two capital faults in our laws with relation to civil debts.
One is, that every man is presumed solvent. A presumption, in
innumerable cases, directly against truth "-—Burke's Address to the
Electors of Bristol, in 1780.

87
cable; and where not fully practicable, it should
be imitated with the utmost possible closeness.
If it be objected that buyers and sellers would
use their utmost endeavours to evade the act
proposed, of course the only answer that can be
given to the objection is, that the greatest
ingenuity must be exerted, so plainly and fully
to word clauses as that they shall meet every
possible case. The debts coming within the
intent and meaning of the act should be absolutely annihilated. They should not be capable
of revival, as such debts are now, after the lapse
of six years, or after bankruptcy, by a fresh
promise; but should be treated as if they never
had existed. Nay, even if paid, the amount
should be, within any reasonable time, recoverable back by the party paying. Nor should
any room for evasion, by breaking the debt into
several items each under forty shillings, or
throwing together several to make one amount
of more than one hundred pounds, or by means
of any deposit or pledge, be left. And as half
measures are ever futile, and often dangerous
it might not be too much to inflict penalties
upon buyers and sellers on credit against the
meaning of the act.* I would by no means
leave it safe to suffer such debts to exist even
* Peter the First, of Portugal, to prevent extravagance and the ruin
of families, is said to have forbidden that credit should be given; and
to have punished the second violation of his law with death.

38
as debts
nothing,
mode of
render it

of honour. If the measure be good,
within the wholesome spirit of our
legislation, should be neglected to
effectual.

One objection would certainly be, that by diminishing the number of actions at law, the revenue would suffer in the article of stamps. To
overthrow this objection we can only appeal to
the opinions of all authors on political economy,
who have any weight. The balance of the good
and evil resulting from any piece of legislation,
must be alone attended to.* If this rule be observed, the objection will fall to the ground.
Besides, it must be borne in mind that many
such debts as are now usually only simple contract debts, would be made specialty debts, on
which stamp duties to a greater amount than
they now yield would be payable. And, moreover,
individuals by being forced to regulate their
expenditure, and to become rationally frugal,
would bear a much greater degree of taxation
than they can now sustain.
This objection, the diminution of the stamp revenue, was raised to Lord Redesdale's late bill
for the institution of cheap courts for the recovery of debts under fifteen pounds. But it came
from a quarter in which existed a strong motive
* " The final view of all politics is to produce the greatest quantity
of happiness in a given tract of country."—Pahij.

39
of interest to oppose the bill. And if it had been
disinterested,, it certainly was not well-founded,
Lotteries continue to be made a source of revenue ; but it is difficult to conceive that evil
can., upon the whole, be productive of good sufficient to outweigh it. Surely the portion of revenue derived from these pernicious sources
might be advantageously raised by more wholesome means. At all events, before the objection
in question be suffered to prevail, it ought to be
shewn, by undeniable calculation, that the revenue accruing from actions for small sums is of
vitally important amount, and cannot be fairly
sought elsewhere,
I am not aware that any other objection, of
even a plausible nature, can be urged against the
proposed measure.
All that has been written against imprisonment for debt is entirely in favour of the present
argument. All the Insolvent Acts, and acts in
mitigation of the bankrupt laws, tend the same
way. But why content ourselves with lopping
the branches, while the parent stem, the very
root may be destroyed ?
There need exist no apprehension that this
plan would prejudicially affect the great stream
of mercantile credit, upon which the importance
of England as a nation mainly rests. On the

40
contrary, that stream would run with a more
clear and even current, if not disturbed by the
polluted spring which custom has permitted to
mix with it.
As to retail tradesmen, those who are not desirous to make an undue profit by violent risks
would rejoice that all should be put upon a fair
level, by being compelled to deal for ready
money. Then would industry, integrity, and
judgment, secure to the tradesman a fair remuneration for his labour; and be no longer superseded by scheming, speculation, and chance.
Why is it that we now sometimes see an immoral
and idle tradesman realizing money enough to
enable him to revel in luxuries to an extent that
would not have been believed a century ago;
while his industrious, sober, and steady neighbour can hardly supply the absolute wants of his
family ? It is that this pernicious custom of employing credit where it is unnecessary, renders
honesty, justice, and prudence, impediments
rather than advantages.
Upon the whole, then, it has been shewn that
credit for sums between forty shillings and one
hundred pounds is in general mischievous; that
it is productive of vice, want, and misery; and
that it may easily be rendered innoxious, by
a measure to which no well-founded objection
exists.
THE END.

APPENDIX,

EXTRACT FROM " THE TIMES" OF MAY 9, 1823.
P E T I T I O N S for a repeal of the Insolvent Act, and some
for a new act on different principles, being every day
submitted to both houses of parliament, it would be desirable that the subject should receive a deeper consideration than has yet been bestowed upon it, and from a class
of minds better qualified for the office than those to whom
it has hitherto been almost exclusively intrusted. The
great body of creditors are provoked at the facility with
which insolvents procure their discharges under the ex«
isting law. Whereas the public, we conceive, have some
ground for murmuring at the circumstances under which
debtors are every day thrown into prison. These debtors
exercise no coercion upon a man in trade, to constitute
themselves his debtors. If there be eagerness—if there be
importunity, it is more on the side of those who seek to
sell their goods, than of those who take them on credit.
The legislature, however, going to the root of things,
ought not to put down the practice of giving credit (were it
possible), but to check its tendency to the increase of improvidence on one side, and of insecurity on the other; and
this two-fold object might, as it seems, be provided for
without any extravagant or revolting innovations on the
present system of our laws. We have seen a sensible
pamphlet on the question, with the short title of " Credit
Pernicious."
For the evil complained of, the author
seems disposed to provide one remedy in which we cer-

G

42
tainly do not concur with him, to wit—that, except in
certain cases, no simple contract, from 40s. to 100/. shall,
after a given period, be recoverable by law. His next
remedy we like better; it is this—that debts which it
would be a general inconvenience to pay from day to
day, such as to attornies, apothecaries, schoolmasters,
rent, interest, &c. & c , shall not be recoverable except
when sued for within a short and definite period; in other
words, a further enforcement of the principle on which the
statute of limitations has been founded. He gives other
details into which we cannot enter. But undoubtedly, to
produce a complete redress of the evils connected with
the insolvent acts, it is indispensable to go to the origin of
them, and to cut away whatever is exuberant in the
system out of which they grow—namely, that of dealing
on credit.

EXTRACT FROM " THE SPECTATOR" OF APRIL 3,1830.
CREDIT.
W E despise the cant of those who, when the people
call for the reform of a public abuse, will tell them
to begin by reforming abuses that are private. It is a
poor satisfaction to him who suffers under the consequences of government profligacy, to be told that, while
the tax-gatherer is picking the one pocket, the swindler is
picking the other. We are of opinion that the honest
man should, as far as possible, be protected against both.
But it does not result from this undeniable truth, that we
must permit private wrong to remain unredressed, because there may be public wrongs which we cannot redress. We, therefore, owe no apology for pointing the attention of our readers to a system which works, we really

43
believe, more mischief in the course of the year, than
the chancellor of the exchequer and all his employes—we
mean the credit system. In laying down the principles of
the cc Cheap Clubs," we dwelt at considerable length on
the great injury which credit inflicts on the ready money
customer, and we shall not recur to this part of the subject.
What we wish at present to notice is, the injury it inflicts on the tradesman, and on the persons who take, as
it is termed, advantage of it.
The ordinary credit (it is retail credit of which we
speak) in times of sound business, used to be twelve
months. The shopkeeper's bills were paid when rendered. There might be a few that were more dilatory
than their neighbours, but those were marked persons.
Now, what was once the rule has been converted into the
exception—the number of punctual payers is yearly diminishing, and the number of the dilatory increasing.
Two or three years' credit was formerly regarded as extraordinary; at present the two or three years are frequently lengthened into five or six ; and even the prescriptive number of six is lengthened out by evasions of
the law, and debts figure in the books of London tradesmen which are nominally of three or four years standing,
but really of eight or nine. In all descriptions of business the same plan goes on. What will be thought of the
economy of that household where the hatter's bill amounts
to two, three, or even five hundred pounds ? What
must have been the extravagance of the original charge,
and the period of the accumulation, when so trifling an
article of dress has swelled to such an amount ? What
must be the butcher's, the baker's, the tailor's bill ? So
inveterate has the system of credit become—so utterly impossible does the tradesman find it to get from the hands
of his debtor the amount of his legal claims—so certain
G 2

44
is he to lose caste by any attempt at realizing them through
the medium of a court of justice—that expedients have
been adopted for that purpose, which at the first mention
of them, appear incredible. We have beard of a man
worth forty or fifty thousand pounds failing for the half of
these sums, in order that, by the means of a friendly assignee, he might compel a settlement under the bankrupt
laws with the honourables and right honourables who
figured in his books, and might start anew in the same
pernicious course, after thus fitting himself by the recovery of his property for a competition with his wealthier
rivals.
The first evil of this system is the carelessness that it
generates in the public. Your cold and cautious people,
whatever be the length of the credit given them, will
take care from time to time to strike a balance between
their debts and their means; but the great mass of mankind, though they may have a dim and hazy recollection
of a multitude of items, will seldom hazard even a conjecture respecting their aggregate amount, till it stares them
in the face in appalling and ruinous magnitude. The
second evil is the enormous augmentation of price that
it occasions. From the fluctuating nature of property, and
the many accidents that affect it, the risk of recovering a
debt increases in a much higher ratio than the mere
number of years for which credit is given. If the risk
of one year's credit be put down as 1, that of two years
will be g, of three years 4, of four years 8. The tradesman, however, is not minutely particular in his calculations ; he adds fifty or sixty per cent, to the one year as
well as to the four years,—prudently judging that, if the
general balance be right, it matters little to him where
the excess of the burden lies. Our country gentlemen are
perpetually complaining of their difficulties-—that they

45
pay as much as ever for all they purchase, and receive
much less for what they sell. It is to the credit system they
owe the continuance of the prices which they deprecate.
So long as they continue to foster it by their practice, so
long must they remain the thralls of men who are quite
aware of their own power, and their customers' weakness, and ever on the alert to employ both to their own advantage. Such, then, are the evils the system inflicts on
the public; it mightily augments the amount of a debt,
and it holds out an almost irresistible temptation to
incur it.
To the shopkeeper of moderate capital it is still more
injurious. It is indeed not saying too much to affirm,
that it will soon drive all such out of the market, or convert them into ready money traders. This last consequence we do not much regret; but, in the nature of
things, ready money traders must always be limited to a
certain class of buyers. It is impossible for many families to avoid getting into a tradesman's books. How is
the smaller dealer to manage with such customers ? He
can neither give them goods at the same price as his cash
neighbour, nor for the same indefinite time as his credit
neighbour : his risk does not admit of the one, nor do his
profits and capital admit of the other. Now this class of
dealers is precisely that in whose preservation the public
is most deeply interested. A large capital in the hands
of a wholesale dealer, and in the hands of a retail
dealer, operates in a very different way. In the former
case it is expended in accelerating and augmenting
the production of raw material, in the invention of machinery, the discovery of improved processes of manufacture,—-all its tendencies, in a word, go to increase
supply, and by consequence, to lower prices. In the
latter case, it invariably augments prices; for, let the

46
competition of wealthy retailers be ever so great, no competition can lessen the risk to which each subjects himself
by extending his credit; every additional hour pro tanto
adds to it, and it would be most irrational to suppose that
any man would hazard a handsome fortune (without a
corresponding premium) merely to catch up a few of the
stray customers of a rival in business. But, in reality, no
system tends more directly to discourage competition,—
not only because it wonderfully narrows the number of
competitors, but by the shackles which it imposes on
buyers. The greater number of our gentry are so involved with their tradesmen, that they dare not quit
them. Sir John is the servant of his butcher, my Lord of
his tailor; and senators who can boldly beard Mr. PEEL>
or the conqueror of NAPOLEON, quail at the aspect of a
STULTZ or a GIBLET.

We fear that a perfect remedy is not to be easily found
for these evils. Cupidity may be restrained, but folly is
incurable. You may bray a country gentleman in a
mortar with his own wheat, and he will come out a country gentleman still. Something, however, in the way of
palliation, may be attempted. In the first place, we
would have the period of prescription shortened one half.
He who cannot pay his debts in three years, will hardly
pay them in six ; and it is the smallest possible hardship
to compel the tradesman to take steps for their recovery
within such a time as shall afford reasonable hopes of it.
To the greater number we know that nothing would be
more acceptable than a fair and legitimate excuse for
doing so,—such an excuse as would not expose them to
the resentment of some swindling man of quality, whose
custom they may despise, but against whose influence
they find it difficult to guard. In the next place, we
would allow interest on book debts, in the same way as

47
upon bills of exchange. We have the example of Scotland, where the recovery of debts is so much shorter and
simpler than among ourselves, for both of these alterations
in the existing law. In Scotland, not only is there a
three years' prescription, but interest is chargeable on all
debts from the day on which the customary credit terminates. The plan we propose, then, would be to allow
from New-year's-day to Lady-day for payment or challenge of every account given in previous to the former,
and to allow interest from Lady-day. We add, or clwllenge^ because at present the tradesman is exposed to
great and most uncalled-for trouble in proving his debt;
and this trouble is tremendously augmented when five
or six years have elapsed from the delivery of the
articles.
It may be supposed that these regulations would make
against the public; but in reality they would make for
it, and in no small degree. The permission by statute to
charge interest, would put an end to much, if not all, of
that indefinite augmentation of price by which the tradesman now contrives to levy it without statute. The shortening of the prescription would diminish risk and the
charges of risk, and increase prudence and vigilance both
in the trader and customer; it would bring into the field,
or continue there, numerous small capitalists, who are
prevented from entering it, or whp must soon leave i t ;
and, lastly, the facility of proving debts would make suits
more rare, and abridge their length and expense when
they occurred.
EXTRACT FROM "THE SPECTATOR" OF APRIL 10, 1830.
RETAIL CREDIT.
W E are glad to find that our observations on credit

48
have excited considerable attention: we have received
more than one communication on the subject, and we are
not displeased that they afford an apology for recurring
again to a subject which is much misunderstood, and which
in practice inflicts much evil on the great mass of the
public, without a corresponding advantage to any part of
i t We find that we are by no means the first who have
endeavoured to expose its workings, or to suggest a remedy. Since the publication of our last number, a wellwritten pamphlet on the subject has been put into our
hands, dated so far back as 1823. So strongly convinced
was the very respectable writer, even then, of the evils of
the credit system, that he proposed to put an end by
statute to all credit under one hundred pounds—or, what
was tantamount, to take away the power of suing for any
less sum. Something approaching to this is provided in
the bill at present before Parliament, in which summary
arrest for debts below one hundred pounds is abolished,
unless where a special case is made out before one of the
judges. But we rather fear, if the disease was too far
advanced in 1823, for so violent a remedy as the pamphlet
proposes, it is absolutely hopeless to look for its adoption
in 1830, when all the symptoms have been so greatly
aggravated, that the most delicate alterative treatment is
required.

EXTRACT FROM "THE TIMES" OF OCTOBER 26, 1833.
I N connexion with the report on Commerce and Manufactures, and with the discussions which will naturally
arise out of it, we think that the public attention might be
advantageously directed to a little pamphlet which was
published about ten years ago, with the startling title of
"Credit Pernicious.' 9
It reflects some praise upon the

49
sagacity of the author, that he wrote two years before the
wild schemes and ruinous calamities of 1825 could be adduced as proofs or illustrations of the general principle
which it was his object to enforce, namely, that credit to©
easily and loosely given, or yielded for too long a time, is
one of the worst evils which can afflict the community.
The difference between England and most parts of the
continent is in this respect most striking, the rule abroad
being ready money for every thing—at home every thing
on credit. That exceptions may be found to both these
rules is true; some individual foreigners may run in debt
for articles of daily consumption, and some, though far,
we fear, from the majority of Englishmen, may deal for
money only; but none can blind themselves to the
prominent fact, that the habit, derived from commercial
transactions, of bargaining to-day, and paying this time
twelvemonth, or at a period more distant still, has pervaded and diseased the whole system of our domestic economy, rendering us in all the details of private life; a nation of unblushing debtors.
The author of the pamphlet takes up for the theme of
his animadversions both branches of this mischievous
abuse ; but with whatever cordiality we may agree with
him in deploring its effects, our concurrence by no means
reaches to his remedy, which, without the least allowance
for those occasions on which a resort to credit even for
petty sums might be safe for the lender, and for the bor*
rower indispensable, would ingraft a monstrous innovation
upon the law of England, and strike a severe blow at personal free agency, by proposing that, in a great variety of
cases, " simple contract debts between 40s. and 100/. shall
not be recoverable by any suit or process whatsoever."
We shall leave such a notable piece of legislation to be dis-

H

50
posed of by its own extravagance, and proceed to lay
before the reader some extracts from the pamphlet,
[Then follow extracts from the Pamphlet, pages 3, 7, 8,
9, 10, 11, 17, 18,19].

To the Editor of « The Times."
15, New Bos well Court,
29th October, 1833.
SIR,

I am obliged by the manner in which you have in
your paper of the 26th, spoken of my little pamphlet
" Credit Pernicious," with regard to one of its objects,
namely, exposure of the evils resulting from unnecessary
credit; but I regret that you do not approve of the remedy it proposes.
If I stood alone in thinking that unnecessary credit in
general ought to be checked by making a law that debts
of certain kinds should not be recoverable by suit, I
would not trouble you with any eifort to displace your
condemnation of my suggestion ; but having consulted
very many men, of all classes within my reach, and found
the majority of them coinciding with me in my opinion,
I hope I shall not be deemed pertinacious in shortly endeavouring to support it.
" Credit," as you yourself write, " too easily and loosely
" given, or yielded for too long a time, is one of the
" worst evils which can afflict the community." That
being the case, it might not perhaps be too much to say,
that in order to get rid of so great an evil, we ought not to
hesitate to ingraft an innovation upon the law of England,
nor even to " strike a severe blow at personal free agency."
But in point of fact, the very thing proposed in the

51
pamphlet already exists in the law of England, with regard
to infants, and for the very purpose of checking, with relation to them, the evils we have just recognized.
Now, if we admit that infants ought to be protected
against themselves, and if we see that a great proportion
of the adult community stands in need of just the same
degree of protection, surely a proposal to give that protection in the same shape in which the law gives it to infants, is not extravagant. As to the restraint on personal
free agency, I venture to think that notwithstanding such
a law as I propose, no creditable man would find a difficulty in borrowing, upon the security of his honour
alone, petty sums for emergencies. Such sums are
daily lent, very generally, without any written acknow->
ledgment. 1 have often lent from five to fifty pounds at
a time, without taking any means to prove the loan, and
I have never experienced any loss on that account. It
would be safer, too, to lend such sums on honour, were
indiscriminate unnecessary credit checked, than it is now.
You will recollect, also, that the pamphlet aims only at
simple contract debts.
Nothing, I am convinced, short of compulsion, will put
a stop to the crying evil we perceive: a milder sort of
compulsion than that which I have ventured to propose,
I am unable to imagine. Practical men could modify it
so as to render it very little inconvenient, and not at all
injurious. If any other remedy, or any better remedy,
be devised, I shall much esteem, and warmly thank, its
promulgator,
I am, Sir,
Your obedient servant,
ARCHIBALD

H2

ROSSER.

m
EXTRACT FROM " T H E MECHANICS' MAGAZINE/7
OF NOVEMBER 2, 1833.
CREDIT PERNICIOUS.
W E advise all, who are in the practice of either giving
or taking credit, to send to Hatchard'sfor a small pamphlet with the above title. It is several years since it was
published, but has (unfortunately) as close an application
to existing circumstances as if it had appeared only yesterday.
*
*
* The title of the production would
lead one to infer that the author thought all cc Credit
Pernicious." The fact, however, is not so; for it is only
to such credit as neither necessity calls for, nor prudence
can approve, that he objects—-admitting, unreservedly,
that credit, " when well regulated, gives room for an extension of commerce which would be unattainable without it." The author would have indicated the purpose
of his pamphlet better, had he entitled it "Abuse of
Credit the Cause of Individual Suffering and Public
Injury." The cases which he considers most signalised
by this abuse, are those of persons with fixed and certain
incomes, getting into tradesmen's books for articles of
personal and household use. He protests that he " cannot
imagine" (as neither can we) " any plausible reason why
persons of this class should pay at a future time rather than
at the present;" and expatiates, with great earnestness
and ability, on the manifold evils to which this inconside^
rate and vicious practice gives rise—causing to the individuals themselves, a constant accumulation of embarrassment and difficulty, terminated but too frequently by utter
insolvency and ruin-r-and raising to the public at large
the prices of all commodities, in an exact ratio to the
losses sustained by tradesmen from their bad debts. We

53
regret that our limits do not permit of our illustrating
these positions by some of the many shrewd observations
by which they are enforced in the pages before u s ; but
this is of the less consequence, as we presume there are
few, who take an active interest in the commercial welfare
of their country, who will not speedily have recourse to
the work itself.
While we thus cordially approve of all that the author
has said of the abuse of credit, we must dissent entirely
from the remedy which he proposes. He would have it
enacted that "simple contract debts between forty shillings and one hundred pounds shall not be recoverable by
any suit or process whatsoever ;" and would admit only
of such exceptions as debts contracted with apothecaries,
schoolmasters, and others, which grow from day to day, and
cannot therefore be conveniently paid beforehand. Now,
this is a remedy which would go, in some cases, as rnuch
beyond the evil as in others it would fall short of it. It
would go beyond the evil, in every case of a manufacturer
purchasing materials to be worked up into some article of
sale, where the materials did not exceed one hundred
pounds in value (which is probably the majority of cases);
for credit under such circumstances is as needful and salutary as in any. And it would fall short of the evil, in not
reaching the largest order of depredators on tradesmen,
the debtors for hundreds and thousands. We must confess
that we do not see, what the number of pounds or shillings
involved in the matter, has to do with the question of credit
at all. The small piece of iron which, converted into a
watch-spring, is increased many thousand times in value,
seems to us to be quite as fair a subject of credit, as the
pack of cotton which sets a hundred spindles in motion.
Neither can we imagine, how any other sort of fixed
rule could be laid down, that would not as often scathe

54
the prudent and. honest dealer, as the reckless and unprincipled debtor. The evil, in fact, appears to us to be
one whjich is altogether beyond the reach of legislative
regulation, and only to be effectually met by awakening
the public mind, through the circulation of such tracts as
that before us, to a full sense of the importance of confining credit to its legitimate uses.
#
. *
*
The scheme would manifestly have the effect of cutting
off entirely the most fruitful source, by far, of lawsuits.
*

*

ifc

*

#

#

EXTRACT FROM "BELL'S NEW WEEKLY
MESSENGER," OF NOVEMBER 10, 1833.
O U R attention has been drawn to a pamphlet, published
ten years ago, of Mr. Archibald Rosser, with the title of
"Credit Pernicious;" in which he ably advocates the
abolition of arrest for debt. Some late commendations of
it in the columns of The Times newspaper have again
brought it before the public, accompanied by an additional two pages, comprising the comments upon it of the
writer in The Times, and Mr. Rosser's reply to those
comments. Amongst the author's proposals is one, that,
in a great variety of cases, u simple contract debts between
forty shillings and one hundred pounds shall not be recoverable by any suit or process whatever."—This proposition, says The Times* writer, would, " without the least
allowance for those occasions on which a resort to credit,
even for petty sums, might be safe for the lender, and for
the borrower indispensable, ingraft a monstrous innovation upon the law of England, and strike a severe blow at
personal free agency." To this (we must think) shallow

55
objecting, the author of the pamphlet replies, that, in
in order to get rid of so great an evil as that which arises
from a wholesale credit-system—" we ought not to hesitate to ingraft an innovation upon the law of England,
nor even to c strike a severe blow at personal free agency.'
But, in point of fact, the very thing proposed in the
pamphlet already exists in the law of England, with regard to infants, and for the very purpose of checking,
with relation to them, the evil we have just recognized.
Now, if we admit that infants ought to be protected
against themselves, and if we see that a great proportion
of the adult community stands in need of just the same
degree of protection, surely a proposal to give that protection in the same shape in which the law gives it to infants, is not extravagant ? As to the restraint on ' personal free agency,' 1 venture to think, that, notwithstanding such a law as I propose, no creditable man would find
a difficulty in borrowing, upon the security of his honour
alone, petty sums for emergencies. Such sums are daily
lent, very generally, without any written acknowledgment.
It would be safer, too, to lend such sums on honour,
were indiscriminate, unnecessary, credit checked, than it
is now. You will recollect, also, that the pamphlet aims
only at simple contract debts."
In this matter, we need scarcely say, that we think
with Mr. Rosser. We are convinced that, if the law of
arrest for debt were altogether abolished, the number of
dishonest debtors and suffering creditors would be infinitely less than at present, while there would be no such
monstrous social anomaly known, as an honest debtor
writhing in the fangs of a merciless and persecuting, and,
perhaps, knavish creditor. By an abolition of the law of
arrest, it would be rogues and fools only that would
suffer: sagacious and prudent tradesmen and others would

56
then only lend their capital and labour to men known to
them as of fair character and repute; and sure are we,
that no set of men are so apprehensive of, and averse to,
that blow at our present ruinous system of enormous credits
(enormous we mean, comparatively, and with relation to the
means of both borrower and lender) which would be struck
by the abolition in question, than the impostors, both lending and borrowing, of the community. Their occupation
would be gone. One, and that the greatest, incentive
and facility to imposture, removed—the consciousness
which the creditor has of his power of arrest, and the
delusive security which he derives from that consciousness
of which the rascally debtor knows well how to make his
account—imposture must, of consequence, become more
rare, as the caution that detects and prevents it, grows
more on the alert and effective. One passage of the pamphlet in question, anticipatory of the beneficial results to
trade which would be produced by the abolition of arrest,
we cannot here deny ourselves the pleasure of quoting.
4i
As to retail tradesmen,'' excellently observes Mr. Rosser, " those who are not desirous to make an undue profit
by violent risks would rejoice that all should be put upon
a fair level, by being compelled to deal for ready money.
Then would industry, integrity, and judgment, secure to
the tradesman a fair remuneration for his labour; and be
no longer superseded by scheming, speculation, and
chance. Why is it that we now sometimes see an immoral and idle tradesman realizing money enough to enable
him to revel in luxuries, to an extent that would not have
been believed a century ago; while his industrious,
sober9 and steady neighbour can hardly supply the absolute wants of his family?
It is, that this pernicious
custom of employing credit where it is unnecessary,
renders honesty, justice, and prudence, impediments,
rather than advantages."

57
But the great and outcrying evil of the law of arrest is
the premium which it holds forth to human hard-heartedness and cruelty: it encourages man to be a suspector,
persecutor, and hater of man, and frequently renders the
Christian in theory little better than a demon in practice
The continued existence of that law is utterly irreconcileable with that of the press, and the huge progress which
the latter is unrestingly effecting for the mind and morality
of the country. With ignorance must disappear the
establishments of ignorance. We are fast tending towards
the day when man shall disdain even to recollect that
man was once prone to avenge his pocket upon his fellow
man, by consigning him to despair and self-loathing in a
dungeon; when for misfortune and misery there shall be
neither fetters nor prisons; when the honest man shall
walk erect and fearless of man, and none but villains live
in terror at the name of the law.

EXTRACT FROM " T H E MORNING ADVERTISER"
OF NOVEMBER 13, 1833.
A PAMPHLET has been republished by Hatchard, entitled " Credit Pernicious"
The object of the republication would seem to be that of investing the writer with
the character of a correct reasorier and true prophet, in
predicting the injury resulting to the middle classes—
tradesmen and consumers—from the system of giving
and taking credit. There is much truth in the author's
leading propositions, that the custom has produced many
pernicious consequences in society. Individuals have
been tempted, by the facilities offered to them, to incur
debts which they are subsequently unable to pay—innumerable writs have been issued—heavy law expenses inI

58
curred, and prisons filled, in consequence of the postponing system thus encouraged. The tradesman has suffered
in an equal proportion. Deluded by the anticipations of
a larger profit, and trusting to the law of arrest to secure
his claim finally, his books have been covered with claims
and assets which have vanished into smoke in Whitecrossstreet or the Insolvent^ Court. And the public who do
pay have also suffered, the scale of prices being universally
raised by the tradesman's anxiety to cover the risk of
trusting those who do not. Many inexperienced and
well-meaning beginners in housekeeping, with incomes
quite sufficient for every reasonable wish or legitimate
necessity, are entrapped gradually into expenses beyond
their means by the facility of obtaining credit. New
wants, bad habits, and silly rivalries are often created and
indulged, which would otherwise have been unthought
of, and in a social view were better suppressed. The
means for exciting envy and uncharitableness, pampering
self, or exciting other little passions are easily procured—
the day of payment is distant. Thus bad proceeds to
worse, the freeman slips gradually into bonds, and the
silken meshes of the spider-web of credit at last close, in
inextricable folds, on the fluttering victim. The debtor
finds to his cost that he is obliged to bribe his creditor
(once all smiles, now rigid) for longer delay, by increasing his debt and liabilities, or by taking worse goods at
usurious prices. So far we may go along with the writer;
but his intention of putting an end to all credit is perfectly
chimerical. How could apothecaries, schoolmasters,
landlords, attorneys, and several other professions and
claimants, be paid in ready money ? Again, if such a
practice were attempted by retail tradesmen, with regard
to their wholesale purchases, or enforced on their customers, trade would be encumbered and crippled to an
extent to which its present unprofitableness would be

59
trifling. If inconsiderate credit be bad, our author's plan
is not the rational mode of remedying its evils, either as
regards the tradesman or the consumer. His plan is to
render all debts contracted between forty shillings and
one hundred pounds irrecoverable. The mere statement
of so chimerical a proposal, is quite enough. It is true a
bill (which will probably be carried) for preventing arrest
under one hundred pounds, on mesne process, would be
desirable; but not because it would destroy credit, as
because it would tend to rest it on substantial security.
After all, there never was a sounder commercial maxim
than that of TURGOT—Laissez Jaire—suffer all bargains
in trade between man and man to proceed without interference, and find their natural level. It is true that clerks,
annuitants, and persons generally having fixed incomes,
might purchase the greater portion of their domestic necessaries with ready money, and advantageously; but the
casualty of a sick-bed, and a consequent loss or suspension of income, would place them in a position to require
temporary credit. Temporary credit has often saved the
most thriving tradesman from irrecoverable destruction;
and if the bubble year which followed the publication of
the pamphlet in review, be triumphantly referred to, as
attesting the truth of its logic, we are bound to say that
the reference is not correct. The greater number of the
failures which then occurred, resulted from a limitation
of reciprocal confidence. Want of credit, rather than
credit, was at the bottom of the evil. With these exceptions and limitations, the recommendation of the author
to pay ready money in all cases where it is practicable,
rather than take credit, will be found privately beneficial,
while a stop to the multiplication of petty law-suits would
be one of its public advantages. The striking effect of
economical management in this way, is well set forth in
the following domestic detail. [Quotations from pages

60
15 and 16, containing the account of Mr. Peregine Lang*
ton's system of domestic economy.]

EXTRACT FROM " T H E LEGAL OBSERVER" OF
NOVEMBER 30, 1833.
PROPOSAL TO ABOLISH CREDIT FOR SUMS
UNDER £100.
T H E proposed abolition of imprisonment for debt, has
naturally led to the consideration of the consequences
which may be expected to arise, in regard to the domestic
trade, if not the foreign commerce, of the country; and it
appears, that one of the immediate effects of the abolition
would be greatly to diminish the present extent of credit.
A trader who believes that his customer can be compelled
to pay his debt, not only by the seizure of his property^
but his person, is induced to trust him more easily and
extensively than if he possessed one of those remedies
only; and whatever may be thought of the prudence of
the trader, there can be no doubt that he very generally
acts upon this notion. A change of the law in this respect
would make him more cautious; he would require more
reference as to character, would shorten the period of
credit, and generally—in passing from one mode of
dealing to another—would be apt to fall into the extreme
of suspicion, as he now too often verges on imprudence.
This feeling would obviously produce a serious effect on
the community.
But then the advocates of the abolition of imprisonment
boldly meet the difficulty, by saying, " Credit is pernicious : it may be true that some evils will arise from the
change—we know that every change, however extensively

61
beneficial, is accompanied by some drawbacks-*-but in
the long run the country will derive advantage." The
reply to which, of course, is, that, admitting the change
will be ultimately good, the present generation (which
endures quite enough from the mischiefs brought upon
it by its predecessors), cannot be expected to make more
large and immediate sacrifices than it already sustains,
for the advantage of those which are to come* And before
the alteration be agreed to, the apparent magnitude of
the immediate evil must be reduced, and that of the
future good increased. The burthen of proof, therefore,
rests on the abolitionists.
Amongst the writers who maintain that credit is perni*
cious, we find Mr. Archibald Rosser, who, in a pamphlet
bearing the name of his favourite doctrine, has argued the
question with great earnestness* and morally (if not legally) with no little force* We are inclined to admit,
that, in the large class of instances to which he refers,
credit is pernicious both to the trader and the customer;
and his pamphlet is an admirable lecture against the folly
of running into debt. But our professional brethren will
be hardly prepared to follow up the doctrine by a law
which shall render "simple contract debts between forty
shillings and one hundred pounds, not recoverable by any
suit or process whatever"
Mr. Rosser urgently presses
forward this proposition; and we have reason to believe
that it has attracted some attention in high quarters : we
do not expect, however, that the solicitor-general will
embody the suggestion in his new bill; and, indeed, if
they of " the opposite faction" be right, there will be no
occasion to frame such a clause, for the bill will have the
effect of destroying credit much more extensively than the
writer before us has contended for.

62
Mr. Rosser sets out with noticing some passages of
Paley's Philosophy (vol. i. p. 77) on credit, and Smith's
Wealth of Nations (vol. ii. p . 1) on the different stages
of society, when its increasing wants rendered a rude
kind of credit necessary. The inferences to be drawn
from the statements in this part of the work disprove, instead of establishing the proposition, that credit is pernicious. We agree, indeed, that u salaried clerks, officers employed by government, and other stipendiaries,
annuitants, and proprietors," should not incur debts.
They injure themselves by doing so, if they keep within
their income, by paying more than they need ; and they
injure their creditors if they exceed it, because, at the
best, there must be delay of payment.
But surely Mr. Rosser possesses too much experience
and practical knowledge to recommend a law which
should prevent tradesmen from recovering debts from
these classes of persons only. The law must be general;
it could not be limited to persons whose situations are
liable to change, and whose salaries and incomes may at
one time be derived from permanent, and at another from
uncertain sources, or partly from each kind. A right of
action might thus be maintained as to half the debt, and
barred as to the rest; or a defence which was good today might be bad to-morrow. It appears, indeed, there
are insuperable difficulties in the way of such an enactment.
After these general observations we must allow Mr.
Rosser to speak for himself. We admit that credit is
pernicious in most of the cases he states ; but we contend
that no law ought to be made of the nature he proposes.
He maintains, however, that it is not inconsistent with

63
specimens of legislation already existing. For instance,
lie says—[Quotations from pages 29 and SO.]
The writer then proceeds to state and consider the objections to his scheme. [Pages 31, 329 33, 34.]
Mr. Rosser, with no small degree of enthusiasm, anticipates the beneficial results of his plan; and we think the
public is indebted to those who will take the trouble,
like the present writer, of discussing the several bearings
of the question of imprisonment for debt, which we think
requires some modification, but certainly not a total overthrow, either by the sweeping measure of the solicitorgeneral, or the stoppage of credit for debts under one
hundred pounds.

EXTRACT FROM « THE ATLAS " OF DECEMBER 8,
1833.
CREDIT PERNICIOUS.
A PAMPHLET, exposing the ruinous consequences of
the credit system in this country, and proposing, as a
remedy, that simple contract debts between forty shillings
and one hundred pounds, should not be recoverable by
law. The arguments are true and just, but the remedy is
alarming; and although the author says that he has
consulted many persons of all classes within his reach,
and that the majority coincided in his views, we suspect
that the cure would be as bad as the disease, and that it
would only open a new evil in our system. We believe it
is a fact that the usury laws generated a spirit of extortion and fraud, and we think this remedy would have a
similar effect. The pamphlet was originally published

64
in 1823, two years before the panic of 1825, and derives,
from that circumstance, something of a prophetic character. A recent notice in a morning paper has induced the
author to place it before the public again. It is well
worth attention.

EXTRACT FROM « THE COURIER" OF DECEMBER 9,
1830.
CREDIT.
As we know, and as we presume every man knows,
that all banking is founded upon credit; the banker
borrowing from the mass of the community, by substituting his written promises to pay for the gold he perhaps
sends out of the country—the Bank of England not being
exempt from the general rule, it borrowing from the
whole people, while it lends a considerable sum to the
government, as a security for payment, and being consequently the great debtor of the country—as we know that
nine-tenths of the transactions of society are carried on
by credit; the grower of cotton trusting the merchant, the
merchant trusting the manufacturer, and the manufacturer trusting the wholesale dealer—we were not a little
startled by lately having a pamphlet put into our hands,
entitled " Credit Pernicious." The author must be, we
immediately thought, some other St. Simon, prepared to
demonstrate, that the present social system, which, by
the by, the Globe of Tuesday night, very accurately
said—
" Like the planetary one, moves forward in steady majesty, in utter carelessness of the politicians, magi, old
women, and star-gazers, who speculate on its direction,
and fondly imagine they can make it what they please"—

65
This author, we thought, must be one of those visionaries who pretend to demonstrate that the present social
system is all wrong, and who fancy they can give it any
impulse they please. We were in error; the author is
a practical lawyer, who merely proposes that " in a
great variety of cases, simple contract debts between
forty shillings and one hundred pounds shall not be recoverable by any suit or process whatever." He adds,
indeed—
" There are certain classes of debts which it might be
necessary to except from the operation of the measure.
Take for instances the cases of masters of vessels sailing
to foreign countries, and carrying out with them small
investments on their own account; and of certain debts
contracted in the coal trade, other than those contracted
by consumers. Credit in these cases is highly useful,
though not absolutely necessary. The object of these
pages is to arrest that spurious credit that infects transactions which cannot properly be called trading transactions, and which spurious credit adds nothing to the
prosperity of the country, and the destruction of which
would take nothing from it."
Spurious credit is a strange phrase; but, taking
these limitations in the widest sense, the author's scheme
seems to us shallow and impracticable. He evidently
draws all his inferences from town life; we are not
much acquainted with rural life, but we have seen a few
instances of cases such as this. A man owns or hires
from two to ten acres of land; he cultivates hops, or
wheat, or cherries for the London market; the value of
his crop varying from one hundred to five hundred
pounds, but it is turned into money only once a year,
about July, or September, or October; such a man
K

66
has to provide himself in the mean time with clothes, and
has to keep his horse and cart and plough in order.
Is he not to take credit with the smith for shoeing his
horse, or mending his plough, or with the saddler, for a
new collar for his horse, or with the wheelwright, for
a new wheel to his cart, or with the shoe-maker for a
new pair of boots, on the proper expectation that he will,
when his crop is gathered, be able to pay; and if he do,
and if he should, when his crop is carried to market and
sold, refuse to pay those who have trusted him, is the
law to deny them all remedy ? The assertion would be
most absurd, and the practice most dangerous. But, we
believe, that a great mass of the debts incurred by the
farmers, or the credit taken by them from Michaelmas to
Michaelmas throughout the kingdom, is each one of less
amount than the one hundred pounds which Mr. Rosser
would deprive of all legal protection. He may say the
farmers should pay in ready money. We will let him
into a little secret. If the farmers, who are the owners of
all the growing produce of the land, had ready money to
pay all the simple contract debts which they incur from
harvest to harvest, and if, without borrowing, they
were enabled to pay the wages of all their workmen, then,
as they own all the growing crops of the country, they
would be under no immediate necessity to bring them to
market to pay their debts. The advantages in relation to
the consumer would be all on their side, and, instead of
now being, as they are, in consequence of incurring these
debts, a dependant class of men, and, as we suppose,
Heaven intended them to be, they would have it in their
power, particularly with a corn law, to starve the whole
community. It is, therefore, completely impossible that
the farmers should pay all the services they require in
ready money; and thus Mr. Rosser's plan of legally exonerating them from the payment of such debts—if it

m
could be carried into execution, and their honesty were
not far superior to the law—would have the effect of ruining the whole agricultural policy of the country.
He should remember also, that at present great exertions are making to give every labourer a rood of land.
Should each one not be able to take credit for a spade by
which the crop can be made ready? The rich and opulent
would by this plan be able to borrow one hundred or one
thousand pounds, but the labourer would not be able to
borrow the price of a spade. We never heard of any
scheme so well calculated to increase the inequality of
property, and to add to the bonds and other instruments
which would be the substitute for contract debts. Mr.
Rosser has seen in this great town a few individuals ruined
by credit, and having his whole mind filled by the near
objects, he sees nothing of that immense mass of transactions which lie afar off in the rural and manufacturing
districts; and, with a view of providing for the few cases
of ruin which fall within his own vision, he would, in his
remorseless ignorance, extinguish, by a general rule, ninetenths of the productive industry of the country.
Mr. Rosser complains of the political economists for
having failed to discuss at length the subject of credit,
and he makes some extended remarks on it; but in our
estimation, he is as ignorant of its origin as when he
began. He talks about u fortuitous circumstances," as if
society were some chance production; but we may be
assured when credit is so universal—being at once the
foundation of all banking, and consequently of all paper
money, and being essential to nine-tenths of the trade of
the whole world—that it takes its origin in some natural
circumstance " which influences the conduct of mankind
at all times and places after a division of labour has been

R2

68
commenced." This circumstance is, that all commodities
are manufactured or produced in different portions of
time. " From the period, for example, of beginning to
prepare the ground for wheat in this country, till the
harvest is gathered in, full eleven months elapse."—" To
grind and sift the wheat, or to make flour into bread, may
be done in a few hours."—" The labours, therefore," says
the author we are quoting, " of the farmer, the miller,
the baker, the engineer, the builder, the tailor, and of
every class of workmen, are completed, or their respective
commodities are prepared for sale and use in different
times."
This great natural fact, that one man is by his labour
hereafter to have the means of payment, though he does
not now possess it, is the foundation of all credit; and it
might easy be shewn, if this were the place for doing so,
that to suppress credit between those whose productions
are immediately ready for consumption and those who will
hereafter have commodities^ would be to suppress production, for in that case each one of these labourers would
have no market for his produce beyond himself, and of
course he would never manufacture for the purpose of exchange. There are some persons, such as publicans,
bakers, and greengrocers, who, being generally paid in
ready money, need credit only till the butt of beer, or the
ton of potatoes, or the sack of flour, be sold ; there are
some persons whose whole incomes are paid daily and
or weekly, and in whom consequently it would be wrong
to take credit beyond the period of payment; there are
others with fixed incomes, whose salaries are paid halfyearly or quarterly, and it would be very injurious to
them if they were prevented from contracting debts by a
law which would not allow those debts to be recovered.
We will not, however, enter into the detail of this subject;

69
we admit that in many cases it is wrong to take credit—
we admit there are many diversities in the subject, many
cases in which trust is indispensable, others where it is
unnecessary, and we, therefore, are satisfied that no general rule can meet them all. They must be left to individual discretion and discrimination, which are more
likely to be weakened than strengthened by legislative interference. Mr. Rosser says, that great injury falls on
the community by credit, but it always falls on individuals,
and in nine cases out of ten the loss is the most appropriate punishment for carelessness which could be devised.
Mr. Rosser, in our opinion, takes a most narrow and contracted view of this important subject; he is, as we have
shewn, ignorant of the natural origin of credit, and of the
natural laws which eternally influence i t ; and, therefore,
he is, we presume, according to the general practice—for
the most ignorant have always the fewest misgivings—the
fitter to propose laws on the subject.

EXTRACT FROM "THE COURIER" OF DECEMBER 14,
1833.
CREDIT PERNICIOUS.
To the Editor of « The Courier."
SIR,
u

C R E D I T Pernicious" is, if ever book or pamphlet
was, certainly in respect to intention, and I am told in
respect to execution also, entitled to be called unpretending. My profession is that of the law ; one principal end of the pamphlet was to diminish litigation ; the
whole was evidently well meant. It had been kindly received by portions of the periodical press which have
large claims on the public attention, and its author had

70
met with no reproach for its publication. These circumstances considered, one would have expected that ill
nature itself could find no occasion for asperity. But
there is no accounting for tastes. A writer in your paper
of the 9th instant, has thought it consistent with good
taste and good feeling to charge me, on account of " Credit
Pernicious," in uncourteous terms, directly with ignorance,
and in something more than insinuation, with presumption.
The public, however, have nothing to do with personal
feelings in such matters, and I shall, therefore, leave
your contributor to settle with himself, as he best may,
the balance of the account of good taste, good nature,
and candour, on the one hand, and unfairness, and uncalled-for vituperation, on the other.
I shall be bold enough to venture on a second edition
of the pamphlet, to which I propose to add an Appendix
containing all the public notices with which it has recently been favoured, and to open it with a preface, in
which I shall endeavour to remove the objections which
have been made to the alteration in the law of debtor
and creditor, which I have taken the liberty to suggest.
Without attempting, within the space you will probably
be able to afford me, to answer the writer of the 9th,
fully, allow me, in the mean time, to make an effort
to shew that he judges hastily.
The evil the pamphlet holds up for examination is, you
will recollect, unnecessaiy credit; credit given and taken
in transactions in which it would be convenient, or not
greatly inconvenient, that ready money should pass. The
evil ([ have prevailed so far) is admitted on all hands,
even by your Correspondent himself, to exist, and to be

71
an evil of great magnitude. I attack no other species of
credit. The writer in question launches at once into the
widest field of credit, and he says that all banking is
founded upon credit. If by " credit" he means belief of
credibility, or trustworthiness, then I agree with him, but
he must have seen that by the word "credit" I have always meant the postponement of the day of payment.
The definition given at the very outset of the pamphlet is
this : — a Credit is that confidence of one individual in
another, under the influence of which the former parts
with goods, money, or other things of real or accepted
value, upon condition of receiving a future compensation."
I hold it to be extremely disingenuous, in the face of this
preliminary definition, and with a perfect knowledge of
the whole scope and object of the pamphlet, to attempt to
induce a belief that I aimed at any interference with the
confidence reposed by depositors in their bankers. The
paragraph with which your contributor opens his critique
does not at all belong to the question, and, however formidable it may appear to those who have not read the
pamphlet, those who have will at once see the paragraph
is a mere flourish.
Your contributor asks, whether a man hiring from two
to ten acres of land, who brings his produce to market
only once a year, is not in the mean while to have credit
with the farrier, the smith, and so on. But he here forgets the pamphlet proposes that the limits of exclusion of
credit are forty shillings as the minimum, and one hundred
pounds as the maximum; and that even those limits are proposed only by way of instance. I presume to think, still,
that leaving credit open under forty shillings, the hirer of
ten acres of land would get on very well without being
able to obtain credit for any thing between that sum and
one hundred pounds, in the form of simple contract. I
have made inquiry of persons versed in agricultural habits

72
and necessities, and they assure me that it would be so,
with a little of that foresight which I have desired to enforce on the community, " The great point," it is said
in the pamphlet, " is so to change the present system, as
that the contracting of a debt, and the discharge of it,
shall form one idea; that it shall become habitual to consider a debt contracted, and a debt paid, as one and the
same thing,"
Your Correspondent lets me, as he says, into a little
secret. " If the farmers," says he, u who are the owners
of all the growing produce of the land, had ready money
to pay all the simple contracts which they incur from harvest to harvest; and if, without borrowing, they were
enabled to pay the wages of all their workmen, then, as
they own all the growing crops of the country, they would
be under no immediate necessity to bring them to market
to pay their debts." Indeed? Whence then would their
ready money for continuing their occupations come ? As
I propose only to slip forward the time of payment to the
time of contracting the debt, instead of leaving it, as it now
does, to linger behind, the necessity with them for raising
money would remain the same. Farmers would, for your
Correspondent's comfort, be just as dependent as they are
now, and as he desires they should be ; except that, which
I suppose he cannot object to, they would be taught not
to spend their money idly. And if the danger your Correspondent apprehends were realized, their landlords, or
an alteration in the corn laws, would very soon bring
them to reason.
Still keeping in the back ground that I do not object
to, e. ff.9 credit for sums under forty shillings, the writer
asks, very unfairly, " should each one (a labourer of a
rood of land) not be able to take credit for a spade (!)
by which the crop can be made ready 2"

13
Your correspondent says of the author of the pamphlet,
f He talks about i fortuitous circumstances' as if society
were some chance production"—and this for the purpose
of imputing ignorance. Those who have not seen the
pamphlet will hardly believe that the only paragraph in
it, in which the phrase u fortuitous circumstances" occurs,
is the following—iC If bills of exchange in general among
these persons (persons not engaged in trade) are bad,
accommodation Mils are infinitely worse. They are the
surest indications of ruin possible in those who interchange
them. Even among large dealers they are symptoms to be
dreaded; but among the class we are speaking of, they
are ruinous to absolute certainty; unless some fortuitous
circumstance arises to defeat the tendency,"
6

The writer observes, truly, that I say great injury falls
on the community by credit, " but," he adds, u it always
falls on individuals." I should like to know of what the
community is composed, if not of individuals. And it is
not the mere individual who trusts that suffers from the
failure of the individual trusted, for we all know very
well that the tradesman endeavours to make, and succeeds
in making, his paying customers suffer for the loss he
sustains by those who do not pay.
My letter must now, however, for I have trespassed
greatly upon you, come to a conclusion. My object has
been to shew, and I hope I have succeeded in it, that the
writer of the article headed " Credit," in your paper of.
the 9th, is in reality a very harmless critic.
I am, Sir,
Your obedient servant,
Dec. 14, 1833.

ARCHIBALD

L

ROSSER.

74
[After the foregoing letter had appeared in the paper
to which it was addressed, 1 discovered, in revising the
pamphlet for a second edition, that I had overlooked
another passage in which the unlucky words, a fortuitous
circumstance" occur. They will be found in part of the
paragraph beginning at p. 5. " Thus far we have supposed the society to confine its traffic to its own immediate neighbourhood. A superabundance of produce for
which there is no demand in the neighbourhood, the result of a favourable soil or situation, or some other fortuitous circumstance, now leads the society to extend its
connections. Goods are transported to distant parts of
the same country, and a new necessity for credit arises."
This acknowledgment is due to the writer in the Courier;
but I think he was not justified in making the use he did
make of the words in question,—A. R.]

EXTRACT FROM " T H E GUARDIAN AND PUBLIC
LEDGER" OF 27 JANUARY, 1834.
The undivided object of the political economy of the
day is the accumulation of capital and its concentration
in few hands, and concurrently therewith our commercial
legislation has been influenced by a similar spirit. Nearly
all our sumptuary laws have been directed not against the
rich but against the poor,, to keep those down who are
down, to fetter industry, destroy credit, and blast the
marketable value of character. To these ends the destruction of the banking system, an increasing ratio of
duty upon stamps representing an enlarged credit in transactions, changes in the laws regulating contract debts
and the relations of debtor and creditor, have largely
contributed; the rights of property and the rights of in-

75
dividuals have equally been tampered with, as if in apparent fear lest a system, under favour of which the Barings,
the Rothschilds, the Arkwrights, the Ricardos, have
been the representatives of a virtual monopoly of wealth,
should so far exteud its baneful operations, as that we
should become a whole nation of millionaires. The currency scheme, which it would almost appear that Ricardo
advocated from the apprehension that aspirants from the
same vulgar class of the community from which he dated
his own rise, should come to interfere by shoals between
the i( wind and his nobility" of stock-jobbing money, effected a sweeping reduction of some twenty-five or
thirty per cent, upon the real staple values of the country
—land and the wages of labour—in lieu of four per cent,
which he proved in his way, and pledged himself would
be the whole possible range of the mischief; increasing of
course to the holders of the fixed paper obligations and
annuitants of the state—of which he and his order were
the heaviest holders and creditors—the amount of values
—the twenty five per cent.—fraudulently abstracted from
the only real and substantial representatives of national
wealth.
Supplementary to these achievements of political economy, have come in aid the speculations of a maudlin and
sentimental philanthropy, weeping in fits over the exit of
some atrocious Fauntleroy convicted of robbing orphans
and widows defenceless; but viewing with unscalding
eye the inch by inch starvation of tens of thousands of
poor weaver-wretches at Colne or Huddersfield, with
their miserable pittance of twopence per day, and their
destructive toil of sixteen hours daily wrestle against
sudden death by hunger; or, alike unmoved, regarding
the able-bodied agricultural poor swarming to the parish
board for their paltry allowance during one half of every
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76
year, or degraded women excited to vice in order by the
fruits to earn the bounty awarded by parish law, with
which to drag on a life equally of want and immorality.
This is the philanthropy which, instead of devising the
facile remedies by simplification and economical reductions for charge for the enforcement of contract obligations, is cutting away the security of the creditor, lest
the feelings of the debtor—too often fraudulent debtor—
should be distressed by rough usage, or shocked with the
mention of a prison. We do not deny that many really
patriotic and benevolent minds have been seduced into
these fantastic speculations of humanity-mongers, and
among them Mr. Archibald Rosser, the author of a
pamphlet published some years ago, under the title of
" Credit Pernicious," the second edition of which, fresh
from the press*, now lies before us.
The amiable enthusiam of this gentlemen has carried
him to the extent of proposing that " simple contract
debts between forty shillings and one hundred pounds
shall not be recoverable by any suit or process whatsoever." The effect of so arbitrary and sweeping an
enactment would manifestly be the extinction of all credit
within the amount represented. Mr. Rosser intends it
clearly as a measure of preventive police against the abuse
of credit among certain classes of the community, who are
always uppermost in his thoughts. He can discern little
or nothing in society beyond " salaried clerks, officers
employed by government, and other stipendiaries, annuitants and proprietors, whose incomes are small, and
either without prospect of increase, or increasing slowly
and by no fixed degrees." These and such as these constitute, however, but a fraction of the nation, and granting
* The proof sheets were sent to the editor.

77
the full force of the assumption that the majority of these
are so reckless or imprudent as to require some special
act of the legislature, by which, like infants or insane
persons, they should be placed under tutelage, it would
surely be a gross injustice to plant unoffending millions
under the same ban as the hundred thousand fraudulent,
or helpless, or miscalculating people. For the sake of
moderating the exorbitant gains which the rich tradesman
enforces from a needy customer—that is, a customer to
whom rich or not credit is a convenience—Mr. Rosser
would annihilate all credit to those most deserving of it,
and he would erect a barrier to the progress of industry
towards wealth. We will tell him how and why.
A very large proportion of the commercial transactions
of the country—more especially of manufacturing—are
composed of dealings within the range of the sums which
Mr. Rosser would expunge from credit privilege. The
total of home consumption alone, and without taking into
account colonial and foreign trade which would in the
main be little affected by the proposition, is estimated by
Mr. Richmond at one hundred and seventy-five millions
of pounds sterling; an amount however swelled by the
infinite inter-trading through the endless ramifications
of producers, dealers, brokers, merchants, shopkeepers,
&c.—in short, from production to consumption—to a
bulk of value defying calculation. A vast proportion of
these dealings, the probable amount of which it is not necessary to guess at, is represented by quantities less than
one hundred pounds, and of these again, an immense majority are credit transactions, or transactions in which character stands in lieu of capital. This is the mass of industry with which Mr. Rosser would deal at one fell
swoop; he would irretrievably ruin the innumerable interests and persons comprised in them. He may consider

78
the evil one of transition only, and that the capitalist
would step in to supply the void thus occasioned by
€t
credit pernicious." But then the startling difficulty
presents itself of a new revolution in the currency* There
exists at present a circulation in the shape of bills of exchange from ten pounds to one hundred pounds, at dates
varying from ten days to three and even six months, to the
amount of millions, and there are open credits in trader's
books besides to the amount of many millions more. This
medium of exchange being upon the new principle destroyed, how would Mr. Rosser replace it?
The open credits in London are usually redeemed in
cash, but in the country, and especially in the trading
parts, they are after all paid in bills of exchange, there
being a double credit in sales, as for instance, goods being
sold at two months open credit to be paid for on the expiration of the term by a bill or acceptance at three
months. Gold and silver are out of the question, for even
if the mines of Mexico, Brazil, and the Ural could be
made more productive, values of some sort must be given
for them, and an increase of our means for that purpose
would avail little against exclusive tariffs or prohibitions.
The bank will not extend its issues except upon deposit
of convertible securities, and it has not yet entered upon
the pawnbroker's department, by lending upon cottons
and woollens. Mr. Rosser imagines, perhaps, that, as
these small bills are paid at maturity in notes or gold,
that it is a question of time alone, the money representatives being always there. But there is such a place as a
clearing house, where millions of value are exchanged
and yet the differences balanced with a hundred thousand
pounds' worth of bank notes. The country bills are in
this manner paid in the metropolis ; when paid in the
place where drawn they are still for the most part liqui-

79
dated by bankers' notes payable in London. One great
evil under which the country now labours, is a currency
notoriously inadequate to the enormous bulk of trading
operations, Mr. Rosser would narrow it still more, unless he is prepared with a substitute certainly not hinted
at in his pamphlet.
We are taking it for granted that he would not destroy
the small traders; that he seeks not to exterminate all
the links connecting the overgrown capitalist with the
consumer, and upon the ruin of intermediate interest divide society into two classes only, the direct and rich
producer and the consumer. If no man were allowed the
benefit of credit who could not command it for more
than one hundred pounds, it is clear that we should make
a rapid stride towards this division into two castes—the
very rich and the very poor. Bills of exchange above
one hundred pounds would circulate to an amount and
supply the loss of the smaller bills, and open credit in
the metropolis legalized only above such an amount
would extinguish the race of small shopkeepers and
small dealers for the use and behoof of the rich. Morrison and the race of capitalists and economists would make
their millions into tens of millions, and the whole race of
small traders from Whitechapel to Hyde Park become
extinguished. This would be the fate of the metropolis, and such also the fate of the like class in the
nation at large. The monopoly of capital is onerous
and oppressive enough already, but by the process of
Mr. Rosser it would become intolerable.
This is the general view of the proposition and of its
immediate consequences. The more disastrous result
would be its effect morally upon national character.
Under all the oppression of overwhelming capita^ so

80
much of late years enhanced by a false economical legislation, the operative and the small trader have
still a chance, trifling though it be, to raise themselves in the social scale by the exertion of industry
and the influence of character. But Mr. Rosser would
cut the ground from beneath them forever; for if u credit"
be a pernicious," character, of which credit is the representative, must become almost valueless—and why ? Let
nstake the case of a skilful, sober, and industrious operative, a cloth dresser or a cotton wreaver. Upon the strength
of his character although known to possess no capital he
may obtain credit—take the latter for example—from the
machine-maker for a few power looms with which to stock
a room in a factory where power is easy to be hired at a
rental. From the cotton-dealer he can obtain one hundred pounds' worth of raw cotton, or from the cotton
spinner as much warp and weft, but the credit is limited
within that amount ; generally speaking, in such a case it
would be limited to less. With these aids, although paying to his creditors ten per cent, for the accommodation,
upon the understanding that credit and risk must have
their fair remuneration, he is enabled through the united
force of his skill and industry to undersell the great capitalist, and still make a living profit, fulfil his obligations
and lay by something—because if the capitalist, Marshal
or Phillips, buys his cotton ten per cent, cheaper, he saves
by his personal labour and superintendence twenty-five
per cent, in wages, and can live more economically. Now
the effect of Mr. Rosser's law declaratory that " credit
is pernicious," would destroy for ever the chance of so
praiseworthy a mechanic; and taking away the motive
for action, for laudable ambition, and the hope of reaching
a station he feels himself qualified to fulfil with respectability, and others deem him fitted to adorn,'he loses at
once the chief incentive to self respect and to the acqui-

81
sition or preservation of character—he sinks into the serf
or the slave whose lot in this world being inevitably cast,
he resigns himself to it with the apathy of despair, or endeavours to drown the remembrance of it in the temporary
excitements of deleterious liquors. The same may be said
even of men in the ranks of clerks or salaried agents,
rescued oftentimes from utter ruin, or elevated to the highest mercantile honours, by an extension of credit in some
crisis of fortune, yielded only upon the strength and reputation which character must always more or less command. This is the lesser view—these are the details of
every day life—whose consideration we recommend to
Mr. Rosser. We have not only generalized upon his
theory, but presented him with details to illustrate its
practical working if ever brought into operation. We
tell him the result would be, were his intentions, benevolently as they are propounded, unfortunately realized,
that England would be converted like Poland into a land
of Serfs and monied Palatines, where, as to rise would be
impracticable, the population must still further be degraded even to the condition of the brutes that perish.
Instead of narrowing his glance to the abuses of credit,
as between clerks, small annuitants, and rich shopkeepers,
we advise him to take into his mind's grasp the varied
intricate and extensive wants and interests of society at
large ; in proportion as he travels among these, new lights
will dawn upon him, and more beneficent projects for
the amelioration of his kind. The due diffusion and dis«
persion of wealth, and the means of acquiring wealth, are
the wants of society, and not accelerated means of its accumulation in the hands of a few. The taskmasters are
already cruel enough—the hewers of wood and drawers
of water, the sojourners in the land of bondage, are already too numerous under the iron rule of the Pharaoh
of political economye A wise legislation will rather seek

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82
to facilitate a more equal division of wealtii than to concentrate its hoards and augment its accumulation in the
hands of overlaying monopolists, wherewith to grind
down the poor still further. How capital is now abused
we need only look to the great manufactories of Leeds,
and the state of the infant poor.
Nothing can well be more absurd than the views which
some of Mr. Rosser's critics take of the relative operations
of money in the hands of a rich manufacturer and a rich
shopkeeper; the monopoly of both inevitably and equally
tend to the same point—the stimulus of the producing
power; the difference is, that the one is the more proximate agent than the other. Equally false is the assertion
that on the Continent there are no credit accounts. With
the shopkeepers of Paris it may, to a considerable extent,
hold good; but the trading and manufacturing interests
throughout France are based upon a system, as here, of
open and bill of exchange credits. It is silly in people
to reason from their own limited experience of dealing
with a butcher, or dabbling with a silk mercer for silks
and laces for family consumption.
To resume: Mr. Rosser must see, we think, that the
multiplied transactions of the country cannot be carried
on without credit; that the currency would again be revolutionized by the extinction of bills of exchange under
one hundred pounds; that the moral character of the people would be degraded if credit for small amounts were
annihilated; and that faith would no longer be attached
to and elevate character, if legal responsibility or obligation were destroyed. We shall rejoice to see his powers
and his unquestionable benevolence applied to a more
enlarged consideration of his subject.

83
EXTRACT FROM "THE MORNING HERALD" OF
JANUARY 28, 1834.
I T is the general opinion that during the next Session
another attempt will be made to introduce a Bill into
Parliament for the repeal of that law which permits
arrests for debt under mesne process: at any rate the
public expects that some amelioration of this odious law
will be adopted. We are convinced that if this great
good were effected it would tend to diminish the number
of dishonest debtors, and, by a parity of reasoning, lessen
the amount of cheated creditors. It would also so wholesomely check that unbounded system of credit from
tradesmen towards persons in private life, who only force
their goods upon their unfortunate, and perhaps imprudent, debtor, merely from the reliance they place in the
monstrous and unnatural power which the creditor now
enjoys over the liberty of the debtor. By an abolition of
this law rogues and fools only would suffer; the honest
debtor would no longer writhe under the power of a merciless creditor and the low harpies of the law, who, in
nine cases out of ten, fatten upon the miseries of the unfortunate. The sense of oppression would then no longer
change the honest spirit of the debtor; a prison and its
foul lessons would not deprive him of the means or the
inclination to struggle against his misfortunes. An honest
man is not easily converted into a rogue; but the rogue
is never converted to honesty by the associations of a
prison.
We have been induced to make these remarks in consequence of having received the proof copy of a second
edition of a pamphlet, entitled " Credit Pernicious," and
which was originally published by Hatchard some ten
years since. During the past year it excited some
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84
discussion amongst our contemporaries, which we think
will by no means be diminished. This pamphlet merits
a serious perusal; it contains sound lessons for the improvident, and that description of tradesmen, who, for
the sake and prospect of enormous profits, pander to the
wanton extravagance of fools, an instance of which was
strongly marked last week, in an action brought by a
Cambridge tradesman in the sheriff's court against a
young peer, for luxuries supplied during his minority.
This case (Bacon v. Louth) has its parallel in thousands
of similar instances. But to return to the pamphlet before
us (which we admit does the worthy enthusiast much
credit, and whose reasoning has been considered just by
high authorities), we are rather startled by the proposition
with which lie sets out, and which is, " that, in a great
variety of cases, simple contract debts between forty shillings and one hundred pounds shall not be recoverable
by any suit or process whatever." The arguments are
true and just, and the author ably attempts to enforce
their power by citing the opinions of Paley, Adam Smith,
and Johnson. But the remedy, nevertheless, is truly
alarming; it will require an infinity of care and penetration to apply the broad principle of Mr. Rosser's proposition to the present state of society. We admit that
credit to certain classes is most pernicious, particularly to
salaried clerks, government servants, stipendiaries, and
the lower classes, especially the credit of the tavern and
the gin-shop ; but we must not forget that credit is the
life and soul of British commerce. Yet we must draw a
distinct line between the injurious and reckless credit
given to private individuals and that just and necessary
credit which is essential to the operations of the merchant,
the banker, the manufacturer, the mariner, and the agriculturist. This must not be tampered with. When we
contemplate the mighty and complicated structure of the

85
national credit—that power which enabled Great Britain
to\jstenv the torrent of the revolutionary war, and which
maintained our fleets so many years upon the seas, and
eventually carried our victorious armies to the plains of
Waterloo—when we reflect that by a refined system of
credit only the British merchant is still enabled to compete with foreign rivals, we cannot countenance any plan
that will affect the superstructure of commercial credit.
The republication of this pamphlet will, however, do
much good; it will revive discussion upon the law of
debtor and creditor, which wants some modification, and
we shall hail the time with satisfaction when, excepting
in cases of fraud and dishonesty, no man shall have power
over the liberty of his fellow.

THE JlilMU,
T H I S END,

A ^ W i f e ^ /fcj**~$**? 3&4J./M- JL^,/W

- _-

J. S. Hodson, Printer, 15, Cross Street, Hatton Garden.