few countries that has not found change desirable. France has reorganized her token coins (1864), entered into the Latin union (1865) and adopted the limping standard in 1874. Germany has completely transformed the monetary system hitherto existing in the German States (1873). The Scandinavian union has been set up (1875). Holland has changed her system more than once. Still later, Austria-Hungary (1892) and Russia (1897) have come over from the silver standard with the practical use of inconvertible paper to new currencies on the gold basis. In America the United States, after a series of monetary experiences, has made the gold dollar its standard unit, though the silver complication still exists. Mexico has succeeded in establishing a gold-exchange standard at such a ratio as to induce the import of gold. British India has had its rupee currency put into relation to the English gold unit, and has been followed by the Straits Settlements. Japan first abandoned its ancient currency (1871). It then adopted a double standard system which became in practice a silver one and later passed into inconvertible paper. Finally, it has (1897) established a composite legal tender system on the gold basis. The Dutch Indies have the gold-exchange standard on the same plan as British India.
Remarks.—In addition to the tabular statements, the following points respecting the currencies of less advanced countries may be indicated. Though there is a tendency to establish the money of the mother-country in colonies, some of the British possessions, acquired by conquest, have kept their former currency. There has been a widespread movement in the backward countries of the world towards reforming their money; chiefly by setting up some line of connexion with the gold standard. In South and Central America the dollar has been retained as the unit; but the movement for co-ordination with the French system has ceased. The English standard has been preferred as a model by Chile and Peru. In Asia the currency of the Philippines has been reorganized under American control. China is considering monetary reform, and Siam has made progress in the direction of the gold-exchange standard. Probably the most defective currencies are now those of Turkey and her tributary states.
Bibliography.—The literature on the subject of money has been well described as “almost measureless.” The list of writers who have contributed to it begins with Aristotle, and includes such famous names as Copernicus, Locke and Newton. A full enumeration would fill a volume of no slight size. All that can be done here is to give a short classified list of the most serviceable books.
I. Economic text-books: English and American—J. S. Mill, Principles of Political Economy (London, 1848; new ed. by Ashley, 1909); Sidgwick, Principles of Political Economy (London, 1883; 3rd ed., 1901); J. S. Nicholson, Principles of Political Economy (3 vols., London, 1893–1901); F. A. Walker, Political Economy (New York, 1883; 2nd ed., 1887, often reprinted); A. T. Hadley, Economics (New York, 1896); E. R. A. Seligman, Principles of Economics (New York, 1905); H. R. Seager, Introduction to Economics (New York, 1904; 3rd ed., 1908). French: M. Chevalier, Cours d’économie politique (vol. iii, “La Monnaie,” Paris, 1850); P. Leroy-Beaulieu, Traité d’économie politique (4 vols., Paris, 1896); C. Gide, Cours d’économie politique (Paris, 1909). German: H. Mangoldt, Grundriss der Volkswirtschaftslehre (2nd ed., Stuttgart, 1871); G. Schonberg, Handbuch der politischen Oeconomie (Tübingen, 1882; 4th ed., 1904); G. Schmoller, Grundriss der allgemeinen Volkswirtschaftslehre (Leipzig, 1900–1904). The Dutch work by N. G. Pierson has been translated into English with the title Principles of Economics (London, 1902).
II. Special treatises on “Money”: W. S. Jevons, Money and the Mechanism of Exchange (London, 1875); F. A. Walker, Money (New York, 1878); J. S. Nicholson, Money and Monetary Problems (London, 1888; 6th ed., 1902); C. A. Conant, The Principles of Money and Banking (2 vols., New York, 1905); A. Arnaune, La Monnaie, le crédit et le change (Paris, 1894; 2nd ed., 1902); A. de Foville, La Monnaie (Paris, 1907); C. Knies, Geld und Kredit (Berlin, 1873–1879); G. F. Knapp, Staatliche Theorie des Geldes (Leipzig, 1905).
III. Works on special questions: See Bimetallism; Banking; and Monetary Conferences for writings on the problems of the standard and depreciation. For the history of money—F. Lenormant, La Monnaie dans l’antiquité (Paris, 1876); W. A. Shaw, History of Currency, 1252–1894 (London, 1895). For the history of the English currency, besides the works on the numismatic side—Lord Liverpool, Coins of the Realm (1805; reprinted 1880). For America—W. G. Sumner, History of American Currency (New York, 1874). On the production and consumption of money materials, W. Jacob, Production and Consumption of the Precious Metals (2 vols., London, 1831); and A. Del Mar, History of the Precious Metals (London, 1880). Technical details in Tate’s Cambist (many editions). (C. F. B.)
MONEY-LENDING, the lending of money on usury (q.v.). The business of the professional money-lender is one which, as
tyranny and abuse are likely to appear, all countries have at
different times endeavoured to regulate. In England the lessons
of experience have shown that the abuses of this business are
best regulated by a system of registration coupled with relief
to debtors against harsh and unconscionable bargains. Other
countries however still appear to cling to the belief that it is
wisest to fix a maximum rate of legal interest. Thus in Germany
the commercial code fixes the legal rate of interest on commercial
transactions at 5%. Moreover in that country traders can
demand interest on commercial debts from the day on which
the debts fall due. In France, again, the Code fixes the rate
of interest on ordinary loans at 5%, and on commercial transactions
at 6%. In the United States of America the law
relating to the lending of money on usury varies in the different
states. All the states have what is called a “legal rate” of
interest; and when no rate of interest is specified in the contract
between the parties, there is a presumption that the borrower
has agreed to pay the legal rate. This legal rate varies from
5% in Louisiana to 8% in Wyoming; in the Eastern states
it is generally 6%. Some of the states have usury laws giving
relief to borrowers in cases where circumstances have compelled
them to agree to extortionate rates; but other states have no such
laws, except that a contract in writing is invariably required
in all cases where the “legal rate” is exceeded.
Practically every form of investment in which a man is capable of indulging involves the lending and borrowing of money, the interest exacted being the profit which the lender receives for the use of his capital. The existence of the professional lender, as apart from the ordinary facilities for borrowing money on good security, is obviously due to the fact that it is not every borrower who is in a position to give good security for a loan. Where the security is bad the market is narrowed; the individuals who are prepared to lend the money on merely personal security require a high rate of interest.
The first people to practise the profession of money-lending in England regularly were the Jews, and the business has remained largely in their hands, though they are in the habit of trading under assumed names. The Norman and Angevin kings were fully alive to the advantages which accrued to the people through borrowing at usury from the Jews, but they were also alive to the advantages which they themselves were able to reap by extorting from the Jews the wealth which the latter had acquired from the people. The Jews were regarded as the king’s serfs, and squeezing them was but a popular form of taxing the people. Indeed in the reign of Henry II. the Scaccarium Judaeorum was established as a separate branch of the exchequer and used for the purpose of filling the royal coffers. The English people on the other hand were not so prone to foster the money-lending business. Sections 10 and 11 of Magna Carta provided that when a person died owing money to a Jew no interest should accrue during the minority of the heir, and further that the widow should be entitled to her dower, and any children who were minors should be provided with necessaries before the repayment of the loan. Then followed a large number of statutes known generally as the Usury Laws (see also Usury). The first of these was passed in 1235 (20 Hen. III. c. 5). The acts were directed to restrain the lending of money at usurious rates. The earlier ones in some cases prohibited the lending of money on usury at all, as in a statute of Jewry of the reign of Edward I.; but the later statutes were chiefly confined to limiting the rate of interest. Thus 21 Jac. I. c. 17 declared void all contracts where the interest was more than 8%. In 1818 a select committee of the House of Commons was appointed to consider the Usury Laws and in 1841 a similar committee of the House of Lords was appointed. As a result an act was passed in 1854 (17 & 18 Vict. c. 90) whereby all the existing laws against usury were repealed.
The question whether any interest is payable or not, and also the amount of such interest, depends on whether the parties to the transaction have expressly or impliedly agreed to the payment of interest by the borrower; for apart from such agreement no interest can lawfully be demanded on a loan.
