While this essay was published in 1836, while William B. Greene was at West Point, similarities between it and the the section on "The Usury Laws" in Greene's Equality (1849) make it worth at least a look as a potential source.
WILLIAM CULLEN BRYANT
On Usury Laws
The fact that the usury laws, arbitrary, unjust, and oppressive as they are, and unsupported by a single substantial reason, should have been suffered to exist to the present time can only be accounted for on the ground of the general and singular ignorance which has prevailed as to the true nature and character of money. If men would but learn to look upon the medium of exchange, not as a mere sign of value, but as value itself, as a commodity governed by precisely the same laws which affect other kinds of property, the absurdity and tyranny of legislative interference to regulate the extent of profit which, under any circumstances, may be charged for it would at once become apparent.
The laws do not pretend to dictate to a landlord how much rent he may charge for his house; or to a merchant what price he shall put upon his cloth; or to a mechanic at what rate he shall sell the products of his skill; or to a farmer the maximum he shall demand for his hay or grain. Yet money is but another form into which all these commodities are transmuted, and there is no reason why the owner of it shall be forbidden to ask exactly that rate of profit for the use of it which its abundance or scarcity makes it worth—no reason why the laws of supply and demand, which regulate the value of all other articles, should be suspended by legislative enactment in relation to this, and their place supplied by the clumsy substitute of feudal ignorance and worse than feudal tyranny.
The value of iron and copper and lead consists of exactly the same elements as the value of gold and silver. The labor employed in digging them, the quantity in which they are found, and the extent of their application in the useful arts, or, in other words, the relation of the demand to the supply, are the circumstances which fix their market price. Should some great manufacture be undertaken in which a vast additional amount of iron or copper or lead would be used, a sudden and considerable rise of price would be the inevitable consequence. Should this increased demand lead to any valuable improvement in the mining art, or to investigations which should discover new and prolific beds of ore, a corresponding fall of prices would occur. These fluctuations are continually taking place, and an attempt to prevent them by state legislation would be about as effectual as the command of the barbarian king that the ocean should not overpass a certain bound. Silver and gold, though in a less degree, are liable to precisely the same fluctuations of intrinsic value, and to seek to confine them to a fixed point is an attempt marked by equal folly.
If, then, the intrinsic value of money cannot be established by law, the value of its use is no less beyond the proper compass of legislation. Though a certain per centum is established as the rate which may be demanded for the use of money, we find, when the article is relatively abundant, that, notwithstanding the law, a much lower rate is received; and why, on the other hand, when money is scarce, should an attempt be made to prevent it from rising to its natural level?
Such attempts have always been, and always will be, worse than fruitless. They not only do not answer the ostensible object, but they accomplish the reverse. They operate, like all restrictions on trade, to the injury of the very class they are framed to protect; they oppress the borrower for the advantage of the lender; they take from t he poor to give to the rich. How is this result produced? Simply by diminishing the amount of capital, which, in the shape of money, would be lent to the community at its fair value, did no restriction exist, and placing what is left in the most extortionate hands. By attaching a stigma and a penalty to the innocent act of asking for money what money is worth, when that value rises above seven per cent, the scrupulous and reputable money lenders are driven from t he market and forced to employ their funds in other modes of investment. The supply, the inadequacy of which in the first place caused the increase in the rate of usance, is thus still further diminished, and the rate of usance necessarily rises still higher. The loanable funds, too, are held only by those who do not scruple to tax their loans with another grievous charge as security against the penalty imposed by an unwise law; and thus our Legislature, instead of assisting the poor man, but makes his necessities the occasion of sorely augmenting his burden.
But usury laws operate most hardly in many cases, even when the general rate of money is below their arbitrary standard. There is an intrinsic and obvious difference between borrowers, which not only justifies but absolutely demands, on the part of a prudent man disposed to relieve the wants of applicants, a very different rate of interest. Two persons can hardly present themselves in precisely equal circumstances to solicit a loan. One man is cautious; another is rash. One is a close calculator, sober in his views, and unexcitable in his temperament; another is visionary and enthusiastic. One has tangible security to offer; another nothing but the airy one of a promise. Who shall say that to lend money to these several persons is worth in each case an equal premium?
Should a person come to us with a project which, if successful, will yield an immense return, but, if unsuccessful, leave him wholly destitute, shall we not charge him for the risk we run in advancing his views? The advocates of usury laws may answer that we have it at our option either to take seven per cent or wholly refuse to grant the required aid. True; but suppose the project one which is calculated, if successful, to confer a vast benefit on mankind. Is it wise in the Legislature in such a case to bar the door against ingenuity, except the money lender turns philanthropist and jeopards his property, not for a fair equivalent, but out of mere love to his fellow man?
The community begin to answer these questions aright, and there is ground for hope that they will ere long insist upon their legislative agents repealing the entire code of barbarous laws by which the trade in money has hitherto been fettered.
from New York Evening Post, September 26, 1836