Extensiv credit, in a popular government, is always pernicious, and may be fatal. When the people are deeply or generally involved, they have power and strong temptations to introduce an abolition of debts; an agrarian law, or that modern refinement on the Roman plan, which is a substitute for both, a paper currency, issued on depreciating principles. Rhode Island is a melancholy proof of this truth, and New Hampshire narrowly escaped the deplorable evils. In governments like ours, it is policy to make it the interest of people to be honest. In short, the whole art of governing consists in binding each individual by his particular interest, to promote the aggregate interest of the community.
Massachusetts affords a striking example of the danger incurred by too many private debts. During the war the operation of justice was necessarily suspended, and debts were constantly multiplying and accumulating. When law came to be rigorously enforced, the people were distressed beyond measure, particularly in the western counties, where people are poorer than in the parts of the State better settled, and nearer to market. These private debts crowded hard, and operated with the demands of the federal creditors, to push the people into violent measures.
The planters in Virginia owe immense sums of money to the British merchants. What is the consequence? a law, suspending the collection of British debts. The loss of their slaves is the ostensible excuse for this law; but a more solid reason must be, the utter impossibility of immediately discharging the debts. In our governments the men who owe the money, make the laws; and a general embarrassment of circumstances is too strong a temptation to evade or suspend the performance of justice. For this reason, the wisdom of the Legislature might cooperate with the interest of the merchant, to check a general credit. In some cases it might be safe and wise to withdraw the protection of law from debts of certain descriptions. It is an excellent law in one State, which ordains, that no tavern debt, of more than two days standing, shall be recoverable by law. It prevents tavern haunting and its consequences, idleness, drunkenness and quarrels. Perhaps laws of this kind have the best effect in introducing punctual payments. Their first effect is to prevent credit; but they gradually change a man's regard for his property, to a more activ and efficient principle, an attention to his character.
In the present anarchy in Massachusetts, monied men get credit with the merchant, and are punctual to fulfil engagements, as they are sensible that the merchant relies solely on their honor. The certain ultimate tendency of withdrawing the protection of law from particular kinds of debts, is to discourage tricks and evasions, and introduce habits of punctuality in commerce.
The present state of our public credit hath the same effect. Repeated violations of public faith, the circulation of a variable medium of trade, the contempt of law, the perpetual fear of new legislativ schemes for discharging our debts, and of tender laws, have made men very cautious in giving credit, and when they do give it, they depend more on the honor of a man than on any security derived from law. This one happy effect of want of confidence in the public, is some small consolation for an infinite variety of political evils and distresses.
Laws to prevent credit would be beneficial to poor people. With respect to the contraction of debts, people at large, in some measure, resemble children; they are not judges even of their own interest. They anticipate their incomes, and very often, by miscalculation, much more than their incomes. But this is not the worst effect; an easy credit throws them off their guard in their expenses. In general we observe that a slow, laborious acquisition of property, creates a caution in expenditures, and gradually forms the miser. On the other hand, a sudden acquisition of money, either by gambling, lotteries, privateering, or marriage, has a tendency to open the heart, or throw the man off his guard, and thus makes him prodigal in his expenses. Perhaps this is ever the case, except when a penurious habit has been previously formed.
An easy and extensiv credit has a similar effect. When people can possess themselves of property without previous labor, they consume it with improvident liberality. A prudent man will not; but a large proportion of mankind have not prudence and fortitude enough to resist the demands of pride and appetite. Thus they often riot on other men's property, which they would not labor to procure. They form habits of indolence and extravagance, which ruin their families, and impoverish their creditors.
Another effect of extensiv credit, is a multitude of lawyers. Every thing which tends to create disputes, to multiply debts, weaken a regard to commercial engagements, and place the collection of debts on law, rather than on honour, increases the encouragement of lawyers. The profession of law is honorable, and the professors, I scruple not to aver, as liberal, honest and respectable, as any class of men in the State. But their business must be considered as a public evil, except in the drafting of legal instruments, and in some real important disputes. Such is the habit of trusting to law, for the recovery of debts, that, in some of the eastern States, one half or two thirds of the lawyers are mere collectors. They bring forward suits for small debts, that are not disputed; they recover judgement upon default, they take out executions, and live upon their fees.
The evil is not so great in the middle States; but it is great in all the States. Never was there such a rage for the study of law. From one end of the continent to the other, the students of this science are multiplying without number. An infallible proof that the business is lucrativ.
The insurgents in Massachusetts enumerate lawyers among their grievances. They wish the Legislature to limit their number and their demands. Short sighted mortals! They seem not to consider that lawyers grow out of their own follies, and that the only radical remedy for the evil is, to contract no more debts than they can pay, with strict punctuality.