in 1854 an Act was passed by which "all existing laws against usury" were repealed.

The repeal of the usury laws had an effect which was neither beneficial to, nor anticipated by, the community at large. The popular clamour for the removal of all restrictions on the rate of interest rapidly subsided when people began to realise the extortionate demands to which borrowers were becoming subjected, without any hope of redress in the great majority of cases. It is true that the courts of equity could act in cases of actual fraud; for the equitable doctrine of relief against fraud prevailed independently of the usury laws and was therefore unaffected by their repeal. But it is always a matter of some difficulty to prove actual fraud, and thousands of harassed borrowers were accordingly unable to obtain redress on that plea. Moreover, in the majority of transactions actual fraud was absent. Speaking generally, there is no fraud where a person in difficulties agrees to pay a high rate of interest in order to obtain the immediate benefit of ready cash. The moneylender, on the other hand, was enabled to have recourse to all the resources of the law to recover his exorbitant demands. He had merely to go before a judge in chambers, prove the existence of the debt, produce the promissory note or bill of exchange, and get judgment for the amount contained in the note or bill. The wretched debtor must then pay up or suffer the bailiffs to be put in possession of his house. In a great many cases the borrower came to some arrangement with the moneylender to avoid having an execution. levied against his property. Needless to say, such arrangement was always in favour of the moneylender, and the unfortunate debtor was compelled to borrow more money in order to meet the lender's terms. Thus was the last state of the debtor worse than the first, and when the blow finally fell the borrower was usually so hopelessly embarrassed that he had pledged practically all his earthly belongings as security for the loan.

After the repeal of the usury laws the business of moneylending was greatly facilitated by the introduction of modern methods of advertising. This period marked the beginning of the specious moneylender's circular which offers loans from £20 to £10,000 to "ladies and gentlemen, noblemen, medical men, clergymen, solicitors, tradesmen, farmers, and persons of position generally, on their own note of hand alone for short or long periods."

These advertisements were, and are at the present day, directed to persons of a certain status or position. Needy borrowers on mere personal security have always formed the majority of the moneylender's clients, for the simple reason that the person of real substantial security only goes to a moneylender from inexperience or a desire for secrecy. Young men from the universities, young men recently come of age with considerable expectations, curates, bank clerks, government officials, officers of the army and navy, necessitous tradesmen, unprotected women and widows with large families and small means, comprise the large class of persons who have social or family position to lose and who are therefore likely to be pliable in the hands of the unscrupulous moneylender.

In 1897 a Select Committee of the House of Commons was appointed to inquire into the alleged evils of moneylending transactions. The evidence given before the committee disclosed an appalling state of affairs which shocked the public conscience. The committee came to the conclusion that the system of moneylending by professional moneylenders at high rates of interest was productive of crime, bankruptcy, extortion from the borrower's family and friends, and other serious injuries to the community. The committee were of opinion that a high rate of interest was not incompatible with fair dealing, and accordingly rejected the proposal that Parliament should fix a maximum rate. But the committee did recommend that the courts should have power to go behind any contract with a moneylender, to inquire into the circumstances of the original loan and of the subsequent transactions, and to make such order as may be reasonable.

The report of the committee was received in 1898, and the legislature immediately took steps to carry the recommendations of the report into effect. The result was the Moneylenders Act of 1900, which is the principal statute dealing with usury at the present day; the Moneylenders Act of 1911 being merely an amendment thereto in regard to bonâ-fide assignments for value. Section of the Moneylenders Act, 1900, enacts that :

Where . . . . there is evidence which satisfies the court that the interest charged in respect of the sum actually lent is excessive, or that the amounts charged for expenses, inquiries, fines, bonus, premium, renewals, or any other charges, are excessive; and that, in either case,

the transaction is harsh and unconscionable, or is otherwise such that a court of equity would give relief, the court may re-open the transaction and take an account between the moneylender and the person sued, and may, notwithstanding any statement or settlement of account or any agreement purporting to close previous dealings and create a new obligation, re-open any account already taken between them, and relieve the person sued from payment of any sum in excess of the sum adjudged by the court to be fairly due in respect of such principal, interest and charges, as the court, having regard to the risk and all the circumstances may adjudge to be reasonable.

Now the most important feature of a moneylending transaction is generally the rate of interest which is charged upon the loan, and it is therefore in most cases the principal element to be considered in determining the question whether or not the transaction impugned is a "harsh and unconscionable" bargain. But a high rate of interest is not always in itself a sufficient reason for setting aside a transaction. In this respect a distinction must be drawn between "unsecured" and "secured" loans. The courts have laid down that a high rate of interest, even amounting to sixty per cent. per annum, is perfectly reasonable where the security for the loan is merely personal. But where the borrower provides some substantial security, interest at the rate of sixty per cent. would be regarded as excessive, and justify the court in re-opening the transaction and relieving the borrower. The value of a security may generally be appraised with a fair degree of accuracy, but the solvency of a borrower who has nothing to offer is nearly always a matter of some speculation. As Lord Macnaghten said: "It is as easy to gauge the solvency of an individual as to estimate the financial ability of a crowd."

In connection with the rate of interest, reference may be made to the "Default Clause" in promissory notes. This clause almost invariably provides that, upon default in payment of any agreed instalment, the whole amount of principal and interest outstanding shall become due forthwith. The hardship of this provision may be illustrated by a simple example. Thus, where a person borrows the sum of £100 on the security of a promissory note for £160, payable in four quarterly instalments of £40 each, and the borrower makes default in paying the first instalment, the whole sum becomes due at once. That is to say, at the end of the first quarter the borrower must repay £160. On that basis the rate of interest charged upon the loan will amount to 240 per cent. per annum. The "Default Clause" is, of course, thoroughly

understood by moneylenders, but its full significance is not always appreciated by borrowers. Any failure on the part of a moneylender to explain the meaning of the "Default Clause" to an inexperienced or unintelligent borrower constitutes evidence of a "harsh and unconscionable " bargain.

Another important circumstance to be taken into consideration by the court is the financial knowledge of the borrower. In this respect a distinction must be drawn between an intelligent and competent person who is able to appreciate the terms of the bargain, and a person who possesses no such qualifications. There is for example a wide gulf between an experienced man of the world who has recourse to moneylenders in order to tide over some pecuniary embarrassment, and an elderly widow, unaccustomed to deal with monetary affairs, who may be driven to borrow money through reduced circumstances. Another leading distinction is between cases where no element of fraud, misrepresentation, or undue pressure is present, and cases in which some such circumstance is present. But on the other hand, it is very important to remember that the borrower should always disclose the true state of his affairs to the lender. Where a borrower conceals any fact which, if truly disclosed, would influence the lender in making the bargain, such concealment will gravely prejudice the borrower in the eyes of the court to whom he applies for relief. Other examples of "unconscionable" circumstances which are sometimes present in moneylending transactions are the following lending money to a youth and relying upon fear of exposure to force his parents to pay; improperly tempting a borrower as, for example, by sending him banknotes in reply to his first preliminary inquiry; taking advantage of a borrower's dependent situation and incompetence to drive a hard bargain. There are numerous other forms of reprehensible conduct on the part of a moneylender which are not capable of any precise definition and must depend upon the circumstances of each particular case. In fact any form of conduct which is not consistent with fair dealing between man and man may entitle the court to re-open a transaction on the ground of it being a "harsh and unconscionable bargain within the meaning of Section 1 of the Moneylenders Act, 1900.

The only other provision of the Moneylenders Act, 1900, which need be discussed here is concerned with registration.

Section 2 of the Act provides that every moneylender shall be duly registered under his own or usual trade name, and in no other name, and with the address at which he carries on the business of moneylending; that he may only carry on the moneylending business in his registered name and at his registered address; and that he must not enter into moneylending agreements or take any security for money in the course of his business as a moneylender otherwise than in his registered name. A fine, not exceeding £100 (or, in the case of a second or subsequent conviction, a fine not exceeding £100, or three months' imprisonment with or without hard labour, or both) may be imposed on a moneylender who fails to comply with the foregoing provisions. The object of registration is to "bring the moneylender out into the light of day" so that a borrower may know the person with whom he is dealing. A transaction with an unregistered moneylender may be set aside entirely, and not a few borrowers have had reason to be grateful on that account. The registration of course must be made in the proper name, or usual trade name, of the lender. In practice however this is seldom done, but it is usually a matter of great difficulty to prove the contrary. In a great many cases the name adopted by the professional moneylender for the purposes of his business is a mere flight of heraldic fancy. The financial paladins of Jermyn Street are wont to take unto themselves names which are reminiscent of Plantagenet or early Norman times; whereas in all truth they are probably entitled to patronymics of yet greater antiquity. For while holding themselves out to be descendants of Norman conquerors, they may generally be more accurately described as descendants of the great host of optimists who followed Moses for forty years in the wilderness.

The Moneylenders Act of 1900 has now been in operation for twenty-five years. While it cannot be said that the evils. rampant between 1854 (the year in which the laws against usury were abolished) and 1900 have been reproduced in full since the latter date, yet it is abundantly clear that the Moneylenders Act of 1900 has failed to check extortionate and unfair bargains. It is true that Section 1 of the Act empowers a court of law to re-open a transaction which is "harsh and unconscionable," but it will be generally conceded that "harsh and unconscionable" is a somewhat elastic term, and the courts have been compelled to

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