4000. INTEREST (Money), Forfeited.—
There is one rule of your[the English] and our law, which, while it proves that every
title of debt is liable to a disallowance of interest
under special circumstances, is so ap
plicable to our case, that I shall cite it as a
text, and apply it to the circumstances of
our case. It is laid down in Vin. Abr. Interest.
c. 7, and 2 Abr. Eq. 5293, and elsewhere
in these words: “Where, by a general
and national calamity, nothing is made out of
lands which are assigned for payment of interest,
it ought not to run on during the time
of such calamity.” This is exactly the case
in question. Can a more general national
calamity be conceived than that universal devastation
which took place in many of these
States during the war? Was it ever more exactly
the case anywhere, that nothing was
made out of the lands which were to pay
the interest? The produce of those lands, for
want of the opportunity of exporting it safely,
was down to almost nothing in real money.
For example, tobacco was less than a dollar
the hundred weight. Imported articles of
clothing or consumption were from four to
eight times their usual price. A bushel of
salt was usually sold for 100 lbs. of tobacco.
At the same time, these lands, and other
property, in which the money of the British
creditor was vested, were paying high taxes
for their own protection, and the debtor, as
nominal holder, stood ultimate insurer of
their value to the creditor, who was the real
proprietor, because they were bought with his
money. And who will estimate the value of
this insurance, or say what would have been
the forfeit, in a contrary event of the war?
Who will say that the risk of the property
was not worth the interest of its price? General
calamity, then, prevented profit, and, consequently,
stopped interest, which is in lieu
of profit. The creditor says, indeed, he has
laid out of his money; he has, therefore, lost
the use of it. The debtor replies, that, if
the creditor has lost, he has not gained it;
that this may be a question between two parties,
both of whom have lost. In that case,
the courts will not double the loss of the one,
to save all loss from the other. That is a rule
of natural as well as municipal law, that in
questions “de damno evitando melior est conditio
possidentis”. If this maxim be just,
where each party is equally innocent, how
much more so, where the loss has been produced
by the act of the creditor? For, a
nation, as a society, forms a moral person,
and every member of it is personally responsible
for his society. It was the act of
the lender, or of his nation, which annihilated
the profits of the money lent; he cannot then
demand profits which he either prevented
from coming into existence, or burned, or
otherwise destroyed, after they were produced.
If, then, there be no instrument, or
title of debt so formal and sacred as to give
right to interest under all possible circumstances,
and if circumstances of exemption,
stronger than in the present case,
cannot possibly be found, then no instrument
or title of debt, however formal
or sacred, can give right to interest
under the circumstances of our case. Let us
present the question in another point of view.
Your own law forbade the payment of interest,
when it forbade the receipt of American
produce into Great Britain, and made
that produce fair prize on its way from the
debtor to the creditor, or to any other, for
his use of reimbursement. All personal access
between creditor and debtor was made
illegal; and the debtor who endeavored to
make a remitment of his debt, or interest,
must have done it three times to ensure its
getting once to hand; for two out of three
vessels were generally taken by the creditor
nation, and, sometimes, by the creditor himself,
as many of them turned their trading
vessels into privateers.—
To George Hammond. Washington ed. iii, 418.
Ford ed., vi, 58.
(Pa.,
1792)
