76. The rate of interest ought to be fixed, as the price of
every other merchandize, by the course of trade alone.
I have already said, that the price of money borrowed, is
regulated like the price of all other merchandize, by the
proportion of the money at market with the demand for it: thus,
when there are many borrowers who are in want of money, the
interest of money rises; when there are many possessors who are
ready to lend, it falls. It is therefore an error to believe that
the interest of money in trade ought to be fixed by the laws of
princes. It has a current price fixed like that of all other
merchandize. This price varies a little, according to the greater
or less security which the lender has; but on equal security, he
ought to raise and fall his price in proportion to the abundance
of the demand, and the law no more ought to fix the interest of
money than it ought to regulate the price of any other
merchandizes which have a currency in trade.
