In his days, credit was not so well established, nor was it stretched as at present: it was more accustomed to violent shocks, and could bear a rougher treatment. But in order to come the better to a thorough knowledge of this matter, let us examine into what might be the consequence, if Great Britain should, at this time, bring down, by statute, the rate of interest _below the level of the stocks_, which I take to be the best rule of determining the present value of money; and this is also the best method of examining the expediency of Child’s method of reducing interest, under the present combination of all our political circumstances. ------------------------------------------------------------------------ CHAP. VI. _What would be the Consequence of reducing, by a British Statute, the legal Interest of Money below the present level of the Stocks._ When Great Britain borrows money upon the public faith, the rate of interest is always stipulated, and these stipulations must be religiously fulfilled, or credit will be at an end. The regulations then proposed to be made, must only refer to contracts of loan entred into by private parties. The current value of money, I think, is best to be determined by the price of stocks. If a 4 _per cent._ sells at par, money may be said to be then at 4 _per cent._ If the same stock falls to 89, then the value of money rises to near 4½: if the same stock rises to 114, then the value of money falls to about 3½; and so in proportion. According, therefore, as stock is found to rise, the price of money falls, and _vice versa_. Suppose, then, the price of money to be at 4 _per cent._ and that government should pass a law, forbidding any man to lend at above 3 _per cent._ what would be the consequence? This is exactly the expedient proposed by Child: money then was at 6 _per cent._ and he proposes, _by a law_, to bring it, all at once, to 4, without alledging that money was then commonly got by private convention at so low a rate.