made prisoners. Those that escape have to wander as fugitives about the country, and the prisoners have little to expect from the Emperor's mercy. The brother of the TIEN-WANG, and one of his chief officers, who were taken, were sent to Pekin for execution. It was thought by many Chinamen, that they would be brushed to death; that is executed by means of an iron brush passed over the body, tearing the flesh from the bones-a method of execution almost surpassing, in the refinement of its cruelty, the ingenious devices of the Spanish Inquisition. With regard to the body of the TIEN-WANG, the Emperor commanded that the flesh. should be torn from the bones, and the head be sent through the country. It was not, however, on account of any ability on the part of the Manchu generals, or any superior wisdom ever displayed by the Imperial government, which turned the scale against the Taepings, and finally effected the complete overthrow of the rebellion. It was the foreign element introduced in favor of the Tartar dynasty, to which the Pekin government is indebted for its own preservation; and that portion of the Empire over which the TIEN-WANG held sway, for deliverance from the blasting influences of his rule. Our own people, as well the English and French, gave, at the last, very effective aid to the Imperialists. Introducing among the Chinese the discipline and tactics of the Western nations, they quickly showed their superiority to the clumsy operations of the rebel soldiers. An American by the name of GoUGH rendered, in this way, most important service, and obtained the title of Admiral. A Mr. WARD also became a General over the Chinese forces. But the most effective aid was rendered by a Major GORDON, of the English army, who drilled a number of the Imperial troops, and was promoted for his eminent ability, to the rank of General in the Chinese service. He assisted the Imperial forces in taking very many important places, or perhaps it would be more correct to say, that the Imperial forces assisted him; for to the superior element, which he was personally instrumental in putting into practice, belongs the merit of the capture of the most important cities, and of the final suppression of the Taeping rebellion.

Nankin will hereafter be open to trade. It was a large and important city, but is now mostly a heap of ruins. The country about it is a desert, and years will elapse before it can recover from the pernicious influences of Great Peace. Taepingism is probably dead forever, and we are not aware that the mercantile interests, or the extension of Christianity, have materially suffered from the failure of the TIEN-WANG's Heavenly administration.

WHY THE GOLD REVENUE IS FALLING OFF.

PROHIBITORY DUTIES.

EXPERIENCE is revealing the many crude and absurd provisions of the present Tariff Act, whereby the revenue of the country is diminished rather than increased.

Take the article of spool-cotton for example. Selecting this article as one, solely of foreign manufacture, our legislators have thought no duty. too high. The present specific and ad valorem duties amount to about

sixty per cent of the foreign cost, and are so arranged, that on a return to lower prices for raw cotton, they will amount to a tax of at least seventy-five per cent-one altogether prohibitory.

The protection incidentally given to a few New England spinners, at the expense of the United States Revenue, is enormous; the taxes paid by them, in currency, being only one-tenth part of those levied on the foreign spinners. The Internal Tax is five per cent in currency, a tax which produces from five to six cents per dozen at this time, and which will not yield more than two and one-quarter cents a dozen at the ordinary prices of spool-cotton. The duty on foreign thread, ranges from twenty-four to twenty-six cents per dozen, according to quality, and is payable in gold. When gold can be bought at a premium of 2.25, this is equal to 54c@60c. per dozen in currency. Since the Tariff Act went into effect, the fluctuations in the price of specie have made the duty, at times, equal to seventy-four cents in currency, against an average tax of six cents on the domestic article.

The consequence is an enormous falling off in the imports, and consequent specie-revenue, raised from duties on spool-cotton, which, for many years has been upwards of $300,000 in coin, at the port of New York alone; and which, for the past two years has been about $500,000 per annum. It is absurd to suppose that a domestic tax of only six cents per dozen in currency will make up this deficiency, even if the entire trade could be transferred to New England.

Already the general bulk of the importations of this article have been largely diminished under successive advances of duty, and since the last Tariff act went into effect, they have almost ceased. The great and sudden reduction of imports for the current year cannot be attributed to excessive importations prior to the passage of the Act, since the imports of 1864 were very nearly the same as those of the two preceeding years. The true explanation is to be found in the losses which foreign spinners are now suffering, in their attempts to contend against these heavy odds, whereby importation is stopped. The duty has passed the point at which the article will yield revenue.

The annexed tables are taken from the reports published weekly of the New York Customs, and are approximately correct, no official statement of revenue from spool-cotton being accessible. As regard the quantities imported at the Port of New York-the figures are official, the duty for each year being assessed according to the Tariff Act then in operation:

REVENUE COLLECTED FROM SPOOL-COTTON AT PORT OF NEW YORK.

Entered for consumption, and withdrawn from warehouse.

30th June, 1859.

(Duty at 30 p. ct, levied

Revenue

In fiscal year ending.

Packages
7,246

Foreign value. D'ty ass'd, p. ct.

in Gold.

on 969 p'k's.

Six months of 1865, 1st July to 15th Dec., 1861...

Sp'fic Duty, eq'l to 12c, & 30 p. c. on 200 yd. thr'd,

COMMERCIAL LAW.-NO. 17.

INTEREST AND USURY.

(Continued from Page 440, Vol. 51.)

CHARGE FOR RISK OR FOR SERVICE.

Ir is undoubtedly lawful for a lender to charge an extra price for the risk he incurs, provided that risk be perfectly distinct and different from the merely personal risk of the debtor's being unable to pay. If anything is paid for this last risk, it is certainly usury. But if it is a part of the bargain that the debt shall not be paid if a vessel or goods do not arrive in safety, as is the case in a loan on bottomry, or on respondentia, this is not usury. And by the same principle, if one buys an annuity to end at the annuitant's death, or a life-estate, even on exorbitant and oppressive terms, against which a court of equity would relieve, still it is not a usurious contract, provided the purchase be actual, and not a mere disguise.

So, one may charge for services rendered, for brokerage, or for rate of exchange, and may even cause a domestic loan or discount to be actually converted into a foreign one, so as to charge the exchange; and this would not be usurious. But here, as before, and indeed throughout the law of usury, it is necessary to remember that the actual intention, and not the apparent purpose or form of the transaction, must determine its character. So, if one lends money to be used in business, and lends it upon such terms that he becomes a partner in fact with those who use it, taking his share of the profits, and becoming liable for the losses, this is not usuri

ous.

So, if one enters into a partnership, and provides money for its business, and the other party is to bear all the losses, and also to pay the capitalist more than legal interest as his share of the profits, this is not usurious, because there is no loan, if there be in fact a partnership; because then there is a very important risk, as he becomes liable for all the debts of the partnership. If, however, there be only a pretended partnership, in order to disguise the fact of the loan, this would be usurious, although very possibly the lender might, as to a third party, lay himself open to a liability for debts incurred, by reason of his interest in the profits.

The banks always get more than legal interest by their way of discounting notes and deducting the whole interest from the amount they give. This is perfectly obvious if we take an extreme case; as if a bank discounted a note of a thousand dollars at fifteen years, in Massachusetts, the borrower would receive one hundred dollars, and at the end of fifteen years he would pay back the hundred dollars, and nine hundred dollars for the use of it. But this method is now established by usage and sanctioned by law. It must, however, be confined to discounts of negotiable paper, not having a very long time to run. For the rule is founded upon usage, and the usage goes no further.

THE SALE OF NOTES.

There are, perhaps, no questions in relation to interest and usury of more importance than those which arise from the sale of notes or other securities. In the first place, there is no doubt whatever that the owner of a note has as good a right to sell it for the most he can get, as he has to sell any goods or wares which he owns. There is here no question of usury, because there is no loan of money, nor forbearance of debt. But, on the other hand, it is quite as certain that if any person makes his own note, and sells that for what he can get, this, while in appearance the sale of a note, is in fact the giving of a note for money. It is a loan and a borrowing, and nothing else. And if the apparent sale be for such a price that the seller pays more than legal interest, or, in other words, if the note bear interest and is sold for less than its face, or is not on interest and more than interest is discounted, it is a usurious transaction. Supposing these two rules to be settled, the question in each case is, under which of them does that case come, or to which of them does it draw nearest.

We are not aware of any general principle so likely to be of use in determining these questions as this: If the seller of a note acquired it by purchase, or if it is his for money advanced or lent by him to its full amount, he may sell it for what he can get; but if he be the maker of the note, or the agent of the maker, and receives for the note less than would be paid him if only a lawful discount were made, it is a usurious loan. In other words, the first holder of a note (and the maker of a note is not, and cannot be, its first holder) must pay to the maker the face of the note, or its full amount. And after paying this, he may sell it, and any subsequent purchaser may sell it, as merchandise. The same rule (if it be law, of which we cannot doubt) must apply to corporations, and all other bodies or persons who issue their notes or bonds on interest. If sold by brokers for them, for less than the full amount, it is usurious. Nor can such notes come into the market free from the taint and the defence of usury, unless the first party who holds them pays for them their full value.

But then comes another question. If a note be offered for sale, and be sold for less than its face, and the purchaser supposes himself to buy it from an actual holder and rot from the maker, can the maker interpose the defence that it was actually usurious, on the ground that the seller was only his agent? We should say that he could not; that there can be no usury unless this is intended; and that the guilty intention of one party cannot affect another party who was innocent. Undoubtedly, a note, originally usurious, is not healed, so far as the owner is concerned, by transfer to an innocent holder. The indorsers may be liable to the holder; but whatever defence the maker could have, on the ground of usury, against the first holder, he may always have against any subsequent holder. This is because there was actual usury at the beginning; that is, one lent and the other borrowed, both knowing that more than legal interest was paid. But in the case of an innocent purchaser, or, rather, of one who supposes, and has a right to suppose, that he is a purchaser, he did not lend his money at all; he only bought a security with it; and, therefore, there is no usury.

We should, however, say that, when a maker shows that the apparent

seller was only his agent, and offers this as evidence that the note passed from him usuriously, he thereby casts upon the buyer the burden of prov ing his innocence; but it is then enough for the buyer to satisfy the jury of his belief that he was only a purchaser.

As one may sell the notes or other securities which he holds as property under no other restriction than that which attends the sale of merchandise, so we think that a man may sell his credit. The cases which relate to this question are far from harmonious. In the dread of usury which was formerly entertained, and the determination-30 strongly expressed by MANSFIELD that it should not, by any device, escape the law, it has undoubtedly been held that the indorser of a note should be liable upon it only for what he received, with lawful interest. But although we have not much positive authority for setting this rule aside, we are quite confident that a better understanding of the nature of negotiable paper, of the contract of indorsement, and of the rules which properly belong to the sale and purchase of money, would make the indorser liable for the

whole of the note.

If A holds the note of B, and sells it to C, without indorsing it, he can certainly sell it for what he pleases; if he chooses to add his indorsement, he will do so, and he will probably do this if the additional value, which he thus imparts to it exceeds the risk he incurs. If, then, he indorses the note, it is to make his merchandise more valuable; and it would seem to be little less than an absurdity to say, that a merchant may not thus give a paper he holds more value, or that he may give the paper this value, but must not realize this value by the sale. If, however, the rule is, that, when called upon by the indorsee, he may plead usury as between them, and pay either nothing, or so much only as he received, without regard to the amount he agreed by his indorsement to pay, it is obvious that the whole effect and utility of the indorsement would be very much impaired. We think that a seller with indorsement should be, and that he now generally would be, held as liable for the full amount of the note.

Some courts have held, that, if one honestly buys a negotiable note for less than its face, he can recover only so much as he pays, with lawful interest. But the law is otherwise generally, and especially in our most commercial States, for the plain reason, that, if this be law, no note would be saleable when money was worth more than lawful interest. That is, no one would buy it, if he could only get his money back with simple interest. Suppose one owes a note for $1,000, having six months to run, when money is worth twelve per cent per annum. The note is worth in the market $1,000, less six per cent, or $60; that is, it is worth $940. But if a man gave this, he could recover under this rule only what he gave, with simple interest; that is, $940 with three per cent interest, or $968 20. Therefore he would not buy it. Only where it is supposed that the law can always regulate and control the actual market value of money, can this rule prevail.

We should say, also, that one who, having no interest in a note, indorses or guaranties it for a certain premium, will be liable for its face; he does not now add his credit to the value of his property and sell both together, as where he indorses a note which he holds himself, but sells his credit alone. This transaction we should not think usurious. And if it was open to no other defence, as fraud, for example, and was in fact