Yet worse than these were the moral results. Doing what one holds to be evil is only second in bad consequences to doing what is really evil; hence, all lending and borrowing, even for the most legitimate purposes and at the most reasonable rates, tended to debase both borrower and lender. The prohibition of lending at interest in continental Europe promoted luxury and discouraged economy; the rich, who were not engaged in business, finding no easy way of employing their incomes productively, spent them largely in ostentation and riotous living. One evil effect is felt in all parts of the world to this hour. The Jews, so acute in intellect and strong in will, were virtually drawn or driven out of all other industries or professions by the theory that their race, being accursed, was only fitted for the abhorred profession of money-lending.(451)
(451) For evil economic results, and especially for the rise of the rate of interest in England and elsewhere at times to forty per cent, see Cunningham, Growth of English Industry and Commerce, Cambridge, 1890, p. 189; and for its rising to ten per cent a month, see Bedarride, Les Juifs en France, en Italie, at en Espagne, p. 220; see also Hallam"s Middle Ages, London, 1853, pp. 401, 402. For the evil moral effects of the Church doctrine against taking interest, see Montesquieu, Esprit des Lois, lib. xxi, chap. xx; see also Sismondi, cited in Lecky. For the trifling with conscience, distinction between "consumptibles" and "fungibles," "possessio" and "dominium," etc., see Ashley, English Economic History, New York, pp. 152, 153; see also Leopold Delisle, Etudes, pp. 198, 468. For the effects of these doctrines on the Jews, see Milman, History of the Jews, vol. iii, p. 179; also Wellhausen, History of Israel, London, 1885, p. 546; also Beugnot, Les Juifs d"Occident, Paris, 1824, pt. 2, p. 114 (on driving Jews out of other industries than money-lending). For a noted mediaeval evasion of the Church rules against usury, see Peruzzi, Storia del Commercio e dei Banchieri di Firenze, Florence, 1868, pp. 172, 173.
These evils were so manifest, when trade began to revive throughout Europe in the fifteenth century, that most earnest exertions were put forth to induce the Church to change its position.
The first important effort of this kind was made by John Gerson. His general learning made him Chancellor of the University of Paris; his sacred learning made him the leading orator at the Council of Constance; his piety led men to attribute to him The Imitation of Christ. Shaking off theological shackles, he declared, "Better is it to lend money at reasonable interest, and thus to give aid to the poor, than to see them reduced by poverty to steal, waste their goods, and sell at a low price their personal and real property."
But this idea was at once buried beneath citations from the Scriptures, the fathers, councils, popes, and the canon law. Even in the most active countries there seemed to be no hope. In England, under Henry VII, Cardinal Morton, the lord chancellor, addressed Parliament, asking it to take into consideration loans of money at interest. The result was a law which imposed on lenders at interest a fine of a hundred pounds besides the annulment of the loan; and, to show that there was an offence against religion involved, there was added a clause "reserving to the Church, notwithstanding this punishment, the correction of their souls according to the laws of the same."
Similar enactments were made by civil authority in various parts of Europe; and just when the trade, commerce, and manufactures of the modern epoch had received an immense impulse from the great series of voyages of discovery by such men as Columbus, Vasco da Gama, Magellan, and the Cabots, this barrier against enterprise was strengthened by a decree from no less enlightened a pontiff than Leo X.
The popular feeling warranted such decrees. As late as the end of the Middle Ages we find the people of Piacenza dragging the body of a money-lender out of his grave in consecrated ground and throwing it into the river Po, in order to stop a prolonged rainstorm; and outbreaks of the same spirit were frequent in other countries. (452)
(452) For Gerson"s argument favouring a reasonable rate of interest, see Coquelin and Guillaumin, Dictionnaire, article Interet. For the renewed opposition to the taking of interest in England, see Craik, History of British Commerce, chap. vi. The statute cited is 3 Henry VII, chap. vi; it is found in Gibson"s Corpus Juris Eccles. Anglic., p. 1071. For the adverse decree of Leo X, see Liegeois, p. 76. See also Lecky, Rationalism, vol. ii. For the dragging out of the usurer"s body at Piacenza, see Burckhardt, The Renaissance in Italy, London, 1878, vol.
ii, p. 339. For public opinion of similar strength on this subject in England, see Cunningham, p. 239; also Pike, History of Crime in England, vol. i, pp. 127, 193. For good general observations on the same, see Stephen, History of Criminal Law in England, London, 1883, vol. iii, pp.
195-197. For usury laws in Castile and Aragon, see Bedarride, pp.
191, 192. For exceedingly valuable details as to the att.i.tude of the mediaeval Church, see Leopold Delisle, Etudes sur la Cla.s.se Agricole en Normandie au Moyen Age, Evreux, 1851, pp. 200 et seq., also p. 468. For penalties in France, see Matthew Paris, Chronica Majora, in the Rolls Series, especially vol. iii, pp. 191, 192. For a curious evasion, sanctioned by Popes Martin V and Calixtus III when Church corporations became money-lenders, see H. C. Lea on The Ecclesiastical Treatment of Usury, in the Yale Review for February, 1894. For a detailed development of interesting subordinate points, see Ashley, Introduction to English Economic History and Theory, vol. ii, ch, vi.
Another mode of obtaining relief was tried. Subtle theologians devised evasions of various sorts. Two among these inventions of the schoolmen obtained much notoriety.
The first was the doctrine of "d.a.m.num emergens": if a lender suffered loss by the failure of the borrower to return a loan at a date named, compensation might be made. Thus it was that, if the nominal date of payment was made to follow quickly after the real date of the loan, the compensation for the antic.i.p.ated delay in payment had a very strong resemblance to interest. Equally cogent was the doctrine of "lucrum cessans": if a man, in order to lend money, was obliged to diminish his income from productive enterprises, it was claimed that he might receive in return, in addition to his money, an amount exactly equal to this diminution in his income.
But such evasions were looked upon with little favour by the great body of theologians, and the name of St. Thomas Aquinas was triumphantly cited against them.
Opposition on scriptural grounds to the taking of interest was not confined to the older Church. Protestantism was led by Luther and several of his a.s.sociates into the same line of thought and practice.
Said Luther. "To exchange anything with any one and gain by the exchange is not to do a charity; but to steal. Every usurer is a thief worthy of the gibbet. I call those usurers who lend money at five or six per cent." But it is only just to say that at a later period Luther took a much more moderate view. Melanchthon, defining usury as any interest whatever, condemned it again and again; and the Goldberg Catechism of 1558, for which he wrote a preface and recommendation, declares every person taking interest for money a thief. From generation to generation this doctrine was upheld by the more eminent divines of the Lutheran Church in all parts of Germany. The English reformers showed the same hostility to interest-bearing loans. Under Henry VIII the law of Henry VII against taking interest had been modified for the better; but the revival of religious feeling under Edward VI caused in 1552 the pa.s.sage of the "Bill of Usury." In this it is said, "Forasmuch as usury is by the word of G.o.d utterly prohibited, as a vice most odious and detestable, as in divers places of the Holy Scriptures it is evident to be seen, which thing by no G.o.dly teachings and persuasions can sink into the hearts of divers greedy, uncharitable, and covetous persons of this realm, nor yet, by any terrible threatenings of G.o.d"s wrath and vengeance," etc., it is enacted that whosoever shall thereafter lend money "for any manner of usury, increase, lucre, gain, or interest, to be had, received, or hoped for," shall forfeit princ.i.p.al and interest, and suffer imprisonment and fine at the king"s pleasure.(453)
(453) For Luther"s views, see his sermon, Von dem Wucher, Wittenberg, 1519; also the Table Talk, cited in Coquelin and Guillaumin, article Interet. For the later, more moderate views of Luther, Melanchthon, and Zwingli, making a compromise with the needs of society, see Bohm-Bawerk, p. 27, citing Wiskemann. For Melanchthon and a long line of the most eminent Lutheran divines who have denounced the taking of interest, see Die Wucherfrage, St. Louis, 1869, pp. 94 et seq. For the law against usury under Edward VI, see Cobbett"s Parliamentary History, vol. i, p.
596; see also Craik, History of British Commerce, chap. vi.
But, most fortunately, it happened that Calvin, though at times stumbling over the usual texts against the taking of interest for money, turned finally in the right direction. He cut through the metaphysical arguments of Aristotle, and characterized the subtleties devised to evade the Scriptures as "a childish game with G.o.d." In place of these subtleties there was developed among Protestants a serviceable fiction--the statement that usury means ILLEGAL OR OPPRESSIVE INTEREST.
Under the action of this fiction, commerce and trade revived rapidly in Protestant countries, though with occasional checks from exact interpreters of Scripture. At the same period in France, the great Protestant jurist Dumoulin brought all his legal learning and skill in casuistry to bear on the same side. A certain ferretlike acuteness and litheness seem to have enabled him to hunt down the opponents of interest-taking through the most tortuous arguments of scholasticism.
In England the struggle went on with varying fortune; statesmen on one side, and theologians on the other. We have seen how, under Henry VIII, interest was allowed at a fixed rate, and how, the development of English Protestantism having at first strengthened the old theological view, there was, under Edward VI, a temporarily successful attempt to forbid the taking of interest by law.
The Puritans, dwelling on Old Testament texts, continued for a considerable time especially hostile to the taking of any interest.
Henry Smith, a noted preacher, thundered from the pulpit of St. Clement Danes in London against "the evasions of Scripture" which permitted men to lend money on interest at all. In answer to the contention that only "biting" usury was oppressive, Wilson, a noted upholder of the strict theological view in political economy, declared: "There is difference in deed between the bite of a dogge and the bite of a flea, and yet, though the flea doth lesse harm, yet the flea doth bite after hir kinde, yea, and draweth blood, too. But what a world this is, that men will make sin to be but a fleabite, when they see G.o.d"s word directly against them!"
The same view found strong upholders among contemporary English Catholics. One of the most eminent of these, Nicholas Sanders, revived very vigorously the use of an old scholastic argument. He insisted that "man can not sell time," that time is not a human possession, but something which is given by G.o.d alone: he declared, "Time was not of your gift to your neighbour, but of G.o.d"s gift to you both."
In the Parliament of the period, we find strong a.s.sertions of the old idea, with constant reference to Scripture and the fathers. In one debate, Wilson cited from Ezekiel and other prophets and attributed to St. Augustine the doctrine that "to take but a cup of wine is usury and d.a.m.nable." Fleetwood recalled the law of King Edward the Confessor, which submitted usurers to the ordeal.
But arguments of this sort had little influence upon Elizabeth and her statesmen. Threats of d.a.m.nation in the next world troubled them little if they could have their way in this. They re-established the practice of taking interest under restrictions, and this, in various forms, has remained in England ever since. Most notable in this phase of the evolution of scientific doctrine in political economy at that period is the emergence of a recognised difference between USURY and INTEREST. Between these two words, which had so long been synonymous, a distinction now appears: the former being construed to indicate OPPRESSIVE INTEREST, and the latter JUST RATES for the use of money.
This idea gradually sank into the popular mind of Protestant countries, and the scriptural texts no longer presented any difficulty to the people at large, since there grew up a general belief that the word "usury," as employed in Scripture, had ALWAYS meant exorbitant interest; and this in spite of the parable of the Talents. Still, that the old Aristotelian quibble had not been entirely forgotten, is clearly seen by various pa.s.sages in Shakespeare"s Merchant of Venice. But this line of reasoning seems to have received its quietus from Lord Bacon. He did not, indeed, develop a strong and connected argument on the subject; but he burst the bonds of Aristotle, and based interest for money upon natural laws. How powerful the new current of thought was, is seen from the fact that James I, of all monarchs the most fettered by scholasticism and theology, sanctioned a statute dealing with interest for money as absolutely necessary. Yet, even after this, the old idea a.s.serted itself; for the bishops utterly refused to agree to the law allowing interest until a proviso was inserted that "nothing in this law contained shall be construed or expounded to allow the practice of usury in point of religion or conscience." The old view cropped out from time to time in various public declarations. Famous among these were the Treatise of Usury, published in 1612 by Dr. Fenton, who restated the old arguments with much force, and the Usury Condemned of John Blaxton, published in 1634. Blaxton, who also was a clergyman, defined usury as the taking of any interest whatever for money, citing in support of this view six archbishops and bishops and over thirty doctors of divinity in the Anglican Church, some of their utterances being very violent and all of them running their roots down into texts of Scripture. Typical among these is a sermon of Bishop Sands, in which he declares, regarding the taking of interest: "This canker hath corrupted all England; we shall doe G.o.d and our country true service by taking away this evill; represse it by law, else the heavy hand of G.o.d hangeth over us and will strike us."
II. RETREAT OF THE CHURCH, PROTESTANT AND CATHOLIC.
But about the middle of the seventeenth century Sir Robert Filmer gave this doctrine the heaviest blow it ever received in England. Taking up Dr. Fenton"s treatise, he answered it, and all works like it, in a way which, however unsuitable to this century, was admirably adapted to that. He cites Scripture and chops logic after a masterly manner.
Characteristic is this declaration: "St. Paul doth, with one breath, reckon up seventeen sins, and yet usury is none of them; but many preachers can not reckon up seven deadly sins, except they make usury one of them." Filmer followed Fenton not only through his theology, but through his political economy, with such relentless keenness that the old doctrine seems to have been then and there practically worried out of existence, so far as England was concerned.
Departures from the strict scriptural doctrines regarding interest soon became frequent in Protestant countries, and they were followed up with especial vigour in Holland. Various theologians in the Dutch Church attempted to a.s.sert the scriptural view by excluding bankers from the holy communion; but the commercial vigour of the republic was too strong: Salmasius led on the forces of right reason brilliantly, and by the middle of the seventeenth century the question was settled rightly in that country. This work was aided, indeed, by a far greater man, Hugo Grotius; but here was shown the power of an established dogma. Great as Grotius was--and it may well be held that his book on War and Peace has wrought more benefit to humanity than any other attributed to human authorship--he was, in the matter of interest for money, too much entangled in theological reasoning to do justice to his cause or to himself. He declared the prohibition of it to be scriptural, but resisted the doctrine of Aristotle, and allowed interest on certain natural and practical grounds.
In Germany the struggle lasted longer. Of some little significance, perhaps, is the demand of Adam Contzen, in 1629, that lenders at interest should be punished as thieves; but by the end of the seventeenth century Puffendorf and Leibnitz had gained the victory.
Protestantism, open as it was to the currents of modern thought, could not long continue under the dominion of ideas unfavourable to economic development, and perhaps the most remarkable proof of this was presented early in the eighteenth century in America, by no less strict a theologian than Cotton Mather. In his Magnalia he argues against the whole theological view with a boldness, acuteness, and good sense which cause us to wonder that this can be the same man who was so infatuated regarding witchcraft. After an argument so conclusive as his, there could have been little left of the old anti-economic doctrine in New England.(454)
(454) For Calvin"s views, see his letter published in the appendix to Pearson"s Theories on Usury. His position is well-stated in Bohm-Bawerk, pp. 28 et seq., where citations are given. See also Economic Tracts, No. IV, New York, 1881, pp. 34, 35; and for some serviceable Protestant fictions, see Cunningham, Christian Opinion on Usury, pp. 60, 61. For Dumoulin (Molinaeus), see Bohm-Bawerk, as above, pp. 29 et seq. For debates on usury in the British Parliament in Elizabeth"s time, see Cobbett, Parliamentary History, vol. i, pp 756 et seq. A striking pa.s.sage in Shakespeare is found in the Merchant of Venice, Act I, scene iii: "If thou wilt lend this money, lend it not as to thy friend; for when did friendship take a breed for barren metal of his friend?" For the right direction taken by Lord Bacon, see Neumann, Geschichte des Wuchers in Deutschland, Halle, 1864, pp. 497, 498. For Salmasius, see his De Usuris, Leyden, 1638, and for others mentioned, see Bohm-Bawerk, pp. 34 et seq.; also Lecky, vol. ii. p. 256. For the saving clause inderted by the bishops in the statute of James I, see the Corpus Juris Eccles. Anglic., p. 1071; also Murray, History of Usury, Philadelphia, 1866, p. 49.
For Blaxton, see his English Usurer, or Usury Condemned, by John Blaxton, Preacher of G.o.d"s Word, London, 1634. Blaxton gives some of Calvin"s earlier utterances against interest. For Bishop Sands;s sermon, see p. 11. For Filmer, see his Quaestio Quodlibetica, London, 1652, reprinted in the Harleian Miscellany, vol x, pp. 105 et seq. For Grotius, see the De Jure Belli ac Pacis, lib. ii, cap. xii. For Cotton Mather"s argument, see the Magnalia, London, 1702, pp. 5, 52.
But while the retreat of the Protestant Church from the old doctrine regarding the taking of interest was henceforth easy, in the Catholic Church it was far more difficult. Infallible popes and councils, with saints, fathers, and doctors, had so constantly declared the taking of any interest at all to be contrary to Scripture, that the more exact though less fortunate interpretation of the sacred text relating to interest continued in Catholic countries. When it was attempted in France in the seventeenth century to argue that usury "means oppressive interest," the Theological Faculty of the Sorbonne declared that usury is the taking of any interest at all, no matter how little; and the eighteenth chapter of Ezekiel was cited to clinch this argument.
Another attempt to ease the burden of industry and commerce was made by declaring that "usury means interest demanded not as a matter of favour but as a matter of right." This, too, was solemnly condemned by Pope innocent XI.
Again an attempt was made to find a way out of the difficulty by declaring that "usury is interest greater than the law allows." This, too, was condemned, and so also was the declaration that "usury is interest on loans not for a fixed time."
Still the forces of right reason pressed on, and among them, in the seventeenth century, in France, was Richard Simon. He attempted to gloss over the declarations of Scripture against lending at interest, in an elaborate treatise, but was immediately confronted by Bossuet. Just as Bossuet had mingled Scripture with astronomy and opposed the Copernican theory, so now he mingled Scripture with political economy and denounced the lending of money at interest. He called attention to the fact that the Scriptures, the councils of the Church from the beginning, the popes, the fathers, had all interpreted the prohibition of "usury" to be a prohibition of any lending at interest; and he demonstrated this interpretation to be the true one. Simon was put to confusion and his book condemned.
There was but too much reason for Bossuet"s interpretation. There stood the fact that the prohibition of one of the most simple and beneficial principles in political and economical science was affirmed, not only by the fathers, but by twenty-eight councils of the Church, six of them general councils, and by seventeen popes, to say nothing of innumerable doctors in theology and canon law. And these prohibitions by the Church had been accepted as of divine origin by all obedient sons of the Church in the government of France. Such rulers as Charles the Bald in the ninth century, and St. Louis in the thirteenth, had riveted this idea into the civil law so firmly that it seemed impossible ever to detach it.(455)
(455) For the declaration of the Sorbonne in the seventeenth century against taking of interest, see Lecky, Rationalism, vol. ii, p. 248, note. For the special condemnation by Innocent XI, see Viva, d.a.m.natae Theses, Pavia, 1715, pp. 112-114. For consideration of various ways of escaping the difficulty regarding interest, see Lecky, Rationalism, vol. ii, pp. 249, 250. For Bousset"s strong declaration against taking interest, see his Oeuvres, Paris, 1845-"46, vol. i, p. 734, vol. vi, p. 654, and vol. ix, p. 49 et seq. For the number of councils and popes condemning usury, see Lecky, as above, vol. ii, p. 255, note, citing Concina.
As might well be expected, Italy was one of the countries in which the theological theory regarding usury--lending at interest--was most generally a.s.serted and a.s.sented to. Among the great number of Italian canonists who supported the theory, two deserve especial mention, as affording a contrast to the practical manner in which the commercial Italians met the question.
In the sixteenth century, very famous among canonists was the learned Benedictine, Vilagut. In 1589 he published at Venice his great work on usury, supporting with much learning and vigour the most extreme theological consequences of the old doctrine. He defines usury as the taking of anything beyond the original loan, and declares it mortal sin; he advocates the denial to usurers of Christian burial, confession, the sacraments, absolution, and connection with the universities; he declares that priests receiving offerings from usurers should refrain from exercising their ministry until the matter is pa.s.sed upon by the bishop.
About the middle of the seventeenth century another ponderous folio was published in Venice upon the same subject and with the same t.i.tle, by Onorato Leotardi. So far from showing any signs of yielding, he is even more extreme than Vilagut had been, and quotes with approval the old declaration that lenders of money at interest are not only robbers but murderers.
So far as we can learn, no real opposition was made in either century to this theory, as a theory; as to PRACTICE, it was different. The Italian traders did not answer theological argument; they simply overrode it. In spite of theology, great banks were established, and especially that of Venice at the end of the twelfth century, and those of Barcelona and Genoa at the beginning of the fifteenth. Nowhere was commerce carried on in more complete defiance of this and other theological theories hampering trade than in the very city where these great treatises were published. The sin of usury, like the sin of commerce with the Mohammedans, seems to have been settled for by the Venetian merchants on their deathbeds; and greatly to the advantage of the magnificent churches and ecclesiastical adornments of the city.
By the seventeenth century the clearest thinkers in the Roman Church saw that her theology must be readjusted to political economy: so began a series of amazing attempts to reconcile a view permitting usury with the long series of decrees of popes and councils forbidding it.
In Spain, the great Jesuit casuist Escobar led the way, and rarely had been seen such exquisite hair-splitting. But his efforts were not received with the grat.i.tude they perhaps deserved. Pascal, revolting at their moral effect, attacked them unsparingly in his Provincial Letters, citing especially such pa.s.sages as the following: "It is usury to receive profit from those to whom one lends, if it be exacted as justly due; but, if it be exacted as a debt of grat.i.tude, it is not usury."
This and a mult.i.tude of similar pa.s.sages Pascal covered with the keen ridicule and indignant denunciation of which he was so great a master.