Chapter IV — On the danger of losing the principal. Certain lax opinions are refuted. The chapter *Naviganti* is set forth in its true sense, the comments of the younger authors being rejected

I. QUESTION I. What is the danger of the principal, and of how many kinds is it? ANSWER. It is the uncertain outcome of losing or recovering the principal. It is twofold: of fact and of right. Now of the first, afterwards of the second. By reason of the danger of fact, not a few of the younger probabilists defend that gain can be exacted in a loan without the stain of usury. For they assert that this danger is always inherent in every loan. One for many I allege, Fr. Claude La Croix, who in Book III, part 2, On Usury, no. 854, writes these things: Sylvius, Serra, and others in Mendo, In the Balance, disputation 6, no. 58, have taught that there is ALWAYS a danger to the principal when a loan is given: and therefore that by reason of the danger something can ALWAYS be exacted. Neither Calvin, nor Salmasius, nor the rest of the patrons of usuries maintain so lax a doctrine. For they teach that when money is delivered on loan to a poor man, or to a rich man pressed by necessity, nothing can be exacted, and they defend only trading usury. Therefore they cry out that the Catholic casuists in words disapprove usury in the abstract, but in fact uphold it more laxly than the rest. If danger is always inherent in a loan, gain is always lawful. Where then in the world is usury? This error Benedict XIV routed in his Encyclical against usury, no. 3, in these words: But this is diligently to be observed, that anyone would falsely, and not without rashness, persuade himself that there are ALWAYS to be found, and everywhere at hand, together with a loan, other lawful titles, or and so forth. Read our commentary upon the aforesaid Encyclical.

II. Others of the younger authors, to cover this error with some paint, distinguish danger into ordinary and extraordinary. By reason of the second, not of the first, they defend that gain can be exacted from a loan. Extraordinary danger is, they say, when you deliver moneys on loan to borrowers of doubtful faith, to prodigals, to bankrupts, to men given to gaming, and so forth. But these are chimerical paradoxes devised for encrusting usury. What prudent man will give his moneys on loan to prodigals, bankrupts, gamesters, litigious men, and men known to be of doubtful faith? Other younger probabilists, dismissing this extraordinary danger, assert that a price can be exacted in a loan when this danger of fact is true and not feigned.

III. My proposition is this. Gain from a loan on account of the danger of losing the principal, whether ordinary or extraordinary, is usurious. Where, I ask, in all holy Scripture, where in the Fathers, is there mention of that danger? But the danger which is with the creditor is to be distinguished from the danger which is with the debtor: which two dangers the younger authors commonly confound. Of the first danger I shall now discourse. This is inherent in every loan: for by this very fact, that a man lends for some time, there is always present a true danger of losing. Therefore if by reason of this danger gain can be exacted from a loan, there will be no gratuitous loan, no usury among Christians. The danger which is with the creditor can have its rise from this, that the affairs of the borrower are desperate, or will be, or can be. In the first case the danger is evident and certain. But no lender will deliver his money to such a borrower, unless, burning with charity, he wish to succour him with the loss of principal and gain. Similarly in the second case, namely when the future ruin of the borrower is foreseen, no prudent man will entrust his moneys to him. The whole difficulty therefore is reduced to the third case, namely to possible danger. This danger is, but is not certain, inherent in every loan. For any man, even a rich one, can be reduced to misery on account of various circumstances: for money is always safer, absolutely speaking, in the hand of the lender than of the borrower. If therefore on account of this possible danger gain be lawful, there will be no usury among men.

IV. Diana and Tamburini answer that it is false that the danger of losing the principal is inherent in every loan. Since, they say, a loan is without danger if the borrower deliver a pledge or a surety. Excellently! But the acute probabilists have thrust themselves into snares. By force of a pledge or of an assurance the danger can be separated from the loan. Therefore, the pledge or assurance being removed, the danger is always inherent in a loan. Therefore always from a loan without a pledge or suretyship gain can be exacted. But this doctrine is anti-evangelical, because it makes all usuries lawful.

V. By another reason I prove the falsity of the opinion recounted. That a lender may be able to exact the said gain by reason of danger, he ought to take upon himself the danger of the principal. But the lender does not take upon himself the danger of losing the principal. Therefore the gain perceived is usurious. That the lender does not take upon himself that danger is a truth of fact. For if the principal delivered on loan be snatched away by theft, or perish by shipwreck or in trade, the borrower, if he be solvent, ought to restore the principal. The danger therefore is with the debtor, not with the creditor: therefore the debtor is unjustly burdened while he is obliged to pay a price for a danger to which not the creditor but the debtor himself is liable. They insist: It can happen that the debtor be not solvent and become bankrupt; and in this case the creditor loses the principal: therefore this danger is always with the creditor. The evasion is vain. For this danger is only possible and most remote. For all lenders, before they entrust their moneys to borrowers, severely weigh their state, their substance, and all the rest: and while they foresee a probable danger of losing the principal, they abstain from the loan. Therefore that danger is most remote, and inherent in any loan whatsoever. If it were a just title of demanding a price, there would be no usury in the world. It is confirmed. A thief commits a theft, and let the thief restore in penitence: he is compelled to pay nothing for the danger, as all confess: and yet the danger of money plundered is greater than of money lent. The thief is not bound, they say, to pay the price of the danger, because no convention preceded between the thief and the lord. An inept evasion. For now the discourse is whether that danger be a just title of a price to be paid. What do you answer? Do you deny it? It is therefore usury to exact a price for it. Do you affirm it? Therefore the thief is bound to pay by a stronger right than the borrower. A convention supposes a title, without which the convention is unjust. When a true title is present, even without a convention the price ought to be paid. Because emerging loss is a true title, a thief is bound to compensate this loss, even if no convention preceded. Besides, imagine someone compelled by force and fraud to lend. What ought the violent borrower to restore? The principal, and all the losses which the compelled lender has suffered, although no agreement preceded concerning these losses to be made good. What ought he to pay for the danger of losing the principal? Nothing at all, as all confess. Therefore that danger is not a title of a price to be paid.

VI. QUESTION II. What is to be said of the title which de Lugo and Tamburini devised? ANSWER. Cardinal de Lugo, disputation 25, section 6, no. 81, and after him Tamburini, Book VIII, tract 3, chapter 8, § 4, no. 1, devised a most witty title of exacting something above the principal. And this is the trouble, disturbance of mind, and anguish of soul which the lender suffers in putting away and counting out his money, if the lender be timorous. Behold the words of de Lugo: “If therefore you could exact beyond the principal when the future loan would be to you a cause of headache, you will be able also to exact when the future loan would be to you a cause of grief and internal fear on account of the danger of losing the principal: because that grief and fear, as contradistinguished from the principal itself, is something which can be brought into an agreement for a price.” More clearly in the same place, no. 83, de Lugo confirms this doctrine of his: “Because if I, because I am lame for example, must undergo a peculiar trouble in bringing the money from my house to lend to you, which trouble others would not undergo, I could well” (N.B.) “exact a peculiar price for that trouble to be undergone by me. If therefore likewise, because I am timorous and fearful, I cannot lend to you without great anguish and fear of losing the principal, it seems that I may exact something for this trouble and burden, without which I cannot lend to you. This nevertheless I leave to the judgment of others.”

VII. This doctrine being admitted, horrid absurdities follow. All lame men will be free from usury, because they will be able to demand a price from a loan on account of the greater labour in bringing the money from the chest. Those who labour under dullness of the eyes must use spectacles in counting the coins, and on account of this trouble can demand a price. What of women, what of nobles fearful and timorous, who the more avaricious they are, the more fearful they are? And shall the price be increased for greater fear and anguish? The doctrine alleged therefore is false, and altogether to be repudiated.

VIII. At the outset a twofold danger is distinct. The one of fact, which is with the debtor, inasmuch as the debtor out of all his goods is bound in any event, even of the principal lost, to restore just as much. The other of right, which the creditor takes upon himself, entering upon a new contract by which he assures the principal, so that if the principal by any chance without fraud or fault of the borrower perish, it perishes to the creditor himself. This danger of right is extrinsic to the loan itself, because it is undertaken by the creditor through a new contract of assurance. And yet this danger also is rejected by Gregory IX in the Decretal directed to St. Raymond O.P. in the year 1236, in which these things are had: One lending a quantity of money to a man sailing or going to the fairs, on the ground that he takes the danger upon himself, being about to receive something beyond the principal, is to be reckoned a usurer. If not even then, when the lender takes the danger upon himself, is it lawful to exact a price, how much less will it be lawful when the whole danger is with the borrower?

IX. Many of the younger authors play the critic in this cause. They say that the pontifical text is corrupt, in which the particle Non is wanting, omitted by the carelessness of copyists. But that evasion is inept, vain, and fictitious, as I have made plain at length in dissertation 1, chapter 5, § 2, On the Triple Contract of Usury. Not only do all the codices lack the particle Non, but — which is decisive — St. Raymond, to whom, as I have said, the Decretal was directed, reports the pontifical text without the aforesaid particle. They insist. In the same Decretal a second case is added, whose beginning is He also who gives, and so forth, ought not on this account to be reputed a usurer. What grammarian, says a certain most recent writer, does not observe that that particle also signifies uniformity with what was said before? But theologians read in the praised Decretal two contracts diverse in species: of loan in the first case; of selling and buying in the second. What uniformity, I ask, is there between these two contracts? To the authority of St. Raymond is added the authority of Lancellotti, who in Book IV of the Institutes, title 7, § 10, On Usuries, sets forth the case of the Decretal in these words: But it is another matter of right, if one lend a certain quantity of money to a man sailing or going to the fairs, and, on the ground that the lender takes the danger upon himself, agrees to receive something beyond the principal: for here he is to be reputed a usurer. What more? The Gloss itself sets forth the case in this manner also: Someone lent a certain quantity of money to a man sailing or going to the fairs, and, on the ground that the lender takes upon himself the danger of the principal, receives something beyond the principal: it is asked whether he be a usurer? The Pontiff answers that he is.

X. This opinion St. Thomas defends, or the author of opusculum 73, chapter 6, saying: If anyone should commit money on loan to one sailing, on account of the hope of some gain, although he should also have received upon himself the danger of the principal, nevertheless he is judged a usurer, even if he lose the whole. St. Raymond in his Summa, title On Usuries, § 7, where he sets forth the Decretal Naviganti given to himself, writes thus: Such men always make such a loan on account of the hope of monetary gain, which is not lawful. These authors were contemporaries of Gregory IX. And if they condemn gain on account of a danger of right, which is otherwise appraisable at a price, as is plain in a third assurer, how much more do they condemn gain on account of a mere danger of fact, inherent in every loan?

XI. Graver theologians also subscribe to St. Thomas and St. Raymond: Navarrus, Soto, Báñez, Gutiérrez, Rebello, Toletus, Tapia, Conrad, López, Genet, Ballerini, Gennaro, the theologians of Louvain and of Paris. The canonists also commonly accede. Honoratus Leotardus, On Usuries, question 18, observes that formerly maritime interest was permitted by civil law on account of the danger undertaken. But now, he says, this maritime usury is altogether condemned, and the civil laws permitting maritime interest have been abrogated by the constitution of Gregory IX, chapter Naviganti, On Usuries. But after he has demonstrated that gain on account of a danger of right undertaken by the creditor is usurious, at no. 13 he disapproves by a stronger right, as usurious, gain perceived on account of the danger of fact to which the creditor exposes himself: although, he says, Leonard Lessius and very many theologians indeed hold that this is lawful … but our opinion is the safer, and received among jurists. Wherefore Fr. Nicholas Gennaro exclaims, part 1, page 56, in these words: So think the Doctors. O the confusion of theologians! And, O good God, into what opinions do so many heads go off! To what end? To justify maritime interest. They sweat that they may favour human cupidity and thirsty avarice.

XII. And what shows me more clearly that that danger is a pure and mere mask devised for covering interest is this: that those younger authors never prescribe to those lenders that they abstain from the loan, when they refuse to deliver it without gain. Wherefore I thus reduce them to a stand. Either they repute that danger true, or false. If false, let the question cease. If true, let them enter upon a contract of partnership, in which according to all there is present a true danger and a true title of gaining. Do they refuse? Therefore they do not want the true danger. And yet this is a certain and safe title of gaining, approved by the consent of all the Doctors. Why do they not want this safe gain? Let them give the reason. Assuredly they will give no other, save that they want the gain and do not want the danger, unless it be fictitious. But if they do not want the dangers of a partnership, let them abstain from the loan. Abstain from the loan? The evangelical law prescribes the loan. True; but a gratuitous loan, and it forbids a usurious loan. The evangelical loan is a fruit of charity without any hope of gain. This gratuitous loan you refuse, unless you obtain usurious gain. With Christ's Gospel therefore I declare to you, either that you deliver a gratuitous loan, if you are able, and if your brother is in need; or, if you cannot, or if the other is not in need, abstain from giving a loan. If at last you intend to make your money fruitful, enter upon lawful contracts either of partnership or of another trade.

XIII. The objections of our adversaries are almost these. They object the decree of the Sacred Congregation of Propaganda Fide given in the year 1645 to the Chinese missionaries, in which these things are had: “In the aforesaid kingdom it is established by law that in a loan thirty per hundred be accepted without regard to ceasing gain or emerging loss: it is asked whether it be lawful for the Chinese, for the loan of their moneys, although there intervene no ceasing gain or emerging loss, to accept the aforesaid quantity of thirty per hundred fixed by the law of the kingdom: the cause of doubting is, because in recovering the money there is some danger, namely that he who receives the loan may flee, or may be tardy in paying, or that it may be necessary to sue before a judge, or on account of other things of this kind.” The resolution of the Sacred Congregation to that query is of the following tenor: “They judged that by reason of the loan immediately and precisely nothing is to be accepted beyond the principal; but if they accept by reason of a danger probably imminent, as in the case, that they are not to be disquieted, provided account be had of the quality of the danger and of the probability of the same, and proportion being preserved between the danger and that which is accepted.”

XIV. To Henry of St. Ignatius alleging this decree in a public disputation it was answered: first, as he himself narrates, Book I, part 1, no. 377, that it is not sufficiently established; second, that the resolution is not approving, but tolerating. Against the first answer he produces Fr. Thomas Hurtado C.M., who produces an authentic copy. But that author obtrudes other pontifical decrees as authentic which are altogether apocryphal. I say therefore that the praised response is either of no credit, or merely permissive and tolerating. Is not this clause found at the end of the boasted decree? Until His Holiness or the Apostolic See shall have ordained otherwise. Further, the Apostolic See in the year 1679, thirty-four years after the response was given, condemned the opinion of the theologians saying: Since money counted down is more precious, and so forth. What of this, that the Apostolic See had for many ages already defined in the chapter Naviganti that he commits usury who, having undertaken the danger of the principal, should receive anything from a loan? This is a pontifical constitution inserted into the code of the sacred Canons, and it suffers no exception.

XV. Finally, the very law of the Chinese kingdom proposed to the Sacred Congregation is most iniquitous. For by that law the quantity of thirty in the hundred is fixed, to be paid yearly on account of the flight of debtors and other dangers. But such a law lays open its own injustice. The Romans reputed the centesima a biting usury. But the Chinese law imposes not twelve but thirty to be paid. Who does not perceive that law to be most iniquitous and most full of savagery?

XVI. They object, secondly: St. Thomas, II-II, q. 77, art. 4, reply 2, teaches that the price can be increased on account of the danger to which a merchant exposes himself in transferring a thing from place to place. Therefore on account of the danger of the principal. A most inept argumentation. Hear the whole text of the Angelic. Not everyone who sells a thing more dearly than he bought it trades, but only he who buys for this, that he may sell more dearly. But if he bought a thing not that he might sell it but that he might keep it, and afterwards on account of some cause wishes to sell it, it is not trade, although he sell it more dearly. For he can lawfully do this, either because he has in some way improved the thing, or because the price of the thing has changed according to the diversity of place or of time, or on account of the danger to which he exposes himself in transferring the thing from place to place, or in causing it to be carried. And according to this neither the buying nor the selling is unjust.

XVII. What of it? In a contract of selling and buying the price can be increased, as the Angelic teaches: therefore also in a loan? Is borrowed money therefore a ware subject to a greater and lesser price, like other wares, on account of danger? Is there therefore no usury in the world? A merchant in transferring wares from place to place sustains many labours and dangers. If the wares be filched by robbers or by pirates, they perish to the merchant himself. On the contrary, if borrowed money, or wares bought with that same money, perish, they perish not to the lender but to the borrower. Therefore there is no parity.

XVIII. They object, thirdly: The danger of the principal is extrinsic to the loan, joined to it by accident, because it arises from the qualities of the borrower — a prodigal, a gamester, a deceiver, and the like. But this danger is appraisable at a price, since a third party can receive a price for assuring it. ANSWER. When Christ commanded, Lend, hoping for nothing thereby, was he ignorant that men are deceivers, prodigals, gamesters? This little distinction being admitted, there is no usury in the world. I yield. Who, unless a fool, delivers his moneys on loan to prodigals, bankrupts, gamesters? What law commands that a loan be delivered to these men? If dangers are here imminent, why do they not abstain from the loan? Give an answer. A loan is commanded that succour may be brought to needy brethren, not that the vices and crimes of prodigals, bankrupts, and gamesters may be fostered. They want the loan, because they desire to gain from the loan. For prudent men would never expose a hundred to a true danger for the hope of gaining five. But because they know that the dangers are commonly chimerical, and they want a certain gain, therefore they lend and refuse to enter upon other contracts liable to true dangers.

XIX. They object, fourthly: The exaction of gain is lawful on account of the danger of emerging loss: therefore also on account of the danger of losing the principal. ANSWER. Each proposition in the sense produced by our adversaries is false. Contracting parties can indeed agree concerning the paying of a loss which threatens the lender, if it in fact come about. But if the loss does not in truth emerge, nothing can be accepted, as I shall make plain below. And the consequence drawn hence is vain. The distinction of intrinsic and extrinsic danger is commonly chimerical. All men can be deceivers. Hence an intrinsic danger arises, as our adversaries confess, by force of which no one can gain. But they call the danger extrinsic when money is lent to borrowers known to be prodigals, gamesters, and bankrupts. Let all lenders be questioned: if they will speak candidly, scarcely one in a hundred will be found who delivers a loan to the men described. Every lender will say that he uses all diligence that he may entrust his money to the safer and more faithful borrowers. Therefore the distinction of intrinsic and extrinsic danger is vain and chimerical. That lenders sometimes entrust their money to such borrowers proceeds from an impotent cupidity of gain and a burning avarice. Similarly, that honest and trusty borrowers sometimes become bankrupt is by accident. What is by accident and rarely happens cannot establish a rule concerning extrinsic and intrinsic danger. A loan is to be given to the poor and needy according to the evangelical law. In respect of them the danger is greater than if it be delivered to the rich. Therefore more gain could be exacted from the poor by reason of the greater danger than from the rich. This is the necessary consequence from the doctrine of the younger authors. But this anti-evangelical doctrine even the heretics themselves detest — Calvin, Salmasius, Heineccius, and other patrons of usuries.

XX. QUESTION III. Is it lawful to exact something above the principal by reason of the labour in counting out the money? ANSWER. Fr. Thomas Tamburini, Book IX, tract 1, chapter 5, § 1, no. 1, teaches that it is lawful to exact something for the preparing of moneys in a great quantity, for the measuring of wheat, and so forth; and he cites for this opinion Molina, Medina, and Navarrus. This opinion is false: for the counting of money is inherent in the loan.

XXI. QUESTION IV. Is it lawful to exact something on account of the obligation of lending, or of not demanding back the loan within a predetermined time? ANSWER. The affirmative opinion Alexander VII condemned, no. 42: It is lawful for a lender to exact something above the principal, if he bind himself not to demand back the principal until a certain time. Fr. Tamburini, Book VIII On the Decalogue, chapter 8, § 5, no. 18, in this manner: I have already said that under this title of a promise not to demand back money lent, five per hundred may be exacted for any year in this money-getting age of ours. So Caramuel. Our money-getting age? In this money-getting age lived Alexander VII, who in the year 1666 condemned the aforesaid doctrine. But Tamburini died in 1675. And therefore I report the lax and proscribed opinions of the casuists, that readers may beware. Let them recall that proscribed opinions are principles whence many other erroneous consequences flow.