Chapter VII — On mental usury, and on agreements added to a loan

I. He who delivers a loan with the intention and hope of obtaining gain as owed to him, although no agreement, whether tacit or express, intervene, commits the sin of usury.

II. Mental usury is twofold. The one which stops within the mind, every exterior action being excluded, when namely a man, although with the hope of an accession above the principal, gives a loan, and yet, being disappointed, receives nothing beyond the principal. This never brings in the burden of restitution. The other, which has an exterior act conjoined, namely when a man, without an express agreement, according to his hope receives an accession: this brings the debt of restitution. This is distinguished from real usury, because real usury besides the real acceptance adds an agreement, that is, real usury receives an accession above the principal from an agreement either tacit or express. On the contrary, mental usury hopes for and receives an accession, every exterior agreement being removed.

III. QUESTION I. Is it lawful to hope for anything from a loan? ANSWER. It is lawful for anyone to hope for benevolence and friendship. But to hope for gain is in no way lawful, as is plain from the evangelical text, nor even as owed out of benevolence. Therefore Innocent XI condemned this thesis: It is not usury when something beyond the principal is exacted as owed out of benevolence and gratitude, but only if it be exacted as owed out of justice. To exact therefore, or to hope for, anything as owed out of benevolence and gratitude is usury. Cajetan, Serra, Prado, whom many of the younger authors follow, teach that it is not only lawful to hope in a loan for gain out of benevolence and gratitude, but moreover that you can manifest this intention, saying that you hope that the offices of a friend and the benefit of the loan will be requited, provided that by an agreement no obligation be imposed. The Salmanticenses say that this is not to be set forth before the avaricious. If it is false, as it is, it is to be proposed neither before the avaricious nor before others. Tamburini, Book VIII, chapter 8, § 2, no. 6, teaches that it is lawful per se and speculatively for a lender, even before he lends, to ask or to stir up the borrower, nay even to bargain with him, that something above the principal be imparted out of mere liberality and truly voluntarily, because nothing is expected by force of the loan. So Molina. Cloaks of usury are proposed speculatively; the rest reduce them to practice, and usurers clothe themselves in them.

IV. Lend, hoping for nothing thereby, says Christ. Let a lender deliver a loan absolutely gratis, so prepared that, every remuneration ceasing, he would deliver the loan. If some hope of a gratuitous remuneration should accompany this absolute will, he would not be to be condemned of mental usury, as St. Thomas teaches. For the rest, if the hope of gain were the chief cause, he would not be free from usury. Nevertheless borrowers also are to be disapproved who neglect to exhibit the offices of liberality and of a grateful mind. On account of the avarice of lenders, and the faithlessness and ingratitude of debtors receiving a loan, the offices of charity are in exile from very many Christians.

V. QUESTION II. He who has celebrated a usurious contract in good faith, can he retain the gain, the usury being known, when he could have entered upon another lawful contract? ANSWER. Some affirm it; but this opinion is to me false. The conditions which are wont to be added, although they temper the laxity, do not nevertheless — as I at least judge — make the opinion probable. Since indeed the lender in fact consents to a usurious contract. His habitual disposition to celebrate another lawful contract does not take away that here and now he consents to what they call material usury. That he receives the gain in good faith does not hinder that, the usury of the gain being known, he ought to restore it. He who in good faith sells above the just price is, the error being known, liable to restitution. Good faith excuses from sin, but not from the burden of restitution. See Vol. VII, Book 3, dissertation 3, chapter 17.

VI. QUESTION III. Whose are the fruits of a pledge delivered to a lender for the assurance of the principal? ANSWER. They are the borrower's, because with him the dominion of the pledge remains. But any thing brings forth fruits for its own lord.

VII. QUESTION IV. Is the agreement of the lex commissoria lawful in the delivery of pledges? ANSWER. This agreement is wrongly called a law. For it is a mere convention, that the pledge be the lender's when at the fixed time the principal is not redeemed. That this agreement is unlawful the laws have decreed, and all affirm it: since a pledge commonly exceeds the price of the principal lent.

VIII. QUESTION V. What is to be said of pupillary and dotal usuries? ANSWER. They call pupillary those usuries which some contend that guardians and curators ought to pay on account of fraud in administering the money of wards: as when guardians turn the ward's money to their own advantage; or because they kept the aforesaid money idle; or because they did not succour the wards in a time of necessity. In these and like cases the civil law decreed that usuries are owed to wards. But this civil law has been abrogated by natural, divine, and canon law. For there is not one Gospel for wards and widows and another for Christians. Unless therefore another just title be present, nothing is owed for money to wards.

IX. A son-in-law can take the fruits of a dotal pledge, just as the fruits of a dowry, as Innocent III decreed, chapter Salubriter, On Usuries. A dowry is given for the sustaining of the burdens of matrimony. Therefore so long as the son-in-law lacks the dowry, he by right perceives the fruits of the pledge, since the pledge was given in place of the dowry.

X. QUESTION VI. Is he a usurer who gives a loan that he may obtain a benefice, or an office, or services of the tongue, of attendance, or of the hand? ANSWER. If it be brought into an agreement, say some, that a benefice or office be conferred upon the lender out of mere liberality and, as they say, out of a requiting gratitude and friendship, there is by them no usury; but otherwise if an agreement be added that the remuneration be made out of justice. This distinction seems to be a mask and cloak of usury. The addition of an agreement is a burden which makes the loan onerous and not gratuitous, as St. Thomas teaches, opusculum 13, and 2-2, question 78, article 2, reply 3. The aforesaid services of the tongue, of attendance, and of the hand are appraisable at a price. Wherefore to bring the same into an agreement, whether express or tacit, is usury.

XI. QUESTION VII. Is he a usurer who gives a loan with the agreement that the borrower resort to his mill, his shop, and the like? ANSWER. Whatever burden is imposed beyond the restitution of the principal is usury. The aforesaid lender therefore, who obliges the borrower to buy wares in his shop, or to come to his mill to grind his wheat, and the like, is a usurer. When two spontaneously deliver things to one another on loan, they commit no usury; but they exercise the mutual offices of charity or benevolence.

XII. QUESTION VIII. Is it lawful to give a loan with an agreement that the other lend back in the future? ANSWER. St. Thomas denies it in the place cited. All these agreements ought to be absent from a loan.

XIII. QUESTION IX. Is he a usurer who obliges a borrower to render the same measure of wheat, wine, oil, and so forth, if the price be increased? ANSWER. It is a lawful agreement to render the same measure when it is equally doubtful whether the price of the said things is to be diminished or increased: since then the advantage or disadvantage is equal. Similarly, when a loan is delivered in good faith, no regard being had to the increase or decrease of the price, the same measure is to be restored. I deliver to you on loan in the month of January three measures of wheat, to be rendered in the month of May, which I had destined to keep for the sustaining of my family. At the time of restitution the price is increased. The same measure altogether is to be rendered, of the same quantity and quality. Moralists dispute whether one who gives corn on loan, being about to keep it for a time of greater price, can exact this greater price. But this dispute is futile. For either the borrower restores before the fixed time, and you keep it until the time of greater price; or he restores at the time of greater price, and you sell it at this time; or finally the borrower is tardy, and then by reason of delay he is a debtor liable to the rules of compensation, according to what is said in chapter 5, no. 6 and following.

XIV. QUESTION X. In the restitution of money lent, is the value or the species to be considered? ANSWER. You delivered on loan a hundred gold pieces at a time when each was worth twenty julii; but at the time of restitution they are worth twenty-four, or eighteen. Innumerable are the subtleties which the jurisconsults have devised upon this question. But the true opinion is that in the restitution of money lent, not the species but the price is to be regarded: and consequently that not money of the same species, but the price at which it was worth at the time of delivery, is to be restored. For although in wares physically consumable by use just as much of the same species in number, weight, and measure is sometimes to be restored, according to what is said in the preceding number; nevertheless money is excepted, in which not its physical species is considered, but the extrinsic value, which depends upon the prince's law. The general rule is always to be held before the eyes, namely that any thing whatsoever increases or decreases to its lord. But the dominion of a thing lent is with the borrower.

XV. When a lender adds an agreement that the borrower restore money of the same species, the general rules are to be regarded. If the danger of increase and of decrease be equal, the agreement is lawful. If the danger be not equal, but greater in respect of the borrower, the agreement is usurious.

XVI. QUESTION XI. Is the opinion probable that a borrower can choose as his surety the lender himself? ANSWER. A borrower, says a certain man, can choose a third party as surety: therefore the lender himself; just as he can by right pay the price to a third party, so also to the lender. That you may perceive the falsity of this opinion, consider the difference between a surety and an assurer. An assurer takes upon himself the danger of the principal, and bargains for a price. If by theft, fire, shipwreck, or other chance the principal perishes, it perishes to the assurer himself. A surety takes upon himself only the danger which is with the borrower, inasmuch as, if the borrower either by impotence or by faithlessness do not restore the principal, the surety himself is bound to render it, and retains an action against the borrower, whom he can by right compel to compensate, if he be solvent. But an assurer retains no action against the debtor. In brief, an assurer takes upon himself the danger of right; a surety the danger of fact. These things being laid down, it is plain how fictitious is the opinion related. For if the borrower himself were to go surety for himself with the lender, would he not betray himself as ridiculous and foolish? Therefore no less ridiculous and foolish is the suretyship which the lender himself undertakes for the borrower. Does this suretyship make the borrower more secure, more rich, more trusty? Therefore this suretyship of the lender is a pure and mere cloak of usury, disapproved by Gregory IX in the chapter Naviganti.

XVII. More witty is the suretyship which a certain man devised. You will ask secondly, he says, whether there is usury in a feigned suretyship. For example: Peter asks a loan of you. You say: I will not lend to you, but to Paul, who afterwards will lend to you. Paul lends to Peter that which he received on loan from you, and wishes you to go surety for Peter. You go surety, and for the suretyship you exact a price from Peter, which now you gain beyond the principal. And this suretyship is here called feigned, because in truth you do not oblige yourself to pay Paul, though Peter do not pay, since Paul owes you just as much.

XVIII. This loan we may call circulatory. These are the questions which the Fathers were ignorant of, and which, that I may use the words of Fr. Reginald, the Doctors of our times turn over. You wish to give a loan to Peter asking it; but that you may obtain gain without usury, this loan must come to the hands of Paul, then from the hands of Paul to the hands of Peter, that by this circuit the gain which you pant after may strip off the dregs of usury. He who contrived this concludes that no injustice or usury is found in this contract, if the suretyship for Peter be truly dangerous. This suretyship, which they call feigned, is worse than the preceding. For it is crafty and fraudulent. The whole machination here at last comes back to this, that Peter the borrower pay you gain above the principal delivered on loan. But usury of itself offers itself to be seen among these artifices. Nor in a manifest matter is there need to dwell longer.

XIX. QUESTION XII. Is the opinion probable of those who grant gain to a lender at the same time receiving a pledge? ANSWER. Fr. Paul Layman proposes this case to himself, tract 4, chapter 16, no. 2, in these words: “A citizen for the greater part of the year has money ready, out of which he can give a loan to needy craftsmen, especially weavers, a pledge being left him for the security of payment, for example a web. But when, the pledge being received, payment is to be made after half a year, an increment is to be added upon each florin given on loan — for example, one batzen. For it must be considered that that increment is not received by reason of the loan, but by reason of the obligation, burden, and care which that citizen takes upon himself for the sake of the weavers, that for nearly the whole year he may have money in readiness for them, that at whatever time they come to his house he may admit them, count out the money,” and so forth: “which obligation is appraisable at a price.”

XX. Fr. Patrick Sporer, tract 6, chapter 4, section 1, § 1, no. 39, adopts this opinion of Layman, and for the same cites Molina, and says that it is common. Tamburini also defends it. Layman's, Sporer's, Tamburini's, and others' opinion being admitted, no one is so immune from usury as manifest usurers. For these, not for half a year, not for nearly the whole year, but for many lustres and for a whole lifetime keep moneys ready, not for weavers only, but for all the needy. Nay, these are not wont to demand a pledge, but expose themselves to some danger. Willingly do they receive all who come to their house, they count out the moneys, and so forth. Why then shall they not be able to exact for each florin one batzen, for each crown two batzen, for each doubloon six batzen? Where then is usury in the world? German citizens receive the craftsmen's web in pledge, and at the same time exact an increment of batzen? If this is not usury, what will be? But they receive the increment, the kindly probabilists reply, not by force of the loan, but because they oblige themselves to deliver the loan, and on account of the burden of receiving into their houses the borrowers who come, and of counting out the money, and of guarding the pledge of the web. Have there been from the founding of the world usurers who did not count out the moneys delivered on loan, who did not receive borrowers into their houses? Even the avaricious themselves suffer scandal when they hear that some usurers are so savage that with a pledge in hand they exact gain. The evasions by which Fr. Layman endeavours to disguise this wicked usury I have overthrown in Vol. VII, Book 3, dissertation 1, chapter 19. The good intention of pious theologians is to be excused. They saw in their own regions — Tamburini in Sicily, Layman and Sporer in Germany, Lessius in Flanders — trades of this and like kind brought in, strengthened by custom, fenced about by the multitude of the peoples. They did not dare to disapprove the customs of their countries, and to condemn contracts long obtaining in their houses. These men said: If we declare these contracts usurious, we take away good faith, no hope of amendment appears, and we thrust an infinite multitude of men into hell. A hundred times does Fr. Diana inculcate these reasonings to confessors. The pious intention of the younger theologians of saving all souls is to be praised, and their zeal to be commended. But if their opinions are false, the peoples commit usury; nor do the desires of the theologians, says St. Augustine, nor the error, because it is public, adds St. Cyprian, withdraw souls from hell.