Article II. Formulation and Arguments of the Conclusion

Every profit sought from a rationale intrinsic to the loan for consumption is unjust.

For a certain condition of the commonwealth, however, it can be licit per se for all to lend money at moderate interest.

The former severity of the Church and her present indulgence are immune from every accusation.

373. I. State of the question. 1. INTENTION OF THE THESIS. We accomplish three things by this thesis. In the first part, we demonstrate the intrinsic malice of the sin of usury according to its genuine concept. Then we vindicate, in present circumstances, the universal liceity of moderate lending at interest. Finally, in the third part, we endeavor to avert the accusations which have customarily been raised against Holy Mother Church in this matter.

2. OPINIONS. The first part is asserted:

a) Against Molinaeus¹ and the heretics later than the age of Calvin, who think that usury is forbidden only when it is repugnant to charity;

¹ Tractatus De Usuris [Treatise on Usuries], no. 10.

b) Against some Catholics of our age: α) Some rather directly deny that usuries from a loan for consumption are per se illicit; and C. d’Annibale openly favors them when, Summula, vol. 2, no. 533, he contends that its dishonesty is established by no law; β) Others less directly reach a similar conclusion by first changing the rationale either of the loan for consumption itself, as those who think with Ballerini, or of the sin of usury, as does the distinguished Professor Funk.

The following oppose the second part:

Socialists, who regard every interest as unjust and deny that money can be fruitfully invested unless by one who at the same time contributes labor;

Some Catholics, who judge that the canonical prohibitions are still in force.

The third part offends, as is evident, only non-Catholics and rationalists who, adhering to liberal tenets, reproach the Church because she formerly impeded the growth of the arts or of business. For those who glory in the Catholic name strive in various ways to defend the Church.

3. THE TERMS ARE EXPLAINED.

It is unjust, and not merely contrary to charity or forbidden by positive law.

Every profit, and not only immoderate or biting usuries. Moreover, it makes no difference in what kind of prestation that profit is sought, whether of money or of another thing, so that we include everything to which there corresponds in the debtor some burden which must be borne from justice.

From a rationale intrinsic to the loan for consumption, that is, by force of those things which are contained in the rationale of a loan for consumption, or, if you prefer, by force of the concession for a time of a thing consumable by its first use. Cf. 363. In these things we deny that there is a title for making profit. We do not, however, contend that anything in the contract of a loan for consumption is positively repugnant to making profit, provided that a sufficient cause is added, whether special—for example, probable loss to the creditor or a disposition of gratitude in the borrower—or even universal on account of some condition of the commonwealth, such as we judge exists today. Wherefore, the profit which we disapprove as made from a loan for consumption as such we can easily approve as sought from such a loan for consumption.

For a certain condition of the commonwealth, however. Therefore, with nearly all Catholics, we too look to the circumstances of society.

The fact that this rationale is not contained in the genus of a loan for consumption indicates something adventitious and contingent as regards the rationale of a loan for consumption as such.

Per se: for sometimes we can be forbidden by charity to seek interest, where the precept of assisting one’s neighbor presses.

For all, so that they can not only lay aside anxiety about seeking some extrinsic title for themselves, but can honestly receive usuries even if it is established that no title is of aid to them.

It can be licit, that is, permitted by divine law. For human law must also be considered besides.

To lend money. We use these less definite words so that we omit for the present whether that agreement can retain the name of a loan for consumption. In French you would say: La concession de crédit, le prêt d’argent [the granting of credit, the loan of money].

Money, I say: indeed, nothing per se prevents another thing from being lent in a similar manner; nevertheless, we do not judge that today the same cause always exists for other fungible things. For in rural places, for example, certain loans for consumption of flour and milk are made for a short time, which from usage and common estimation are not judged to have to be repaid with some interest.

At moderate interest. For the just price must always be observed; by exceeding it, you would commit the sin of usury.

The former severity of the Church, by which she universally forbade exactions of interest,

and her present indulgence, by which she seems universally to permit lending at interest,

are immune from every accusation: whether of error, of inconsistency, or of opposition to the temporal happiness of society. For to these all the principal heads of complaint are reduced.

4. NOTE ON THE THESIS. a) It seems to us theologically certain, not only insofar as it says that the laws of the Church are immune from error, but also insofar as it argues the injustice of profit sought from a loan for consumption. Nevertheless, out of deference to the authority of writers of our age who, certainly led by good counsel, obscure this truth, we concede that we should abstain from branding with a theological note the opinions contrary to our first conclusion.

b) We regard the remaining things as simply certain. Indeed, we propose our explanation as the more probable one.

374. A. OF THE FIRST PART. Every profit sought from a rationale intrinsic to the loan for consumption is unjust.

Argument 1. From ecclesiastical monuments. a) By universal laws—which can establish nothing contrary to faith or morals—the Church prohibited every profit from a loan for consumption, so that the Supreme Pontiff declared that he could not dispense in this matter.

But. Such a prohibition argues that profit is unjust by the nature of the thing.

Therefore. From infallible monuments of the Church we infer the injustice of every profit sought from a rationale intrinsic to the loan for consumption.

To the major. Observe first that the collections of the decretals of Gregory IX, of the Sixth Book, and of the Clementines are authentic, so that the individual laws contained in these collections, whatever their first origin or signification may have been, by the fact of the promulgation of the collections themselves² obtain the force of universal laws of the Church and must be interpreted as they are found inserted in the Corpus of Law. Now, that the universal laws of the Church are infallible in this manner, so that they can establish nothing contrary to faith or morals, is certain doctrine among theologians.

² The first collection was promulgated by the constitution Rex Pacificus, September 5, 1234; the second by the constitution Sacrosanctae, March 3, 1298; the third by the constitution Quoniam nulla, October 25, 1317.

The matter to be established is this: 1. The Church prohibited every profit from a loan for consumption. We already have this from chapter 7, Praeterea, On Usuries, which, after the precept, “Moreover, forbid your parishioners to receive usuries,” imposes penalties upon both clerics and laymen; and more clearly from chapter 10, Consuluit, under the same title, where the Supreme Pontiff, having been asked what right ought to be observed concerning one who, “since he would not otherwise be about to lend, lends money with the purpose that, although every agreement is absent, he nevertheless receives more than the principal,”³ or one who “does not otherwise grant a pledged word under oath⁴ until, although without exaction, he receives some emolument from it,” thus defines the matter: “Men of this kind, because of the intention of profit which they have, must be judged to act wrongly, and must be efficaciously induced in the judgment of souls to restore those things which have been received in this manner.” The same is moreover now entirely established from the longstanding consensus of theologians and canonists, who for many centuries attributed this force to the canonical enactments concerning usury.

³ In these marks recognize mental usury.

⁴ Parabola here means the same as word, speech (Du Cange, Glossary). In French you would say: Parole jurée [pledged word].

2. The Supreme Pontiff declared that he could not dispense: for thus reads chapter 4, Super eo, under the same title: “We do not see that any dispensation can be made concerning this.” The matter concerned, moreover, usury which would be admitted for the ransoming of captives.

To the minor. A prohibition of this kind argues divine law, and indeed natural law. Divine, for otherwise the Supreme Pontiff could dispense; natural: for, in the New Law, it is a general canon that we are not bound by a positive divine precept except concerning faith and the sacraments (cf. Suarez, On Religion, tr. 2, bk. 2, chap. 1). But. A universal prohibition of natural law cannot be explained in this matter without injury to justice. For in the case of a rich borrower, there is no obligation of mercy. Moreover, the obligation of restitution which is frequently inculcated can scarcely be declared otherwise.

b) A confirmation of the greatest weight comes from the encyclical

Vix pervenit, which was indeed first addressed only to the bishops of Italy, but afterward was sent both by Benedict XIV himself and by the Roman Congregations to other regions, so that for nearly a century it was the constant norm for deciding cases in the Church,⁵ and in which, moreover, the Pontiff testifies that he settled the matter after the case had been diligently discussed and by the unanimous vote of an assembly, convened for that purpose, of most distinguished men.

⁵ Cf., for example, Instruction of the Holy Office, February 4, 1827; Response of the Holy Office, November 29, 1854, Collectanea of the Propagation of the Faith, nos. 2133, 2136.

C. d’Annibale, vol. 2, no. 532, 533, would free himself from this difficulty by saying that “there was dispute back and forth concerning its genuine sense”; but these things are lightly asserted. For nothing is clearer than the text of the document itself, as Rev. Dr. Funk⁶ admits; and, for one who reads the doubts proposed to the Roman Congregations, it is evident that only this one matter came into controversy: whether the encyclical was to be understood with the title of civil law excluded or even posited. Cf. Collectanea of the Propagation of the Faith, no. 2140.

⁶ In the article cited, 1875 (Tübingen Quarterly), pp. 42, 43.

Now the words of the encyclical contain our position verbatim:

“The kind of sin which is called usury . . . ,” it says in the first proposition, “consists in this, that someone, from the loan for consumption itself (which by its own nature demands that only as much be returned as was received), wishes more to be returned to him than was received, and therefore contends that some profit beyond the principal is owed to him by reason of the loan for consumption itself.”

And under no. II: “He is certainly convicted of acting against the law of the loan for consumption, which is necessarily concerned with equality in giving and returning, if, once equality has been established, he does not yet fear to exact something more from anyone by force of the loan for consumption itself (for which satisfaction has already been made by an equal).”

Argument 2. From reason. It is contrary to the equality of justice to seek the price of a use which does not exist.

But. He does this who intends to profit by force of a loan for consumption.

Therefore. He who intends to profit by force of a loan for consumption violates the equality of justice.

The minor is proved. For the concession of the principal thing is compensated by the restitution of a thing similar in quality and quantity, just as, in a lease, the horse is returned for the horse. The danger, moreover, of losing the thing does not per se become greater than it was before; or rather it is diminished, since the borrower also bears the fortuitous event. Indeed, this security can compensate for the inconvenience, minimal in itself, which the other sustains from having relinquished for some time the faculty of consuming the thing. For that deprivation is often not burdensome, as when, because of the short interval or the abundance in which the thing is at hand to the creditor, he will in no way need, for example, that money which he has given as a loan for consumption. And today the growing practice of renting, for a price, strongboxes in large banking establishments, where money can be kept safely, gives an excellent confirmation of this assertion.

But if it happens that the extension of credit is rendered burdensome by an accompanying danger or deprivation, this compensatory usury is indeed justly sought, but not by force of the loan for consumption.

It remains, therefore, that usury sought by force of the loan for consumption is formally the price of the use of a thing communicated for some time, just as happens when a horse is let for hire. But the thing in question is one whose use consists in consumption. Therefore. He who seeks to profit from a loan for consumption, or to receive anything beyond the principal under a title of strict justice, seeks the price of a use which does not exist. As St. Thomas says, II-II, q. 78, art. 1, he is like a seller of wine who wished to sell separately the wine and the use of the wine.—Nor should you say that the consumption itself can be fruitful. For a loan for consumption, in its own rationale, does not of itself contain definitely either this kind of consumption or its common availability, which can have a price. Therefore, neither is this a rationale for profiting by force of the loan for consumption.

It is confirmed 1) by the authority of the Catholic school.

It is confirmed 2) by those who today are most versed in pecuniary affairs and who admit that it is not repugnant for interest to become zero.⁷

⁷ “The rate of interest on money tends to fall: that is a blunt fact. It does not appear probable that it will become zero, but still this is not mathematically impossible, and one can even conceive that it might become negative, with bankers demanding a premium to preserve capital and assure its security.” H. Laurent, Théorie et pratique des assurances sur la vie [Theory and Practice of Life Insurance], p. 115, admissions examiner at the École Polytechnique, member of the Institute of French Actuaries.

375. B. OF THE SECOND PART. For a certain condition of the commonwealth, however, it can be licit per se for all to lend money at moderate interest.

Argument 1. From the practice of the Church, such as appears in the responses of the Sacred Congregations to which we appealed above in the historical notices. For not once but many times, both through the Sacred Penitentiary and through the Holy Office, with the Supreme Pontiff approving, when positively asked about liceity, the Church judged that all, both ecclesiastics and laymen,⁸ without consideration of a title,⁹ nor of good faith, insofar as the obligation of justice is concerned,¹⁰ were not to be disturbed on account of lending at interest, provided that they were ready to stand by the mandates of the Church. Now, this formula, according to the testimony of St. Alphonsus, vol. 3, no. 765, “signifies not mere tolerance, but positive permission”; and, since Catholic theologians commonly—C. d’Annibale, Pesch, Lehmkuhl, Ballerini-Palmieri, etc.—interpret these responses as truly permissive, and the matter concerns morals, in which, had she been asked, the Church would not have dissembled, this style of the Curia certainly argues at least a probable rationale which today makes lending at interest honest in general.

⁸ Holy Office, August 31, 1831.

⁹ Holy Office, January 17, 1838.

¹⁰ Sacred Penitentiary, January 17, 1836.

That the Church did not issue a solemn definition concerning this matter is already sufficiently explained by the fact that it was not apparent why it was necessary. For if sufficient provision has been made for the “practical” instruction of the faithful, the Holy See, on account of her eminent prudence, is accustomed to defer a formal definition for a long time. Add also that not a few controversies still rage concerning the very just cause of present-day lending at interest, which seems to hinder the definition of principles.

Rev. Fr. Lehmkuhl, vol. 1, no. 1106, supplies this other rationale why the Church should abstain from a doctrinal proposition: the honesty of the present practice depends upon a condition of money that is not, as it were, natural, but adventitious, and that is accordingly per se mutable. We did indeed formerly assent to this ingenious explanation; but, after the matter was better weighed, we judge that view to be scarcely probable, nor is it intimated by any word of the decrees, which rather disclose the intention of resolving the moral doubt while leaving the principles untouched.

Cf. what Rev. Dr. Van Roey wrote elegantly concerning this matter, De iusto auctario [On a Just Increase], pp. 72-77.

Argument 2. From reason. Such is the condition of things today that not only movable but also immovable goods very frequently change owners and can be acquired with money. Businesses and trades which are directed to profitable operations have also grown enormously; and the practice of conducting them even with the money of others has become so frequent that several opportunities are generally at hand for one who wishes to invest monies profitably (négocier, capitaliser [to trade, to capitalize]). Therefore, although undertakings not rarely turn out otherwise, there nevertheless exists a common facility, by the aid of money, either to acquire fruitful things or to have a part in profitable businesses. Moreover, the very possession of money procures credit (crédit), whose utility is of the highest economic order.

Hence thus:

He who possesses some thing is accustomed to value it from the utility which it will bring him not only in its own species but also in another species. That this can be transferred to fungible things is not ambiguous. Wherefore no one doubts that the possession of money, the more it affords the abundance of acquiring fertile lands or exercising profitable trades, will be of greater value to a man who thinks of becoming rich or conducting business. Therefore, in the fruitful consumption of a fungible thing or its conversion into fruitful things, there is a certain weight worthy of valuation per se. So long, however, as those opportunities are rare, or their use is infrequent, this is a special valuation by a few, which does not affect the value of things and accordingly cannot be computed except by those few who truly deprive themselves of such a faculty. Hence the titles which were called extrinsic. But make those opportunities, as it were, continuously available, so that the knowledge and will to seize them are widespread: the possession of money will now be commonly valued from that economic utility. And, as is evident from the preceding thesis, from common estimation there is generated a value which, adhering to the possession of money in anyone, will be ceded together with it for a time or in perpetuity, and can justly be compensated by an annual price or interest. Indeed, the very form of this price, which is placed in an annual or monthly prestation, agrees well with the nature of things. For the advantages which are commonly expected from possessed money consist in increments which are customarily obtained from fruitful things or trades carried on after stated intervals.

This can be reduced to a few words in formal terms thus:

In order that, for a certain condition of the commonwealth, money can justly be lent by all at moderate interest, it is enough that money be commonly valued from the hope of fruitful consumption or from the credit which it procures. For then, from that hope, the possession of money draws a value of which the creditor is deprived for a time and for which he rightly demands compensation through interest.

But. Such a condition of the commonwealth can exist, as is evident from present-day facts. Therefore.

It is confirmed 1. From St. Thomas, on Ethics, V, lect. 9, at the end: “It makes no difference, however, whether five beds are given, or only what five beds are worth.”

2. And the argument is especially clear from Lessius, who already in his time proposed an argument similar to ours in order to excuse the merchants who, on the Antwerp Exchange, established a price for being without money. Although he did not dare then openly to approve an opinion which seemed too new, he nevertheless rejects it so gently and answers so weakly the arguments which he himself had first vigorously proposed that he sufficiently manifests himself to incline in mind toward the opinion which we defend. Cf. chap. 20, no. 123-127. “A price can be imposed . . . even upon the burden of being without one’s money for such or such a time. For since money is an instrument of conducting business, and to deprive oneself of the instrument of one’s art is capable of valuation in money, why could not merchants also by common consent impose some price upon being without money? . . . Now, this price seems capable of being exacted by any merchant, even if no profit ceases for him. First, because it is the just price of being without money among merchants; . . . secondly, when a price has been imposed upon some thing or obligation on account of just causes which are commonly present, they can exact it even if such an obligation is not burdensome to me, indeed even if it is advantageous, because it is commonly valued at so much.” Thus also C. de Lugo, disp. 25, no. 18, permits even one who was in fact not going to cultivate a field to demand a price for the obligation not to cultivate it.

3. Rev. Fr. Palmieri¹¹ seems to us to embrace the matter in a manner similar to ours:

¹¹ Opus theologicum [Theological Work], among the notes, no. 667, 2nd ed.

“It does not matter that someone, either because of his ignorance or because of other circumstances, is not equal to capturing profit with his money; for the value and price of money (as also of other things) depend not upon these contingencies, but upon common estimation and use.

“Therefore, while this condition of society which we have described endures, since the money of anyone is per se capable of generating profit and worthy of a certain price for this power, there is no need for individual creditors to consider whether some profit will in fact cease for them if they lend; for, even if they would have kept it idle, nevertheless, when they hand it over as a loan for consumption, it is always true that they hand over a thing which, according to common use, is capable of generating profit and which therefore, according to common estimation (upon which the value of things depends), is worthy of some price.

“This is certainly, among other things, the difference between the present and the former condition of society. The price of generating profit now inheres in money because of the common estimation and common use of men, and therefore is independent of the private condition of the possessor of the money: formerly that price depended only upon the private condition and industry of the possessor of the money. Therefore, it was then necessary to inquire whether profit really ceased for the creditor; now it is licit to omit this special inquiry. To this point also pertain the responses of the Sacred Congregations permitting an increase, even with the title of profit ceasing having been prescinded from—that title, I say, which formerly prevailed.”

376. C. OF THE THIRD PART. The former severity of the Church and her present indulgence are immune from every accusation.

A threefold accusation of this kind can be imagined: error, inconsistency, an unreasonable harassment of business and the arts.

1. There was no error, either in commending charity or in prohibiting lucrative usury by force of a loan for consumption: this is evident from the first part. At most, it can be said that theologians perhaps noticed the changed economic circumstances somewhat later, and judged certain cases more strictly than was right from true principles but with the fact considered less accurately. This private error, however, which was not lacking in happy fruits, as we shall see, cannot be imputed to the Church, especially since it was not long-lasting and some confusion can scarcely be avoided in those periods which contain a certain and not yet perfect change of morals.¹²

¹² In French we say: époques de transition [periods of transition].

2. No inconsistency can be objected, since the very nature of things demands a different solution of the question in different circumstances. This appears clearly from the second part.

As Rev. Dr. Van Roey¹³ very well observes, “we indeed perceive a very great evolution in the application of the doctrine, but no opposition in the doctrine itself.”

¹³ On a Just Increase, p. 78.

3. Nor is the third accusation any less easily dissolved. For:

a) The occasion of the severity was the cruel oppression of the poor and afflicted. The very arguments of the decrees testify to this. Did the Church harm temporal prosperity when she rescued innumerable men of the lowest order from utter ruin? The distinguished Jannet¹⁴ does not hesitate to say that these laws were plainly necessary for the salvation of the people, and that without them the emancipation of serfs and the liberty of tenants would have been undone. And indeed, in very truth, have we not already seen St. Basil and St. Ambrose (cf. the passages cited above) piously solicitous for small patrimonies and for the very liberty of men?

¹⁴ “Its rigorous application [that of the Church’s discipline concerning usury] was, moreover, in preceding centuries an indispensable measure of public safety. . . . All the fruits of the emancipation of the serfs would have been lost; the great landowners would have destroyed every independence among the populations living around them, as at Rome and in ancient Greece.” Le Capital, la Spéculation et la Finance [Capital, Speculation, and Finance], chap. 3, p. 80.

b) The Church forbade only this: that, apart from every partnership and every purchase of rent, someone should, from a simple loan for consumption, without labor and without danger, seek an increase from idle money.

Since the Church in no way prevented someone from seeking profit by means of money in true business, by buying, as we would say today, shares, she fostered truly profitable businesses and provoked the ingenuity of men to discover other contracts which would furnish a just title for profit. Hence there arose various more useful forms of contracts by which labor and money were joined in partnership. Hence, according to the testimony of Claude Jannet,¹⁵ contracts of exchange and insurance were practically devised. Wherefore Benedict XIV rightly and deservedly affirmed in the encyclical Vix pervenit, proposition IV: “There is no doubt that in those same contracts there is available a manifold licit mode and rationale for preserving and increasing human commerce and fruitful business itself unto the public good.”¹⁶

¹⁵ In a note to p. 296 of the work Les lois économiques [Economic Laws], by de Metz-Noblat.

¹⁶ Zech, work cited, diss. 3, in section 1, and the distinguished Jannet, Le Capital, etc., pp. 85-86, explain well the utility of these contracts.

Therefore, the Church did not suppress the will to profit; but she compelled the possessor of money to seek, by contributing labor and through true business, the profit which he would have captured without his own labor, often by oppressing the needy, if it had been licit to receive interest from a loan for consumption. Wherefore, even if theologians erred in considering the fact and applied the true doctrine with excessive severity, this rather had happy fruits per accidens.

c) It is also useful to observe well what difference there is, in safeguarding truth and justice, between ecclesiastical and secular power. The latter looks to the temporal end and the external order and, lest graver evils arise, must often tolerate certain sins. Wherefore the followers of the liberal school will perhaps¹⁷ show that certain civil sanctions enacted against usuries were harmful, but by this reasoning they will by no means establish that it was not in the interest of the commonwealth that notions of equity and justice be efficaciously promoted by the Church in accordance with her office of teaching all truth.

¹⁷ We abstain from that question. We shall note only this: even laws which indiscriminately tolerated usuries ought to have been abrogated in view of the common good. Cf. the imperial edict of Joseph II, December 2, 1803. What of the fact that even today there are some among more recent writers who lament that legal prohibitions were suppressed?

d) From the fact that an immoderate cupidity for profit and riches has generated so many hatreds and so many dangers in present society, these liberal economists will act altogether foolishly if they turn it into an accusation against the Church that she vindicated equity and justice, that she protected the wretched and restrained “the twin plagues of life, excessive desire for wealth and thirst for pleasures.” (Encyclical Rerum novarum.)

But if these calumnies sometimes find support among some scholars of these matters who have written with a hostile mind toward the Church,¹⁸ nevertheless, there are not lacking others, even outside the Church, most learned professors who, weighing the whole matter in a more equitable balance, have pronounced a far different judgment. It pleases us to bring forward here some examples from among them, especially since by various considerations they also illustrate what has been said thus far. And we shall borrow them from professors of England who today have an illustrious name in economics.

¹⁸ Thus, for example, Endemann in the writings cited.

We shall begin with the distinguished Professor A. Marshall, who teaches political economy at the University of Cambridge. Now he has the following:

“We are perhaps apt to lay too much stress on the condemnation by the Church of ‘usury’ and some kinds of trade. There was then [in the Middle Ages] very little scope for lending capital to be used in business, and when there was, the prohibition could be evaded by many devices, some of which were indeed sanctioned by the Church itself.”¹⁹

¹⁹ Principles of Economics, vol. 1, bk. 1, chap. 2, § 8, p. 28, 4th ed.

From the distinguished Professor Ashley, who is now dean of the Faculty of Commerce at the new University of Birmingham, and has praise especially as an author on economic history, we borrow these longer passages:

“A modern banking authority, by no means in sympathy with mediaeval ideas or their modern exponents, has nevertheless declared that in what he calls ‘an agricultural semi-barbarous community,’ the money-lender does more harm than good. This was precisely the opinion of the Church; and accordingly it endeavoured to suppress money-lending for gain altogether. The very fact that we hardly meet in the Middle Ages with such instances of oppression of the poor by usurers, as were frequent enough in Modern Europe during the brief period in which there were no restrictions on the usurer’s trade, would seem to prove that on the whole, the combined action of Church and State backed up by popular sympathy, was successful. The mere fact that statutes were passed against usury from time to time, with the usual pessimistic preamble, no more proves that the law was generally broken, than the frequent new criminal laws of modern times prove that all men are thieves and murderers. So long as the conditions remained what have just been described, the Canonist doctrine was but the ‘legal,’ and it may be added, the ethical ‘expression of economic conditions.’ ‘It implies,’ as the German economic historian, Arnold, long ago said, ‘that money had not yet the characteristics of capital.’

“But with the growth of trade and the increase of opportunities for investment, money began to have the ‘characteristics of capital’; it began to represent a force from the employment of which its owner could expect to obtain a revenue, in other ways than by loans for consumption. Trade found out these ways for itself, first and foremost by the practice of partnership; then by the purchase of rent-charges; and again by the employment of loans bearing interest after a certain period of gratuitous use.

“It is altogether misleading and unfair, then, to speak of the prohibition as putting obstacles in the way of the employment of capital. So far as wealth was intended to serve as capital, it found ways open for its employment—ways which were adequate for the time and against which the canonists had not a word to say.”²⁰

²⁰ Ashley, An Introduction to English Economic History and Theory, vol. 1, pt. 1, bk. 1, chap. 1, § 17.

The prohibition of the Church, as he himself goes on to say, endured as long as it was necessary for protecting the poor and weak against the rich and powerful.

“The prohibition of usury was clearly the centre of the canonist doctrine. That prohibition, as it is ordinarily interpreted, and indeed as it was actually formulated in some few passages of the Fathers, would have prevented every sort of investment of capital for the sake of gain, except in the owner’s present business. But there was certainly a steady growth of capital and of investment especially in trade, in the later Middle Ages; and for this investment, methods were found which did not conflict with the prohibition of usury, and which one after another received the approval of the Church, either by official declaration or by acquiescence in the judgment of authoritative writers.”²¹

²¹ An Introduction to English Economic History and Theory, vol. 1, pt. 2, bk. 2, chap. 6, § 65, p. 395.

These excellent words of Professor Cunningham, who is perhaps second to no one in England in knowledge of economic history, also serve our purpose:

“It is commonly supposed that narrow minded ecclesiastics laid down an arbitrary and unjustifiable rule against taking interest, and that they thus hampered the growth of trade. The rule was not arbitrary, but commended itself to ordinary common-sense and it did not hamper trade. The limits which were laid down in regard to money loans were not so narrow as modern writers appear to suppose, and every encouragement was given to men who could afford it, to make gratuitous loans for definite periods, as a form of christian charity. And it may be confidently affirmed that no real hindrance was put in the way of material progress in the then existing state of society by these restrictions.”²²

²² Growth of English Industry and Commerce, vol. 1, bk. 2, chap. 6, § 85, “The Condemnation of Usury” (3rd ed.).

In the same work below:²³

²³ Vol. 1, bk. 3, chap. 5, § 11.

“In so far as the wealth of moneyed men was diverted to usurious dealings instead of being employed in regular trade, there was a danger and not a benefit to society, for money was actually diverted from the directions in which it could be best used for the real advantage of the nation.”

377. III. DIFFICULTIES.

1. IT IS LICIT TO PROFIT BY FORCE OF A LOAN FOR CONSUMPTION. For:

²⁴ On the heading above. Cf. Molina, disp. 304; C. de Lugo, disp. 25, sect. 2 and 2; Ballerini, place cited.

a) A loan for consumption contains a service rendered to another. But. No one is bound to benefit another gratuitously.

Reply. I concede or pass over the antecedent. I distinguish the minor. No one is bound, that is, he can refuse the service without injury, C.; that is, if he wills to render it, he can exact a price, I subdistinguish: if it is capable of valuation at a price, C.; otherwise, N.

Instance. That service is a benefit. But. A benefit can receive a wage by natural law. Therefore. (C. d’Annibale, vol. 2, no. 533.)

Reply. I concede or pass over the major. To the minor, I distinguish. A benefit can receive a wage from gratitude, C.; one owed from strict justice, I subdistinguish: if it is also burdensome or furnishes something capable of valuation at a price, C.; otherwise, N. I distinguish the consequence likewise.²⁵

²⁵ The distinguished Jannet, Le Capital, etc., p. 83, says very well: “The idea of Bentham, Hume, Turgot, and Bastiat, that a service rendered is the cause for receiving interest, would lead to justifying all speculations upon the passions or the embarrassed position of this or that borrower.”

b) (Or a new instance.) But. It is burdensome. The availability of money at hand to someone does not exist without a prior self-denial by which one abstained from spending it. But. This self-denial is a certain deprivation which receives in interest a just reward or compensation.—The inventor of this title of abstinence²⁶ is an English writer named Senior, whom many thereafter imitated, especially Bastiat, Harmonies, VII, Capital.

²⁶ Reward for abstinence.

Reply. I distinguish the major. Without a prior self-denial formally accepted and made for the good of the debtor, I deny; without a certain material self-denial, generally commanded by one’s proper and private pursuit—for example, of becoming rich—I concede. I contradistinguish the minor.

This objection offends common sense and is deservedly ridiculed by the socialists. Cf. Pesch, place cited, pp. 41-42; Weiss, place cited, p. 673; Antoine, place cited, 1st ed., p. 503, no. 4. At most it could be conceded that, by positive law, insofar as it contributes to the common good to sharpen zeal for thrift, moderate lending at interest is fittingly permitted for this reason.

c) In a loan for consumption, the time for which the debtor can defer payment is always justly compensated. For by it the money lent becomes a present good for the borrower, but a future good for the creditor. But. A present good is worth more than a future good. Therefore. Thus Böhm von Bawerk, Kapital und Kapitalzins, vol. 2, p. 300.

Reply. I deny the assertion; and to the argument, I divide the major. It becomes present for the borrower, C. Future for the creditor, I distinguish: and at the same time uncertain or with emergent loss or profit ceasing, I subdistinguish: always, N.; sometimes, C.—To the minor. A present good is worth more because it is more certain, or is not acquired without expenses, and the creditor is meanwhile deprived of utility, C.; otherwise, I deny.²⁷

²⁷ “If one ‘you have’ is worth more than two ‘you will have,’ common sense says plainly enough that this is because of the risks.” Cauwes, Cours d’économie politique [Course of Political Economy], vol. 3, no. 886, where he excellently refutes this opinion. Indeed, he adds that it happens that a future good is worth more than a present one, and gives the example of public securities (fonds publics) which are presumed to be of increasing value.

We speak of those things which obtain per se and in every condition of society. Moreover, if during the interval it becomes a future good, at the moment of payment the money again becomes a present good.

d) The sterility of money must be denied. For the sterility of money is no greater than that of a knife or field, which without the labor of man furnishes neither utility nor fruits. But when human industry is applied, as, for example, in business, money too is said to be, and is, fruitful. Cf. Tübingen Quarterly, 1879, p. 25.

Reply. The parity is denied.

For the primary and objective use of a knife or field preserves the substance with the user and brings either utility or fruits; whereas money per se perishes for the user, and its consumption is not of itself (always) fruitful. In particular cases, however, according to the preceding thesis, it must be considered whether the utility is proper to the one ceding the use or to the user. We suppose, moreover, that a contract of partnership is not being conducted. Cf. what is to be said in the immediately following thesis.

e) A loan for consumption contains the obligation not to reclaim the money before a certain time. But. This is always worthy of a price. Therefore. The minor is proved from the parity with the obligation of giving a loan for consumption, which is capable of valuation at a price. Otherwise, the stipulation by which a creditor bound the borrower thereafter to return the favor by another giving of a loan for consumption could not have been condemned as usurious. Thus Ballerini, place cited, p. 615, no. 255, and p. 650, no. 323.

Reply. I pass over the major. I deny the minor; and to the proof, I deny the parity. For, besides the fact that the obligation of contracting a loan for consumption, because of the less determinate circumstances of that future loan, more easily becomes burdensome per se, it entails an alienation of liberty, which no one ought to admit gratuitously. But the obligation not to reclaim before a certain time is not an obligation properly so called or a personal bond: it is the mere observance of a conceded real right. But. It is accepted that a price cannot be exacted for satisfying an obligation already undertaken from justice, or for observing the right of another. Thus, a donor would foolishly exact a price for the obligation never to reclaim the thing donated. Thus, he who speaks is already bound from justice not to violate truth to another’s harm: he can be bound by an onerous agreement to speak, but not to refrain from uttering injurious words. Similarly, the act of showing the way is not capable of valuation at a price; but what prevents someone from binding himself from justice, for a price, to perform this office? Indeed, although a donation is essentially gratuitous, it is not repugnant for the promise of a donation to be compensated with money. And, as Molina, disp. 304, observes, for a price you can bind yourself to sell; but, in the sale itself, besides the price of the thing, you cannot exact anything on account of the necessity of thereafter being without that thing. Wherefore the obligation not to reclaim money lent is not formally, as an obligation, capable of valuation at a price, but only from another source, as was explained in the proof. But if you say that some inconvenience inheres of itself in the deprivation of money, this is sufficiently compensated by the greater security which the creditor obtains. For we suppose the restitution of the money to be certain. Cf. the proof itself. This difficulty is treated at length by C. de Lugo, disp. 25, sect. 3, but we do not approve his response in no. 24; what he adds in no. 25 pleases us more.²⁸

²⁸ Rev. Dr. Van Roey himself denies that the obligation of giving a loan for consumption is capable of valuation per se. De iusto auctario [On a Just Increase], pp. 252-256.

2. ONE CANNOT SIN BY USURY UNLESS THERE IS AN ABUSE OF ANOTHER’S NECESSITY. For no injury is done to one who, compelled by no necessity, seeks a loan for consumption, since he is “knowing and willing.” Tübingen Quarterly, 1869, pp. 409-411.

Reply. I deny the assertion and its rationale.

For, equally as by necessity, someone can be compelled by passion and subjective cupidity to contract a loan for consumption, and therefore equally unwillingly pay illicit or immoderate usuries. Cf. St. Thomas, On Evil, q. 13, art. 4; Molina, disp. 304, no. 11; and Zech, diss. 1, § 154. Moreover, the abuse of another’s necessity can sometimes be contrary merely to charity, as when, while a needy poor man ought to have been assisted, you do not grant money except at interest which is per se moderate.

1. FROM THE VERY STERILITY OF MONEY the socialists argue against the present-day liceity of lending at interest.

Reply. Money is sterile in itself, but not always in an equivalent or as an instrument of business. Since they in turn deny the latter, it will be demonstrated in what follows (nos. 395-397).

2. FOR THE EXPLANATION THROUGH FRUITFUL CONSUMPTION. As soon as there is fruitful consumption on the part of the borrower, interest can be sought. For they concede that money is then no longer sterile. Therefore, there occurs, as it were, a lease of money. Tübingen Quarterly, 1875, p. 220.

Reply. I deny the antecedent. For although money is not sterile for the borrower, it does not follow that it is fruitful for the creditor or in itself. You would say otherwise if the creditor himself had a part in the business by force of a contract and furnished the money in such a way that, as a partner in the business, he should be judged himself to have profitably invested his own money. Cf. Molina, disp. 304, no. 12.

3. THOSE WHO CONCEDE ONLY A PRESUMED EXTRINSIC TITLE argue in various ways.

a) The opportunity of profiting from money was already commonly present even in the Middle Ages, or certainly long before our age; yet theologians did not suspect a just cause for lending at interest other than an extrinsic title.

Reply. I deny the assertion until it is proved. For those skilled in economic science think otherwise. Cf. below, no. 384.

Moreover, in order that the objective value of money to be used may increase, it is not enough that an opportunity for fruitful conversion be commonly available, unless at the same time, from the common knowledge of the opportunity and the will to use it, the facility has entered into common estimation. Cf. what was said concerning value and the function of common estimation, nos. 350 and 350 bis.

Finally, what wonder is it if theologians did not immediately from the beginning perceive the changed circumstances and were slow in accommodating their tenets to them? Was there not dispute among them for three centuries (from the thirteenth to the sixteenth) concerning the title of profit ceasing? Now the dispute concerning the universal honesty of lending at interest, which today seems to be drawing to an end, itself took its beginnings two or three centuries ago.

b) The faculty of profiting from money does not cohere with it as the faculty of habitation does with a house. For this utility is intrinsic to the house and is always present, whether you occupy the house or not. On the contrary, the utility of money seems first to arise when you have determined to invest it in a fruitful business. Wherefore, when this will is absent, the utility itself and the cause of just compensation seem to perish.

Reply. Having passed over the antecedent and its proof, I deny the final inference and the consequent. For if you carefully recall what was said above, the goodness or quality of a thing is not sold or let formally insofar as it is intrinsic to the thing, but insofar as those who know it generally will to use it. Therefore, if men commonly preferred to live under the open sky, the utility of habitation would be deprived of value. Wherefore, economically, it matters little whether the utility itself was prior or posterior to the will to use it.

It will be enough if, from present-day circumstances, money per se offers to all the faculty of fruitful conversion which men generally will to enjoy, just as a house always offers to one who wills it the opportunity of useful habitation.

c) The faculty of profiting from money is restored together with it. Therefore. By this restitution it is sufficiently compensated.

Reply. I distinguish the antecedent. It is restored for the future, C.; for the past, N. It is not the same for me, for example, to become the possessor of this faculty after a year as already to be so now. For useful conversions succeed one another in a series as it were continuous, which, the longer it is, brings the hope of more abundant profit. Besides, in nearly the same manner you would say that the utility of a house is restored together with the house itself and therefore merits no other compensation.