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 USURY

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USURY

6) is quoted which, while ordering the degradation of clerics, would also have punishment inflicted on lay- men, who obstinately persisted in usurious practices; but the mention of laymen is of extremely doubtful authenticity. It may tlien be said that until the ninth century canonical decrees forbade this profit, shameful as it was considered, only to clerics.

Nevertheless, the 12th canon of the First Council of Carthage (34.5) and the 36th canon of the Council of Aix (789) have declared it to be reprehensible even for laymen to make money by lending at interest. The canonical laws of the Middle Ages absolutely for- bade the practice. This prohibition is contained in the Decree of Gratian, q. 3, C. IV, at the beginning, and c. 4, q. 4, C. IV; and in 1. .5, t. 19 of the Decretals, for example in chapters 2, 5, 7, 9, 10, and 13. These chapters order the profit so obtained to be restored; and Alexander III (c. 4, "Super eo",eodem) declares that he has no power to dispense from the obhgation. Chapters 1, 2, and 6, eodem, condemn the stratagems to which even clerics resorted to evade the law of the general councils, and the Third of the Lateran (1179) and the Second of Lyons (1274) condemn usurers. In the Council of Vienne (1311) it was declared that if any person obstinately maintained that there was no sin in the practice of demanding interest, he should be punished as a heretic (see c. "Ex gravi", unic. Clem., "De usuris", V, 5). It is a curious fact that for a long time a certain impunity was in such matters granted to Jews. The Fourth Council of the Lateran (121.5), c. 27, only forbids them to exact excessive interest. Urban III, c. 12, "De usuris" (V, 19) and St. Louis in twenty-tliree of his regulations extended the prohibition to the Jews. With the exception of e. 27 of the Fourth Council of the Lateran, we know of no canon law which takes into consideration the question of moderate interest ; and canon law nowhere states distinctly that iiiterest is, under any cu-cum- stances whatsoever, contrary to justice. Theologians and canonists of the Middle Ages constructed a rational theory of the loan for consumption, which contains this fundamental statement: the mutumn, or loan of things meant for immediate consumption, does not legahze, as such, any stipulation to jxay interest; and interest exacted on such a loan must be returned, as having been unjustly claimed. This was the doctrine of St. Thomas and Scotus; of Mohna, Lessius, and de Lugo. Canonists adopted it as well as the theologians; and Benedict XIV made it his own in his famous Encychcal "Vix pervenit" of 1 Novem- ber, 1745, which was promulgated after thorough examination, but addressed only to the bishops of Italy, and therefore not an infallible Decree. On 29 July, 1S36, the Holy Office incidentally declared that tlii.s Encyclical applied to the whole Church; but such a declaration could not give to a document an infal- lible character which it otherwise did not possess. The schismatic Greeks, at least since the sixieenth cent ury, do not consider the taking of interest on loans as intrinsically bad.

While Lut her, Melanchthon, and Zwingli condemned loaning for interest, Calvin permitted interest on money advanced to rich i)ersoTis; his disciple Salmasius gave effect to this opinion by a systematic code of rules. Hy degrees a certain number of Catholic writers relaxed their severit v. Scipio Maffei, a friend of HciicdicI XIV, wrote a J'clilirati-d treatise, ''Dell' inipicgo del dunaro", to justify nn oi)inion which in this iiialter resembles that of Calvin. Economists g<iicrally upliold the theoretical lawfulness of interest on loans. For a long time civil law was in agreement with canon law; hut as early a.s the sixteenth century, Germany allowed interest at .5 per cent; in France, on the contrary, interest on loans was forbiddini until the Decree of 2 aiul 3 October, 17.S9. Contempo- rary laws always consider the loan for consumption as gratuitous in principle, but allow a stiijulation for

the payment of interest to be added. In modern legislation, two questions remain to be decided: (1) whether it is desirable to establish a maximum legal rate; and (2) by what means usurious exactions may be prevented. The Holy See admits practically the lawfulness of interest on loans, even for ecclesiastical property, though it has not promulgated any doc- trinal Decree on the subject. See the replies of the Holy Office dated 18 August, 1830, 31 August, 1831, 17 January, 1838, 26 March, 1840, and 28 February, 1871; and that of the Sacred Penitentiary of 11 February, 1S32. These rephes will be found collected in the "Collectio Lacensis" (Acta et decreta s. conciUorum recentiorum), VI, col. 677, Appendix to the Council of Pondicherry; and in the "Enchiridion" of Father Bucceroni.

Every one admits that a duty of charity may command us to lend gratuitously, just as it commands us to give freely. The point in question is one of justice: is it contrary to the equity required in mutual contracts to ask from the borrower interest in addition to the return of the money lent? It may be remarked that the best authors have long recognized the law- fulness of interest to compensate a lender for the risk of losing his capital, or for positive loss, such as the privation of the profit which he might otherwise have made, if he had not advanced the loan. They also admit that the lender is justified in exacting a fine of some kind (a conventional penalty) in case of any delay in repayment arising from the fault of the borrower. These are what are called extrinsic grounds, admitted without dispute since the end of the sixteenth century, and justifying the stipulation for reasonable interest, proportionate to the risk involved in the loan. Another discussion, which has not been closed, but only su.spended, relates to the question whether the civil law creates a new and real title, whether the State can, in order to extend and promote credit for the good of the community, permit interest on loans. We think it can. But there will scarcely be any need for such a law except in circumstances which aheady justify the general practice of lending for interest. (On these extrinsic rights see: Funk, " Geschichte des kirchhchen Zinsverbotes" ; Lehmkuld, "Theologia moralis", I, n. 1306 sqq., 11th ed.)

The precise question then is this: if we consider justice onl}', without reference to extrinsic circum- stances, can the loan of money, or of any chattel which is not destroyed by use, entitle the lender to a gain or profit which is called interest? To this question some persons, namely the economists of the classic school, and some Cathohc writers, answer "yes, and always"; others, namely Sociahsts, and some Catho- lic writers, answer "no, never"; and lastly some Cath- oUcs give a less unconditional answer, "sometimes, but not always"; and they explain the different attitudes of the Churcli in condemning at one time, and at another authorizing, the practice of taking interest on loans, by the difference of circumstances and the state of society. The principal argument in favour of the first opinion is that the lender does the borrow er a service which should be paid for. This is, of course, a materialistic view of human senice, which when rendered in a spirit of active benevolence is repaiii by gratitude: only onerous service, which costs or represents some trouble or privation, is sold or liired for money. Now, at times when opportunities for investing money in commercial luuh'rtakings or con- verting it into revenue-producing property were com- paratively rare, a loan made to a solvent person, instead of being onerous to the lender, was rather an advantage, in giving him full security for his nioney, for the borrower insured him against its accidental loss. And we liave just shown that the loan of things meant for inunediate consumption was not, as such, a source of revenue. Father Ballerini (Opus morale, III, pt. Ill, ii) thought that the justice or injustice