Page:Catholic Encyclopedia, volume 15.djvu/273

USURY of taking interest depends on one's intention; thus, we may give credit gratuitously, or we may give the use of our money for a consideration. In the first case, the contract is essentially gratuitous; and as formerly this gratuitous contract was the ordinary practice, the Church was opposed to all claim of interest. However, as the use of money has its value, ke the use of anything else, the Church on this round at the present day permits the lending of loney for interest. In spite of the assent of many uthors to this explanation, we do not approve it. n Koraan law, gratuitousness was not es.sential to he mitluum, but only presumed in the absence of any tipulation to the contrarj'. Persons who openly or ?cretly demanded interest proved conclusively that liey were not actuated by motives of benevolence; nd the Church, in condemning them, did not raise le question of their intention. The answer to Ballerini is that rent is a price paid for the use of a thing ot destroyed by use. The expenditure of money lay be productive, and the person lending money and so depriving himself of profit may claim a compensation for that privation; but this is a question of extrinsic circumstances, not of justice in itself.

Others with Claudio-Jannet (Le capital, la speculation et la finance, iii. II and III) distinguish between le loan for consumption and the loan for production: e may ask interest from the borrower who takes loney on credit in order to produce or gain money; ut not from one who borrows under pressure of pcessity, or for some unproductive expenditure, he increased frequency of loans for production con- dered in connexion with the different extrinsic cir- imstances would seem to justify the demand for iterest on such loans at the present day. In a spirit lat is not irreconcilable with the ruMngs of the athers in the matter, this system contains this ele- lent of truth, that the lender of a sum of money hich is intended for productive use may refuse to nd except on condition of being made a partner in le imdertaking, and may claim afixed interest which presents that share of the profit, which he might asonably expect to receive. The system, neverthe- ss, is formally condemned by the EncycUcal "Vix ?rvenit", and contradicts the principle of the just due; it tends in fact to make the borrower pay for le special advantage, while the compensation is regulated by the general advantage procured by the possession of a thing, not by the special circumstances the borrower. Others justify the existing practice by presumption of extrinsic circumstances, which is confirmed, according to some persons, by the permission the civil law. This explanation appears to us isatisfactory. The extrinsic circumstances do not ways exist, while we can always lend at interest, ithout any scruple on the score of justice. And hat is there to show that modern legislators pass ws merely to quiet men's consciences?

But we may correct this last opinion by the aid of le general principles of contractual justice; and we lall then more fully understand the strictness of le law of earher times, and the greater hberty allowed the present day. The just price of a thing is ised on the general estimate, which depends not in 1 cases on universal utiUty, but on general utility, nee the possession of an object is generally useful, may require the price of that general utility, even hen the object is of no use to me. There is much eater facilil y nowad.iys for making profitable invest- ents of savings, and a true value, therefore, is always tarhed lo the possession of money, as also to credit 3elf. A lender, during the whole time that the loan intinues, deprives himself of a valuable thing, for le price of which he is compensated by the interest.

is right at the present day to permit interest on oney lent, as it wa-s not wrong to condemn the practice at a time when it was more difficult to find profitable investments for money. So long as no objection was made to the profitable investment of capital in industrial undertakings, discouragement of interest on loans acted as an encouragement of legiti- mate trade; it also led to the creation of new con- tractual associations, such as insurance companies, which give a reasonable hope of gain without risk. The action of the Church has found distinguished defenders, even outside her own pale, among the representatives of contemporary economic science. We may mention tfiree English authors: Marshall, professor of political economy at the Uni\ersity of Cambridge (Principles of Economics, I, I, ii, sees. 8 etc.); .\shley, professor at the new University of Birmingham (An Introduction to English Economic History and Theory, I, I, i, sec. 17); and the celebrated historian of poUtical economy. Professor Cunningham (Growth of English Industry and Commerce, I, II, vi, sec. 8.5, third edition). Even at the present day, a smaU number of French CathoUcs (Abbe Morel, "Du pret a interet"; Modest e, "Le pret a interet, derniere forme de resclavago") see in the attitude of the Church only a tolerance justified by the fear of greater evOs. 'This is not so. The change in the attitude of the Church is due entirely to a change in economic matters that require the present system. The Holy See itself puts its funds out at interest, and requires ecclesiastical adtiiinistrators to do the same. A recent writer, Father BcUiot of the Friars Minor, denounces in loans for interest "the principal economic scourge of civiU- zation", though the accumulation of wealth in the hands of a few capitalists, which he deplores so much, does not arise so much from lending money at proper interest as from industrial investments, banking operations, and specidations, which have never been condemned as unjust in principle. There has never been at any time any prohibition against the invest- ment of capital in commercial or industrial under- takings or in the public funds.

Lending money at interest gives us the opportunity to exploit the passions or necessities of other men by compelling them to submit to ruinous conditions; men are robbed and left destitute under the pretext of charity. Such is the usury against which the Fathers of the Church have always protested, and which is universally condemned at the present day. Dr. Funk defined it as the abuse of a certain superiority at the expense of another man's necessity; but in this description he points to the opportunity and the means which en.able a man to commit the sin of usury, rather than the formal malice of the sin itself. It is in itself unjust extortion, or robbery. The sin is frequently committed. In .some countries are found instances of the exaction of interest at 30, .50, 100 per cent, and even more. The evil is so great in India that we might expect legal provisions to fight against such ruinous abuse. The exorbitant charges of pawnbrokers for money lent on pledge, and, in some instances, of persons selling goods to be paid for by instalments, are also instances of usury dis- guised under another name. As a remedy for the evil, respectable associations for mutual lending have been instituted, such a.s the b.anks known by the name of their founder, RaifTeisen, and help h.as been sought from legislators; but (here is no general agree- ment ;is to the form which legislation on this subject should take.