 |
[Footnote 1: Jourdain, op. cit., p. 15.]
[Footnote 2: Rise and Influence, of Rationalism in Europe, vol. ii. p. 261.]
[Footnote 3: Endemann, Studien, vol. i. p. 17.]
In answer to the question 'whether it is a sin to take usury for money lent,' Aquinas replies: 'To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality, which is contrary to justice.
'In order to make this evident, we must observe that there are certain things the use of which consists in their consumption; thus we consume wine when we use it for drink, and we consume wheat when we use it for food. Wherefore in such-like things the use of the thing must not be reckoned apart from the thing itself, and whoever is granted the use of the thing is granted the thing itself; and for this reason to lend things of this kind is to transfer the ownership. Accordingly, if a man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice. In like manner he commits an injustice who lends wine or wheat, and asks for double payment, viz. one, the return of the thing in equal measure, the other, the price of the use, which is called usury.
'On the other hand, there are other things the use of which does not consist in their consumption; thus to use a house is to dwell in it, not to destroy it. Wherefore in such things both may be granted; for instance, one man may hand over to another the ownership of his house, while reserving to himself the use of it for a time, or, vice versa, he may grant the use of a house while retaining the ownership. For this reason a man may lawfully make a charge for the use of his house, and, besides this, revendicate the house from the person to whom he has granted its use, as happens in renting and letting a house.
'But money, according to the philosopher,[1] was invented chiefly for the purpose of exchange; and consequently the proper and principal use of money is its consumption or alienation, whereby it is sunk in exchange. Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury; and, just as a man is bound to restore other ill-gotten goods, so he is bound to restore the money which he has taken in usury.'[2]
[Footnote 1: Eth. v. Pol. 1.]
[Footnote 2: II. ii. 78, 1.]
The essential thing to notice in this explanation is that the contract of mutuum is shown to be a sale. The distinction between things which are consumed in use (res fungibiles), and which are not consumed in use (res non fungibiles) was familiar to the civil lawyers; but what they had never perceived was precisely what Aquinas perceived, namely, that the loan of a fungible thing was in fact not a loan at all, but a sale, for the simple reason that the ownership in the thing passed. Once the transaction had been shown to be a sale, the principle of justice to be applied to it became obvious. As we have seen above, in treating of sales, the essential basis of justice in exchange was the observance of aequalitas between buyer and seller—in other words, the fixing of a just price. The contract of mutuum, however, was nothing else than a sale of fungibles, and therefore the just price in such a contract was the return of fungibles of the same value as those lent. If the particular fungible sold happened to be money, the estimation of the just price was a simple matter—it was the return of an amount of money of equal value. As money happened to be the universal measure of value, this simply meant the return of the same amount of money. Those who maintained that something additional might be claimed for the use of the money lost sight of the fact that the money was incapable of being used apart from its being consumed.[1] To ask for payment for the sale of a thing which not only did not exist, but which was quite incapable of existence, was clearly to ask for something for nothing—which obviously offended against the first principles of commutative justice. 'He that is not bound to lend,' says Aquinas in another part of the same article, 'may accept repayment for what he has done, but he must not exact more. Now he is repaid according to equality of justice if he is repaid as much as he lent, wherefore, if he exacts more for the usufruct of a thing which has no other use but the consumption of its substance, he exacts a price of something non-existent, and so his exaction is unjust.'[2] And in the next article the principle that mutuum is a sale appears equally clearly: 'Money cannot be sold for a greater sum than the amount lent, which has to be paid back.'[3]
[Footnote 1: Aquinas did not lose sight of the fact that money might, in certain cases, be used apart from being consumed—for instance, when it was not used as a means of exchange, but as an ornament. He gives the example of money being sewn up and sealed in a bag to prevent its being spent, and in this condition lent for any purpose. In this case, of course, the transaction would not be a mutuum, but a locatio et conductio, and therefore a price could be charged for the use of the money (Quaestiones Disputatae de Malo, Q. xiii. art. iv. ad. 15, quoted in Cronin's Ethics, vol. ii. p. 332).]
[Footnote 2: II. ii. 78, 1, ad. 5.]
[Footnote 3: II. ii. 78, 2, ad. 4. Biel distinguishes three kinds of exchange: of goods for goods, or barter; of goods for money, or sale; and of money for money; and adds, 'In his contractibus ... generaliter justitia in hoc consistit quod fiant sine fraude, et servetur aequalitas substantiae, qualitatis, quantitatis in commutatis (Op. cit., IV. xv. 1). Buridan says that usury is contrary to natural law 'ex conditione justitiae quae in aequalitate damni et lucri consistit; quoniam injustum est pro re semel commutata pluries pretium recipere' (In Lib. Pol., iv. 6).]
The difficulty which moderns find in understanding this teaching, is that it is said to be based on the sterility of money. A moment's thought, however, will convince us that money is in fact sterile until labour has been applied to it. In this sense money differs in its essence from a cow or a tree. A cow will produce calves, or a tree will produce fruit without the application of any exertion by its owner; but, whatever profit is derived from money, is derived from the use to which it is put by the person who owns it. This is all that the scholastics meant by the sterility of money. They never thought of denying that money, when properly used, was capable of bringing its employer a profit; but they emphatically asserted that the profit was due to the labour, and not to the money.
Antoninus of Florence clearly realised this: 'Money is not profitable of itself alone, nor can it multiply itself, but it may become profitable through its employment by merchants';[1] and Bernardine of Sienna says: 'Money has not simply the character of money, but it has beyond this a productive character, which we commonly call capital.'[2] 'What is money,' says Brants, 'if it is not a means of exchange, of which the employment and preservation will give a profit, if he who possesses it is prudent, active, and intelligent? If this money is well employed, it will become a capital, and one may derive a profit from it; but this profit arises from the activity of him who uses it, and consequently this profit belongs to him—it is the fruit, the remuneration of his labour.... Did they (the scholastics) say that it was impossible to draw a profit from a sum of money? No; they admitted fully that one might de pecunia lucrari; but this lucrum does not come from the pecunia, but from the application of labour to the sum.'[3]
[Footnote 1: Quoted in Brants, op. cit., p. 134.]
[Footnote 2: Ibid.]
[Footnote 3: Brants, op. cit., pp. 133-5; Nider, De Cont. Merc. iii. 15.]
Therefore, if the borrower did not derive any profit from the loan, the sum lent had in fact been sterile, and obviously the just price of the loan was the return of the amount lent; if, on the contrary, the borrower had made a profit from it, it was the reward of his labour, and not the fruit of the loan itself. To repay more than the sum lent would therefore be to make a payment to one person for the labour of another.[1] The exaction of usury was therefore the exploitation of another man's exertion.[2]
[Footnote 1: Gerson, De Cont., iv. 15.]
[Footnote 2: Neumann, when he says that 'it was sinful to recompense the use of capital belonging to another' (Geschichte des Wuchers in Deutschland, p. 25), seems to miss the whole point of the discussion. The teaching of the canonists on rents and partnership shows clearly that the owner of capital might draw a profit from another's labour, and the central point of the usury teaching was that money which has been lent, and employed so as to produce a profit by the borrower, belongs not 'to another,' but to the very man who employed it, namely, the borrower.]
It is interesting to notice how closely the rules applying in the case of sales were applied to usury. The raising of the price of a loan on account of some special benefit derived from it by the borrower is precisely analogous to raising the sale price of an object because it is of some special individual utility to the buyer. On the other hand, as we shall see further down, any special damage suffered by the lender was a sufficient reason for exacting something over and above the amount lent; this was precisely the rule that applied in the case of sales, when the seller suffered any special damage from parting with the object sold. Thus the analogy between sales and loans was complete at every point. In both, equality of sacrifice was the test of justice.
Nor could it be suggested that the delay in the repayment of the loan was a reason for increasing the amount to be repaid, because this really amounted to a sale of time, which, of its nature, could not be owned.[1]
[Footnote 1: Rambaud, op. cit., p. 63; Aquinas(?), De Usuris, i. 4.]
The scholastic teaching, then, on the subject was quite plain and unambiguous. Usury, or the payment of a price for the use of a sum lent in addition to the repayment of the sum itself, was in all cases prohibited. The fact that the payment demanded was moderate was irrelevant; there could be no question of the reasonableness of the amount of an essentially unjust payment.[1] Nor was the payment of usury rendered just because the loan was for a productive purpose—in other words, a commercial loan. Certain writers have maintained that in this case usury was tolerated;[2] but they can easily be refuted. As we have seen above, mutuum was essentially a sale, and, therefore, no additional price could be charged because of some special individual advantage enjoyed by the buyer (or borrower). It was quite impossible to distinguish, according to the scholastic teaching, between taking an additional payment because the lender made a profit by using the loan wisely, and taking it because the borrower was in great distress, and therefore derived a greater advantage from the loan than a person in easier circumstances. The erroneous notion that loans for productive purposes were entitled to any special treatment was finally dispelled in 1745 by an encyclical of Benedict XIV.[3]
[Footnote 1: Jourdain, op. cit., p. 35.]
[Footnote 2: E.g. Perin, Premiers Principes d'Economie politique, p. 305; Claudio Jannet, Capital Speculation et Finance, p. 83; De Metz-Noblat, Lois economiques, p. 293.]
[Footnote 3: Rambaud, op. cit., p. 69.]
Sec. 5. Extrinsic Titles.
Usury, therefore, was prohibited in all cases. Many people at the present day think that the prohibition of usury was the same thing as the prohibition of interest. There could not be a greater mistake. While usury was in all circumstances condemned, interest was in every case allowed. The justification of interest rested on precisely the same ground as the prohibition of usury, namely, the observance of the equality of commutative justice. It was unjust that a greater price should be paid for the loan of a sum of money than the amount lent; but it was no less unjust that the lender should find himself in a worse position because of his having made the loan. In other words, the consideration for the loan could not be increased because of any special benefit which it conferred on the borrower, but it could be increased on account of any special damage suffered by the lender—precisely the same rule as we have seen applied in the case of sales. The borrower must, in addition to the repayment of the loan, indemnify the lender for any damage he had suffered. The measure of the damage was the difference between the lender's condition before the loan was made and after it had been repaid—in other words, he was entitled to compensation for the difference in his condition occasioned by the transaction—id quod interest.
Before we discuss interest properly so called, we must say a word about another analogous but not identical title of compensation, namely, the poena conventionalis. It was a very general practice, about the legitimacy of which the scholastics do not seem to have had any doubt, to attach to the original contract of loan an agreement that a penalty should be paid in case of default in the repayment of the loan at the stipulated time.[1] The justice of the poena conventionalis was recognised by Alexander of Hales,[2] and by Duns Scotus, who gives a typical form of the stipulation as follows: 'I have need of my money for commerce, but shall lend it to you till a certain day on the condition that, if you do not repay it on that day, you shall pay me afterwards a certain sum in addition, since I shall suffer much injury through your delay.'[3] The poena conventionalis must not be confused with either of the titles damnum emergens or lucrum cessans, which we are about to discuss; it was distinguished from the former by being based upon a presumed injury, whereas the injury in damnum emergens must be proved; and for the latter because the damage must be presumed to have occurred after the expiration of the loan period, whereas in lucrum cessans the damage was presumed to have occurred during the currency of the loan period. The important thing to remember is that these titles were really distinct.[4] The essentials of a poena conventionalis were, stipulation from the first day of the loan, presumption of damage, and attachment to a loan which was itself gratuitous.[5] The Summa Astesana clearly maintained the distinction between the two titles of compensation,[6] as also did the Summa Angelica.[7]
[Footnote 1: Ashley, op. cit., vol. i. pt. i. p. 399.]
[Footnote 2: Biel, op. cit., iv. 15, 11.]
[Footnote 3: Cleary, op. cit., p. 93.]
[Footnote 4: Ibid., p. 95.]
[Footnote 5: Cleary, op. cit., p. 94.]
[Footnote 6: Endemann, Studien, vol. i. p. 20.]
[Footnote 7: ccxl.]
The first thing to be noted on passing from the poena conventionalis to interest proper is that the latter ground of compensation was generally divided into two kinds, damnum emergens and lucrum cessans. The former included all cases where the lender had incurred an actual loss by reason of his having made the loan; whereas the latter included all cases where the lender, by parting with his money, had lost the opportunity of making a profit. This distinction was made at least as early as the middle of the thirteenth century, and was always adopted by later writers.[1]
[Footnote 1: Ashley, op. cit., vol. i. pt. ii. p. 399.]
The title damnum emergens never presented any serious difficulty. It was recognised by Albertus Magnus,[1] and laid down so clearly by Aquinas that it was not afterwards questioned: 'A lender may without sin enter an agreement with the borrower for compensation for the loss he incurs of something he ought to have, for this is not to sell the use of money, but to avoid a loss. It may also happen that the borrower avoids a greater loss than the lender incurs, wherefore the borrower may repay the lender with what he has gained.'[2] The usual example given to illustrate how damnum emergens might arise, was the case of the lender being obliged, on account of the failure of the borrower, to borrow money himself at usury.[3]
[Footnote 1: Roscher, Geschichte, p. 27.]
[Footnote 2: II. ii. 78, 2, ad. 1.]
[Footnote 3: Ashley, op. cit., vol. i. pt. i. p. 400.]
Closely allied to the title of damnum emergens was that of lucrum cessans. According to some writers, the latter was the only true interest. Dr. Cleary quotes some thirteenth-century documents in which a clear distinction is made between damnum and interesse;[1] and it seems to have been the common custom in Germany at a later date to distinguish between interesse and schaden.[2] Although the division between these two titles was very indefinite, they did not meet recognition with equal readiness; the title damnum emergens was universally admitted by all authorities; while that of lucrum cessans was but gradually admitted, and hedged round with many limitations.[3]
[Footnote 1: Op. cit., p. 95.]
[Footnote 2: Ashley, op. cit., vol. i. pt. ii. p. 401.]
[Footnote 3: Cleary, op. cit., p. 98; Endemann, Studien, vol. ii. p. 279; Bartolus and Baldus said that damnum emergens and lucrum cessans were divided by a very narrow line, and that it was often difficult to distinguish between them. They suggested that the terms interesse proximum and interesse remotum would be more satisfactory, but they were not followed by other writers (Endemann, Studien, vol. ii, pp. 269-70).]
The first clear recognition of the title lucrum cessans occurs in a letter from Alexander III., written in 1176, and addressed to the Archbishop of Genoa: 'You tell us that it often happens in your city that people buy pepper and cinnamon and other wares, at the time worth not more than five pounds, promising those from whom they received them six pounds at an appointed time. Though contracts of this kind and under such a form cannot strictly be called usurious, yet, nevertheless, the vendors incur guilt, unless they are really doubtful whether the wares might be worth more or less at the time of payment. Your citizens will do well for their own salvation to cease from such contracts.'[1] As Dr. Cleary points out, the trader is held by this decision to be entitled to a recompense on account of a probable loss of profit, and the decision consequently amounts to a recognition of the title lucrum cessans.[2] The title is also recognised by Scotus and Hostiensis.[3]
[Footnote 1: Decr. Greg. v. 5, 6.]
[Footnote 2: Op. cit., p. 67.]
[Footnote 3: Ibid., p. 99.]
The attitude of Aquinas to the admission of lucrum cessans is obscure. In the article on usury he expressly states that 'the lender cannot enter an agreement for compensation through the fact that he makes no profit out of his money, because he must not sell that which he has not yet, and may be prevented in many ways from having.'[1] Two comments must be made on this passage; first, that it only refers to making a stipulation in advance for compensation for profit lost, and does not condemn the actual payment of compensation;[2] second, that the point is made that the probability of gaining a profit on money is so problematical as to make it unsaleable. As Ashley points out, the latter consideration was peculiarly important at the time when the Summa was composed; and, when in the course of the following two centuries the opportunities for reasonably safe and profitable business investments increased, the great theologians conceived that they were following the real thought of Aquinas by giving to this explanation a pure contemporanea expositio. The argument in favour of this construction is strengthened by a reference to the article of the Summa dealing with restitution,[3] where it is pointed out that a man may suffer in two ways—first, by being deprived of what he actually has, and, second, by being prevented from obtaining what he was on his way to obtain. In the former case an equivalent must always be restored, but in the latter it is not necessary to make good an equivalent, 'because to have a thing virtually is less than to have it actually, and to be on the way to obtain a thing is to have it merely virtually or potentially, and so, were he to be indemnified by receiving the thing actually, he would be paid, not the exact value taken from him, but more, and this is not necessary for salvation. However, he is bound to make some compensation according to the condition of persons and things.' Later in the same article we are told that 'he that has money has the profit not actually, but only virtually; and it may be hindered in many ways.'[4] It seems quite clear from these passages that Aquinas admitted the right to compensation for a profit which the lender was hindered from making on account of the loan; but that, in the circumstances of the time, the probability of making such a profit was so remote that it could not be made the basis of pecuniary compensation. The probability of there being a lucrum cessans was thought small, but the justice of its reward, if it did in fact exist, was admitted.
[Footnote 1: II. ii. 78, 2, ad. 1.]
[Footnote 2: Rambaud, op. cit., p. 67.]
[Footnote 3: II. ii. 62, 4.]
[Footnote 4: Ibid., ad. 1 and 2.]
This interpretation steadily gained ground amongst succeeding writers; so that, in spite of some lingering opposition, the justice of the title lucrum cessans was practically universally admitted by the theologians of the fifteenth century.[1]
[Footnote 1: Ashley, op. cit., p. 99. Lucrum cessans was defined by Navarrus as 'amissio facta a creditore per pecuniam sibi non redditam' (Endemann, Studien, vol. ii. p. 279).]
Of course the burden of proving that an opportunity for profitable investment had been really lost was on the lender, but this onus was sufficiently discharged if the probability of such a loss were established. In the fifteenth century, with the expansion of commerce, it came to be generally recognised that such a probability could be presumed in the case of the merchant or trader.[1] The final condition of this development of the teaching on lucrum cessans is thus stated by Ashley:[2] 'Any merchant, or indeed any person in a trading centre where there were opportunities of business investment (outside money-lending itself) could, with a perfectly clear conscience, and without any fear of molestation, contract to receive periodical interest from the person to whom he lent money; provided only that he first lent it to him gratuitously, for a period that might be made very short, so that technically the payment would not be reward for the use, but compensation for the non-return of the money.' At a later period than that of which we are treating in the present essay the short gratuitous period could be dispensed with, but until the end of the fifteenth century it seems to have been considered essential.[3]
[Footnote 1: Ashley, op. cit., vol. i. pt. ii. p. 402.]
[Footnote 2: Ibid.]
[Footnote 3: Ashley, op. cit. vol. i. pt. ii. p. 402; Endemann, Studien, vol. ii. pp. 253-4; Cleary, op. cit., p. 100.]
Of course the amount paid in respect of lucrum cessans must be reasonable in regard to the loss of opportunity actually experienced; 'Lenders,' says Buridan, 'must not take by way of lucrum cessans more than they would have actually made by commerce or in exchange';[1] and Ambrosius de Vignate explains that compensation must only be made for 'the time and just interesse of the lost gain, which must be certain and proximate.'[2]
[Footnote 1: Eth., iv. 6.]
[Footnote 2: De Usuris, c. 10.]
There was another title on account of which more than the amount of the loan could be recovered, namely, periculum sortis. In one sense it was a contradiction in terms to speak of the element of risk in connection with usury, because from its very definition usury was gain without risk as opposed to profit from a trading partnership, which, as we shall see presently, consisted of gain coupled with the risk of loss. It could not be lost sight of, however, that in fact there might be a risk of the loan not being repaid through the insolvency of the borrower, or some other cause, and the question arose whether the lender could justly claim any compensation for the undertaking of this risk. 'Regarded as an extrinsic title, risk of losing the principal is connected with the contract of mutuum, and entitles the lender to some compensation for running the risk of losing his capital in order to oblige a possibly insolvent debtor. The greater the danger of insolvency, the greater naturally would be the charge. The contract was indifferent to the object of the loan; it mattered not whether it was intended for commerce or consumption; it was no less indifferent to profit on the part of the borrower; it took account simply of the latter's ability to pay, and made its charge accordingly. It resembled consequently the contracts made by insurance companies, wherein there is a readiness to risk the capital sum for a certain rate of payment; the only difference was that the probabilities charged for were not so much the likelihood of having to pay, as the likelihood of not receiving back.'[1]
[Footnote 1: Cleary, op. cit., p. 115.]
We have referred above, when dealing with the legitimacy of commercial profits, to the difficulty which was felt in admitting the justice of compensation for risk, on account of the Gregorian Decretal on the subject. The same decree gave rise to the same difficulty in connection with the justification of a recompense for periculum sortis. There was a serious dispute about the actual wording of the decree, and even those who agreed as to its wording differed as to its interpretation.[1] The justice of the title was, however, admitted by Scotus, who said that it was lawful to stipulate for recompense when both the principal and surplus were in danger of being lost[2]; by Carletus;[3] and by Nider.[4] The question, however, was still hotly disputed at the end of the fifteenth century, and was finally settled in favour of the admission of the title as late as 1645.[5]
[Footnote 1: Ibid.]
[Footnote 2: Cleary, op. cit., p. 117.]
[Footnote 3: Summa Angelica Usura, i. 38.]
[Footnote 4: De Cont. Merc., iii. 15.]
[Footnote 5: Cleary, op. cit., p. 117.]
Sec. 6. Other Cases in which more than the Loan could be repaid.
We have now discussed the extrinsic titles—poena conventionalis, damnum emergens, lucrum cessans, and periculum sortis. There were other grounds also, which cannot be reduced to the classification of extrinsic titles, on which more than the amount of the loan might be justly returned to the lender. In the first place, the lender might justly receive anything that the borrower chose to pay over and above the loan, voluntarily as a token of gratitude. 'Repayment for a favour may be done in two ways,' says Aquinas. 'In one way, as a debt of justice; and to such a debt a man may be bound by a fixed contract; and its amount is measured according to the favour received. Wherefore the borrower of money, or any such thing the use of which is its consumption, is not bound to repay more than he received in loan; and consequently it is against justice if he is obliged to pay back more. In another way a man's obligation to repayment for favour received is based on a debt of friendship, and the nature of this debt depends more on the feeling with which the favour was conferred than on the question of the favour itself. This debt does not carry with it a civil obligation, involving a kind of necessity that would exclude the spontaneous nature of such a repayment.'[1]
[Footnote 1: II. ii. 78, 2, ad. 2.]
It was also clearly understood that it was not wrongful to borrow at usury under certain conditions. In such cases the lender might commit usury in receiving, but the borrower would not commit usury in paying an amount greater than the sum lent. It was necessary, however, in order that borrowing at usury might be justified, that the borrower should be animated by some good motive, such as the relief of his own or another's need. The whole question was settled once and for all by Aquinas: 'It is by no means lawful to induce a man to sin, yet it is lawful to make use of another's sin for a good end, since even God uses all sin for some good, since He draws some good from every evil.... Accordingly it is by no means lawful to induce a man to lend under a condition of usury; yet it is lawful to borrow for usury from a man who is ready to do so, and is a usurer by profession, provided that the borrower have a good end in view, such as the relief of his own or another's need.... He who borrows for usury does not consent to the usurer's sin, but makes use of it. Nor is it the usurer's acceptance of usury that pleases him, but his lending, which is good.'[1]
[Footnote 1: II. ii. 78, 4.]
We should mention here the montes pietatis, which occupied a prominent place among the credit-giving agencies of the later Middle Ages, although it is difficult to say whether their methods were examples of or exceptions to the doctrines forbidding usury. These institutions were formed on the model of the montes profani, the system of public debt resorted to by many Italian States. Starting in the middle of the twelfth century,[1] the Italian States had recourse to forced loans in order to raise reserves for extraordinary necessities, and, in order to prevent the growth of disaffection among the citizens, an annual percentage on such loans was paid. A fund raised by such means was generally called a mons or heap. The propriety of the payment of this percentage was warmly contested during the fourteenth and fifteenth centuries—the Dominicans and Franciscans defending it, and the Augustinians attacking it. But its justification was not difficult. In the first place, the loans were generally, if not universally, forced, and therefore the payment of interest on them was purely voluntary. As we have seen, Aquinas was quite clear as to the lawfulness of such a voluntary payment. In the second place, the lenders were almost invariably members of the trading community, who were the very people in whose favour a recompense for lucrum cessans would be allowed.[2] Laurentius de Rodulphis argued in favour of the justice of these State loans, and contended that the bondholders were entitled to sell their rights, but advised good Christians to abstain from the practice of a right about the justice of which theologians were in such disagreement[3]; and Antoninus of Florence, who was in general so strict on the subject of usury, took the same view.[4]
[Footnote 1: Endemann, Studien, vol. i. p. 433.]
[Footnote 2: Ashley, op. cit., vol. i. pt. i. p. 448.]
[Footnote 3: De Usuris.]
[Footnote 4: Ashley, op. cit., p. 449.]
It was probably the example of these State loans, or montes profani, that suggested to the Franciscans the possibility of creating an organisation to provide credit facilities for poor borrowers, which was in many ways analogous to the modern co-operative credit banks. Prior to the middle of the fifteenth century, when this experiment was initiated, there had been various attempts by the State to provide credit facilities for the poor, but these need not detain us here, as they did not come to anything.[1] The first of the montes pietatis was founded at Orvieto by the Franciscans in 1462, and after that year they spread rapidly.[2] The montes, although their aim was exclusively philanthropic, found themselves obliged to make a small charge to defray their working expenses, and, although one would think that this could be amply justified by the title of damnum emergens, it provoked a violent attack by the Dominicans. The principal antagonist of the montes pietatis was Thomas da Vio, who wrote a special treatise on the subject, in which he made the point that the montes charged interest from the very beginning of the loan, which was a contradiction of all the previous teaching on interest.[3]
[Footnote 1: Cleary, op. cit., p. 108; Brants, op. cit., p. 159.]
[Footnote 2: Perugia, 1467; Viterbo, 1472; Sevona, 1472; Assisi, 1485; Mantua, 1486; Cesana and Parma, 1488; Interamna and Lucca, 1489; Verona, 1490; Padua, 1491, etc. (Endemann, Studien, vol. i. p. 463).]
[Footnote 3: De Monte Pietatis.]
The general feeling of the Church, however, was in favour of the montes. It was felt that, if the poor must borrow, it was better that they should borrow at a low rate of interest from philanthropic institutions than at an extortionate rate from usurers; several montes were established under the direct protection of the Popes;[1] and finally, in 1515, the Lateran Council gave an authoritative judgment in favour of the montes. This decree contains an excellent definition of usury as it had come to be accepted at that date: 'Usury is when gain is sought to be acquired from the use of a thing, not fruitful in itself, without labour, expense, or risk on the part of the lender.'[2]
[Footnote 1: Cleary, op. cit., p. 111.]
[Footnote 2: Ashley, op. cit., vol. i. pt. ii. p. 451.]
It was generally admitted by the theologians that the taking of usury might be permitted by the civil authorities, although it was insisted that acting in accordance with this permission did not absolve the conscience of the usurer. Albertus Magnus conceded that 'although usury is contrary to the perfection of Christian laws, it is at least not contrary to civil interests';[1] and Aquinas also justified the toleration of usury by the State: 'Human laws leave certain things unpunished, on account of the condition of those who are imperfect, and who would be deprived of many advantages if all sins were strictly forbidden and punishments appointed for them. Wherefore human law has permitted usury, not that it looks upon usury as harmonising with justice, but lest the advantage of many should be hindered.'[2] Although this opinion was controverted by AEgidius Romanus,[3] it was generally accepted by later writers. Thus Gerson says that 'the civil law, when it tolerates usury in some cases, must not be said to be always contrary to the law of God or the Church. The civil legislator, acting in the manner of a wise doctor, tolerates lesser evils that greater ones may be avoided. It is obviously less of an evil that slight usury should be permitted for the relief of want, than that men should be driven by their want to rob or steal, or to sell their goods at an unfairly low price.'[4] Buridan explains that the attitude of the State towards usury must never be more than one of toleration; it must not actively approve of usury, but it may tacitly refuse to punish it.[5]
[Footnote 1: Rambaud, op. cit., p. 65; Espinas, op. cit., p. 103.]
[Footnote 2: II. ii. 78, 1, ad. 3.]
[Footnote 3: De Reg. Prin., ii. 3, 11.]
[Footnote 4: De Cont., ii. 17.]
[Footnote 5: Quaest. super. Lib. Eth., iv. 6.]
Sec. 7. The Justice of Unearned Income.
Many modern socialists—'Christian' and otherwise—have asserted that the teaching of the Church on usury was a pronouncement in favour of the unproductivity of capital.[1] Thus Rudolf Meyer, one of the most distinguished of 'Christian socialists,' has argued that if one recognises the productivity of land or stock, one must also recognise the productivity of money, and that therefore the Church, in denying the productivity of the latter, would be logically driven to deny the productivity of the former.[2] Anton Menger expresses the same opinion: 'There is not the least reason for attacking from the moral and religious standpoints loans at interest and usury more than any other form of unearned income. If one questions the legitimacy of loans at interest, one must equally condemn as inadmissible the other forms of profit from capital and lands, and particularly the feudal institutions of the Middle Ages.... It would have been but a logical consequence for the Church to have condemned all forms of unearned revenue.'[3]
[Footnote 1: Ashley, op. cit., vol. i. pt. ii. p. 427.]
[Footnote 2: Der Kapitalismus fin de siecle, p. 29.]
[Footnote 3: Das Recht auf den Arbeiterstrag. See the Abbe Hohoff in Democratie Chretienne, Sept. 1898, p. 284.]
No such conclusion, however, can be properly drawn from the mediaeval teaching. The whole discussion on usury turned on the distinction which was drawn between things of which the use could be transferred without the ownership, and things of which the use could not be so transferred. In the former category were placed all things which could be used, either by way of enjoyment or employment for productive purposes, without being destroyed in the process; and in the latter all things of which the use or employment involved the destruction.
With regard to income derived from the former, no difficulty was ever felt; a farm or a house might be let at a rent without any question, the return received being universally regarded as one of the legitimate fruits of the ownership of the thing. With regard to the latter, however, a difficulty did arise, because it was felt that a so-called loan of such goods was, when analysed, in reality a sale, and that therefore any increase which the goods produced was in reality the property, not of the lender, but of the borrower. That money was in all cases sterile was never suggested; on the contrary, it was admitted that it might produce a profit if wisely and prudently employed in industry or commerce; but it was felt that such an increase, when it took place, was the rightful property of the owner of the money. But when money was lent, the owner of this money was the borrower, and therefore, when money which was lent was employed in such a way as to produce a profit, that profit belonged to the borrower, not the lender. In this way the schoolmen were strictly logical; they fully admitted that wealth could produce wealth; but they insisted that that additional wealth should accrue to the owner of the wealth that produced it.
The fact is, as Boehm-Bawerk has pointed out, that the question of the productivity of capital was never discussed by the mediaeval schoolmen, for the simple reason that it was so obvious. The justice of receiving an income from an infungible thing which was temporarily lent by its owner, was discussed and supported; but the justice of the owner of such a thing receiving an income from the thing so long as it remained in his own possession was never discussed, because it was universally admitted.[1] It is perfectly correct to say that the problems which have perplexed modern writers as to the justice of receiving an unearned income from one's property never occurred to the scholastics; such problems can only arise when the institution of private property comes to be questioned; and private property was the keystone of the whole scholastic economic conception. In other words, the justice of a reward for capital was admitted because it was unquestioned.
[Footnote 1: Capital and Interest, p. 39.]
The question that caused difficulty was whether money could be considered a form of capital. At the present day, when the opportunities of industrial investment are wider than they ever were before, the principal use to which money is put is the financing of industrial enterprises; but in the Middle Ages this was not the case, precisely because the opportunities of profitable investment were so few. This is the reason why the mediaeval writers did not find it necessary to discuss in detail the rights of the owner of money who used it for productive purposes. But of the justice of a profit being reaped when money was actually so employed there was no doubt at all. As we have seen, the borrower of a sum of money might reap a profit from its wise employment; there was no question about the justice of taking such a profit; and the only matter in dispute was whether that profit should belong to the borrower or the lender of the money. This dispute was decided in favour of the borrower on the ground that, according to the true nature of the contract of mutuum, the money was his property. It was, therefore, never doubted that even money might produce a profit for its owner. The only difference between infungible goods and money was that, in the case of the former, the use might be transferred apart from the property, whereas, in the case of the latter, it could not be so transferred.
The recognition of the title lucrum cessans as a ground for remuneration clearly implies the recognition of the legitimacy of the owner of money deriving a profit from its use; and the slowness of the scholastics to admit this title was precisely because of the rarity of opportunities for so employing money in the earlier Middle Ages. The nature of capital was clearly understood; but the possibility of money constituting capital arose only with the extension of commerce and the growth of profitable investments. Those scholastics who strove to abolish or to limit the recognition of lucrum cessans as a ground for remuneration did not deny the productivity of capital, but simply thought the money had not at that time acquired the characteristics of capital.[1]
[Footnote 1: See Ashley, op. cit., vol. i. pt. ii. pp. 434-9.]
If there were any doubt about the fact that the scholastics recognised the legitimacy of unearned income, it would be dispelled by an understanding of their teaching on rents and partnership, in the former of which they distinctly acknowledged the right to draw an unearned income from one's land, and in the latter of which they acknowledged the same right in regard to one's money.[1]
[Footnote 1: On this discussion see Ashley, Economic History, vol. i. pt. ii. pp. 427 et seq.; Rambaud, Histoire, pp. 57 et seq.; Funk, Zins und Wucher; Arnold, Zur Geschichte des Eigenthums, pp. 92 et seq.; Boehm-Bawerk, Capital and Interest (Eng. trans.), pp. 1-39.]
Sec. 8. Rent Charges.
There was never any difficulty about admitting the justice of receiving a rent from a tenant in occupation of one's lands, because land was understood to be essentially a thing of which the use could be sold apart from the ownership; and it was also recognised that the recipient of such a rent might sell his right to a third party, who could then demand the rent from the tenant. When this was admitted it was but a small step to admit the right of the owner of land to create a rent in favour of another person in consideration for some payment. The distinctions between a census reservativus, or a rent established when the possession of land was actually transferred to a tenant, and a census constitutivus, or a rent created upon property remaining in the possession of the payer, did not become the subject of discussion or difficulty until the sixteenth century.[1] The legitimacy of rent charges does not seem to have been questioned by the theologians; the best proof of this being the absence of controversy about them in a period when they were undoubtedly very common, especially in Germany.[2] Langenstein, whose opinion on the subject was followed by many later writers,[3] thought that the receipt of income from rent charges was perfectly justifiable, when the object was to secure a provision for old age, or to provide an income for persons engaged in the services of Church or State, but that it was unjustifiable if it was intended to enable nobles to live in luxurious idleness, or plebeians to desert honest toil. It is obvious that Langenstein did not regard rent charges as wrongful in themselves, but simply as being the possible occasions of wrong.[4]
[Footnote 1: Ashley, op. cit., vol. i. pt. ii. p. 409.]
[Footnote 2: Endemann, Studien, vol. ii. p. 104.]
[Footnote 3: Endemann, Studien, vol. ii. p. 109.]
[Footnote 4: Roscher, Geschichte, p. 20.]
In the fifteenth century definite pronouncements on rent charges were made by the Popes. A large part of the revenue of ecclesiastical bodies consisted of rent charges, and in 1425 several persons in the diocese of Breslau refused to pay the rents they owed to their clergy on the ground that they were usurious. The question was referred to Pope Martin V., whose bull deciding the matter was generally followed by all subsequent authorities. The bull decides in favour of the lawfulness of rent charges, provided certain conditions were observed. They must be charged on fixed property ('super bonis suis, dominiis, oppidis, terris, agris, praediis, domibus et hereditatibus') and determined beforehand; they must be moderate, not exceeding seven or ten per cent.; and they must be capable of being repurchased at any moment in whole or in part, by the repayment of the same sum for which they were originally created. On the other hand, the payer of the rent must never be forced to repay the purchase money, even if the goods on which the rent was charged had perished—in other words, the contract creating the rent charge was one of sale, and not of loan. The bull recites that such conditions had been observed in contracts of this nature from time immemorial.[1] A precisely similar decree was issued by Calixtus III. in 1455.[2]
[Footnote 1: Extrav. Commun., iii. 5, i.]
[Footnote 2: Ibid., c. 2.]
These decisions were universally followed in the fifteenth century.[1] It was always insisted that a rent could only be charged upon something of which the use could be separated from the ownership, as otherwise it would savour of usury.[2] In the sixteenth century interesting discussions arose about the possibility of creating a personal rent charge, not secured on any specific property, but such discussions did not trouble the writers of the period which we are treating. The only instance of such a contract being considered is found in a bull of Nicholas V. in 1452, permitting such personal rent charges in the kingdoms of Aragon and Sicily, but this permission was purely local, and, as the bull itself shows, was designed to meet the exigencies of a special situation.[3]
[Footnote 1: Ashley, op. cit., vol. i. pt. ii. p. 410.]
[Footnote 2: Biel, op. cit., Sent. IV. xv. 12.]
[Footnote 3: Cleary, op. cit., p. 124.]
Sec. 9. Partnership.
The teaching on partnership contains such a complete disproof of the contention that the mediaeval teaching on usury was based on the unproductivity of capital, that certain writers have endeavoured to prove that the permission of partnership was but a subterfuge, consciously designed to justify evasions of the usury law. Further historical knowledge, however, has dispelled this misconception; and it is now certain that the contract of partnership was widely practised and tolerated long before the Church attempted to insist on the observance of its usury laws in everyday commercial life.[1] However interesting an investigation into the commercial and industrial partnerships of the Middle Ages might be, we must not attempt to pursue it here, as we have rigidly limited ourselves to a consideration of teaching. We must refer, however, to the commenda, which was the contract from which the later mediaeval partnership (societas) is generally admitted to have developed, because the commenda was extensively practised as early as the tenth century, and, as far as we know, never provoked any expression of disapproval from the Church. This silence amounts to a justification; and we may therefore say that, even before Aquinas devoted his attention to the subject, the Church fully approved of an institution which provided the owner of money with the means of procuring an unearned income.
[Footnote 1: Ashley, op. cit., vol. i. pt. ii. p. 411; Weber, Handelsgesellschaften, pp. 111-14.]
The commenda was originally a contract by which merchants who wished to engage in foreign trade, but who did not wish to travel themselves, entrusted their wares to agents or representatives. The merchant was known as the commendator or socius stans, and the agent as the commendatarius or tractator. The most usual arrangement for the division of the profits of the adventure was that the commendatarius should receive one-fourth and the commendator three-fourths. At a slightly later date contracts came to be common in which the commendatarius contributed a share of capital, in which case he would receive one-fourth of the whole profit as commendatarius, and a proportionate share of the remainder as capitalist. This contract came to be generally known as collegantia or societas. Contracts of this kind, though originally chiefly employed in overseas enterprise, afterwards came to be utilised in internal trade and manufacturing industry.[1]
[Footnote 1: Ashley, op. cit., vol. i. pt. ii. pp. 412-14.]
The legitimacy of the profits of the commendator never seems to have caused the slightest difficulty to the canonists. In 1206 Innocent III. advised the Archbishop of Genoa that a widow's dowry should be entrusted to some merchant so that an income might be obtained by means of honest gain.[1] Aquinas expressly distinguishes between profit made from entrusting one's money to a merchant to be employed by him in trade, and profit arising from a loan, on the ground that in the former case the ownership of the money does not pass, and that therefore the person who derives the profit also risks the loan. 'He who lends money transfers the ownership of the money to the borrower. Hence the borrower holds the money at his own risk, and is bound to pay it all back: wherefore the lender must not exact more. On the other hand, he that entrusts his money to a merchant or craftsman so as to form a kind of society does not transfer the ownership of the money to them, for it remains his, so that at his risk the merchant speculates with it, or the craftsman uses it for his craft, and consequently he may lawfully demand, as something belonging to him, part of the profits derived from his money.'[2] This dictum of Aquinas was the foundation of all the later teaching on partnership, and the importance of the element of risk was insisted on in strong terms by the later writers. According to Baldus, 'when there is no sharing of risk there is no partnership';[3] and Paul de Castro says, 'A partnership when the gain is shared, but not the loss, is not to be permitted.'[4] 'The legitimacy,' says Brants, 'of the contract of commenda always rested upon the same principle; capital could not be productive except for him who worked it himself, or who caused it to be worked on his own responsibility. This latter condition was realised in commenda.'[5]
[Footnote 1: Greg. Decr., iv. 19, 7.]
[Footnote 2: II. ii. 78, 2, ad. 5.]
[Footnote 3: Brants, op. cit., p. 167.]
[Footnote 4: Consilia, ii. 55; also Ambrosius de Vignate, De Usuris, i. 62; Biel, Op. cit., IV. xv. 11.]
[Footnote 5: Op. cit., p. 172.]
Although the contract of partnership was fully recognised by the scholastics, it was not very scientifically treated, nor were the different species of the contract systematically classified. The only classification adopted was to divide contracts of partnership into two kinds—those where both parties contributed labour to a joint enterprise, and those where one party contributed labour and the other party money. The former gave no difficulty, because the justice of the remuneration of labour was admitted; but, while the latter was no less fully recognised, cases of it were subjected to careful scrutiny, because it was feared that usurious contracts might be concealed under the appearance of a partnership.[1] The question which occupied the greatest space in the treatises on the subject was the share in which the profits should be divided between the parties. The only rule which could be laid down, in the absence of an express contract, was that the parties should be remunerated in proportion to the services which they contributed—a rule the application of which must have been attended with enormous difficulties. Laurentius de Rodulphis insists that equality must be observed;[2] and Angelus de Periglis de Perusio, the first monographist on the subject, does not throw much more light on the question. The rule as stated by this last writer is that in the first place the person contributing money must be repaid a sum equal to what he put in, and the person contributing labour must be paid a sum equal to the value of his labour, and that whatever surplus remains must be divided between the two parties equally.[3] The question of the shares in which the profits should be distributed was not one, however, that frequently arose in practice, because it was the almost universal custom for the partners to make this a term of their original contract. Within fairly wide limits it was possible to arrange for the division of the profits in unequal shares—say two-thirds and one-third. The shares of gain and loss must, however, be the same; one party could not reap two-thirds of the profit and bear only one-third of the loss; but it might be contracted that, when the loss was deducted from the gain, one party might have two-thirds of the balance, and the other one-third.[4] In no case, of course, could the party contributing the money stipulate that his principal should in all cases be returned, because that was a mutuum. The party contributing the labour might validly contract that he should be paid for his labour in any case, but, if this was so, the contract ceased to be a societas and became a locatio operarum, or ordinary contract of work for wages. In all cases, common participation in the gains and losses of the enterprise was an essential feature of the contract of partnership.[5]
[Footnote 1: Summa Astesana, iii. 12.]
[Footnote 2: De Usuris, i. 19.]
[Footnote 3: De Societatibus, i. 130.]
[Footnote 4: De Societatibus, i. 130.]
[Footnote 5: Ibid.]
Before concluding the subject of partnership, we must make reference to the trinus contractus, which caused much discussion and great difficulty. As we have seen, a contract of partnership was good so long as the person contributing money did not contract that he should receive his original money back in all circumstances. A contract of insurance was equally justifiable. There was no doubt that A might enter into partnership with B; he could further insure himself with C against the loss of his capital, and with D against damage caused by fluctuations in the rate of profits. Why, then, should he not simultaneously enter into all three contracts with B? If he did so, he was still B's partner, but at the same time he was protected against the loss of his principal and a fair return upon it—in other words, he was a partner, protected against the risks of the enterprise. The legitimacy of such a contract—the trinus contractus, as it was called—was maintained by Carletus in the Summa Angelica, which was published about 1476, and by Biel.[1] Early in the sixteenth century Eck, a young professor at Ingolstadt, brought the question of the legitimacy of this contract before the University of Bologna, but no formal decision was pronounced, and, had it not been for the reaction following the Reformation, the trinus contractus would probably have gained general acceptance. As it was, it was condemned by a provincial synod at Milan in 1565, and by Sixtus V. in 1585.[2]
[Footnote 1: Op. cit., IV. xv. 11. Lecky attributed the invention of the trinus contractus to the Jesuits—who were only founded in 1534 (History of Rationalism, vol. ii. p. 267).]
[Footnote 2: Ashley, op. cit., vol. i. pt. ii. pp. 439 et seqq.; Cleary, op. cit., pp. 126 et seqq.]
We should also refer to the contract of bottomry, which consisted of a loan made to the owner—or in some cases the master—of a ship, on the security of the ship, to be repaid with interest upon the safe conclusion of a voyage. This contract could not be considered a partnership, inasmuch as the property in the money passed to the borrower; but it probably escaped condemnation as usurious on the ground that the lender shared in the risk of the enterprise. The payment of some additional sum over and above the money lent might thus be justified on the ground of periculum sortis. The contract, moreover, was really one of insurance for the shipowner, and contracts of insurance were clearly legitimate. In any event the legitimacy of loans on bottomry was not questioned before the sixteenth century.[1]
[Footnote 1: Ashley, op. cit., vol. i. pt. ii. pp. 421-3; Palgrave, Dictionary of Political Economy, art. 'Bottomry'; Cunningham, Growth of English Industry and Commerce, vol i. p. 257.]
Sec. 10. Concluding Remarks on Usury.
It is to be hoped that the above exposition of the mediaeval doctrine on usury will dispel the idea that the doctrine was founded upon the injustice of unearned income. Far from the receipt of an unearned income from money or other capital being in all cases condemned, it was unanimously recognised, provided that the income accrued to the owner of the capital, and not to somebody else, and that the rate of remuneration was just. The teaching on partnership rested on the fundamental assumption that a man might trade with his money, either by using it himself, or by allowing other people to use it on his behalf. In the latter case, the person making use of the money might be either assured of being paid a fixed remuneration for his services, in which case the contract was one of locatio operarum, or he might be willing to let his remuneration depend upon the result of the enterprise, in which case the contract was one of societas. In either case the right of the owner of the money to reap a profit from the operation was unquestioned, provided only that he was willing to share the risks of loss. But if, instead of making use of his money for trading either by his own exertions or by those of his partner or agent, he chose to sell his money, he was not permitted to receive more for it than its just price—which was, in fact, the repayment of the same amount. This was what happened in the case of a mutuum. In that case the ownership of the money was transferred to the borrower, who was perfectly at liberty to trade with it, if he so desired, and to reap whatever gain that trade produced. The prohibition of usury, far from being proof of the injustice of an income from capital, is proof of quite the contrary, because it was designed to insure that the income from capital should belong to the owner of that capital and to no other person.[1] Although, therefore, no price could be paid for a loan, the lender must be prevented from suffering any damage from making the loan, and he might make good his loss by virtue of the implied collateral contract of indemnity, which we discussed above when treating of extrinsic titles. If the lender, through making the loan, had been prevented from making a profit in trade, he might be indemnified for that loss. All through the discussions on usury we find express recognition of the justice of the owner of money deriving an income from its employment; all that the teaching of usury was at pains to define was who the person was to whom money, which was the subject matter of a mutuum, belonged. It is quite impossible to comprehend how modern writers can see in the usury teaching of the scholastics a fatal discouragement to the enterprise of traders and capitalists; and it is equally impossible to understand how socialists can find in that doctrine any suggestion of support for the proposition that all unearned income is immoral and unjust.
[Footnote 1: See Rambaud, op. cit., p. 59.]
SECTION 3.—THE MACHINERY OF EXCHANGE
We have already drawn attention to the fact that there was no branch of economics about which such profound ignorance ruled in the earlier Middle Ages as that of money. As we stated above, even as late as the twelfth century, the theologians were quite content to quote the ill-founded and erroneous opinions of Isidore of Seville as final on the subject. It will be remembered that we also remarked that the question of money was the first economic question to receive systematic scientific treatment from the writers of the later Middle Ages. This remarkable development of opinion on this subject is practically the work of one man, Nicholas Oresme, Bishop of Lisieux, whose treatise, De Origine, Natura, Jure et Mutationibus Monetarum, is the earliest example of a pure economic monograph in the modern sense. 'The scholastics,' says Roscher, 'extended their inquiries from the economic point of view further than one is generally disposed to believe; although it is true that they often did so under a singular form.... We can, however, single out Oresme as the greatest scholastic economist for two reasons: on account of the exactitude and clarity of his ideas, and because he succeeded in freeing himself from the pseudo-theological systematisation of things in general, and from the pseudo-philosophical deduction in details.'[1]
[Footnote 1: Quoted in the Introduction to Wolowski's edition of Oresme's Tractatus (Paris, 1864).]
Even in the thirteenth century natural economy had not been replaced to any large extent by money economy. The great majority of transactions between man and man were carried on without the intervention of money payments; and the amount of coin in circulation was consequently small.[1] The question of currency was not therefore one to engage the serious attention of the writers of the time. Aquinas does not deal with money in the Summa, except incidentally, and his references to the subject in the De Regimine Principum—which occur in the chapters of that work of which the authorship is disputed—simply go to the length of approving Aristotle's opinions on money, and advising the prince to exercise moderation in the exercise of his power of coining sive in mutando sive in diminuendo pondus.[2]
[Footnote 1: Brants, op. cit., p. 179; Rambaud, op. cit., p. 73.]
[Footnote 2: De Reg. Prin., ii. 13.]
As is often the case, the discussion of the rights and duties of the sovereign in connection with the currency only arose when it became necessary for the public to protest against abuses. Philip the Fair of France made it part of his policy to increase the revenue by tampering with the coinage, a policy which was continued by his successors, until it became an intolerable grievance to his subjects. In vain did the Pope thunder against Philip;[1] in vain did the greatest poet of the age denounce
'him that doth work With his adulterate money on the Seine.'[2]
[Footnote 1: Le Blant, Traite historique des Monnaies de France, p. 184.]
[Footnote 2: Dante, Paradiso, xix.]
Matters continued to grow steadily worse until the middle of the fourteenth century. During the year 1348 there were no less than eleven variations in the value of money in France; in 1349 there were nine, in 1351 eighteen, in 1353 thirteen, and in 1355 eighteen again. In the course of a single year the value of the silver mark sprang from four to seventeen livres, and fell back again to four.[1] The practice of fixing the price of many necessary commodities must have aggravated the natural evil consequences of such fluctuations.[2]
[Footnote 1: Wolowski's Introduction to Oresme's Tractatus, p. xxvii.]
[Footnote 2: See Endemann, Studien, vol. ii. p. 34.]
This grievance had the good result of fixing the attention of scholars on the money question. 'Under the stress of facts and of necessity,' says Brants, 'thinkers applied their minds to the details of the theory of money, which was the department of economics which, thanks to events, received the earliest illumination. Lawyers, bankers, money-changers, doctors of theology, and publicists of every kind, attached a thoroughly justifiable importance to the question of money. We are no doubt far from knowing all the treatises which saw the light in the fourteenth century upon this weighty question; but we know enough to affirm that the monetary doctrine was very developed and very far-seeing.'[1] Buridan analysed the different functions and utilities of money, and explained the different ways in which its value might be changed.[2] He did not, however, proceed to discuss the much more important question as to when the sovereign was entitled to make these alterations. This was reserved for Nicholas Oresme, who published his famous treatise about the year 1373. The merits of this work have excited the unanimous admiration of all who have studied it. Roscher says that it contains 'a theory of money, elaborated in the fourteenth century, which remains perfectly correct to-day, under the test of the principles applied in the nineteenth century, and that with a brevity, a precision, a clarity, and a simplicity of language which is a striking proof of the superior genius of its author.'[3] According to Brants, 'the treatise of Oresme is one of the first to be devoted ex professo to an economic subject, and it expresses many ideas which are very just, more just than those which held the field for a long period after him, under the name of mercantilism, and more just than those which allowed of the reduction of money as if it were nothing more than a counter of exchange.'[4] 'Oresme's treatise on money,' says Macleod, 'may be justly said to stand at the head of modern economic literature. This treatise laid the foundations of monetary science, which are now accepted by all sound economists.'[5] 'Oresme's completely secular and naturalistic method of treating one of the most important problems of political economy,' says Espinas, 'is a signal of the approaching end of the Middle Ages and the dawn of the Renaissance.'[6] Dr. Cunningham adds his tribute of praise: 'The conceptions of national wealth and national power were ruling ideas in economic matters for several centuries, and Oresme appears to be the earliest of the economic writers by whom they were explicitly adopted as the very basis of his argument.... A large number of points of economic doctrine in regard to coinage are discussed with much judgment and clearness.'[7] Endemann alone is[8] inclined to quarrel with the pre-eminence of Oresme; but on this question, he is in a minority of one.[9]
[Footnote 1: Op. cit., p. 186.]
[Footnote 2: Quaest. super Lib. Eth., v. 17; Quaest. super Lib. Pol., i. 11.]
[Footnote 3: Quoted in Wolowski, op. cit., and see Roscher, Geschichte, p. 25.]
[Footnote 4: Op. cit., p. 190.]
[Footnote 5: History of Economics, p. 37.]
[Footnote 6: Op. cit., p. 110.]
[Footnote 7: Growth of English Industry and Commerce, vol. i. p. 359.]
[Footnote 8: Grundsaetze, p. 75.]
[Footnote 9: See an interesting note in Brants, op. cit., p. 187.]
The principal question which Oresme sets out to answer, according to the first chapter of this treatise, is whether the sovereign has the right to alter the value of the money in circulation at his pleasure, and for his own benefit. He begins the discussion by going over the same ground as Aristotle in demonstrating the origin and utility of money, and then proceeds to discuss the most suitable materials which can be made to serve as money. He decides in favour of gold and silver, and shows himself an unquestioning bimetallist. He further admits the necessity of some token money of small denominations, to be composed of the baser metals. Having drawn attention to the transition from the circulation of money, the value of which is recognised solely by weight, to the circulation of that which is accepted for its imprint or superscription, the author insists that the production of such an imprinted coinage is essentially a matter for the sovereign authority in the State. Oresme now comes to the central point of his thesis. Although, he says, the prince has undoubtedly the power to manufacture and control the coinage, he is by no means the owner of it after it has passed into circulation, because money is a thing which in its essence was invented and introduced in the interests of society as a whole.
Oresme then proceeds to apply this central principle to the solution of the question which he sets himself to answer, and concludes that, as money is essentially a thing which exists for the public benefit, it must not be tampered with, nor varied in value, except in cases of absolute necessity, and in the presence of an uncontroverted general utility. He bases his opposition to unnecessary monetary variation on the perfectly sound ground that such variation is productive of loss either to those who are bound to make or bound to receive fixed sums in payment of obligations. The author then goes on to analyse the various kinds of variation, which he says are five—figurae, proportionis, appellationis, ponderis, and materiae. Changes of form (figurae) are only justified when it is found that the existing form is liable to increase the damage which the coins suffer from the wear and tear of usage, or when the existing currency has been degraded by widespread illegal coining; changes proportionis are only allowable when the relative value of the different metals constituting the coinage have themselves changed; simple changes of name (appellationis), such as calling a mark a pound, are never allowed. Changes of the weight of the coins (ponderis) are pronounced by Oresme to be just as gross a fraud as the arbitrary alteration of the weights or measures by which corn or wine are sold; and changes of matter (materiae) are only to be tolerated when the supply of the old metal has become insufficient. The debasement of the coinage by the introduction of a cheaper alloy is condemned.
In conclusion, Oresme insists that no alteration of any of the above kinds can be justified at the mere injunction of the prince; it must be accomplished per ipsam communitatem. The prince exercises the functions of the community in the matter of coinage not as principalis actor, but as ordinationis publicae executor. It is pointed out that arbitrary changes in the value of money are really equivalent to a particularly noxious form of taxation; that they seriously disorganise commerce and impoverish many merchants; and that the bad coinage drives the good out of circulation. This last observation is of special interest in a fourteenth-century writer, as it shows that Gresham's Law, which is usually credited to a sixteenth-century English economist, was perfectly well understood in the Middle Ages.[1]
[Footnote 1: The best edition of Oresme's Tractatus is that by Wolowski, published at Paris in 1864, which includes both the Latin and French texts.]
This brief account of the ground which Oresme covered, and the conclusions at which he arrived, will enable us to appreciate his importance. Although his clear elucidation of the principles which govern the questions of money was not powerful enough to check the financial abuses of the sovereigns of the later Middle Ages, they exercised a profound influence on the thought of the period, and were accepted by all the theologians of the fifteenth century.[2]
[Footnote 2: Biel, op. cit., IV. xv. 11; De Monetarum Potestate et Utilitate, referred to in Jourdain, op. cit., p. 34.]
CHAPTER IV
CONCLUSION
We have now passed in review the principal economic doctrines of the mediaeval schoolmen. We do not propose to attempt here any detailed criticism of the merits or demerits of the system which we have but briefly sketched. All that we have attempted to do is to present the doctrines in such a way that the reader may be in a position to pass judgment on them. There is one aspect of the subject, however, to which we may be allowed to direct attention before concluding this essay. It is the fashion of many modern writers, especially those hostile to the Catholic Church, to represent the Middle Ages as a period when all scientific advance and economic progress were impeded, if not entirely prevented, by the action of the Church. It would be out of place to inquire into the advances which civilisation achieved in the Middle Ages, as this would lead us into an examination of the whole history of the period; but we think it well to inquire briefly how far the teaching of the Church on economic matters was calculated to interfere with material progress. This is the lowest standard by which we can judge the mediaeval economic teaching, which was essentially aimed at the moral and spiritual elevation of mankind; but it is a standard which it is worth while to apply, as it is that by which the doctrines of the scholastics have been most generally condemned by modern critics. To test the mediaeval economic doctrine by this, the lowest standard, it may be said that it made for the establishment and development of a rich and prosperous community. We may summarise the aim of the mediaeval teaching by saying that, in the material sphere, it aimed at extended production, wise consumption, and just distribution, which are the chief ends of all economic activity.
It aimed at extended production through its insistence on the importance and dignity of manual labour.[1] As we showed above, one of the principal achievements of Christianity in the social sphere was to elevate labour from a degrading to an honourable occupation. The example of Christ Himself and the Apostles must have made a deep impression on the early Christians; but no less important was the living example to be seen in the monasteries. The part played by the great religious orders in the propagation of this dignified conception cannot be exaggerated. St. Anthony had advised his imitators to busy themselves with meditation, prayer, and the labour of their hands, and had promised that the fear of God would reside in those who laboured at corporal works; and similar exhortations were to be found in the rules of Saints Macarius, Pachomius, and Basil.[2] St. Augustine and St. Jerome recommended that all religious should work for some hours each day with their hands, and a regulation to this effect was embodied in the Rule of St. Benedict.[3] The example of educated and holy men voluntarily taking upon themselves the most menial and tedious employments must have acted as an inspiration to the laity. The mere economic value of the monastic institutions themselves must have been very great; agriculture was improved owing to the assiduity and experiments of the monks;[4] the monasteries were the nurseries of all industrial and artistic progress;[5] and the example of communities which consumed but a small proportion of what they produced was a striking example to the world of the wisdom and virtue of saving.[6] Not the least of the services which Christian teaching rendered in the domain of production was its insistence upon the dominical repose.[7]
[Footnote 1: See Sabatier, L'Eglise et le Travail manuel, and Antoine, Cours d'Economie sociale, p. 159.]
[Footnote 2: Levasseur, Histoire des Classes ouvrieres en France, vol. i. pp. 182-3.]
[Footnote 3: Reg. St. Ben., c. 48.]
[Footnote 4: List, National System of Political Economy, ch. 6.]
[Footnote 5: Janssen, History of the German People, vol. ii. p. 2.]
[Footnote 6: Dublin Review, N.S., vol. vi. p. 365; see Goyau, Autour du Catholicisme sociale, vol. ii. pp. 79-118; Gasquet, Henry VIII. and the English Monasteries, vol. ii. p. 495.]
[Footnote 7: Dublin Review, vol. xxxiii. p. 305. See Goyau, Autour du Catholicisme sociale, vol. ii. pp. 93 et seq.]
The importance which the scholastics attached to an extended and widespread production is evidenced by their attitude towards the growth of the population. The fear of over-population does not appear to have occurred to the writers of the Middle Ages;[1] on the contrary, a rapidly increasing population was considered a great blessing for a country.[2] This attitude towards the question of population did not arise merely from the fact that Europe was very sparsely populated in the Middle Ages, as modern research has proved that the density of population was much greater than is generally supposed.[3]
[Footnote 1: Brants, op. cit., p. 235, quoting Sinigaglia, La Teoria Economica della Populazione in Italia, Archivio Giuridico, Bologna, 1881.]
[Footnote 2: Catholic Encyclopaedia, art. 'Population.' Brants draws attention to the interesting fact that a germ of Malthusianism is to be found in the much-discussed Songe du Vergier, book ii. chaps. 297-98, and Franciscus Patricius de Senis, writing at the end of the fifteenth century, recommends emigration as the remedy against over-population (De Institutione Reipublicae, ix.).]
[Footnote 3: Dureau de la Malle, 'Memoire sur la Population de la France au xiv^e Siecle,' Memoires de l'Academie des Inscriptions et Belles-Lettres, vol. xiv. p. 36.]
The mediaeval attitude towards population was founded upon the sanctity of marriage and the respect for human life. The utterances of Aquinas on the subject of matrimony show his keen appreciation of the natural social utility of marriage from the point of view of increasing the population of the world, and of securing that the new generation shall be brought up as good and valuable citizens.[1] While voluntary virginity is recommended as a virtue, it is nevertheless distinctly recognised that the precept of virginity is one which by its very nature can be practised by only a small proportion of the human race, and that it should only be practised by those who seek by detachment from earthly pleasures to regard divine things.[2] Aquinas further says that large families help to increase the power of the State, and deserve well of the commonwealth,[3] and quotes with approbation the Biblical injunction to 'increase and multiply.'[4] AEgidius Romanus demonstrates at length the advantages of large families in the interests of the family and the future of the nation.[5]
[Footnote 1: Summa Cont. Gent., iii. 123, 136.]
[Footnote 2: Summa, II. ii. 151 and 152.]
[Footnote 3: De Reg. Prin., iv. 9.]
[Footnote 4: Gen. i. 28.]
[Footnote 5: De Reg. Prin., ii. 1, 6.]
The growth of a healthy population was made possible by the reformation of family life, which was one of the greatest achievements of Christianity in the social sphere. In the early days of the Church the institution of the family had been reconstituted by moderating the harshness of the Roman domestic rule (patria potestas), by raising the moral and social position of women, and by reforming the system of testamentary and intestate successions; and the great importance which the early Church attached to the family as the basic unit of social life remained unaltered throughout the Middle Ages.[5]
[Footnote 5: Troplong, De l'Influence du Christianisme sur le Droit civil des Romains; Cossa, Guide, p. 99; Devas, Political Economy, p. 168; Perin, La Richesse dans les Societes chretiennes, i. 541 et seq.; Hettinger, Apologie du Christianisme, v. 230 et seq.]
The Middle Ages were therefore a period when the production of wealth was looked upon as a salutary and honourable vocation. The wonderful artistic monuments of that era, which have survived the intervening centuries of decay and vandalism, are a striking testimony to the perfection of production in a civilisation in which work was considered to be but a form of prayer, and the manufacturer was prompted to be, not a drudge, but an artist.
In the Middle Ages, however, as we have said before, man did not exist for the sake of production, but production for the sake of man; and wise consumption was regarded as at least as important as extended production. The high estimation in which wealth was held resulted in the elaboration of a highly developed code of regulation as to the manner in which it should be enjoyed. We do not wish to weary the reader with a repetition of that which we have already fully discussed; it is enough to call attention to the fact that the golden mean of conduct was the observance of liberality, as distinguished, on the one hand, from avarice, or a too high estimation of material goods, and, on the other hand, from prodigality, or an undue disregard for their value. Social virtue consisted in attaching to wealth its proper value.
Far more important than its teaching either on production or consumption was the teaching of the mediaeval Church on distribution, which it insisted must be regulated on a basis of strict justice. It is in this department of economic study that the teaching of the mediaevals appears in most marked contrast to the teaching of the present day, and it is therefore in this department that the study of its doctrines is most valuable. As we said above, the modern world has become convinced by bitter experience of the impracticability of mere selfishness as the governing factor in distribution; and the economic thought of the time is concentrated upon devising some new system of society which shall be ruled by justice. On the one hand, we see socialists of various schools attempting to construct a Utopia in which each man shall be rewarded, not in accordance with his opportunities of growing rich at the expense of his fellow-man, but according to the services he performs; while, on the other hand, we find the Christian economists striving to induce a harassed and bewildered world to revert to an older and nobler social ethic.
It is no part of our present purpose to estimate the relative merits of these two solutions for our admittedly diseased society. Nor is it our purpose to attempt to demonstrate how far the system of economic teaching which we have sketched in the foregoing pages is applicable at the present day. We must, however, in this connection draw attention to one important consideration, namely, that the mediaeval economic teaching was expressly designed to influence the only constant element in human society at every stage of economic development. Methods of production may improve, hand may give place to machine industry, and mechanical inventions may revolutionise all our conceptions of transport and communication; but there is one element in economic activity that remains a fixed and immutable factor throughout the ages, and that element is man. The desires and the conscience of man remain the same, whatever the mechanical environment with which he is encompassed. One reason which suggests the view that the mediaeval teaching is still perfectly applicable to economic life is that it was designed to operate upon the only factor of economic activity that has not changed since the Middle Ages—namely, the desires and conscience of man.
It is important also to draw attention to the fact that the acceptance of the economic teaching of the mediaeval theologians does not necessarily imply acceptance of their teaching on other matters. There is at the present day a growing body of thinking men in every country who are full of admiration for the ethical teaching of Christianity, but are unable or unwilling to believe in the Christian religion. The fact of such unbelief or doubt is no reason for refusing to adopt the Christian code of social justice, which is founded upon reason rather than upon revelation, and which has its roots in Greek philosophy and Roman law rather than in the Bible and the writings of the Fathers. It has been said that Christianity is the only religion which combines religion and ethics in one system of teaching; but although Christian religious and ethical teaching are combined in the teaching of the Catholic Church, they are not inseparable. Those who are willing to discuss the adoption of the Socialist ethic, which is not combined with any spiritual dogmas, should not refuse to consider the Christian ethic, which might equally be adopted without subscribing to the Christian dogma.
As we said above, it is no part of our intention to estimate the relative merits of the solutions of our social evils proposed by socialists and by Catholic economists. One thing, however, we feel bound to emphasise, and that is that these two solutions are not identical. It is a favourite device of socialists, especially in Catholic countries, to contend that their programme is nothing more than a restatement of the economic ideals of the Catholic Church as exhibited in the writings of the mediaeval scholastics. We hope that the foregoing pages are sufficient to demonstrate the incorrectness of this assertion. Three main principles appear more or less clearly in all modern socialistic thought: first, that private ownership of the means of production is unjustifiable; second, that all value comes from labour; and, third, that all unearned income is unjust. These three great principles may or may not be sound; but it is quite certain that not one of them was held by the mediaeval theologians. In the section on property we have shown that Aquinas, following the Fathers and the tradition of the early Church, was an uncompromising advocate of private property, and that he drew no distinction between the means of production and any other kind of wealth; in the section on just price we have shown that labour was regarded by the mediaevals as but a single one of the elements which entered into the determination of value; and in the section on usury we have shown that many forms of unearned income were not only tolerated, but approved by the scholastics.
We do not lose sight of the fact that socialism is not a mere economic system, but a philosophy, and that it is founded on a philosophical basis which conflicts with the very foundations of Christianity. We are only concerned with it here in its character of an economic system, and all we have attempted to show is that, as an economic system, it finds no support in the teaching of the scholastic writers. We do not pretend to suggest which of these two systems is more likely to bring salvation to the modern world; we simply wish to emphasise that they are two systems, and not one. One's inability to distinguish between Christ and Barabbas should not lead one to conclude that they are really the same person.
INDEX
Abelard, 14. Acts of the Apostles, 168. communism in, 44, 46. Adam, 140. and Eve, slavery the result of their sin, 92. Administrative occupations, position in artes possessivae, 143. AEgidius Romanus, 98, 197, 225. Agriculture, position in artes possessivae, 142, 143. its encouragement recommended, 143. Albertus Magnus, 16, 82, 176, 186, 197. Albigenses, the, belief in communism, 66. Alcuin, 14. Alexander of Hales, 176, 185. Alexander III., Pope, 187. attitude to usury, 174. Alfric, see Colloquy of Archbishop, The. Almsgiving, as justice, not charity, 69. duty of, 80. enforcement by the State, 85. summary of mediaeval teaching on, 84. the early Church on, 52. Ambition, a virtue, 79. Ambrosius de Vignate, 191, 208. Ananias, 46, 52. Ancients, loss of economic teaching of, 15. Angelus de Periglis de Perusio, 209, 210. Antoine, 87, 172, 223. Antoninus of Florence, 9, 68, 79, 110, 122, 181, 196. Ape of Aristotle, the, see Albertus Magnus. Apostles, the, attitude to manual labour, 223. attitude to private property and communism, 48. attitude to usury, 168. Apostles, the, fornication expressly forbidden by, 168. teaching regarding slavery, 89. Apostoli, the, belief in communism, 66. Aquinas, see Thomas Aquinas. Aragon, personal rent charges permitted in, 205. Architecture, see Manufacture. Archivio Giuridico, 225. Ardant, 69. Aristotle, 14, 16, 36, 97, 98, 142, 146, 169, 215, 219. as source for Thomas Aquinas, 62. attitude of Thomas Aquinas to his opinion, 94 et seq. Cossa on his influence, 17. his principles maintained through Thomas Aquinas, 19. his theory of slavery opposed to that of St. Augustine, 93. influence on controversies of the schools, 17. influence on mediaeval thought, 16. renewed study of, 16. Arnold, 203. Artes pecuniativae, 142. Artes possessivae, 142. encouragement recommended by Aquinas, 143. Arnobius, 45. Ashley, Sir W.H., 3, 6, 7, 18, 21, 23, 27, 29, 30, 33, 40, 76, 105, 113, 126, 134, 146, 149, 175, 185, 186, 187, 188, 190, 191, 195, 196, 197, 198, 202, 203, 205, 206, 207, 211, 212. Augustinians, the, 195. Ausmo, Nicholas de, 156. Avarice, an offence against liberality, 79. a sin towards the individual himself and the community, 78. relativity of, 75. Avarice, the necessary basis of trade, 145. Ayenbite of Inwit, The, 151.
Baldus, 187, 208. [Greek: banousia], a sin, 77, 78. Barabbas, 231. Bartlett, Dr. V., 56, 90. Bartolus, 187. Baudrillard, 76. Beauvais, Vincent de, 7, 16. Begards, the, belief in communism, 66. Benedict XIV., Pope, an encyclical of, 183. Benigni, 61. Bergier, 45. Bernardine of Siena, 112, 181. Biel, 99, 100, 104, 106, 107, 108, 112, 118, 121, 124, 145, 150, 156, 180, 185, 205, 208, 211, 221. Bimetallism, Oresme's support of, 219. Blanqui, 146. Bohemia, communistic teaching in, 86. Boehm-Bawerk, 174, 200, 203, 211. Bottomry, contract of, 211. Brant, Sebastian, 137. Brants, V.L.J.L., 9, 10, 13, 19, 21, 66, 101, 111, 112, 114, 121, 122, 123, 142, 159, 181, 208, 215, 216, 217, 218, 225. Breslau, refusal to pay rent in, 204. Brunetto Latini, 123. Building, see Manufacture. Buridan, 70, 72, 76, 77, 78, 109, 110, 143, 180, 191, 198, 217.
Cabet, 42. Caepolla, 108, 118, 120. Cajetan, 65, 79. on the Summa, 68. Calippe, Abbe, 49, 62. on Thomas Aquinas, 68. Calixtus III., Pope, decree regarding rent, 205. Cambium, 155. conditions justifying, 157. dealt with by Brants, 159. minutum, 157, 158. motives justifying, 157. per litteras, 157, 158. siccum, 157. the three kinds of, 157, 158. when justifiable, not a loan, 158. Campsor, the, his remuneration approved, 156. Canon law the source of knowledge of Christian economic teaching, 13. Canonist doctrine, dealt with by Sir W. Ashley, 2. Dr. Cunningham's estimate of its importance, 27. its impracticability demonstrated by Endemann, 20. value of the study of, 29. Canonists, the, 117. Capital, question of the productivity of, 198 et seq. Carletus, 120, 150, 193, 211. Carlyle, Dr., 44, 58, 63. Castro, Paul, 208. Catholic Encyclopaedia, The, definition of 'Middle Ages,' 3. on Communism, 46. on Just Price, 112, 126. on Political Economy, 30. on Population, 225. on Slavery, 90, 100. Cato, 162. Cattle-breeding, see Agriculture. Census constitutivus, 203. reservativus, 203. Centesima, the maximum rate of interest in Borne, 161. Cesana, montes pietatis at, 196. Champagny, 80. Change, see Cambium. Chevallier, 20. Christ, 42, 231. a working man, 137. attitude to manual labour, 223. attitude to private property and communism, 47. teaching regarding slavery, 89. Christendom, economic unity of, 11. Christian economic teaching, 13. economists, their attempts to reinstitute mediaeval economics, 228. Christian Monitor, The, 139. Christian Exhortation, The, on the protection of the farmer, 143. Christianity, as providing an ethical basis of society, 31. attitude to manual labour, 137, 223. attitude to slavery, 88. foundations and origin of its code of social justice, 229. Christianity, influence in abolition of Roman slavery, 99 et seq. possibility of adopting ethics without dogmas of, 229. reformation of family life by, 226. relation of economic teaching of, to socialism, 33. social theory of, 12. Church, economic teaching of the mediaeval, 12. the, attitude to commerce at end of the Middle Ages, 152. the, attitude to monies pietatis, 197. the, effect of economic teaching of, on material progress, 223. the, necessity for understanding economic teaching of, 32. the, principles followed by, in fixing price, 114. the, prohibition of usury not peculiar to, 160. the, socialist view of its teaching on usury, 198. the early, 230. the early teaching on usury, 167 et seq. Cicero, 56, 58, 162. Civil Law, Commentaries on, a source of knowledge of Christian economic teaching, 13. Civilisation, result of its advance in the thirteenth century, 15. Classical economists, recent reaction against, 29. Cleary, Dr., 35, 135, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 172, 173, 174, 175, 185, 186, 187, 188, 191, 192, 193, 196, 197, 205. Clement of Alexandria, see St. Clement. of Rome, see St. Clement. Clergy, the, and usury, 169. the, prohibition of trading by, 151. Coinage, see Money. Collegantia, 207. Colloquy of Archbishop Alfric, The, 149. Commenda, the, 206. Commendatarius, the, 207. Commendator, the, 207. Common estimation, of just price not the final criterion, 134. Commerce, attitude of later fifteenth century to, 150. attitude of mediaeval theologians to, 136. attitude of the Church at end of Middle Ages, 152. condemnation of, by early Christians, 145. condemnation of, by scholastics, 146. dangerous to virtue, 145, 151. definition of, 144. extension of, in thirteenth century, 15. factors making for its illegality, 151. gradual change of mediaeval attitude to, 152. justification of, not based on payment for labour, 154. legitimacy dependent on methods, 146. legitimacy dependent on motives, 148. motives regarded as justifying, 153. necessity for, realised, 147. necessity of controlling its operations, 154. not dealt with by early writers, 13. position in the artes possessivae, 143. prohibition of speculative, 151. rules applying to, defined by Nider, 150. Communism, alleged, of early Christians, 43. not part of scholastic teaching, 66. Community of user, doctrine of, 85. no relation to modern socialistic communism, 86. Commutations, see Exchange. Compensation, for failure to repay loans by date stipulated, 185. for profit hindered, 189. Competition, effect of unrestricted, 31. Comte, his definition of 'Middle Ages' followed by Dr. Ingram, 3. Conquerors, their right to enslavement of the conquered adopted by Aquinas, 96. Constantine, 43. Constantinople, fall of, regarded as end of the Middle Ages, 4. Consumption, regulation of, 32. wise, importance of, 227. wise, the aim of mediaeval teaching, 223. Contract, Thomas Aquinas on, 38. Corinthians, Epistle to the, 48. Corpus Juris Canonici, 13, 146. Cossa, L.,5, 6, 17, 108, 220. Credit, 119. Crusades, the, influence of, 15. the, influence on trade, 146. Cunningham, Dr. W., 2, 9, 10, 11, 13, 23, 24, 26, 27, 79, 116, 122, 124, 126, 127, 128, 129, 130, 138, 139, 152, 212, 218. Currency, see Money. Cyprian, 168, 170. attitude to property, 50. |
|
