The Papacy might denounce usurers, but, as the center of the most highly organized administrative system of the age, receiving remittances from all over Europe, and receiving them in money at a time when the revenue of other Governments still included personal services and payments in kind, it could not dispense with them. Dante put the Cahorsine money-lenders in hell, but a Pope gave them the title of “peculiar sons of the Roman Church.”[28] Grosstête rebuked the Lombard bankers, and a bishop of London expelled them, but papal protection brought them back.[29] Archbishop Peckham, a few years later, had to implore Pope Nicholas III to withdraw a threat of excommunication, intended to compel him to pay the usurious interest demanded by Italian money-lenders, though, as the archbishop justly observed, “by your Holiness’s special mandate, it would be my duty to take strong measures against such lenders.”[30] The Papacy was, in a sense, the greatest financial institution of the Middle Ages, and, as its fiscal system was elaborated, things became, not better, but worse. The abuses which were a trickle in the thirteenth century were a torrent in the fifteenth. And the frailties of Rome, if exceptional in their notoriety, can hardly be regarded as unique. Priests, it is from time to time complained, engage in trade and take usury.[31] Cathedral chapters lend money at high rates of interest. The profits of usury, like those of simony, should have been refused by churchmen, as hateful to God; but a bishop of Paris, when consulted by a usurer as to the salvation of his soul, instead of urging restitution, recommended him to dedicate his ill-gotten wealth to the building of Notre-Dame.[32] “Thus,” exclaimed St. Bernard, as he gazed at the glories of Gothic architecture, “wealth is drawn up by ropes of wealth, thus money bringeth money.... O vanity of vanities, yet no more vain than insane! The Church is resplendent in her walls, beggarly in her poor. She clothes her stones in gold, and leaves her sons naked.”[33]
The picture is horrifying, and one must be grateful to those, like M. Luchaire and Mr. Coulton, who demolish romance. But the denunciation of vices implies that they are recognized as vicious; to ignore their condemnation is not less one-sided than to conceal their existence; and, when the halo has vanished from practice, it remains to ask what principles men valued, and what standards they erected. The economic doctrines elaborated in the Summæ of the Schoolmen, in which that question receives its most systematic answer, have not infrequently been dismissed as the fanciful extravagances of writers disqualified from throwing light on the affairs of this world by their morbid preoccupation with those of the next. In reality, whatever may be thought of their conclusions, both the occasion and the purpose of scholastic speculations upon economic questions were eminently practical. The movement which prompted them was the growth of trade, of town life, and of a commercial economy, in a world whose social categories were still those of the self-sufficing village and the feudal hierarchy. The object of their authors was to solve the problems to which such developments gave rise. It was to reconcile the new contractual relations, which sprang from economic expansion, with the traditional morality expounded by the Church. Viewed by posterity as reactionaries, who damned the currents of economic enterprise with an irrelevant appeal to Scripture and to the Fathers, in their own age they were the pioneers of a liberal intellectual movement. By lifting the weight of antiquated formulæ they cleared a space within the stiff framework of religious authority for new and mobile economic interests, and thus supplied an intellectual justification for developments which earlier generations would have condemned.
The mercantilist thought of later centuries owed a considerable debt to scholastic discussions of money, prices, and interest. But the specific contributions of medieval writers to the technique of economic theory were less significant than their premises. Their fundamental assumptions, both of which were to leave a deep imprint on the social thought of the sixteenth and seventeenth centuries, were two: that economic interests are subordinate to the real business of life, which is salvation, and that economic conduct is one aspect of personal conduct, upon which, as on other parts of it, the rules of morality are binding. Material riches are necessary; they have a secondary importance, since without them men cannot support themselves and help one another; the wise ruler, as St. Thomas said,[34] will consider in founding his State the natural resources of the country. But economic motives are suspect. Because they are powerful appetites, men fear them, but they are not mean enough to applaud them. Like other strong passions, what they need, it is thought, is not a clear field, but repression. There is no place in medieval theory for economic activity which is not related to a moral end, and to found a science of society upon the assumption that the appetite for economic gain is a constant and measurable force, to be accepted, like other natural forces, as an inevitable and self-evident datum, would have appeared to the medieval thinker as hardly less irrational or less immoral than to make the premise of social philosophy the unrestrained operation of such necessary human attributes as pugnacity or the sexual instinct. The outer is ordained for the sake of the inner; economic goods are instrumental—sicut quædam adminicula, quibus adjuvamur ad tendendum in beatitudinem. “It is lawful to desire temporal blessings, not putting them in the first place, as though setting up our rest in them, but regarding them as aids to blessedness, inasmuch as they support our corporal life and serve as instruments for acts of virtue.”[35] Riches, as St. Antonino says, exist for man, not man for riches.
At every turn, therefore, there are limits, restrictions, warnings against allowing economic interests to interfere with serious affairs. It is right for a man to seek such wealth as is necessary for a livelihood in his station. To seek more is not enterprise, but avarice, and avarice is a deadly sin. Trade is legitimate; the different resources of different countries show that it was intended by Providence. But it is a dangerous business. A man must be sure that he carries it on for the public benefit, and that the profits which he takes are no more than the wages of his labor. Private property is a necessary institution, at least in a fallen world; men work more and dispute less when goods are private than when they are common. But it is to be tolerated as a concession to human frailty, not applauded as desirable in itself; the ideal—if only man’s nature could rise to it—is communism. “Communis enim,” wrote Gratian in his decretum, “usus omnium, quae sunt in hoc mundo, omnibus hominibus esse debuit.”[36] At best, indeed, the estate is somewhat encumbered. It must be legitimately acquired. It must be in the largest possible number of hands. It must provide for the support of the poor. Its use must as far as practicable be common. Its owners must be ready to share it with those who need, even if they are not in actual destitution. Such were the conditions which commended themselves to an archbishop of the business capital of fifteenth-century Europe.[37] There have been ages in which they would have been described, not as a justification of property, but as a revolutionary assault on it. For to defend the property of the peasant and small master is necessarily to attack that of the monopolist and usurer, which grows by devouring it.
The assumption on which all this body of doctrine rested was simple. It was that the danger of economic interests increased in direct proportion to the prominence of the pecuniary motives associated with them. Labor—the common lot of mankind—is necessary and honorable; trade is necessary, but perilous to the soul; finance, if not immoral, is at best sordid and at worst disreputable. This curious inversion of the social values of more enlightened ages is best revealed in medieval discussions of the ethics of commerce. The severely qualified tolerance extended to the trader was partly, no doubt, a literary convention derived from classical models; it was natural that Aquinas should laud the State which had small need of merchants because it could meet its needs from the produce of its own soil; had not the Philosopher himself praised αὐτάρκεια? But it was a convention which coincided with a vital element in medieval social theory, and struck a responsive note in wide sections of medieval society. It is not disputed, of course, that trade is indispensable; the merchant supplements the deficiencies of one country with the abundance of another. If there were no private traders, argued Duns Scotus, whose indulgence was less carefully guarded, the governor would have to engage them. Their profits, therefore, are legitimate, and they may include, not only the livelihood appropriate to the trader’s status, but payment for labor, skill, and risk.[38]
The defence, if adequate, was somewhat embarrassing. For why should a defence be required? The insistence that trade is not positively sinful conveys a hint that the practices of traders may be, at least, of dubious propriety. And so, in the eyes of most medieval thinkers, they are. Summe periculosa est venditionis et emptionis negotiatio.[39] The explanation of that attitude lay partly in the facts of contemporary economic organization. The economy of the medieval borough—consider only its treatment of food supplies and prices—was one in which consumption held somewhat the same primacy in the public mind, as the undisputed arbiter of economic effort, as the nineteenth century attached to profits. The merchant pure and simple, though convenient to the Crown, for whom he collected taxes and provided loans, and to great establishments such as monasteries, whose wool he bought in bulk, enjoyed the double unpopularity of an alien and a parasite. The best practical commentary on the tepid indulgence extended by theorists to the trader is the network of restrictions with which medieval policy surrounded his activities, the recurrent storms of public indignation against him, and the ruthlessness with which boroughs suppressed the middleman who intervened between consumer and producer.
Apart, however, from the color which it took from its environment, medieval social theory had reasons of its own for holding that business, as distinct from labor, required some special justification. The suspicion of economic motives had been one of the earliest elements in the social teaching of the Church, and was to survive till Calvinism endowed the life of economic enterprise with a new sanctification. In medieval philosophy the ascetic tradition, which condemned all commerce as the sphere of iniquity, was softened by a recognition of practical necessities, but it was not obliterated; and, if reluctant to condemn, it was insistent to warn. For it was of the essence of trade to drag into a position of solitary prominence the acquisitive appetites; and towards those appetites, which to most modern thinkers have seemed the one sure social dynamic, the attitude of the medieval theorist was that of one who holds a wolf by the ears. The craftsman labors for his living; he seeks what is sufficient to support him, and no more. The merchant aims, not merely at livelihood, but at profit. The traditional distinction was expressed in the words of Gratian: “Whosoever buys a thing, not that he may sell it whole and unchanged, but that it may be a material for fashioning something, he is no merchant. But the man who buys it in order that he may gain by selling it again unchanged and as he bought it, that man is of the buyers and sellers who are cast forth from God’s temple.”[40] By very definition a man who “buys in order that he may sell dearer,” the trader is moved by an inhuman concentration on his own pecuniary interest, unsoftened by any tincture of public spirit or private charity. He turns what should be a means into an end, and his occupation, therefore, “is justly condemned, since, regarded in itself, it serves the lust of gain.”[41]
The dilemma presented by a form of enterprise at once perilous to the soul and essential to society was revealed in the solution most commonly propounded for it. It was to treat profits as a particular case of wages, with the qualification that gains in excess of a reasonable remuneration for the merchant’s labor were, though not illegal, reprehensible as turpe lucrum. The condition of the trader’s exoneration is that “he seeks gain, not as an end, but as the wages of his labor.”[42] Theoretically convenient, the doctrine was difficult of application, for evidently it implied the acceptance of what the sedate irony of Adam Smith was later to describe as “an affectation not very common among merchants.” But the motives which prompted it were characteristic. The medieval theorist condemned as a sin precisely that effort to achieve a continuous and unlimited increase in material wealth which modern societies applaud as a quality, and the vices for which he reserved his most merciless denunciations were the more refined and subtle of the economic virtues. “He who has enough to satisfy his wants,” wrote a Schoolman of the fourteenth century, “and nevertheless ceaselessly labors to acquire riches, either in order to obtain a higher social position, or that subsequently he may have enough to live without labor, or that his sons may become men of wealth and importance—all such are incited by a damnable avarice, sensuality, or pride.”[43] Two and a half centuries later, in the midst of a revolution in the economic and spiritual environment, Luther, in even more unmeasured language, was to say the same.[44] The essence of the argument was that payment may properly be demanded by the craftsmen who make the goods, or by the merchants who transport them, for both labor in their vocation and serve the common need. The unpardonable sin is that of the speculator or the middleman, who snatches private gain by the exploitation of public necessities. The true descendant of the doctrines of Aquinas is the labor theory of value. The last of the Schoolmen was Karl Marx.
If such ideas were to be more than generalities, they required to be translated into terms of the particular transactions by which trade is conducted and property acquired. Their practical expression was the body of economic casuistry, in which the best-known elements are the teaching with regard to the just price and the prohibition of usury. These doctrines sprang as much from the popular consciousness of the plain facts of the economic situation as from the theorists who expounded them. The innumerable fables of the usurer who was prematurely carried to hell, or whose money turned to withered leaves in his strong box, or who (as the scrupulous recorder remarks), “about the year 1240,” on entering a church to be married, was crushed by a stone figure falling from the porch, which proved by the grace of God to be a carving of another usurer and his money-bags being carried off by the devil, are more illuminating than the refinements of lawyers.[45]
On these matters, as the practice of borough and manor, as well as of national governments, shows, the Church was preaching to the converted, and to dismiss its teaching on economic ethics as the pious rhetoric of professional moralists is to ignore the fact that precisely similar ideas were accepted in circles which could not be suspected of any unnatural squeamishness as to the arts by which men grow rich. The best commentary on ecclesiastical doctrines as to usury and prices is the secular legislation on similar subjects, for, down at least to the middle of the sixteenth century, their leading ideas were reflected in it. Plain men might curse the chicanery of ecclesiastical lawyers, and gilds and boroughs might forbid their members to plead before ecclesiastical courts; but the rules which they themselves made for the conduct of business had more than a flavor of the canon law. Florence was the financial capital of medieval Europe; but even at Florence the secular authorities fined bankers right and left for usury in the middle of the fourteenth century, and, fifty years later, first prohibited credit transactions altogether, and then imported Jews to conduct a business forbidden to Christians.[46] Cologne was one of the greatest of commercial entrepôts; but, when its successful business man came to make his will, he remembered that trade was perilous to the soul and avarice a deadly sin, and offered what atonement he could by directing his sons to make restitution and to follow some less dangerous occupation than that of the merchant.[47] The burgesses of Coventry fought the Prior over a question of common rights for the best part of a century; but the Court Leet of that thriving business city put usury on a par with adultery and fornication, and decreed that no usurer could become mayor, councillor, or master of the gild.[48] It was not that laymen were unnaturally righteous; it was not that the Church was all-powerful, though its teaching wound into men’s minds through a hundred channels, and survived as a sentiment long after it was repudiated as a command. It was that the facts of the economic situation imposed themselves irresistibly on both. In reality, there was no sharp collision between the doctrine of the Church and the public policy of the world of business—its individual practice was, of course, another matter—because both were formed by the same environment, and accepted the same broad assumptions as to social expediency.
The economic background of it all was very simple. The medieval consumer—we can sympathize with him today more easily than in 1914—is like a traveller condemned to spend his life at a station hotel. He occupies a tied house and is at the mercy of the local baker and brewer. Monopoly is inevitable. Indeed, a great part of medieval industry is a system of organized monopolies, endowed with a public status, which must be watched with jealous eyes to see that they do not abuse their powers. It is a society of small masters and peasant farmers. Wages are not a burning question, for, except in the great industrial centers of Italy and Flanders, the permanent wage-earning class is small. Usury is, as it is today in similar circumstances. For loans are made largely for consumption, not for production. The farmer whose harvest fails or whose beasts die, or the artisan who loses money, must have credit, seed-corn, cattle, raw materials, and his distress is the money-lender’s opportunity. Naturally, there is a passionate popular sentiment against the engrosser who holds a town to ransom, the monopolist who brings the livings of many into the hands of one, the money-lender who takes advantage of his neighbor’s necessities to get a lien on their land and foreclose. “The usurer would not loan to men these goods, but if he hoped winning, that he loves more than charity. Many other sins be more than this usury, but for this men curse and hate it more than other sin.”[49]
No one who examines the cases actually heard by the courts in the later Middle Ages will think that resentment surprising, for they throw a lurid light on the possibilities of commercial immorality.[50] Among the peasants and small masters who composed the mass of the population in medieval England, borrowing and lending were common, and it was with reference to their petty transactions, not to the world of high finance, that the traditional attitude towards the money-lender had been crystallized. It was natural that “Juetta [who] is a usuress and sells at a dearer rate for accommodation,” and John the Chaplain, qui est usurarius maximus,[51] should be regarded as figures at once too scandalous to be tolerated by their neighbors and too convenient to be altogether suppressed. The Church accepts this popular sentiment, gives it a religious significance, and crystallizes it in a system, in which economic morality is preached from the pulpit, emphasized in the confessional, and enforced, in the last resource, through the courts.
The philosophical basis of it is the conception of natural law. “Every law framed by man bears the character of a law exactly to that extent to which it is derived from the law of nature. But if on any point it is in conflict with the law of nature, it at once ceases to be a law; it is a mere perversion of law.”[52] The plausible doctrine of compensations, of the long run, of the self-correcting mechanism, has not yet been invented. The idea of a law of nature—of natural justice which ought to find expression in positive law, but which is not exhausted in it—supplies an ideal standard by which the equity of particular relations can be measured. The most fundamental difference between medieval and modern economic thought consists, indeed, in the fact that, whereas the latter normally refers to economic expediency, however it may be interpreted, for the justification of any particular action, policy, or system of organization, the former starts from the position that there is a moral authority to which considerations of economic expediency must be subordinated. The practical application of this conception is the attempt to try every transaction by a rule of right, which is largely, though not wholly, independent of the fortuitous combinations of economic circumstances. No man must ask more than the price fixed, either by public authorities, or, failing that, by common estimation. True, prices even so will vary with scarcity; for, with all their rigor, theologians are not so impracticable as to rule out the effect of changing supplies. But they will not vary with individual necessity or individual opportunity. The bugbear is the man who uses, or even creates, a temporary shortage, the man who makes money out of the turn of the market, the man who, as Wyclif says, must be wicked, or he could not have been poor yesterday and rich today.[53]
The formal theory of the just price went, it is true, through a considerable development. The dominant conception of Aquinas—that prices, though they will vary with the varying conditions of different markets, should correspond with the labor and costs of the producer, as the proper basis of the communis estimatio, conformity with which was the safeguard against extortion—was qualified by subsequent writers. Several Schoolmen of the fourteenth century emphasized the subjective element in the common estimation, insisted that the essence of value was utility, and drew the conclusion that a fair price was most likely to be reached under freedom of contract, since the mere fact that a bargain had been struck showed that both parties were satisfied.[54] In the fifteenth century St. Antonino, who wrote with a highly developed commercial civilization beneath his eyes, endeavored to effect a synthesis, in which the principle of the traditional doctrine should be observed, while the necessary play should be left to economic motives. After a subtle analysis of the conditions affecting value, he concluded that the fairness of a price could at best be a matter only of “probability and conjecture,” since it would vary with places, periods and persons. His practical contribution was to introduce a new elasticity into the whole conception by distinguishing three grades of prices—a gradus pius, discretus, and rigidus. A seller who exceeded the price fixed by more than 50 per cent. was bound, he argued, to make restitution, and even a smaller departure from it, if deliberate, required atonement in the shape of alms. But accidental lapses were venial, and there was a debatable ground within which prices might move without involving sin.[55]
This conclusion, with its recognition of the impersonal forces of the market, was the natural outcome of the intense economic activity of the later Middle Ages, and evidently contained the seeds of an intellectual revolution. The fact that it should have begun to be expounded as early as the middle of the fourteenth century is a reminder that the economic thought of Schoolmen contained elements much more various and much more modern than is sometimes suggested. But the characteristic doctrine was different. It was that which insisted on the just price as the safeguard against extortion. “To leave the prices of goods at the discretion of the sellers is to give rein to the cupidity which goads almost all of them to seek excessive gain.” Prices must be such, and no more than such, as will enable each man to “have the necessaries of life suitable for his station.” The most desirable course is that they should be fixed by public officials, after making an enquiry into the supplies available and framing an estimate of the requirements of different classes. Failing that, the individual must fix prices for himself, guided by a consideration of “what he must charge in order to maintain his position, and nourish himself suitably in it, and by a reasonable estimate of his expenditure and labor.”[56] If the latter recommendation was a counsel of perfection, the former was almost a platitude. It was no more than an energetic mayor would carry out before breakfast.
No man, again, may charge money for a loan. He may, of course, take the profits of partnership, provided that he takes the partner’s risks. He may buy a rent-charge; for the fruits of the earth are produced by nature, not wrung from man. He may demand compensation—interesse—if he is not repaid the principal at the time stipulated. He may ask payment corresponding to any loss he incurs or gain he foregoes. He may purchase an annuity, for the payment is contingent and speculative, not certain. It is no usury when John Deveneys, who has borrowed £19 16s., binds himself to pay a penalty of £40 in the event of failure to restore the principal, for this is compensation for damages incurred; or when Geoffrey de Eston grants William de Burwode three marks of silver in return for an annual rent of six shillings, for this is the purchase of a rent-charge, not a loan; or when James le Reve of London advances £100 to Robert de Bree of Dublin, merchant, with which to trade for two years in Ireland, for this is a partnership; or when the priory of Worcester sells annuities for a capital sum paid down.[57] What remained to the end unlawful was that which appears in modern economic text-books as “pure interest”—interest as a fixed payment stipulated in advance for a loan of money or wares without risk to the lender. “Usura est ex mutuo lucrum pacto debitum vel exactum ... quidquid sorti accedit, subaudi per pactum vel exactionem, usura est, quodcunque nomen sibi imponat.”[58] The emphasis was on pactum. The essence of usury was that it was certain, and that, whether the borrower gained or lost, the usurer took his pound of flesh. Medieval opinion, which has no objection to rent or profits, provided that they are reasonable—for is not every one in a small way a profit-maker?—has no mercy for the debenture-holder. His crime is that he takes a payment for money which is fixed and certain, and such a payment is usury.
The doctrine was, of course, more complex and more subtle than a bald summary suggests. With the growth of the habit of investment, of a market for capital, and of new forms of economic enterprise such as insurance and exchange business, theory became steadily more elaborate, and schools more sharply divided. The precise meaning and scope of the indulgence extended to the purchase of rent-charges produced one controversy, the foreign exchanges another, the development of Monts de Piété a third. Even before the end of the fourteenth century there had been writers who argued that interest was the remuneration of the services rendered by the lender, and who pointed out (though apparently they did not draw the modern corollary) that present are more valuable than future goods.[59] But on the iniquity of payment merely for the act of lending, theological opinion, whether liberal or conservative, was unanimous, and its modern interpreter,[60] who sees in its indulgence to interesse the condonation of interest, would have created a scandal in theological circles in any age before that of Calvin. To take usury is contrary to Scripture; it is contrary to Aristotle; it is contrary to nature, for it is to live without labor; it is to sell time, which belongs to God, for the advantage of wicked men; it is to rob those who use the money lent, and to whom, since they make it profitable, the profits should belong; it is unjust in itself, for the benefit of the loan to the borrower cannot exceed the value of the principal sum lent him; it is in defiance of sound juristic principles, for when a loan of money is made, the property in the thing lent passes to the borrower, and why should the creditor demand payment from a man who is merely using what is now his own?
The part played by authority in all this is obvious. There were the texts in Exodus and Leviticus; there was Luke vi. 35—apparently a mistranslation; there was a passage in the Politics, which some now say was mistranslated also.[61] But practical considerations contributed more to the doctrine than is sometimes supposed. Its character had been given it in an age in which most loans were not part of a credit system, but an exceptional expedient, and in which it could be said that “he who borrows is always under stress of necessity.” If usury were general, it was argued, “men would not give thought to the cultivation of their land, except when they could do nought else, and so there would be so great a famine that all the poor would die of hunger; for even if they could get land to cultivate, they would not be able to get the beasts and implements for cultivating it, since the poor themselves would not have them, and the rich, for the sake both of profit and of security, would put their money into usury rather than into smaller and more risky investments.”[62] The man who used these arguments was not an academic dreamer. He was Innocent IV, a consummate man of business, a believer, even to excess, in Realpolitik, and one of the ablest statesmen of his day.
True, the Church could not dispense with commercial wickedness in high places. It was too convenient. The distinction between pawnbroking, which is disreputable, and high finance, which is eminently honorable, was as familiar in the Age of Faith as in the twentieth century; and no reasonable judgment of the medieval denunciation of usury is possible, unless it is remembered that whole ranges of financial business escaped from it almost altogether. It was rarely applied to the large-scale transactions of kings, feudal magnates, bishops and abbots. Their subjects, squeezed to pay a foreign money-lender, might grumble or rebel, but, if an Edward III or a Count of Champagne was in the hands of financiers, who could bring either debtor or creditor to book? It was even more rarely applied to the Papacy itself; Popes regularly employed the international banking-houses of the day, with a singular indifference, as was frequently complained, to the morality of their business methods, took them under their special protection, and sometimes enforced the payment of debts by the threat of excommunication. As a rule, in spite of some qualms, the international money-market escaped from it; in the fourteenth century Italy was full of banking-houses doing foreign exchange business in every commercial center from Constantinople to London, and in the great fairs, such as those of Champagne, a special period was regularly set aside for the negotiation of loans and the settlement of debts.[63]
It was not that transactions of this type were expressly excepted; on the contrary, each of them from time to time evoked the protests of moralists. Nor was it mere hypocrisy which caused the traditional doctrine to be repeated by writers who were perfectly well aware that neither commerce nor government could be carried on without credit. It was that the whole body of intellectual assumptions and practical interests, on which the prohibition of usury was based, had reference to a quite different order of economic activities from that represented by loans from great banking-houses to the merchants and potentates who were their clients. Its object was simple and direct—to prevent the well-to-do money-lender from exploiting the necessities of the peasant or the craftsman; its categories, which were quite appropriate to that type of transaction, were those of personal morality. It was in these commonplace dealings among small men that oppression was easiest and its results most pitiable. It was for them that the Church’s scheme of economic ethics had been worked out, and with reference to them, though set at naught in high places, it was meant to be enforced, for it was part of Christian charity.
It was enforced partly by secular authorities, partly, in so far as the rivalry of secular authorities would permit it, by the machinery of ecclesiastical discipline. The ecclesiastical legislation on the subject of usury has been so often analyzed that it is needless to do more than allude to it. Early Councils had forbidden usury to be taken by the clergy.[64] The Councils of the twelfth and thirteenth centuries forbid it to be taken by clergy or laity, and lay down rules for dealing with offenders. Clergy who lend money to persons in need, take their possessions in pawn, and receive profits beyond the capital sum lent, are to be deprived of their office.[65] Manifest usurers are not to be admitted to communion or Christian burial; their offerings are not to be accepted; and ecclesiastics who fail to punish them are to be suspended until they make satisfaction to their bishop.[66] The high-water mark of the ecclesiastical attack on usury was probably reached in the legislation of the Councils of Lyons (1274) and of Vienne (1312). The former re-enacted the measures laid down by the third Lateran Council (1175), and supplemented them by rules which virtually made the money-lender an outlaw. No individual or society, under pain of excommunication or interdict, was to let houses to usurers, but was to expel them (had they been admitted) within three months. They were to be refused confession, absolution and Christian burial until they had made restitution, and their wills were to be invalid.[67] The legislation of the Council of Vienne was even more sweeping. Declaring that it has learned with dismay that there are communities which, contrary to human and divine law, sanction usury and compel debtors to observe usurious contracts, it declares that all rulers and magistrates knowingly maintaining such laws are to incur excommunication, and requires the legislation in question to be revoked within three months. Since the true nature of usurious transactions is often concealed beneath various specious devices, money-lenders are to be compelled by the ecclesiastical authorities to submit their accounts to examination. Any person obstinately declaring that usury is not a sin is to be punished as a heretic, and inquisitors are to proceed against him tanquam contra diffamatos vel suspectos de hæresi.[68]
It would not be easy to find a more drastic example, either of ecclesiastical sovereignty, or of the attempt to assert the superiority of the moral law to economic expediency, than the requirement, under threat of excommunication, that all secular legislation sanctioning usury shall be repealed. But, for an understanding of the way in which the system was intended to work, the enactments of Councils are perhaps less illuminating than the correspondence between the papal Curia and subordinate ecclesiastical authorities on specific cases and questions of interpretation. Are the heirs of those who have made money by usury bound to make restitution? Yes, the same penalties are to be applied to them as to the original offenders. The pious object of ransoming prisoners is not to justify the asking of a price for a loan. A man is to be accounted a usurer, not only if he charges interest, but if he allows for the element of time in a bargain, by asking a higher price when he sells on credit. Even when debtors have sworn not to proceed against usurers, the ecclesiastical authorities are to compel the latter to restore their gains, and, if witnesses are terrorized by the protection given to usurers by the powerful, punishment can be imposed without their evidence, provided that the offence is a matter of common notoriety. An archbishop of Canterbury is reminded that usury is perilous, not only for the clergy, but for all men whatever, and is warned to use ecclesiastical censures to secure the restoration, without the deduction of interest, of property which has been pawned. Usurers, says a papal letter to the archbishop of Salerno, object to restoring gains, or say that they have not the means; he is to compel all who can to make restitution, either to those from whom interest was taken, or to their heirs; when neither course is possible, they are to give it to the poor; for, as Augustine says, non remittitur peccatum, nisi restituitur ablatum. At Genoa, the Pope is informed, a practice obtains of undertaking to pay, at the end of a given term, a higher price for wares than they were worth at the moment when the sale took place. It is not clear that such contracts are necessarily usurious; nevertheless, the sellers run into sin, unless there is a probability that the wares will have changed in value by the time that payment is made; “and therefore your fellow-citizens would show a wise regard for their salvation if they ceased making contracts of the kind, since the thoughts of men cannot be concealed from Almighty God.”[69]
It is evident from the number of doubtful cases referred to Rome for decision that the law with regard to usury was not easily administered. It is evident, also, that efforts were made to offer guidance in dealing with difficult and technical problems. In the book of common forms, drawn up in the thirteenth century for the guidance of the papal penitentiary in dealing with hard cases, precedents were inserted to show how usurers should be handled.[70] About the same time appeared St. Raymond’s guide to the duties of an archdeacon, which contains a long list of inquiries to be made on visitation, covering every conceivable kind of extortion, and designed to expose the various illusory contracts—fictitious partnerships, loans under the guise of sales, excessive deposits against advances—by which the offence was concealed.[71] Instructions to confessors define in equal detail the procedure to be followed. The confessor, states a series of synodal statutes, is to “make inquiry concerning merchandising, and other things pertaining to avarice and covetousness.” Barons and knights are to be requested to state whether they have made ordinances contrary to the liberty of the Church, or refused justice to any man seeking it, or oppressed their subjects with undue tallages, tolls or services. “Concerning burgesses, merchants and officers (ministrales) the priest is to make inquiry as to rapine, usury, pledges made by deceit of usury, barratry, false and lying sales, unjust weights and measures, lying, perjury and craft. Concerning cultivators (agricolas) he is to inquire as to theft and detention of the property of others, especially with regard to tithes ... also as to the removing of landmarks and the occupation of other men’s land.... Concerning avarice it is to be asked in this wise: hast thou been guilty of simony ... an unjust judge ... a thief, a robber, a perjurer, a sacrilegious man, a gambler, a remover of landmarks in fields ... a false merchant, an oppressor of any man and above all of widows, wards and others in misery, for the sake of unjust and greedy gain?” Those guilty of avarice are to do penance by giving large alms, on the principle that “contraries are to be cured with contraries.” But there are certain sins for which no true penitence is possible until restitution has been made. Of these usury is one; and usury, it is to be noted, includes, not only what would now be called interest, but the sin of those who, on account of lapse of time, sell dearer and buy cheaper. If for practical reasons restitution is impossible, the offender is to be instructed to require that it shall be made by his heirs, and, when the injured party cannot be found, the money is to be spent, with the advice of the bishop if the sum is large and of the priest if it is small, “on pious works and especially on the poor.”[72]
The more popular teaching on the subject is illustrated by the manuals for use in the confessional and by books for the guidance of the devout. The space given in them to the ethics of business was considerable. In the fifteenth century, Bishop Pecock could meet the Lollards’ complaint that the Scriptures were buried beneath a mass of interpretation, by taking as his illustration the books which had been written on the text, “Lend, hoping for nothing again,” and arguing that all this teaching upon usury was little enough “to answer ... all the hard, scrupulous doubts and questions which all day have need to be assoiled in men’s bargains and chafferings together.”[73] A century later there were regions in which such doctrine was still being rehearsed with all the old rigor. In 1552 the Parliament which made the Scottish Reformation was only eight years off. But the catechism of the archbishop of St. Andrews, which was drawn up in that year, shows no disposition to compromise with the economic frailties of his fellow-countrymen. It denounces usurers, masters who withhold wages, covetous merchants who sell fraudulent wares, covetous landlords who grind their tenants, and in general—a comprehensive and embarrassing indictment—“all wretches that will be grown rich incontinent,” and all “who may keep their neighbor from poverty and mischance and do it not.”[74]
On the crucial question, how the ecclesiastical courts dealt in practice with these matters, we have very little light. They are still almost an unworked field. On the Continent we catch glimpses of occasional raids. Bishops declare war on notorious usurers, only to evoke reprisals from the secular authorities, to whom the money-lender is too convenient to be victimized by any one but themselves.[75] At the end of the thirteenth century an archbishop of Bourges makes some thirty-five usurers disgorge at a sitting,[76] and seventy years later an inquisitor at Florence collects 7,000 florins in two years from usurers and blasphemers.[77] In England commercial morality was a debatable land, in which ecclesiastical and secular authorities contended from time to time for jurisdiction. The ecclesiastical courts claimed to deal with cases of breach of contract in general, on the ground that they involved læsio fidei, and with usury in particular, as an offence against morality specifically forbidden by the canon law. Both claims were contested by the Crown and by municipal bodies. The former, by the Constitutions of Clarendon,[78] had expressly reserved proceedings as to debts for the royal courts, and the same rule was laid down more than once in the course of the next century. The latter again and again forbade burgesses to take proceedings in the courts christian, and fined those who disregarded the prohibition.[79] Both, in spite of repeated protests from the clergy,[80] made good their pretension to handle usurious contracts in secular courts; but neither succeeded in ousting the jurisdiction of the Church. The question at issue was not whether the usurer should be punished—a point as to which there was only one opinion—but who should have the lucrative business of punishing him, and in practice he ran the gauntlet of all and of each. Local authorities, from the City of London to the humblest manorial court, make by-laws against “unlawful chevisance” and present offenders against them.[81] The Commons pray that Lombard brokers may be banished, and that the ordinances of London concerning them may be made of general application.[82] The justices in eyre hear indictments of usurers,[83] and the Court of Chancery handles petitions from victims who can get no redress at common law.[84] And Holy Church, though there seems to be only one example of legislation on the subject by an English Church Council,[85] continues to deal with the usurer after her own manner.
For, in spite of the conflict of jurisdictions, the rising resentment against the ways of ecclesiastical lawyers, and the expanding capitalism of the later Middle Ages, it is evident that commercial cases continued, on occasion at least, to come before the courts christian. Nor, after the middle of the fourteenth century, was their right to try cases of usury contested by the secular authorities. A statute of 1341 enacted that (as laid down long before) the King should have cognizance of usurers dead, and the Church of usurers living. The same reservation of ecclesiastical rights was repeated when the question was taken up a century later under Henry VII, and survived, an antiquated piece of common form, even into the age of lusty capitalism under Elizabeth and James I.[86]
That ecclesiastical authorities had much opportunity of enforcing the canon law in connection with money-lending is improbable. It was naturally in the commercial towns that cases of the kind most frequently arose, and the towns did not look with favor on the interference of churchmen in matters of business. In London, collisions between the courts of the Official, the Mayor and the King were frequent in the early thirteenth century. Men took proceedings before the first, it seems, when a speedy decision was desired, or when their case was of a kind which secular courts were not likely to regard with favor. Thus craftsmen, to give one curious example out of many, were evidently using the courts christian as a means of giving effect to trade union regulations, which were more likely to be punished than enforced by the mayor and aldermen, by the simple device of imposing an oath and proceeding against those who broke it for breach of faith. The smiths, for instance, made a “confederacy,” supported by an oath, with the object, as they declared, of putting down night-work, but, as was alleged in court, of preventing any but members of their organization from working at the trade, and summoned blacklegs before the ecclesiastical courts. The spurriers forbade any one to work between sunset and sunrise, and haled an offending journeyman before the archdeacon, with the result that “the said Richard, after being three times warned by the Official, had been expelled from the Church and excommunicated, until he would swear to keep the ordinance.”[87]
Even at a later period the glimpses which we catch of the activities of the ecclesiastical jurisdiction are enough to show that it was not wholly a dead letter. Priests accused of usury undergo correction at the hands of their bishops.[88] Petitioners appeal for redress to the Court of Chancery on the ground that they have failed to secure justice in the courts of bishops or archdeacons, where actions on cases of debts or usury have been begun before “spiritual men.”[89] The records of ecclesiastical courts show that, though sometimes commercial questions were dismissed as belonging to the secular courts, cases of breach of contract and usury continued, nevertheless, to be settled by them.[90] The disreputable family of Marcroft—William the father was a common usurer, Alice his daughter baked bread at Pentecost, and Edward his son made a shirt on All Saints’ Day—is punished by the ecclesiastical court of Whalley as it deserves.[91] At Ripon a usurer and his victim are induced to settle the case out of court.[92] The Commissary of London cites Thomas Hall super crimine usurariæ pravitatis, on the ground that, having advanced four shillings on the security of Thomas Foster’s belt, he had demanded twelve pence over and above the principal, and suspends him when he does not appear in court.[93] Nor did business of this kind cease with the Reformation. Cases of usury were being heard by ecclesiastical courts under Elizabeth, and even in a great commercial center like the City of London it was still possible in the reign of James I for the Bishop’s Commissary to be trying tradesmen for “lending upon pawnes for an excessive gain.”[94]
It was not only by legal penalties, however, that an attempt was made to raise a defensive barrier against the exactions of the money-lender. From a very early date there was a school of opinion which held that, in view of the various stratagems by which usurious contracts could be “colored,” direct prohibition was almost necessarily impotent, and which favored the policy of providing facilities for borrowing on more reasonable terms than could be obtained from the money-lender. Ecclesiastics try, in fact, to turn the flank of the usurer by establishing institutions where the poor can raise capital cheaply. Parishes, religious fraternities, gilds, hospitals and perhaps monasteries lend corn, cattle and money.[95] In England, bishops are organizing such loans with papal approval in the middle of the thirteenth century,[96] and two centuries later, about 1462, the Franciscans lead the movement for the creation of Monts de Piété, which, starting in Italy, spread by the first half of the sixteenth century to France, Germany, and the Low Countries, and, though never taken up in England—for the Reformation intervened—supplied a topic of frequent comment and eulogy to English writers on economic ethics.[97] The canon law on the subject of money-lending underwent a steady development, caused by the necessity of adapting it to the increasing complexity of business organization, down at least to the Lateran Council of 1515. The ingenuity with which professional opinion elaborated the code was itself a proof that considerable business—and fees—were the result of it, for lawyers do not serve God for naught. The canonists, who had a bad reputation with the laity, were not, to put it mildly, more innocent than other lawyers in the gentle art of making business. The Italians, in particular, as was natural in the financial capital of Europe, made the pace, and Italian canonists performed prodigies of legal ingenuity. In England, on the other hand, either because Englishmen were unusually virtuous, or, as a foreigner unkindly said, because “they do not fear to make contracts on usury,”[98] or, most probably, because English business was a conservative and slow-going affair, the English canonist Lyndwood is content to quote a sentence from an English archbishop of the thirteenth century and to leave it at that.[99]
But, however lawyers might distinguish and refine, the essential facts were simple. The Church sees buying and selling, lending and borrowing, as a simple case of neighborly or unneighborly conduct. Though a rationalist like Bishop Pecock may insist that the rich, as such, are not hateful to God,[100] it has a traditional prejudice against the arts by which men—or at least laymen—acquire riches, and is apt to lump them together under the ugly name of avarice. Merchants who organize a ring, or money-lenders who grind the poor, it regards, not as business strategists, but as nefandæ belluæ—monsters of iniquity. As for grocers and victualers “who conspire wickedly together that none shall sell better cheap than another,” and speculators “who buy up corn, meat and wine ... to amass money at the cost of others,” they are “according to the laws of the Church no better than common criminals.”[101] So, when the price of bread rises, or when the London fruiterers, persuaded by one bold spirit that they are “all poor and caitiffs on account of their own simplicity, and if they would act on his advice they would be rich and powerful,”[102] form a combine, to the great loss and hardship of the people, burgesses and peasants do not console themselves with the larger hope that the laws of supply and demand may bring prices down again. Strong in the approval of all good Christians, they stand the miller in the pillory, and reason with the fruiterers in the court of the mayor. And the parish priest delivers a sermon on the sixth commandment, choosing as his text the words of the Book of Proverbs, “Give me neither riches nor poverty, but enough for my sustenance.”
Such, in brief outline, was the background of economic thought which the sixteenth century inherited, and which it brought to the bewildering changes in land tenure, in prices, in commercial and financial organization, that made the age a watershed in economic development. It is evident that the whole implication of this philosophy was, on one side, intensely conservative. There was no question of progress, still less of any radical social reconstruction. In the numerous heretical movements of the Middle Ages social aspirations were often combined with criticisms of the luxury and pomp of the ecclesiastical hierarchy. The official Church, to which independence of thought among the lower orders was but little less abhorrent when it related to their temporal well-being than when it was concerned with their eternal salvation, frowned upon these dangerous speculations, and sometimes crushed them with a ferocity as relentless as the most savage of the White Terrors of modern history has shown to the most formidable of insurrections.
Intellectually, religious opinion endorsed to the full the static view, which regarded the social order as a thing unalterable, to be accepted, not to be improved. Except on rare occasions, its spokesmen repeated the conventional doctrine, according to which the feet were born to labor, the hands to fight, and the head to rule. Naturally, therefore, they denounced agitations, like the communal movement,[103] designed to overturn that natural order, though the rise of the Free Cities was one of the glories of medieval Europe and the germ of almost every subsequent advance in civilization. They referred to questions of economic conduct, not because they were anxious to promote reforms, but because they were concerned with the maintenance of traditional standards of personal morality, of which economic conduct formed an important part.
Practically, the Church was an immense vested interest, implicated to the hilt in the economic fabric, especially on the side of agriculture and land tenure. Itself the greatest of landowners, it could no more quarrel with the feudal structure than the Ecclesiastical Commission, the largest of mineral owners today, can lead a crusade against royalties. The persecution of the Spiritual Franciscans, who dared, in defiance of the bull of John XXII, to maintain St. Francis’ rule as to evangelical poverty, suggests that doctrines impugning the sanctity of wealth resembled too closely the teaching of Christ to be acceptable to the princes of the Christian Church.
The basis of the whole medieval economic system, under which, except in Italy and Flanders, more than nine-tenths of the population consisted of agriculturists, had been serfdom or villeinage. Confronted in the sixteenth century with the unfamiliar evils of competitive agriculture, conservative reformers were to sigh for the social harmonies of a vanished age, which “knyt suche a knott of colaterall amytie betwene the Lordes and the tenaunts that the Lorde tendered his tenaunt as his childe, and the tenaunts againe loved and obeyed the Lorde as naturellye as the childe the father.”[104] Their idealization of the past is as misleading, as an account of the conditions of previous centuries, as it is illuminating as a comment upon those of their own. In reality, so far as the servile tenants, who formed the bulk of medieval agriculturists, were concerned, the golden age of peasant prosperity is, except here and there, a romantic myth, at which no one would have been more surprised than the peasants themselves. The very essence of feudal property was exploitation in its most naked and shameless form, compulsory labor, additional corvées at the very moments when the peasant’s labor was most urgently needed on his own holding, innumerable dues and payments, the obligation to grind at the lord’s mill and bake at the lord’s oven, the private justice of the lord’s court. The custom of the manor, the scarcity of labor, and, in England, the steadily advancing encroachments of the royal courts, blunted the edge of the system, and in fifteenth-century England a prosperous yeomanry was rising on its ruins. But, during the greater part of the Middle Ages, its cumulative weight had been, nevertheless, immense. Those who lived under it had no illusions as to its harshness. The first step which the peasant who had saved a little money took was to buy himself out of the obligation to work on the lord’s demesne. The Peasants’ Revolt in England, the Jacquerie in France and the repeated risings of the German peasantry reveal a state of social exasperation which has been surpassed in bitterness by few subsequent movements.
It is natural to ask (though some writers on medieval economics refrain from asking) what the attitude of religious opinion was towards serfdom. And it is hardly possible to answer that question except by saying that, apart from a few exceptional individuals, religious opinion ignored it. True, the Church condemned arbitrary tallages, and urged that the serf should be treated with humanity. True, it described the manumission of serfs as an act of piety, like gifts to the poor. For serfs are not “living tools,” but men; in the eyes of God all men are serfs together, conservi, and in the Kingdom of Heaven Lazarus is before Dives.[105] True, villeinage was a legal, not an economic, category; in the England of the fourteenth century there were serfs who were rich men. But to release the individual is not to condemn the institution. Whatever “mad priests” might say and do, the official Church, whose wealth consisted largely of villeins, walked with circumspection.
The canon law appears to have recognized and enforced serfdom.[106] Few prominent ecclesiastics made any pronouncement against it. Aquinas explains it as the result of sin, but that does not prevent his justifying it on economic grounds.[107] Almost all medieval writers appear to assume it or excuse it. Ecclesiastical landlords, though perhaps somewhat more conservative in their methods, seem as a whole to have been neither better nor worse than other landlords. Rustica gens optima flens, pessima gaudens, was a sentiment which sometimes appealed, it is to be feared, to the children of light concerned with rent rolls and farming profits, not less than to the feudal aristocracy, with whom the heads of the ecclesiastical hierarchy were inextricably intermingled. When their chance came, John Nameless, and John the Miller, and John Carter, who may be presumed to have known their friends, burned the court rolls of an abbot of St. Albans, and cut off the head of an archbishop, and ran riot on the estates of an abbot of Kempten, with not less enthusiasm than they showed in plundering their lay exploiters. It was not the Church, but revolting peasants in Germany and England, who appealed to the fact that “Christ has made all men free”;[108] and in Germany, at least, their ecclesiastical masters showed small mercy to them. The disappearance of serfdom—and, after all, it did not disappear from France till late in the eighteenth century, and from Germany till the nineteenth—was part of a general economic movement, with which the Church had little to do, and which churchmen, as property-owners, had sometimes resisted. It owed less to Christianity than to the humanitarian liberalism of the French Revolution.