Reflections on the Formation and Distribution of wealth [22]
this loss cannot be looked upon as unjust. The schoolmen, compelled to acknowledge the justice of these considerations, have allowed that interest for money may be taken, provided the capital is alienated, that is, provided the lender gave up his right to be reimbursed his money in a certain time, and permitted the borrower to retain it as long as he was inclined to pay the interest thereof only. The reason of this toleration was, that then it is no longer a loan of money for which an interest is paid, but a purchase, which is bought with a sum of money, as we purchase lands. This was a mode to which they had recourse, to comply with the absolute necessity which exists of borrowing money, in the course of the transactions of society, without fairly avowing the fallacy of those principles, upon which they had condemned the practice: but this clause for the alienation of the capital, is not an advantage to the borrower, who remains equally indebted to the lender, until he shall have repaid the capital, and whose property always remains as a security for the safety of such capital; -- it is even a disadvantage, as he finds it more difficult to borrow money when he is in want of it; for persons who would willingly consent to lend for a year or two, a sum of money which they had destined for the purchase of an estate, would not lend it for an uncertain time. Besides, if they are permitted to sell their money for a perpetual rent, why may they not lend it for a certain number of years, for a rent which is only to continue for that term? If an interest of 1000 livres per annum is equivalent to the sum of 20000 livres from him to keep such a sum in perpetuity, 1000 livres will be an equivalent for the possession of that sum for one year.
74. True foundation of interest of money.
A man then may lend his money as lawfully as he may sell it; and the possessor of money may either do one or the other, not only because money is equivalent to a revenue, and a means to procure a revenue: not only because the lender loses, during the continuance of the loan, the revenue he might have procured by it; not only because he risks his capital; not only because the borrower can employ it in advantageous acquisitions, or in undertakings from whence he will draw a large profit; the proprietor of money may lawfully receive the interest of it, by a more general and decisive principle. Even if none of these circumstances should take place, he will not have the less right to require an interest for his loan, for this reason only, that his money is his own. Since it is his own, he has a right to keep it, nothing can imply a duty in him to lend it; if then he does lend, he may annex such a condition to the loan as he chuses, in this he does no injury to the borrower, since the latter agrees to the conditions, and has no sort of right over the sum lent. The profit which money can procure the borrower, is doubtless one of the most prevailing motives to determine him to borrow on interest; it is one of the means which facilitates his payment of the interest, but this is by no means that which gives a right to the lender to require it; it is sufficient for him that his money is his own, and this is a right inseparable from property. He who buys bread, does it for his support, but the right the baker has to exact a price is totally independent of the use of bread; the same right he would possess in the sale of a parcel of stones, a right founded on this principle only, that the bread is his own, and no one has any right to oblige him to give it up for nothing.
75. Answer to an objection.
This reflection brings us to the consideration of the application made by an author, of the text, mutuum date nihil inde sperantes, and shews how false that application is, and how distant from the meaning of the Gospel. The passage is clear, as interpreted by modern and reasonable divines as a precept of charity. All mankind are bound to assist each other; a rich man who should see, his fellow creature in distress, and who, instead of gratuitously
74. True foundation of interest of money.
A man then may lend his money as lawfully as he may sell it; and the possessor of money may either do one or the other, not only because money is equivalent to a revenue, and a means to procure a revenue: not only because the lender loses, during the continuance of the loan, the revenue he might have procured by it; not only because he risks his capital; not only because the borrower can employ it in advantageous acquisitions, or in undertakings from whence he will draw a large profit; the proprietor of money may lawfully receive the interest of it, by a more general and decisive principle. Even if none of these circumstances should take place, he will not have the less right to require an interest for his loan, for this reason only, that his money is his own. Since it is his own, he has a right to keep it, nothing can imply a duty in him to lend it; if then he does lend, he may annex such a condition to the loan as he chuses, in this he does no injury to the borrower, since the latter agrees to the conditions, and has no sort of right over the sum lent. The profit which money can procure the borrower, is doubtless one of the most prevailing motives to determine him to borrow on interest; it is one of the means which facilitates his payment of the interest, but this is by no means that which gives a right to the lender to require it; it is sufficient for him that his money is his own, and this is a right inseparable from property. He who buys bread, does it for his support, but the right the baker has to exact a price is totally independent of the use of bread; the same right he would possess in the sale of a parcel of stones, a right founded on this principle only, that the bread is his own, and no one has any right to oblige him to give it up for nothing.
75. Answer to an objection.
This reflection brings us to the consideration of the application made by an author, of the text, mutuum date nihil inde sperantes, and shews how false that application is, and how distant from the meaning of the Gospel. The passage is clear, as interpreted by modern and reasonable divines as a precept of charity. All mankind are bound to assist each other; a rich man who should see, his fellow creature in distress, and who, instead of gratuitously