Principles of Political Economy, Vol. 2Roscher, Wilhelm
General
Principles of Political Economy, Vol. 2
Roscher, Wilhelm
Economics
The canon law, from the first, endeavored to prevent contracts for
interest. We may even say that the prohibition of interest-usury is the
key-stone of the whole system of the political economy of the _Corpus
Juris Canonici_. The development of that law coincides, as to time, with
the senility of the Roman Empire and the childhood of modern
nations.[191-1] In the golden age of papal power, every
interest-creditor was refused the communion, the _testamenti factio_ and
the right of ecclesiastical burial. Proceedings at law could not be
instituted for the recovery of the principal debt until the creditor had
restored all the interest obtained. In the council of Vienna, in 1311,
it was declared heresy to defend the taking of interest. The universal
antipathy of the church towards the growing importance of the
_bourgeoisie_,[191-2] and the desire to give the spiritual courts an
extensive jurisdiction in litigated cases, may have contributed largely
to the adoption of these measures. In later medieval times, the secular
power offered its services to execute these laws;[191-3] and, to judge
of what public opinion in this matter was, we need only call to mind the
decided disapproval of interest by Dante, Luther and Shakespeare.[191-4]
The _Weddeschat_, a species of pledge or loan on security, constituted
the transition from this state of things to the modern economic system
of interest. The _Weddeschat_ was a sale with a reserved right of
redemption, by which the debtor gave his creditor the use and enjoyment
of a piece of land a sort of interest in kind, but which he could at any
time recover back, by payment of the principal. This was not very
oppressive on the debtor, as he was the only party who could recall the
contract.[191-5] In a higher stage of civilization, indeed the
continuance of this species of land-pledge would be exceedingly
disadvantageous, since the momentary possessor of a piece of land which
might be bought back by another person at any time at a price fixed in
advance, would scarcely think of improving it.[191-6]
And so, the introduction of rent-purchase (_Rentekauf_) was an important
step in advance: the incumbrancing of a piece of land which remained in
the possession of the debtor with an interest in kind paid to the
creditor. The latter could never claim anything further, while the
debtor and his heirs might redeem the land from this interest-incumbrance
by paying back the purchase money.[191-7] As the Pope, on the 19th of
January, 1569, renewed, in express terms, the prohibition of all interest
not based on rent-purchase, so did the police ordinances of the Empire, of
the sixteenth century, declare it to be the only lawful form of loaning at
interest; provided, always, that only the debtor could demand the
cancellation of the contract.[191-8] We find, however, that, on the whole,
at least Protestant countries had, before 1654, adopted the modern Roman
law relating to interest.[191-9] [191-10]
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