Many have made witty invectives against usury. They say that it is pity
the devil should have God’s part, which is the tithe; that the usurer
is the greatest Sabbath-breaker, because his plough goeth every Sunday;
that the usurer is the drone that Virgil speaketh of:—
“Ignavum fucos pecus a præsepibus arcent;”[434]
that the usurer breaketh the first law that was made for mankind
after the fall, which was, “in sudore vultûs tui comedes panem
tuum;”[435] not, “in sudore vultûs alieni;”[436] that usurers should
have orange-tawny[437] bonnets, because they do Judaize; that it is
against nature for money to beget money, and the like. I say this only,
that usury is a “concessum propter duritiem cordis;”[438] for, since
there must be borrowing and lending, and men are so hard of heart as
they will not lend freely, usury must be permitted. Some others have
made suspicious and cunning propositions of banks, discovery of men’s
estates, and other inventions; but few have spoken of usury usefully.
It is good to set before us the incommodities and commodities of usury,
that the good may be either weighed out, or culled out; and warily to
provide, that, while we make forth to that which is better, we meet not
with that which is worse.
The discommodities of usury are, first, that it makes fewer merchants;
for were it not for this lazy trade of usury, money would not lie
still, but would, in great part, be employed upon merchandising,
which is the “vena porta”[439] of wealth in a state. The second, that
it makes poor merchants; for as a farmer cannot husband his ground
so well if he sit at a great rent, so the merchant cannot drive his
trade so well if he sit[440] at great usury. The third is incident to
the other two; and that is, the decay of customs of kings, or states,
which ebb or flow with merchandising. The fourth, that it bringeth the
treasure of a realm or state into a few hands; for the usurer being at
certainties, and others at uncertainties, at the end of the game most
of the money will be in the box; and ever a state flourisheth when
wealth is more equally spread. The fifth, that it beats down the price
of land; for the employment of money is chiefly either merchandising or
purchasing, and usury waylays both. The sixth, that it doth dull and
damp all industries, improvements, and new inventions, wherein money
would be stirring, if it were not for this slug. The last, that it is
the canker and ruin of many men’s estates, which, in process of time,
breeds a public poverty.
On the other side, the commodities of usury are, first, that, howsoever
usury in some respect hindereth merchandising, yet in some other
it advanceth it; for it is certain that the greatest part of trade
is driven by young merchants upon borrowing at interest; so as if
the usurer either call in, or keep back his money, there will ensue
presently a great stand of trade. The second is, that, were it not for
this easy borrowing upon interest, men’s necessities would draw upon
them a most sudden undoing, in that they would be forced to sell their
means (be it lands or goods), far under foot; and so, whereas usury
doth but gnaw upon them, bad markets would swallow them quite up. As
for mortgaging or pawning, it will little mend the matter; for either
men will not take pawns without use, or, if they do, they will look
precisely for the forfeiture. I remember a cruel moneyed man in the
country, that would say, “The devil take this usury, it keeps us from
forfeitures of mortgages and bonds.” The third and last is, that it is
a vanity to conceive that there would be ordinary borrowing without
profit; and it is impossible to conceive the number of inconveniences
that will ensue, if borrowing be cramped. Therefore, to speak of the
abolishing of usury is idle; all states have ever had it in one kind
or rate, or other; so as that opinion must be sent to Utopia.[441]
To speak now of the reformation and reglement[442] of usury, how the
discommodities of it may be best avoided, and the commodities retained.
It appears, by the balance of commodities and discommodities of usury,
two things are to be reconciled; the one, that the tooth of usury be
grinded, that it bite not too much; the other, that there be left
open a means to invite moneyed men to lend to the merchants, for the
continuing and quickening of trade. This cannot be done, except you
introduce two several sorts of usury, a less and a greater; for if you
reduce usury to one low rate, it will ease the common borrower, but
the merchant will be to seek for money; and it is to be noted that the
trade of merchandise being the most lucrative, may bear usury at a good
rate; other contracts not so.
To serve both intentions, the way would be briefly thus: that there
be two rates of usury; the one free and general for all; the other
under license only to certain persons, and in certain places of
merchandising. First, therefore, let usury in general be reduced to
five in the hundred, and let that rate be proclaimed to be free and
current; and let the state shut itself out to take any penalty for the
same. This will preserve borrowing from any general stop or dryness;
this will ease infinite borrowers in the country; this will, in good
part, raise the price of land, because land purchased at sixteen years’
purchase will yield six in the hundred, and somewhat more, whereas
this rate of interest yields but five. This, by like reason, will
encourage and edge industrious and profitable improvements, because
many will rather venture in that kind, than take five in the hundred,
especially having been used to greater profit. Secondly, let there be
certain persons licensed to lend to known merchants upon usury, at a
higher rate, and let it be with the cautions following: Let the rate
be, even with the merchant himself, somewhat more easy than that he
used formerly to pay; for, by that means, all borrowers shall have some
ease by this reformation, be he merchant, or whosoever; let it be no
bank or common stock, but every man be master of his own money; not
that I altogether mislike banks, but they will hardly be brooked, in
regard of certain suspicions. Let the state be answered[443] some small
matter for the license, and the rest left to the lender; for if the
abatement be but small, it will no whit discourage the lender; for he,
for example, that took before ten or nine in the hundred, will sooner
descend to eight in the hundred, than give over his trade of usury, and
go from certain gains to gains of hazard. Let these licensed lenders
be in number indefinite, but restrained to certain principal cities
and towns of merchandising; for then they will be hardly able to color
other men’s moneys in the country, so as the license of nine will not
suck away the current rate of five; for no man will send his moneys far
off, nor put them into unknown hands.
If it be objected, that this doth in a sort authorize usury, which
before was in some places but permissive; the answer is, that it is
better to mitigate usury by declaration, than to suffer it to rage by
connivance.[444]