THE TRUE ETHICAL PRINCIPLE.
The true ethical principle that should govern the relation between the
owner of property and the person holding that property as a loan, does
not differ from the principle that is recognized as prevailing in all
the other relations of life. The party to whom the service is rendered
is under obligation. The party served is the one who must pay for the
service. The party served must pay in proportion to the amount of
service rendered him. If that service is great, then the payment must
be large. If the service is slight, then the payment is small, and
when there is no service then no payment can be claimed.
This principle is recognized in all worthy and upright transactions.
It is the service rendered that is rewarded in a court of justice. An
employe recovers his wages from his employer for his services
rendered. The condition of the employer's business does not enter into
the count. It may have been unprofitable or a great success but that
cannot affect the claim either way.
A physician charges for the services given a patient. The recovery or
death of the patient can neither increase nor diminish them.
In service we always surrender something of ourselves or of our own,
and each knows the sacrifice or effort he has made; he cannot know the
value of this to the other, and he need not know. Full compensation is
due from the party served but no compensation is due when no service
is given nor property surrendered.
The usurer's whole claim is for the service of his property. But he
does not surrender a particle of his wealth. He does not become poorer
in making his loan. He holds all his wealth as fully as before,
whether it be a loan of money or grains or tools. There has been no
outgo of property for which, in any other relation, he could claim a
reward or compensation from his fellow. He simply deposits his
property with his fellow and takes security for its safe keeping. It
must be preserved perfectly and restored fully.
When we consider the true principle, that compensation is due always
for services rendered, the obligation is upon the lender for the care
and preservation of his property. The borrower in any and every case
gives a real and valuable service in preservation and restoration at
the end of the term, while the lender renders no personal service nor
does he part with a particle of his wealth.
There is always a service rendered in caring for and preserving the
property of another. It may be very great or it may be very small. It
may be so great that no one would undertake it though the property
should be freely given him.
In 1800 the "Faithful Steward" was wrecked in Delaware bay near the
shore. It had on board a large number of passengers, emigrants, who
nearly all perished. Few lives were saved and all the property was
lost. One young man, of the kin of the writer, swam ashore through the
breakers. Before he left the vessel an old man offered him a stocking
full of gold if he cared to try and save it. Though young and vigorous
he would not undertake to try to save it for it. This was an extreme
case of risk and danger.
In another extreme case the service may be very small, reduced to the
minimum, for instance, caring for the gold of another by locking it up
in a fire and burglar-proof safe. For this simple service a
comparatively small charge is made. But caring for the property of
another is always some service that earns a reward great or small.
The nature of the service is not changed and the principle still holds
when the deposit is made with a person who gives ample pledges for its
full return; the principle still holds when the deposit is made in a
farm and secured there by mortgage, making it safer than in the iron
vault.
The true ethical principle, equity between man and man, requires that
the holder of the property of another shall be compensated by the
owner of the property for his services in caring for and preserving
it. The amount of compensation depends on the difficult or favorable
conditions attending its care. These conditions greatly vary, perhaps
in no two cases are exactly alike, and so there can be no fixed price
or rate at which one will receive and care for the property of
another. The extreme limit of liberality permitted is that he may care
for the property of another for nothing. He is not permitted to pay a
price for the privilege. The revealed divine law, true ethics and
equity and duty of self preservation forbid him. Perfect preservation
of any amount, large or small, for any time, long or short, whatever
the incidental advantages to the borrower, is the highest compensation
a borrower is permitted to give for any loan. The demand for more than
this by the owner is to be resisted as unjust and oppressive.
An express company receives a package of money for which it receipts
and becomes responsible and agrees to deliver to the owner at some
distant point. For this service it receives compensation in accordance
with the amount of service. If the conditions are dangerous and the
distance great the charge is large. If the conditions are very
favorable and safe the charges are small.
If the amount of service is reduced to the minimum, in rare cases, no
charge may be made. But that a price should be paid for the privilege
of caring for and conveying it, is inconsistent with the management
of an honest business. The purpose would be either to rob the owner of
his wealth or to rob the employes of their services.
An insurance company undertakes to protect a property for a term of
years, to a distant date. A rate is given for protection from a single
element, as fire. If all destructive agents are included the rate is
higher. The rate is higher for a long than a short period. All the
business world recognize the value of this service and nearly every
kind of property may now be insured. The premium is cheerfully paid by
the owner of the property for the service rendered him. It is a real
and valuable service to have his property protected, preserved, or
restored, so that it cannot be lost before the distant date. It is
conceivable that a property might be so indestructible that the risk
would be practically nothing and a policy might be issued without a
premium, but that a price should be paid for the privilege of
protecting any property is utterly inconsistent with rational
insurance.
Now usury presumes to reverse this ethical order and requires that the
insurance company shall pay the owner of the property for the
privilege of protecting it. Under usury the property given into the
care of another, and called a loan, must be perfectly protected and
preserved by the borrower, restored if lost, and returned in full to
the owner at the agreed distant date, and a price paid for the
privilege of performing the service.
The true ethical principle and equity in the relations between the
owner of a property and the one who holds, protects and preserves it,
require that the owner shall render to the holder a just compensation.
This will vary in different conditions, it may be very small, it may
in rare cases be entirely eliminated; but they also utterly forbid
that the party rendering the service shall pay for the privilege of
serving.
One may submit to an injustice in order to gain an advantage. He can
do better for himself by submitting than by resisting. His employer
may be hard and oppressive but this is the best job he can get and he
holds on, but that does not justify the oppressions of the employer up
to the breaking point. It may be to the advantage of a borrower to
submit to the exactions of usury, that is, he may gain more wealth by
borrowing upon interest than not, but that does not relieve usury of
its oppression up to the breaking point when it can no longer be
endured. There is no better ethical basis for low interest than high
interest. Low rates of interest are oppressions that may be suffered
or endured for a possible gain, but high rates are intolerable. The
principle is the same whatever the rate of interest, whether it be low
or high. They only differ in the degrees of their severity.