FRANCIS BACON.
From the short dissertation on usury found in the works of Bacon we
learn that the taking of usury was a recognized evil and odious in his
time.
It will be noticed that he eliminates risk from usury and sees that
"In the game of certainties against uncertainties" usury is sure to
win. It will be noticed also that he mentions only economic arguments
against usury. He does not give ethical and moral reasons. He does not
mention the want of sympathy for the poor and their oppression.
In his statement of the arguments in defence he implies that the
usurer is less grasping than the man he knew who said "The devil take
this usury."
This is the very opposite of the picture of the usurer given by his
contemporary, Shakespeare, in his character, Shylock.
His specious argument for the regulation of the evil "For some small
matter for the license" is familiar to modern reformers in connection
with other sins. He speaks of the reduction of the usury rates as a
general good and believes "It will no whit discourage the lender."
Wrong-doers in all the ages have been ready to part with a portion of
the profits of an unlawful business for the cover of the authority of
the state.
The following is his discussion in full
OF USURY.
"Many have made witty invectives against usury. They say that it is a
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 praesepibus arcent._
"That the usurer breaketh the first law that was made for mankind
after the fall, which was, _in sudore vultus tui comedes panem tuum;
non in sudore vultus alieni_; (in the sweat of thy face shalt thou eat
bread--not in the sweat of another's face.) That usurers should have
orange-tawney bonnets, because they do Judaize. That it is against
nature for money to beget money; and the like. I say only this, that
usury is a _concessum propter duritiem cordis_; (a thing allowed by
reason of the hardness of men's hearts): 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 the 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, 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_ of wealth in a state. The second, that it makes poor
merchants. For as a farmer can not husband his ground so well if he
sit at a great rent, so the merchant can not drive his trade so well,
if he sit 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 wealth or 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 purchasing or merchandising; 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, man'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 monied man in the
country that would say: 'The devil take this usury, it keeps us from
forfeitures of mortagages 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 would 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.
"To speak now of the reformation and reiglement of usury; how the
discommodities of it may be best avoided, and the commodities of it
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 monied men to lend to the merchants for
the continuing and quickening of trade. This can not 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 interest; 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 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 great 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 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 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 in 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 monies in the country. So as the license of nine will not
suck away the current rate of five; for no man will lend his monies
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."
(Works of Francis Bacon, Vol. 12, Page 218.)