The primitive Romans had not any
laws to regulate the rate of usury.
[35]
In the contests which arose on
this subject between the plebeians and the patricians, even in the
sedition on the Mons Sacer, nothing
was alleged, on the one hand, but justice, and on the other, the severity of contracts.
[36]
They then only followed private agreements, which, I believe, were
most commonly at twelve per cent per annum. My reason is, that in the
ancient language of the Romans, interest at six per cent was called
half-usury, and interest at three per cent, quarter-usury.
[37]
Total usury must, therefore, have been interest at twelve per cent.
But if it be asked how such great interest could be established
among a people almost without commerce, I answer that this people, being
very often obliged to go to war without pay, were under a frequent
necessity of borrowing: and as they incessantly made happy expeditions,
they were commonly well able to pay. This is visible from the recital of
the contests which arose on this subject; they did not then disagree
concerning the avarice of creditors, but said that those who complained
might have been able to pay, had they lived in a more regular
manner.
[38]
They then made laws which had only an influence on the present
situation of affairs: they ordained, for instance, that those who
enrolled themselves for the war they were engaged in should not be
molested by their creditors; that those who were in prison should be set
at liberty; that the most indigent should be sent into the colonies; and
sometimes they opened the public treasury. The people, being eased of
their present burdens, became appeased; and as they required nothing for
the future, the senate was far from providing against it.
At the time when the senate maintained the cause of usury with so
much constancy, the Romans were distinguished by an extreme love of
frugality, poverty, and moderation: but the constitution was such that
the principal citizens alone supported all the expenses of government,
while the common people paid nothing. How, then, was it possible to
deprive the former of the liberty of pursuing their debtors, and at the
same time to oblige them to execute their offices, and to support the
republic amidst its most pressing necessities?
Tacitus says that the law of the Twelve Tables fixed the interest at
one per cent.
[39]
It is evident that he was mistaken, and that he took
another law, of which I am going to speak, for the law of the Twelve
Tables. If this had been regulated in the law of the Twelve Tables, why
did they not make use of its authority in the disputes which afterwards
arose between the creditors and debtors? We find no vestige of this law
upon lending at interest; and let us have ever so little knowledge of
the history of Rome, we shall see that a law like this could not be the
work of the decemvirs.
The Licinian law, made eighty-five years after that of the Twelve
Tables,
[40]
was one of those temporary regulations of which we have
spoken. It ordained that what had been paid for interest should be
deducted from the principal, and the rest discharged by three equal
payments.
In the year of Rome 398, the tribunes Duellius and Menenius caused a
law to be passed which reduced the interest to one per cent per
annum.
[41]
it is this law which Tacitus confounds with that of the
Twelve Tables,
[42]
and this was the first ever made by the Romans to fix
the rate of interest. Ten years after,
[43]
this usury was reduced
one-half,
[44]
and in the end entirely abolished;
[45]
and if we may
believe some authors whom Livy had read, this was under the consulate of
C. Martius Rutilius and Q. Servilius, in the year of Rome 413.
[46]
It fared with this law as with all those in which the legislator
carries things to excess: an infinite number of ways were found to elude
it. They enacted, therefore, many others to confirm, correct, and
temper it. Sometimes they quitted the laws to follow the common
practice; at others, the common practice to follow the laws; but in this
case, custom easily prevailed.
[47]
When a man wanted to borrow, he found
an obstacle in the very law made in his favour; this law must be evaded
by the person it was made to succour, and by the person condemned.
Sempronius Asellus, the prætor, having permitted the debtors to act in
conformity to the laws,
[48]
was slain by the creditors for attempting to
revive the memory of a severity that could no longer be supported.
[49]
I quit the city, in order to cast an eye on the provinces.
I have somewhere else observed that the Roman provinces were
exhausted by a severe and arbitrary government.
[50]
But this is not all;
they were also ruined by a most shocking usury.
Cicero takes notice that the inhabitants of Salamis wanted to borrow
a sum of money at Rome, but could not, because of the Gabinian law.
[51]
We must, therefore, inquire into the nature of this law.
As soon as lending upon interest was forbidden at Rome, they
contrived all sort of means to elude the law;
[52]
and as their
allies,
[53]
and the Latins, were not subject to the civil laws of the
Romans, they employed a Latin, or an ally, to lend his name, and
personate the creditor. The law, therefore, had only subjected the
creditors to a matter of form, and the public were not relieved.
The people complained of this artifice; and Marius Sempronius,
tribune of the people, by the authority of the senate, caused a
plebiscitum to be enacted to this purport, that in regard to loans the
laws prohibiting usury between Roman citizens should equally take place
between a citizen and an ally, or a citizen and a Latin.
[54]
At that time they gave the name of allies to the people of Italy
properly so called, which extended as far as the Arno and the Rubicon,
and was not governed in the form of a Roman province.
It is an observation of Tacitus
[55]
that new frauds were constantly
committed, whenever any laws were passed for the preventing of usury.
Finding themselves debarred from lending or borrowing in the name of an
ally, they soon contrived to borrow of some inhabitant of the provinces.
To remedy this abuse they were obliged to enact a new law; and
Gabinius
[56]
upon the passing of that famous law, which was intended to
prevent the corruption of suffrages, must naturally have reflected that
the best way to attain his end was to discourage the lending upon
interest: these were two objects naturally connected; for usury always
increased at the time of elections,
[57]
because they stood in need of
money to bribe the voters. It is plain that the Gabinian law had
extended the Senatus Consultum of Marcus Sempronius to the provinces,
since the people of Salamis could not borrow money at Rome because of
that very law. Brutus, under fictitious names, lent them some money
[58]
at four per cent a month,
[59]
and obtained for that purpose two Senatus
Consulta; in the former of which it was expressly mentioned that this
loan should not be considered as an evasion of the law,
[60]
and that the
governor of Sicily should determine according to the stipulations
mentioned in the bond of the Salaminians.
As lending upon interest was forbidden by the Gabinian law between
provincials and Roman citizens, and the latter at that time had all the
money of the globe in their hands, there was a necessity for tempting
them with the bait of extravagant interest, to the end that the
avaricious might thus lose sight of the danger of losing their money.
And as they were men of great power in Rome, who awed the magistrates
and overruled the laws, they were emboldened to lend, and to extort
great usury. Hence the provinces were successively ravaged by every one
who had any credit in Rome: and as each governor, at entering upon his
province, published his edict
[61]
wherein he fixed the rate of interest
in what manner he pleased, the legislature played into the hands of
avarice, and the latter served the mean purposes of the legislator.
But the public business must be carried on; and wherever a total
inaction obtains, the state is undone. On some occasions the towns, the
corporate bodies and societies, as well as private people, were under
the necessity of borrowing — a necessity but too urgent, were it only
to repair the ravages of armies, the rapacity of magistrates, the
extortions of collectors, and the corrupt practices daily introduced;
for never was there at one period so much poverty and opulence. The
senate, being possessed of the executive power, granted, through
necessity, and oftentimes through favour, a permission of borrowing from
Roman citizens, so as to enact decrees for that particular purpose. But
even these decrees were discredited by the law; for they might give
occasion to the people's insisting upon new rates of interest, which
would augment the danger of losing the capital, while they made a
further extension of usury.
[62]
I shall ever repeat it, that mankind are
governed not by extremes, but by principles of moderation.
He pays least, says Ulpian, who pays latest.
[63]
This decides the
question whether interest be lawful; that is, whether the creditor can
sell time, and the debtor buy it.
