methods and conditions of human progress and of scientific inquiry; the highest virtues of whose civilizations are the worst vices of the new; whose propositions were fancies, and whose conclusions fables, was it strange that, when they came to be authorities in the Church as well as in the Schools, a night of intense darkness settled over Europe, a darkness which could never have been dispelled, but for the new races in whom a sense of duty, and the worth of man apart from his relations to the State, were most potent springs of action, and but for whom the picture presented by Western Asia might have been that presented to-day by those portions of Europe still occupied by what are termed the Latin Races?

The existence of independent commercial communities in constant intercourse, having similar objects and pursuits, and acting and reacting upon each other, laid the foundation, not only of the laws of nations, but of those economic and political systems which so strikingly distinguish modern from ancient society. Their passion for luxury and wealth could only be gratified by the possession of the precious metals, of which their own countries furnished but a scanty supply. These are the only materials out of which races unskilled in the mechanic arts can easily create articles of beauty and ornament, and which can be transported to the most distant points at small cost compared with their value. From the want of highways into the interior, the most important productions of Northern and Western Europe had a commercial value only along the navigable water-lines. Their wealth, therefore, necessarily came to be largely measured by the amount of gold and silver they possessed; and, in accordance with the spirit of the age, in which, from the teachings of the Church-which had assumed nothing less than entire authority in affairs, human as well as divine - the protective sentiment or idea was carried into, and sought to be enforced in every walk and department of life. It was regarded as a proper function of government to reenforce by legal enactments individual enterprises in bringing the precious metals into, and retaining them within the country. The error consisted, not in an undue importance attached to the precious metals, and the desirableness of their possession, but in the methods by which it was sought to secure them. The nations had not then, if they have yet, learned

that production must be in ratio to the freedom enjoyed by their people, intellectual, political, and religious; and that, as all balances in trade are always payable in coin, the people producing the greatest amount of merchandise will always have, relatively, the greatest amount of the precious metals; and that, consequently, the wisest policy is to leave their articulations perfectly free. The amount of the precious metals of a nation is not to be measured by that which it actually has in hand, but by the quantity of them to which it has the right of possession. A capitalist may not have a dollar in hand who has millions loaned and payable in coin, at call. At the time when what is called the Mercantile System was in full vigor, usury was forbidden by law as well as by the teachings of religion. Had it been allowed, the political and religious disturbances which almost universally prevailed would have rendered it wholly unsafe for one people to have intrusted large amounts of capital to the safekeeping of another, and, perhaps, far distant one. At that time, usury, which now plays such a transcendent part in human affairs, was practised only by Jews and Lombards, and was often, itself, a fruitful cause of social disturbance.1

1 The subject of usury is well fitted to form one of the most interesting chapters in the history of mankind. Upon none has there been a wider difference of opinion; of none has the importance been so little appreciated and understood; none has been a more fruitful source of political and social disquiet; and none has presented to legislators more difficult problems for solution.

The earliest historical reference to the subject is to be found in the Mosaic law: "If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury."- Exodus xxii. 25. "Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury: unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury, that the Lord thy God may bless thee." - Deuteronomy xxiii. 19, 20. These extracts recognize the abstract lawfulness of usury. Aristotle forbade it as against nature, that is, against the dignity of citizenship. As the Greeks, however, were inclined to nautical adventure and to commerce, the use of money in their operations was indispensable; and, as the teachings of their philosophers carried very little moral obligation, usury was an almost universal practice among them, nor do there seem to have been any legal enactments against it. From the frequency of civil and political commotions, the rates charged were necessarily high. With the Romans, usury was practised from the foundation of the city. By the Twelve Tables, which probably did little more than embody the customary law, the rate for the use of money was fixed at twelve per cent. The penalty imposed for exacting a greater rate was the forfeiture of three times the amount usuriously taken. Such rate, for a new people, was not excessive, and would undoubtedly have given no sufficient ground of complaint but

The principles of the Mercantile System, as set out by Smith, were as follows:

"Two principles being established, that wealth consisted in gold and silver; and that these metals were brought into a country

for the terrible penalties which followed the non-payment of the debt. "The cruelty," says Gibbon, "of the Twelve Tables against insolvent debtors still remains to be told. After judicial proof or confession of debt, thirty days of grace were allowed before a Roman was delivered into the power of his fellowcitizen. In this private prison, twelve ounces of rice was his daily food; he might be bound with a chain of fifteen pounds' weight, and his misery was thrice exposed in the market-place to solicit the compassion of his friends and countrymen. At the expiration of sixty days, the debt was discharged by the loss of liberty or life; the insolvent debtor was either put to death or sold into foreign slavery beyond the Tiber: but, if several creditors were alike obstinate and unrelenting, they might legally dismember his body, and satiate their revenge by this horrid partition."-Decline and Fall of the Roman Empire, Chap. xliv.

Although the severity of the Roman law in reference to usury became in time greatly mitigated, usury under the Empire as well as under the Republic was a standing grievance, and was one of the most difficult problems that engaged the attention of the government. In the year 407, U. C., the rate was lowered to five per cent. In the year 412, U. C., the taking of interest at any rate was forbidden. This, like all similar laws, wherever enacted, was almost wholly inoperative. Usury continued to be practised, the rates charged being regulated according to the nature and risk of the transaction. Under the dictatorship of Sulla, the rate was fixed at three per cent. Julius Cæsar attempted to control it by police regulations. All such attempts, which were utterly futile, only served to show the difficult nature of the subject with which they dealt. They only aggravated the evils which they sought to cure. In the reign of the Emperor Tiberius, the city was threatened with insurrection by those oppressed by the exorbitant rates which continued to be charged. "Usury," says Gibbon, "the intolerable grievance of Rome, was discouraged by the Twelve Tables, and abolished by the clamors of the people. It was revived by their wants and idleness; tolerated by the discretion of the prætors; and finally determined by the Code of Justinian. By that code, persons of illustrious rank were confined to the moderate rate of four per cent; six was pronounced to be the ordinary and legal standard of interest; eight was allowed for the convenience of manufacturers and merchants; twelve was granted to nautical insurance, which the wiser ancients had not attempted to define. But, except in this perilous adventure, the practice of exorbitant usury was severely restrained. The most simple interest was condemned by the clergy of the East and West; but the sense of mutual benefit, which had triumphed over the laws of the Republic, has resisted with equal firmness the decrees of the Church, and even the prejudices of mankind." - Decline and Fall of the Roman Empire, Chap. xliv.

Usury, among the ancients, does not appear to have been regarded as morally wrong. With the Hebrews, it might be practised with the Gentiles. With the Greek, it was against nature, that is, was unworthy of a free citizen. It might be practised by slaves, or by persons occupying an inferior political position, from whom the duties of the citizen were not required. With him, virtue

which had no mines, only by the balance of trade,' or by export. ing to a greater value than it imported, it necessarily became the great object of Political Economy to diminish as much as possible

was the synonyme of the modern word "honor." Neither term raised or involved moral distinctions. Usury was detested by the Romans, chiefly from the cruelties to which debtors were exposed. It was, perhaps, from such a sentiment that Cato made his famous reply, when asked what he thought of the practice of usury. No sooner, however, had the Empire been converted to Christianity than its sinfulness came to be an established dogma. As the Hebrews were considered as constituting one family, between the members of which usury was not to be tolerated, so the early Christians regarded themselves in the same light, and applied to themselves the same rule; and the Church, so soon as it acquired sufficient power to speak authoritatively, declared it to be a crime punishable by the severest penalties. Upon the revival of learning, the teachings of Aristotle came in to reënforce most powerfully the Mosaic injunction; and, as for ages the Church was the paramount power, its teachings were accepted with blind and unreasoning submission.

It may seem remarkable that a principle or practice from which the Church, or the religious organizations at the present day, derive so vast an advantage, and upon which are acknowledged to rest the moral as well as the material welfare of society, should at the outset have encountered from them such bitter hostility. The wonder ceases when the condition of the race at the time of its conversion to Christianity, and the nature of the religious instinct, is considered. It was inevitable that the early Christians should regard themselves as one family, and apply to their condition the Mosaic rule. With such sentiments, the teachings of Aristotle would be eagerly accepted. The unlawfulness of usury having become a dogma, it was established for all time: for a dogma that is proper for one age must be proper for all ages. It was res judicata. To again raise the question, would have been to impugn the authority of the Church, - a presumption upon no account to be tolerated. While the Church denounced usury as a deadly sin, and thundered its anathemas against all offenders, for the discovery of whose crimes torture might be used, to whom the rites of religion were refused in their lifetime, and who were condemned to eternal punishment after death, the natural instinct of man still asserted itself. None but Churchmen or Schoolmen felt it to be a sin to receive compensation for the loan of that from which by its use they might derive an income; nor could a borrower see any reason why he should not pay a part of the advantage which a loan secured to him. If other articles of property, which might be returned, were chargeable for their use, it was naturally asked why a charge might not be

1 Smith has the folly to assume that Political Economy existed as a science as early as the fifteenth or sixteenth centuries! There was no more notion of it at the time he supposed, than there was of the laws of gravity. No higher or broader sentiment was involved in the efforts of a nation, three hundred years ago, to bring in and retain the precious metals within it, than that now felt by a miser to get and hoard all he can. Both act in obedience to a common instinct to accumulate the greatest possible amount of the highest form of property. The whole system about which Smith makes so much ado, and the idea that mediæval legislation in reference to the precious metals proceeded from, or represented any thing like, a deliberate study or investigation of the laws of money, or of Political Economy, are sheer absurdities.

the importations of foreign goods for home consumption, and to increase, as much as possible, the exportation of the produce of domestic industry. Its two great engines, therefore, for enriching

made for the use of money? It was replied, that when a horse, for example, was borrowed and returned, the use of the horse was an advantage distinct from the horse; and for such an advantage a charge might properly be made. But, when money was borrowed and used, the thing itself was consumed. It was no longer in the hands of the borrower, nor had it any value distinct from its use. When, therefore, the borrower returned a sum equal to the loan, he had done all that was required of him. To make him pay for the use of the money borrowed, was to make him pay for that which, as far as he was concerned, did not exist; that is, to make him pay something which he did not receive, or to make him pay twice for the same thing. Such arguments, however conclusive with the Churchmen, were not so readily appreciated by the people. The authority of the former, however, was sufficient to confine the loaning of money to the Jews; to whom, as beyond the pale of the Church, its reasoning did not apply. In this way this class was vested, as it were, with the monopoly of money-lending, and became the money-changers and bankers of the world. Nothing can be more striking than their continuance and success in a calling which subjected them not only to the denunciations of the Church, and to the contempt and hatred of all Christians, but to the rapacity and lawlessness of the feudal tyrants of the countries in which they sojourned. They were outside the protection of the law; and it was a virtue, rather than a crime, to rob and persecute them. Yet they still continued to acquire and hold the greater part of the money of the world. About the close of the eleventh century, however, upon the revival of commerce in the free cities of Italy, their inhabitants became so far emancipated from the teachings and rules of the Church that usury was not only tolerated, but held to be an honorable calling. Its practice was one of the causes of the marvellous progress of those cities. Florence became what London is at the present time, the monetary centre of the world. Their commercial spirit spread itself over the rest of Europe; and Italian bankers, known as the Lombards, soon became the rivals of the Jews, and were seated in every great mart of trade. It was from them that Lombard Street, in which they were chiefly collected in London, took its name. As they were Christians, and consequently tolerated, they soon eclipsed the Jews in their peculiar calling. The Church, however, did not change its attitude, nor was there any considerable amelioration in England of the laws against usury until 1546, in which its lawfulness was especially recognized by an act of Parliament. It was not till the Reformation, which emancipated the mind from the dogmas of the Church, that the subject of usury came to be treated in a manner which could lead to its proper solution. It could then be discussed upon its own merits. A large number of the leading reformers proclaimed its lawfulness; although to establish the rate to be charged was still considered to be, as it is to-day in many countries, a proper function of government. Even in the State of New York, the taking of more than seven per cent is punished by very severe penalties.

No proposition seems better established at the present time than that the charge for the use of money should, like that for all other kinds of property, be regulated by the demand; that the price of a horse, in the form of money, should be just as valuable to the holder as the horse. That so simple a truth should require ages to gain admittance into the mind or conviction of mankind must be almost wholly due to its teachers, and, in modern times, to Churchmen and Schoolmen. These classes have been the most formidable obstacles to the progress of society.