Montesquieu

The early Romans had no laws to regu­late the rate of usury.1 In the dis­pu­tes that arose on this sub­ject bet­ween ple­beians and patri­cians, even in the sedi­tion of the Mons Sacer,2 only good faith was alle­ged on one side, and on the other only the har­sh­ness of contracts.

So they fol­lo­wed indi­vi­dual conven­tions, and I think the most ordi­nary ones were at twelve per­cent per annum. My rea­son is that in the old lan­guage3 of the Romans, inte­rest at six per­cent was cal­led half-usury, inte­rest at three per­cent quar­ter-usury : full usury was the­re­fore inte­rest at twelve per­cent.

Now if you ask how such enor­mous usu­ries could have become esta­bli­shed among a peo­ple which was almost without com­merce, I will say that this peo­ple, very often obli­ged to go to war without wages, very often nee­ded to bor­row ; and that, regu­larly making feli­ci­tous expe­di­tions, it very often could rea­dily repay. And that is clear in the rela­tion of the dis­pu­tes that arose in this regard : there is no disa­gree­ment on the ava­rice of those who lent, but they say that those who com­plai­ned could have paid had they lived pru­dently.4

Therefore, they made laws that bore only on the pre­sent situa­tion : they orde­red, for exam­ple, that those who enlis­ted for the war that had to be sus­tai­ned would not be pur­sued by their cre­di­tors, that those who were in irons would be deli­ve­red, and that the most indi­gent would be taken to the colo­nies ; some­ti­mes they ope­ned the public trea­sury. The peo­ple were cal­med by relief from pre­sent ills, and as they asked for nothing for the future, the senate was far from anti­ci­pa­ting it.

At the time when the senate was so stead­fastly defen­ding the cause of usury, the love of poverty, of fru­ga­lity, and of medio­crity was extreme among the Romans ; but such was the cons­ti­tu­tion that the prin­ci­pal citi­zens bore all the costs of the state, and the popu­lace paid nothing. How could the prin­ci­pals be depri­ved of the pur­suit of their deb­tors, and be asked to acquit their res­pon­si­bi­li­ties, and under­write the pres­sing needs of the repu­blic ?

Tacitus says that the law of the Twelve Tables set inte­rest at one per­cent per annum. Obviously he was wrong, and had taken for the law of the Twelve Tables a dif­fe­rent law which I shall now dis­cuss. If the law of the Twelve Tables had so deter­mi­ned, why, in the dis­pu­tes that arose bet­ween cre­di­tors and deb­tors, would they not have invo­ked its autho­rity ? We find no ves­tige of this law on len­ding at inte­rest, and anyone who is ver­sed in Roman his­tory will see that such a law could not have been the work of the decem­virs.

The Lician law,5 made eighty-five years after the law of the Twelve Tables, was one of the tem­po­rary laws which we have men­tio­ned. It decreed that what had been paid in inte­rest should be deduc­ted from the capi­tal, the rest to be paid off in three equal pay­ments.

In the Roman year 398, the tri­bu­nes Duellius and Menenius put through a law that redu­ced inte­rest to one per­cent per annum.6 It is this law that Tacitus7 confu­ses with the law of the Twelve Tables, and it is the first one enac­ted among the Romans to set the inte­rest rate. Ten years later,8 this usury was redu­ced to half that9 ; later it was com­ple­tely sup­pres­sed10 ; and if we are to believe some wri­ters whom Livy had read, it was under the consu­late11 of C. Martius Rutilius and P. Servillius, in the Roman year 413.

This law had the same fate as all laws where the legis­la­tor took things too far : means were found to evade it. It took many others to confirm, cor­rect, and tem­per it. Sometimes they left laws aside to fol­low the prac­ti­ces,12 some­ti­mes they left prac­ti­ces aside to fol­low the laws ; but in this case prac­tice was easily to pre­vail. When a man bor­rows, he finds an obs­ta­cle in the very law that is made in his favor ; that law has against it both the per­son it helps and the per­son it condemns. Prætor Sempronius Asellus, having allo­wed deb­tors to act in accor­dance with the laws,13 was killed by the cre­di­tors14 for wan­ting to revive the memory of a rigi­dity that could no lon­ger be main­tai­ned.

Under Sulla, L. Valerius Flaccus made a law allo­wing inte­rest at three per­cent per annum. This law, the most equi­ta­ble and mode­rate of those the Romans enac­ted on this sub­ject, is disap­pro­ved by Paterculus.15 But if this law was neces­sary to the repu­blic, if it was use­ful to all indi­vi­duals, and if it for­med a com­mu­ni­ca­tion of conve­nience bet­ween the deb­tor and the bor­ro­wer, it was not unjust.

He who pays later, says Ulpian,16 pays less : that deci­des the ques­tion of whe­ther inte­rest is legi­ti­mate, that is to say, whe­ther the cre­di­tor can sell time, and the deb­tor buy it.17

Usury and interest meant the same thing to the Romans.

See Dionysius of Halicarnassus, who has described it so well.

Usuræ semisses, trientes, quadrantes. See on this subject the various titles of the Digest and of the code De usuris, and above all law 17 with its note following De usuris.

See the speech of Appius on this subject in Dionysius of Halicarnassus.

In the Roman year 388. Livy, book VI.

Unciaria usura. Livy, book VII.

Annals, book VI.

Under the consulate of L. Manlius Torquatus and C. Plautius, according to Livy, book VII, and that is the law of which Tacitus speaks, Annals, book VI.

Semiunciaria usura.

As Tacitus says, Annals, book VI.

The law on it was made on the pursuit of M. Genucius, tribune of the people, Livy, book VII at the end.

Veteri jam more fænus receptum erat, Appian, Civil Wars, book I.

Permisit eos legibus agere, Appian, Civil Wars, book I, and Epitome of Livy, book LXIV.

Roman year 663.

Turpissimæ legis autor, quâ creditoribus solvi quadrantem jusserat, book II. Some writers have interpreted this passage as if the law of Flaccus had ordered payment of only one-quarter of the capital ; but it seems to me that that was not the language of the Latin writers : where reduction of debts was concerned, they used the words quadrans, triens, etc. to denote usury, and tertia pars and quarta pars, to denote capital. (2) The consul Valerius is said to be the author of a law which a seditious tribune would scarcely have made. (3) This was in the fury of the civil war, and it was more a matter of maintaining the public credit than destroying it ; finally, this civil war was not over the abolishment of debts.

Law 12, following De verborum significatione [‘on the meaning of words’].

[In the edition of 1758, chapter XXII continues with Annex 19.]