Luther was well aware that to lend at interest was already “usual” and even “common in all classes.”[262] It was also, as a Protestant contemporary complained in 1538, twice as prevalent in the Lutheran communities than among the Catholics.[263] Still Luther insists obstinately that, “it was a very idle objection, and one that any village sexton could dispose of when people pleaded the custom of the world contrary to the Word of God, or against what was right.… It is nothing new or strange that the world should be hopeless, accursed, damned; this it had always been and would ever remain. If you obey its behests, you also will go with it into the abyss of hell.”[264]
Though in his instructions to the pastors he condemns indiscriminately, as a “thief, robber and murderer,” everyone who charges interest, still he wants his teaching to be applied above all to the “great ogres in the world, who can never charge enough per cent.” “The sacrament and absolution” were to be denied them, and “when about to die they were to be left like the heathen and not granted Christian burial” unless they had first done penance. To the “small usurer it is true my sentence may sound terrible, I mean to such as take but five or six on the hundred.”[265]
All, however, whether the percentage they charge be small or great, he advises to bring their objections to him, or to some other minister, “or to a good lawyer,”[266] so as to learn the further reasons and particulars concerning the prohibition of receiving interest. Every pastor was to preach strongly and fearlessly on its general unlawfulness in order that he may not “go to the devil” with those of his flock who charge interest.
Not that Luther was very hopeful about the results of such preaching. “The whole world is full of usurers,” he said in 1542 in the Table-Talk, and to a friend who had asked him: “Why do not the princes punish such grievous usury and extortion?” Luther answers: “Surely, the princes and kings have other things to do; they have to feast, drink and hunt, and cannot attend to this.” “Things must soon come to a head and a great and unforeseen change take place! I hope, however, that the Last Day will soon make an end of it all.”[267]
As to his grounds for condemning interest, he declares in the same conversation: “Money is an unfruitful commodity which I cannot sell in such a way as to entitle me to a profit.” He is but re-echoing the axiom “Pecunia est sterilis,” etc., maintained all too long in learned Catholic circles. Hence, as he says in 1540, “Lending neither can nor ought to be a true trade or means of livelihood; nor do I believe the Emperor thinks so either.” Besides, “it is not enough in the sight of heaven to obey the laws of the Emperor.”[268] According to him God had positively forbidden in the Old Testament the charging of any interest, as contrary to the natural law and as oppressive and unlawful usury (Ex. xxii. 25; Lev. xxv. 36; Deut. xxiii. 19, etc.). In the New Testament Christ, so Luther thinks, solemnly confirmed the prohibition when He said in St. Matthew’s gospel: “Give to him that asketh thee and from him that would borrow of thee turn not away” (v. 42), and in St. Luke (vi. 35) still more emphatically: “Lend, hoping for nothing.”[269]
In the Old Law, however, the charging of interest was by no means absolutely forbidden to the Jews (Deut. xxiii. 19 f.), so that it could not be regarded as a thing repugnant to the natural law, though the Mosaic Code interdicted it among the Jews themselves. As for the New-Testament passages Luther had no right to infer any prohibition from them. Our Saviour, after speaking of offering the other cheek to the smiter, of giving also our cloak to him who would take away our coat, and of other instances of the exercise of extraordinary virtue, goes on to advise our lending without hope of return. But many understood this as a counsel, not as a command. Luther indeed says that thereby they were making nought of Christ’s doctrine. He insists that all these counsels were real commands, viz. commands to be ever ready to suffer injustice and to do good; the secular authorities were there to see that human society thereby suffered no harm. The Papists, however, and the scholastics looked upon these things in a different light. “The sophists had no reason for altering our Lord’s commands and for making out that they were ‘consilia’ as they term them.”[270] “They teach that Christ did not enjoin these things on all Christians, but only on the perfect, each one being free to keep them if he desires.” In this way the Papists do away with the doctrine of Christ; they thereby condemn, destroy and get rid of good works, whilst all the time accusing us of forbidding them; “hence it is that the world has got so full of monks, tonsures and Masses.”[271]—Yet, even if we take the words of Christ, as quoted, let us say, by St. Luke, and see in them a positive command, yet they would refer only to the social and economic conditions prevailing among the Jews at the time the words were spoken. According to certain commentators, moreover, the words have no reference to the question of interest, because, so they opine, “it was a question of relinquishing all claim not merely on the interest but on the capital itself.”[272]
The Jesuit theologians of the 16th and 17th centuries as a rule were careful to instance a number of cases in which the canonical prohibition of charging even a moderate rate of interest does not apply. They thus paved the way for the abrogation of the prohibition. Of this we have an instance in Iago Lainez, who in principle was strongly averse to the charging of interest. This theologian, who later became General of the Jesuits, when a preacher at the busy commercial city of Genoa, wrote (1553-1554) an essay on usury embodying the substance of his addresses to the merchants.[273] Lainez there points out that any damage accruing to the lender from the loan, and also the temporary absence of profit on it, constitutes a sufficient ground for demanding a moderate interest.[274] He also strongly insists that the lender, in compensation for his willingness to lend, may accept from the borrower a “voluntary” premium;[275] the lender, moreover, has a perfect right to safeguard himself by stipulating for a fine (pœna conventionalis) from the borrower should repayment be delayed. All this comes under the instances of “apparent usury,” which he enumerates: “Casus qui videntur usurarii et non sunt” (cap. 10).
Luther devotes no such prudent consideration to those exceptional cases. He was more inclined by nature harshly to vindicate the principles he had embraced than to seek how best to limit them in practice. “He did not take into account loans asked for, not from necessity, but for the purpose of making profit on the borrowed money”;[276] yet, after all, this was the very point on which the question turned in the early days of economic development. He discusses the lawfulness of a voluntary premium and comes to the conclusion that it is wrong. He scoffs at the lender, as a mere hypocrite, who argues: “The borrower is very thankful for such a loan and freely and without compulsion offers me 5, 6 or even 10 florins on the hundred.” “But even an adulteress and an adulterer,” says Luther in his usual vein, “are thankful and pleased with each other; a robber, too, does an assassin a great service when he helps him to commit highway robbery.” The borrower does the lender a similar criminal service and spiritual injury, for which no premium can make compensation.[277] As regards the case where the loan is not repaid at the specified time, Luther is, of course, of opinion that any real loss to the owner must be made good by the borrower. But now, he says, “they accept reimbursement for losses which they never suffered at all,” they simply calculate the interest on a loss which they may possibly suffer from not having back the money when the time comes for buying or paying. “In its efforts to make a certainty of what is uncertain, will not usury soon be the ruin of the world!”[278]
In the Table-Talk a friend, in 1542, raised an objection: If a man trades with the money lent him and makes 15 florins yearly, he must surely pay the lender something for this. Of this Luther, however, will not hear. “No, this is merely an accidental profit, and on accidentals no rule can be based.”[279] That the profit was “accidental” was, however, simply his theory.
In spite of all this Luther did make exceptions, though, in view of his rigid theory and reading of the Bible, it is difficult to see how he could justify them.