In no place was this inconvenience more felt than at the Romish court, even at a time when it boasted of divine infallibility; and nowhere was more care employed to remove it. A plan, therefore, was at length devised, by which the evil, as was supposed, would be banished. A capital was collected from which money was to be lent to the poor for a certain period on pledges without interest. This idea was indeed not new; for such establishments had long before been formed and supported by humane princes. The emperor Augustus, we are told, converted into a fund the surplus of the money which arose to the State from the confiscated property of criminals, and lent sums from it, without interest, to those who could pledge effects equal to double the amount[3]. Tiberius also advanced a large capital, from which those were supplied with money for three years, who could give security on lands equivalent to twice the value[4]. Alexander Severus reduced the interest of money by lending it at a low rate, and advancing sums to the poor without interest to purchase lands, and agreeing to receive payment from the produce of them[5].
These examples of the ancients were followed in modern Italy. In order to collect money, the popes conferred upon those who would contribute towards that object a great many fictitious advantages, which at any rate cost them nothing. By bulls and holy water they dispensed indulgences and eternal salvation; they permitted burthensome vows to be converted into donations to lending-houses; and authorised the rich who advanced them considerable sums to legitimate such of their children as were not born in wedlock. As an establishment of this kind required a great many servants, they endeavoured to procure these also on the same conditions; and they offered, besides the above-mentioned benefits, a great many others not worth notice, to those who would engage to discharge gratis the business of their new undertaking; but in cases of necessity they were to receive a moderate salary from the funds. This money was lent without interest for a certain time to the poor only, provided they could deposit proper pledges of sufficient value.
It was, however, soon observed that an establishment of this kind could neither be of extensive use nor of long duration. In order to prevent the secret lending of money, by the usurious arts which had begun to be practised, it was necessary that it should advance sums not only to those who were poor in the strictest sense of the word, but to those also who, to secure themselves from poverty, wished to undertake and carry on useful employments, and who for that purpose had need of capitals. However powerful the attractions might be, which, on account of the religious folly that then prevailed, induced people to make large contributions, they gradually lost their force, and the latter were lessened in proportion, especially as a spirit of reformation began soon after to break out in Germany, and to spread more and more into other countries. Even if a lending-house should not be exhausted by the maintenance of its servants, and various accidents that could not be guarded against, it was still necessary, at any rate, to borrow as much money at interest as might be sufficient to support the establishment. As it was impossible that it could relieve all the poor, the only method to be pursued was to prevent their increase, by encouraging trade, and by supplying those with money who wanted only a little to enable them to gain more, and who were in a condition and willing to pay a moderate interest. The pontiffs, therefore, at length resolved to allow the lending-houses to receive interest, not for the whole capitals which they lent, but only for a part, merely that they might raise as much money as might be sufficient to defray their expenses; and they now, for the first time, adopted the long-established maxim, that those who enjoy the benefits should assist to bear the burthen—a maxim which very clearly proves the legality of interest. When this opening was once made, one step more only was necessary to place the lending-houses on that judicious footing on which they would in all probability have been put by the inventor himself, had he not been under the influence of prejudice. In order that they might have sufficient stock in hand, it was thought proper to give to those who should advance them money a moderate interest, which they prudently concealed by blending it with the unavoidable expenses of the establishment, to which it indeed belonged, and which their debtors, by the practice a little before introduced, were obliged to make good. The lending-houses, therefore, gave and received interest. But that the odious name might be avoided, whatever interest was received, was said to be pro indemnitate; and this is the expression made use of in the papal bull.
All this, it must be confessed, was devised with much ingenuity: but persons of acuteness still discovered the concealed interest; and a violent contest soon arose respecting the legality of lending-houses, in which the greatest divines and jurists of the age took a part; and by which the old question, whether one might do anything wicked, or establish interest, in order to effect good, was again revived and examined. Fortunately for the pontifical court, the folly of mankind was still so great that a bull was sufficient to suppress, or at least to silence, the spirit of inquiry. The pope declared the holy mountains of piety, “sacri monti de pietà,” to be legal; and threatened those with his vengeance who dared to entertain any further doubts on the subject. All the cities now hastened to establish lending-houses; and their example was at length followed in other countries. Such, in a general view, is the history of these establishments: I shall now confirm it by the necessary proofs.
When under the appellation of lending-house we understand a public establishment where any person can borrow money upon pledges, either for or without interest, we must not compare it to the tabernæ argentariæ or mensæ nummulariæ of the Romans. These were banking-houses, at which the state and rich people caused their revenues to be paid, and on which they gave their creditors orders either to receive their debts in money, or to have the sums transferred in their own name, and to receive security for them. To assign over money and to pay money by a bill were called perscribere and rescribere; and an assignment or draft was called attributio. These argentarii, mensarii, nummularii, collybistæ and trapezitæ followed the same employment, therefore, as our cashiers or bankers. The former, like the latter, dealt in exchanges and discount; and in the same manner also they lent from their capital on interest, and gave interest themselves, in order that they might receive a greater. Those who among the ancients were enemies to the lending of money on interest brought these people into some disrepute; and the contempt entertained for them was probably increased by prejudice, though those nummarii who were established by government as public cashiers held so exalted a rank that some of them became consuls. Such banking-houses existed in the Italian States in the middle ages, about the year 1377. They were called apothecæ seu casanæ feneris[6], and in Germany Wechselbanke, banks of exchange; but they were not lending-houses in the sense in which I here understand them.
Equally distinct also from lending-houses were those banks established in the fourteenth century, in many cities of Italy, such, for example, as Florence, in order to raise public loans. Those who advanced money on that account received an obligation and monthly interest, which on no pretext could be refused, even if the creditor had been guilty of any crime. These obligations were soon sold with advantage, but oftener with loss; and the price of them rose and fell like that of the English stocks, but not so rapidly; and theologists disputed whether one could with a safe conscience purchase an obligation at less than the stated value, from a proprietor who was obliged to dispose of it for ready specie. If the State was desirous or under the necessity of repaying the money, it availed itself of that regale called by Leyser regale falsæ monetæ, and returned the capital in money of an inferior value. This establishment was confirmed, at least at Florence, by the pontiff, who subjected those who should commit any fraud in it to ecclesiastical punishment and a fine, which was to be carried to the papal treasury: but long before that period the republic of Genoa had raised a loan by mortgaging the public revenues. I have been more particular on this subject, because Le Bret[7] calls these banks, very improperly, lending-houses; and in order to show to what a degree of perfection the princely art of contracting and paying debts was brought so early as the fourteenth century.
Those who have as yet determined the origin of lending-houses with the greatest exactness, place it, as Dorotheus Ascanius, that is Matthias Zimmermann[8], does, in the time of Pope Pius II. or Paul II., who filled the papal chair from 1464 to 1471; and the reason for supposing it to have been under the pontificate of the latter is, because Leo X. in his bull, which I shall quote hereafter, mentions that pope as the first who confirmed an establishment of this kind. As the above account did not appear to me satisfactory, and as I knew before that the oldest lending-houses in Italy were under the inspection of the Franciscans, I consulted the Annals of the Seraphic Order, with full expectation that this service would not be omitted in that work; and I indeed found in it more materials towards the history of lending-houses than has ever been collected, as far as I know, by any other person.
As complaints against usury, which was practised by many Christians, but particularly by the Jews, became louder and more public in Italy in the fifteenth century, Barnabas Interamnensis, probably of Terni, first conceived the idea of establishing a lending-house. This man was originally a physician; had been admitted to the degree of doctor; was held in great respect on account of his learning; became a Minorite, or Franciscan; acquired in that situation every rank of honour, and died, in the first monastery of this order at Assisi (in monte Subasio[9]), in the year 1474. While he was employed in preaching under Pope Pius II. at Perugia, in the territories of the Church, and observed how much the poor were oppressed by the usurious dealings of the Jews, he made a proposal for raising a capital by collections, in order to lend from it on pledges to the indigent, who should give monthly, for the use of the money borrowed, as much interest as might be necessary to pay the servants employed in this establishment, and to support it. Fortunatus de Copolis, an able jurist of Perugia, who after the death of his wife became also a Franciscan, approved of this plan, and offered to assist in putting it into execution. To be assured in regard to an undertaking which seemed to approach so near to the lending on interest, both these persons laid their plan before the university of that place, and requested to know whether such an establishment could be allowed; and an answer being given in the affirmative, a considerable sum was soon collected by preaching, so that there was a sufficiency to open a lending-house. Notwithstanding this sanction, many were displeased with the design, and considered the receiving of interest, however small it might be, as a species of usury. Those who exclaimed most against it were the Dominicans (ex ordine Prædicatorum): and they seem to have continued to preach in opposition to it, till they were compelled by Leo X. to be silent; while the Franciscans, on the other hand, defended it, and endeavoured to make it be generally adopted. The dispute became more violent when, at the end of a year, after all expenses were paid, a considerable surplus was found remaining; and as the managers did not know how to dispose of it, they at length thought proper to divide it amongst the servants, because no fixed salaries had been appointed for them. Such was the method first pursued at Perugia; but in other places the annual overplus was employed in a different manner. The particular year when this establishment began to be formed I have nowhere found marked; but as it was in the time of Pius II., it must have been in 1464, or before that period[10]. It is very remarkable that this pontiff confirmed the lending-house at Orvieto (Urbs Vetus) so early as the above year; whereas that at Perugia was sanctioned, for the first time, by Pope Paul II. in 1467. It is singular also that Leo X., in his confirmation of this establishment, mentions Paul II., Sixtus IV., Innocent VIII., Alexander VI. and Julius II.; but not Pius II. Pope Sixtus IV., as Wadding says, confirmed in 1472 the lending-house at Viterbo, which had, however, been begun so early as 1469, by Franciscus de Viterbo, a Minorite[11].
In the year 1479 Sixtus IV. confirmed the lending-house which had been established at Savona, the place of his birth, upon the same plan as that at Perugia. The bull issued for this purpose is the first pontifical confirmation ever printed[12]; for that obtained for Perugia was not, as we are told by the editor, to be found in the archives there in 1618, the time when the other was printed. I have never found the confirmation of those at Orvieto and Viterbo. Ascianus sought for them, but without success, in Bullarium Magnum Cherubini, and they are not mentioned by Sixtus. This pontiff, in his bull, laments that the great expenses to which he was subjected did not permit him to relieve his countrymen with money, but that he would grant to the lending-house so many spiritual advantages, as should induce the faithful to contribute towards its support; and that it was his desire that money should be lent from it to those who would assist gratis during a year in the business which it required. If none could be found to serve on these conditions, a moderate salary was to be given. He added a clause also respecting pledges; but passed over in silence that the debtors were to contribute anything for the support of the institution by paying interest, which Barnabas, whose name does not occur in the bull, introduced however at Perugia, and which the pope tacitly approved.
The greater part of the lending-houses in Italy were established in the fifteenth and following centuries by the Minorites Marcus Bononiensis, Michael a Carcano[13], Cherubinus Spoletanus, Jacobus de Marchia, Antonius Vercellensis, Angelus a Clavasio, and above all, Bernardinus Tomitano, named also Feltrensis and Parvulus. This man was born at Feltri, in the country of Treviso, in the year 1439. His father was called Donato Tomitano, and his mother Corona Rambaldoni; they were both of distinguished families, though some assert that he was of low extraction, and a native of Tomi, a small place near Feltri, on which account he got the name of Tomitano. The name of Parvulus arose from his diminutive stature, which he sometimes made a subject of pleasantry[14]. This much at any rate is certain, that he had received a good education. In 1456, when seventeen years of age, he suffered his instructors, contrary to the inclination of his father, to carry him to Padua, to be entered in the order of the Minorites; and on this occasion he changed his christian-name Martin into Bernardinus. As he was a good speaker, he was employed by his order in travelling through Italy and preaching. He was heard with applause, and in many parts the people almost paid him divine honours. The chief object of his sermons was to banish gaming, intemperance, and extravagance of dress; but he above all attacked the Jews, and excited such a hatred against them, that the governments in many places were obliged to entreat or to compel him either to quit their territories or not to preach in opposition to these unfortunate people, whom the crowds he collected threatened to massacre; and sometimes when he visited cities where there were rich Jews and persons who were connected with them in trade, he was in danger of losing even his own life. Taking advantage of this general antipathy to the Jews, he exerted himself, after the example of Barnabas, his brother Minorite, to get lending-houses established, and died at Pavia in the year 1494. The Minorites played a number of juggling tricks with his body, pretending that it performed miracles, by which means they procured him a place in the catalogue of the saints; and to render his name still more lasting, some of his sermons have been printed among the works of the writers of the Franciscan order[15].