contracting debt as a desperate
resource, without any fair prospect of ability to repay: debt and famine
run together in the mind of the poet Hesiod. The borrower is, in this
unhappy state, rather a distressed man soliciting aid than a solvent man
capable of making and fulfilling a contract. If he cannot find a friend
to make him a free gift in the former character, he will not, under the
latter character, obtain a loan from a stranger, except by the promise
of exorbitant interest, and by the fullest eventual power over his
person which he is in a condition to grant. In process of time a new
class of borrowers arise who demand money for temporary convenience or
profit, but with full prospect of repayment--a relation of lender and
borrower quite different from that of the earlier period, when it
presented itself in the repulsive form of misery on the one side, set
against the prospect of very large profit on the other. If the Germans
of the time of Tacitus looked to the condition of the poor debtors in
Gaul, reduced to servitude under a rich creditor, and swelling by
hundreds the crowd of his attendants, they would not be disposed to
regret their own ignorance of the practice of money-lending. How much
the interest of money was then regarded as an undue profit extorted from
distress is powerfully illustrated by the old Jewish law; the Jew being
permitted to take interest from foreigners--whom the lawgiver did not
think himself obliged to protect--but not from his own countrymen. The
_Koran_ follows out this point of view consistently, and prohibits the
taking of interest altogether. In most other nations laws have been made
to limit the rate of interest, and at Rome especially the legal rate was
successively lowered--though it seems, as might have been expected, that
the restrictive ordinances were constantly eluded. All such restrictions
have been intended for the protection of debtors; an effect which large
experience proves them never to produce, unless it be called protection
to render the obtaining of money on loan impracticable for the most
distressed borrowers. But there was another effect which they _did_
tend to produce--they softened down the primitive antipathy against the
practice generally, and confined the odious name of usury to loans lent
above the fixed legal rate.

In this way alone could they operate beneficially, and their tendency to
counterwork the previous feeling was at that time not unimportant,