cit._, p. 35.]

[Footnote 2: _E.g._ Perin, _Premiers Principes d'Economie politique_,
p. 305; Claudio Jannet, _Capital Speculation et Finance_, p. 83; De
Metz-Noblat, _Lois economiques_, p. 293.]

[Footnote 3: Rambaud, _op. cit._, p. 69.]

Sec. 5. _Extrinsic Titles_.

Usury, therefore, was prohibited in all cases. Many people at the
present day think that the prohibition of usury was the same thing
as the prohibition of interest. There could not be a greater mistake.
While usury was in all circumstances condemned, interest was in every
case allowed. The justification of interest rested on precisely the
same ground as the prohibition of usury, namely, the observance of the
equality of commutative justice. It was unjust that a greater price
should be paid for the loan of a sum of money than the amount lent;
but it was no less unjust that the lender should find himself in a
worse position because of his having made the loan. In other words,
the consideration for the loan could not be increased because of any
special benefit which it conferred on the borrower, but it could
be increased on account of any special damage suffered by the
lender--precisely the same rule as we have seen applied in the case
of sales. The borrower must, in addition to the repayment of the loan,
indemnify the lender for any damage he had suffered. The measure of
the damage was the difference between the lender's condition before
the loan was made and after it had been repaid--in other words, he
was entitled to compensation for the difference in his condition
occasioned by the transaction--_id quod interest_.

Before we discuss interest properly so called, we must say a word
about another analogous but not identical title of compensation,
namely, the _poena conventionalis_. It was a very general practice,
about the legitimacy of which the scholastics do not seem to have had
any doubt, to attach to the original contract of loan an agreement
that a penalty should be paid in case of default in the repayment
of the loan at the stipulated time.[1] The justice of the _poena
conventionalis_ was recognised by Alexander of Hales,[2] and by Duns
Scotus, who gives a typical form of the stipulation as follows: 'I
have need of my money for commerce, but shall lend it to you till a
certain day on the condition that, if you do not repay it on that day,
you shall pay me afterwards a certain sum in addition, since I shall
suffer much injury through your delay