How the Golden Rule Legitimizes Interest (Usury)

This is from Gerhard’s Locorum Theologiacorum. Thank you to William Cloninger for assistance with the Latin translation.

234. We demonstrate, however, by the following reasons: 1. From natural equity. 1. Christ, our Savior, embraced the precept of natural equity with this authoritative rule: "All things that you wish men to do to you, do you also to them" (Matthew 7:12), or as Luke reported the words in chapter 6, verse 31: As you wish men to do to you, do you also to them ὁμοίως, similarly. In Matthew, it is added that this is the law and the prophets, meaning that whatever the law and the prophets prescribe concerning justice and right in civil society can most conveniently be referred to this rule.

Now, in the aforementioned case, it is so arranged that the debtor seeks money from us, not compelled by some extreme need, but with the purpose of engaging in business, making a profit, and securing his own advantages; conversely, it cannot be denied that the creditor could have similarly engaged in business, made a profit, and secured his own advantages with this same money.

Therefore, equity itself and the sanction of natural law require that the debtor deal with the creditor in the same way he would wish to be dealt with in a similar case, that is, to admit the creditor to a share of the profit and, as compensation for the increase in his own resources that he could have gained by the use of the money but is meanwhile forced to forgo, to pay him something annually.

2. Furthermore, what due gratitude demands is certainly also required by natural law, for gratitude is a part of natural law, and thus the obligation that arises from gratitude is of natural law. Now, in the aforementioned case, due gratitude demands that he who does business and profits with another’s money, or is even relieved and freed from a great burden attached to his immovable goods, should show himself grateful toward the one by whom he has been benefited, which is done not only by repaying the principal but also by some generous compensation.

He who feels that a great benefit has come to him from another’s money is naturally obliged to acknowledge the benefit and render some ἀντίδωρον [compensation in return/reciprocal gift]. Therefore, natural law will also demand the same from him.

Nor is there any ground for someone to object that gratitude is indeed a matter of natural law and obligation, but it ought to be free, and thus a debtor should not be civilly bound by a written agreement to it. For that to which someone is naturally obliged, to that he can also be civilly obliged; what someone is bound to perform by right, to that he can also be compelled by external means.

Thus, he who has received a loan of money is naturally obliged to repay it, yet he can also, without injustice, be civilly bound to the same.

Indeed, because of the stain of original sin, such great ἀχαριστία [ingratidute] has seized the minds of many that they use borrowed money as if it were found, and do not think of repayment, whence creditors are often forced to risk the principal itself, about which Sirach complains at length in chapter 29, verses 4 to 10. Hence, the magistrate, with salutary laws that are the remedies for evils, has wished to provide in the republic that the debtor be obliged not only to secure the repayment of the borrowed money, as it is called, but also to provide compensation for the service rendered out of a grateful heart.