AND OTHER DISHONEST
Encyclical of Pope Benedict XIV promulgated on November 1, 1745.
To the Venerable Brothers, Patriarchs, Archbishops,
Bishops and Ordinary Clergy of Italy. Venerable Brothers, Greetings
and Apostolic Benediction.
Hardly had the new controversy (namely, whether certain contracts
should be held valid) come to our attention, when several opinions
began spreading in Italy that hardly seemed to agree with sound
doctrine; We decided that We must remedy this. If We did not do
so immediately, such an evil might acquire new force by delay
and silence. If we neglected our duty, it might even spread further,
shaking those cities of Italy so far not affected.
Therefore We decided to consult with a number
of the Cardinals of the Holy Roman Church, who are renowned for
their knowledge and competence in theology and canon law. We also
called upon many from the regular clergy who were outstanding
in both the faculty of theology and that of canon law. We chose
some monks, some mendicants, and finally some from the regular
clergy. As presiding officer, We appointed one with degrees in
both canon and civil law, who had lengthy court experience. We
chose the past July 4 for the meeting at which We explained the
nature of the whole business. We learned that all had known and
considered it already.
2. We then ordered them to consider carefully
all aspects of the matter, meanwhile searching for a solution;
after this consideration, they were to write out their conclusions.
We did not ask them to pass judgment on the contract which gave
rise to the controversy since the many documents they would need
were not available. Rather We asked that they establish a fixed
teaching on usury, since the opinions recently spread abroad seemed
to contradict the Church's doctrine. All complied with these orders.
They gave their opinions publicly in two convocations, the first
of which was held in our presence last July 18, the other last
August 1; then they submitted their opinions in writing to the
secretary of the convocation.
3. Indeed they proved to be of one mind in their
I. The nature of the sin called usury has its
proper place and origin in a loan contract. This financial contract
between consenting parties demands, by its very nature, that one
return to another only as much as he has received. The sin rests
on the fact that sometimes the creditor desires more than he has
given. Therefore he contends some gain is owed him beyond that
which he loaned, but any gain which exceeds the amount he gave
is illicit and usurious.
II. One cannot condone the sin of usury by arguing
that the gain is not great or excessive, but rather moderate or
small; neither can it be condoned by arguing that the borrower
is rich; nor even by arguing that the money borrowed is not left
idle, but is spent usefully, either to increase one's fortune,
to purchase new estates, or to engage in business transactions.
The law governing loans consists necessarily in the equality of
what is given and returned; once the equality has been established,
whoever demands more than that violates the terms of the loan.
Therefore if one receives interest, he must make restitution according
to the commutative bond of justice; its function in human contracts
is to assure equality for each one. This law is to be observed
in a holy manner. If not observed exactly, reparation must be
III. By these remarks, however, We do not deny
that at times together with the loan contract certain other titles-which
are not at all intrinsic to the contract-may run parallel with
it. From these other titles, entirely just and legitimate reasons
arise to demand something over and above the amount due on the
contract. Nor is it denied that it is very often possible for
someone, by means of contracts differing entirely from loans,
to spend and invest money legitimately either to provide oneself
with an annual income or to engage in legitimate trade and business.
From these types of contracts honest gain may be made.
IV. There are many different contracts of this
kind. In these contracts, if equality is not maintained, whatever
is received over and above what is fair is a real injustice. Even
though it may not fall under the precise rubric of usury (since
all reciprocity, both open and hidden, is absent), restitution
is obligated. Thus if everything is done correctly and weighed
in the scales of justice, these same legitimate contracts suffice
to provide a standard and a principle for engaging in commerce
and fruitful business for the common good. Christian minds should
not think that gainful commerce can flourish by usuries or other
similar injustices. On the contrary We learn from divine Revelation
that justice raises up nations; sin, however, makes nations miserable.
V. But you must diligently consider this, that
some will falsely and rashly persuade themselves-and such people
can be found anywhere-that together with loan contracts there
are other legitimate titles or, excepting loan contracts, they
might convince themselves that other just contracts exist, for
which it is permissible to receive a moderate amount of interest.
Should any one think like this, he will oppose not only the judgment
of the Catholic Church on usury, but also common human sense and
natural reason. Everyone knows that man is obliged in many instances
to help his fellows with a simple, plain loan. Christ Himself
teaches this: "Do not refuse to lend to him who asks you."
In many circumstances, no other true and just contract may be
possible except for a loan. Whoever therefore wishes to follow
his conscience must first diligently inquire if, along with the
loan, another category exists by means of which the gain he seeks
may be lawfully attained.
4. This is how the Cardinals and theologians
and the men most conversant with the canons, whose advice We had
asked for in this most serious business, explained their opinions.
Also We devoted our private study to this matter before the congregations
were convened, while they were in session, and again after they
had been held; for We read the opinions of these outstanding men
most diligently. Because of this, We approve and confirm whatever
is contained in the opinions above, since the professors of Canon
Law and Theology, scriptural evidence, the decrees of previous
popes, and the authority of Church councils and the Fathers all
seem to enjoin it. Besides, We certainly know the authors who
hold the opposite opinions and also those who either support and
defend those authors or at least who seem to give them consideration.
We are also aware that the theologians of regions neighboring
those in which the controversy had its origin undertook the defense
of the truth with wisdom and seriousness.
5. Therefore We address these encyclical letters
to all Italian Archbishops, Bishops, and priests to make all of
you aware of these matters. Whenever Synods are held or sermons
preached or instructions on sacred doctrine given, the above opinions
must be adhered to strictly. Take great care that no one in your
dioceses dares to write or preach the contrary; however if any
one should refuse to obey, he should be subjected to the penalties
imposed by the sacred canons on those who violate Apostolic mandates.
6. Concerning the specific contract which caused
these new controversies, We decide nothing for the present; We
also shall not decide now about the other contracts in which the
theologians and canonists lack agreement. Rekindle your zeal for
piety and your conscientiousness so that you may execute what
We have given.
7. First of all, show your people with persuasive
words that the sin and vice of usury is most emphatically condemned
in the Sacred Scriptures; that it assumes various forms and appearances
in order that the faithful, restored to liberty and grace by the
blood of Christ, may again be driven headlong into ruin. Therefore,
if they desire to invest their money, let them exercise diligent
care lest they be snatched by cupidity, the source of all evil;
to this end, let them be guided by those who excel in doctrine
and the glory of virtue.
8. In the second place, some trust in their own
strength and knowledge to such an extent that they do not hesitate
to give answers to those questions which demand considerable knowledge
of sacred theology and of the canons. But it is essential for
these people, also, to avoid extremes, which are always evil.
For instance, there are some who judge these matters with such
severity that they hold any profit derived from money to be illegal
and usurious; in contrast to them, there are some so indulgent
and so remiss that they hold any gain whatsoever to be free of
usury. Let them not adhere too much to their private opinions.
Before they give their answer, let them consult a number of eminent
writers; then let them accept those views which they understand
to be confirmed by knowledge and authority. And if a dispute should
arise, when some contract is discussed, let no insults be hurled
at those who hold the contrary opinion; nor let it be asserted
that it must be severely censured, particularly if it does not
lack the support of reason and of men of reputation. Indeed clamorous
outcries and accusations break the chain of Christian love and
give offense and scandal to the people.
9. In the third place, those who desire to keep
themselves free and untouched by the contamination of usury and
to give their money to another in such a manner that they may
receive only legitimate gain should be admonished to make a contract
beforehand. In the contract they should explain the conditions
and what gain they expect from their money. This will not only
greatly help to avoid concern and anxiety, but will also confirm
the contract in the realm of public business. This approach also
closes the door on controversies-which have arisen more than once-since
it clarifies whether the money, which has been loaned without
apparent interest, may actually contain concealed usury.
10. In the fourth place We exhort you not to
listen to those who say that today the issue of usury is present
in name only, since gain is almost always obtained from money
given to another. How false is this opinion and how far removed
from the truth! We can easily understand this if we consider that
the nature of one contract differs from the nature of another.
By the same token, the things which result from these contracts
will differ in accordance with the varying nature of the contracts.
Truly an obvious difference exists between gain which arises from
money legally, and therefore can be upheld in the courts of both
civil and canon law, and gain which is illicitly obtained, and
must therefore be returned according to the judgments of both
courts. Thus, it is clearly invalid to suggest, on the grounds
that some gain is usually received from money lent out, that the
issue of usury is irrelevant in our times.
11. These are the chief things We wanted to say
to you. We hope that you may command your faithful to observe
what these letters prescribe; and that you may undertake effective
remedies if disturbances should be stirred up among your people
because of this new controversy over usury or if the simplicity
and purity of doctrine should become corrupted in Italy. Finally,
to you and to the flock committed to your care, We impart the
Given in Rome at St. Mary Major, November 1,
1745, the sixth year of Our Pontificate.