with it, if he so desired, and to reap whatever gain that trade produced.  The prohibition of usury, far from being proof of the injustice of an income from capital, is proof of quite the contrary, because it was designed to insure that the income from capital should belong to the owner of that capital and to no other person.[1] Although, therefore, no price could be paid for a loan, the lender must be prevented from suffering any damage from making the loan, and he might make good his loss by virtue of the implied collateral contract of indemnity, which we discussed above when treating of extrinsic titles.  If the lender, through making the loan, had been prevented from making a profit in trade, he might be indemnified for that loss.  All through the discussions on usury we find express recognition of the justice of the owner of money deriving an income from its employment; all that the teaching of usury was at pains to define was who the person was to whom money, which was the subject matter of a mutuum, belonged.  It is quite impossible to comprehend how modern writers can see in the usury teaching of the scholastics a fatal discouragement to the enterprise of traders and capitalists; and it is equally impossible to understand how socialists can find in that doctrine any suggestion of support for the proposition that all unearned income is immoral and unjust.

[Footnote 1:  See Rambaud, op. cit., p. 59.]

SECTION 3.—­THE MACHINERY OF EXCHANGE

We have already drawn attention to the fact that there was no branch of economics about which such profound ignorance ruled in the earlier Middle Ages as that of money.  As we stated above, even as late as the twelfth century, the theologians were quite content to quote the ill-founded and erroneous opinions of Isidore of Seville as final on the subject.  It will be remembered that we also remarked that the question of money was the first economic question to receive systematic scientific treatment from the writers of the later Middle Ages.  This remarkable development of opinion on this subject is practically the work of one man, Nicholas Oresme, Bishop of Lisieux, whose treatise, De Origine, Natura, Jure et Mutationibus Monetarum, is the earliest example of a pure economic monograph in the modern sense.  ‘The scholastics,’ says Roscher, ’extended their inquiries from the economic point of view further than one is generally disposed to believe; although it is true that they often did so under a singular form....  We can, however, single out Oresme as the greatest scholastic economist for two reasons:  on account of the exactitude and clarity of his ideas, and because he succeeded in freeing himself from the pseudo-theological systematisation of things in general, and from the pseudo-philosophical deduction in details.’[1]

[Footnote 1:  Quoted in the Introduction to Wolowski’s edition of Oresme’s Tractatus (Paris, 1864).]