In a rude condition such as that of the ancient Germans described by Tacitus, loans on interest are unknown.  Habitually careless of the future, the Germans were gratified both in giving and receiving presents, but without any idea that they thereby either imposed or contracted an obligation.  To a people in this state of feeling, a loan on interest presents the repulsive idea of making profit out of the distress of the borrower.  Moreover, it is worthy of remark that the first borrowers must have been for the most part men driven to this necessity by the pressure of want, and 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, coinciding as it did with other tendencies arising out of the industrial progress of society, which gradually exhibited the relation of lender and borrower in a light more reciprocal, beneficial, and less repugnant to the sympathies of the bystander.