Montes Pietatis

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Montes Pietatius are charitable institutions of credit that lend money at low rates of interest, or without interest at all, upon the security of objects left in pawn, with a view to protecting persons in want from usurers. Being charitable establishments, they lend only to people who are in need of funds to pass through some financial crisis, as in cases of general scarcity of food, misfortunes, etc. On the other hand, these institutions do not seek financial profit, but use all profits that may accrue to them for the payment of employees and to extend the scope of their charitable work.

Formerly there were not only pecuniary montes (numarii) which lent money, but also grain montes (grantatici), flour montes, etc. In the history of these establishments it may be observed that the word mons, even in ancient Latin (Plautus, Prudentius), was used to signify a "great quantity", or heap, with reference to money, while the juridic term for a monetary "fund" was rather massa; and long before the creation of the montes pietatis the word mons (in Italian, monte) was used to designate collected funds, destined to various ends, which in time came to be called montes profani. Thus the public debt that was contracted by the Republic of Venice between 1164 and 1178 was called Mons or Imprestita, and similar montes were created by Genoa (1300) and by Florence (1345); the stock companies of the Middle Ages, also, were called montes, as, for example, the "mons aluminarius", which operated the alum deposits of Tolfa. The same was true of insurance societies and of the banks of exchange or of credit that for the greater part were in the hands of Jews or of the so-called Lombards. As these banks often lent money on objects delivered to them in pawn, the charitable institutions which were created for transactions of that class also took the name of mons, pietatis being added to express the fact that the establishments in question were beneficent and not speculative.

In the Middle Ages it was very difficult to obtain money, as much on account of its scarcity as of the prohibitions by which Christians were bound in relation to usury, which second condition gave a species of monopoly of the credit business to the Jews, who were excluded from all other kinds of trade or industry, and who were often accorded great privileges by the towns, on condition of the establishment of pawn banks. They lent money at excessive rates of interest—as much as 60 per cent—or, when that was prohibited, as at Florence, where they were not allowed to charge more than 20 per cent, they resorted to subterfuges that made it possible for them to obtain as high rates as elsewhere. And in this way, they soon became rich and hated. Not less hated, however, were the so-called coarsini (named not after the city of Cahors in France, but after that of Cavour in Piedmont); likewise the Lombards, who were a kind of travelling bankers, and whose extortions were often even greater than those of the Jews, their usual rate of interest being 43½ per cent, and frequently as high as 80 per cent. It was often a question, during the Middle Ages, of finding a remedy for this exploitation of the misfortune of others; although it is not true that St. Anthony of Padua founded a mons pietatis. The celebrated Doctor Durand de Saint Pourçain, Bishop of Mende, proposed that the magistrates of cities be compelled to lend money at low rates of interest. It is not known whether this proposition was accepted or not, but, in either event, it did not suggest the idea of the monte, for there lacked the condition of objects pawned, which was the case, also, in the institution of the "Montde Salins", established later than 1350. The first true mons pietatis was founded in London, where Bishop Michael Nothburg, in 1361, left 1000 marks of silver for the establishment of a bank that should lend money on pawned objects, without interest, providing that the expenses of the institution be defrayed from its foundation capital. In this way, of course, the capital was eventually consumed, and the bank closed. In 1389 Philippe de Maizières published his project for the establishment of an institution that should lend money without interest, but should receive remuneration from those who might profit by its loans; this project, however, was not realized. Finally (1462), the first mons pietatis was established at Perugia, and in a few years there were similar institutions throughout Italy. The establishment and dissemination of montes pietatis is one of the brightest glories of the followers of the "Poverello" of Assisi, for the mons pietatis of Perugia was founded in consequence of the preaching at that city of the Franciscan Michele Carcano of Milan, who inveighed against the usury of the Jews (1461). The fund for that charitable establishment was made up in part by voluntary contributions and in part by money lent by the Jews themselves. But the idea of the mons pietatis was devised by the Franciscans Barnabò da Terni and Fortunato Coppoli of Perugia. In fact it seems that for a long time the preachers of the Franciscan Order had considered the problem of applying an effectual remedy to the evils of usury (cf. Holzapfel, 32 sq.). The assistance and the influence of the Apostolic delegate to Perugia, Ermolao Barbaro, Bishop of Verona, greatly facilitated the work at the former town, and it was soon repeated at Orvieto (1463) through the action of the Franciscan Bartolommeo da Colle, and also at Gubbio and at other towns of Umbria. In the Marches the first mons was established at Monterubbiano, in 1465, through the efforts of the Franciscan Antonuzzo and the Dominican Cristoforo; the first city of the Papal States that established a mons pietatis was Viterbo (1469); in Tuscany, Siena (1472); in Liguria, Savona, and Genoa (1480), and in the Milanese territory, Milan (1483); everywhere it was the Franciscan Observants who took the initiative. But the greatest development was given to this work by Blessed Bernardino da Feltre, whose apostolic journeys were marked by montes pietatis, either instituted or re- established; he introduced them at Mantua (1484) and at various cities of the Venetian Republic, where they had to struggle against the ill-will of the Government; he carried them also the Abruzzi, to Emilia, and to Romagna.

The montes pietatis were either autonomous establishments, or, as at Perugia, municipal corporations; they had a director, called depositarius, an appraiser, a notarius or accountant, salesmen, and other employees; and all were paid either with a fixed salary or with a percentage in the profits of the establishment. It should be noted that in the beginning the montes did not lend money gratuitously, but, on the contrary, the expressed intention of the founders was that the money should be lent at interest, varying from 4 to 12 per cent. After opposition had been shown to these establishments montes gratuiti were instituted in some places, especially in Lombardy, but as these charities were not self-supporting they were altered to establishments that lend with interest, for Blessed Bernardino da Feltre always insisted on the necessity of interest to ensure the permanency of the institution. At the end of each month or of each year the net profits were applied to the capital, and if they were considerable, the rate of interest was lowered. In order to increase the funds of these institutions in some cities, collections were regularly taken on appointed days—at Padua on Easter day—or boxes were set up for contributions as at Gubbio and Orvieto. At Gubbio there was a tax of 1 per cent on all property bequeathed by will, and at Spello the notary was required to remind the testator that he should leave something to the monte.

At first the sums loaned were very small, the maximum limit at Perugia being six florins, and at Gubbio four. Thus it was hoped that speculation and extravagance would be avoided, but little by little the limit was increased in some places to 100 and even to 1000 ducats. The amount of a given loan was equal to two-thirds the value of the object pawned, which, if not redeemed within the stipulated time, was sold at public auction, and if the price obtained for it was greater than the loan with the interest, the surplus was made over to the owner.

The opposition to the montes which has been referred to came in the first place from those whose interests were affected, the Jews and the Lombards, who were able to prevent the introduction of these charities into some cities, as Venice and Rome, until 1539. At Florence their efforts were directed to the same end, but the people rising in tumult obtained the recall of Blessed Bernardino da Feltre to the city. At Aquila the Jews sent a commission to Blessed Bernardino to ask him not to appear in the pulpit. But the most serious opposition the montes encountered was from certain theologians and canonists, who censured these establishments because they lent money at interest, which in those times was considered illicit even by the promoters of the montes. The controversy was long and bitter. The opposition was not directed against the montes pietatis as such, but merely against the condition of requiring interest. It was not admitted that the use of the interest to maintain the charity justified the usury, since a good end could not justify evil means, and it was held that lending money at interest was intrinsically bad, money being unfruitful by its nature, and since Christ expressly forbids the practice (Luke 6:33). The term interest was not readily admitted by the friends of the montes, who replied that there were in reality two contracts between the montes and the borrower: one that of the loan, which should be gratuitous, the other implying the custody of the object pawned, therefore, the use of space and personal responsibility, which should not be gratuitous; and it was precisely on account of these two conditions that interest was charged. The loan, therefore, was regarded merely as a conditio sine qua non, and not as a direct cause of the interest. On the other hand, even the adversaries of the montes admitted that the damnum emergens or the lacrum cessans were legitimate titles upon which to require interest; and these two principles may be applied to the mons pietatis. Many other objections to which it was easy to reply were adduced, and in these disputations the friends of the montes were victorious. Only at Fænza, in 1494, was the defender of the montes unable to answer the objections of the Augustinian Bariano, who is the author of a work entitled "De Monte Impietatis". It was among the Dominicans, however, that the montes found a greater number of antagonists, notably the young Tommaso de Vio, who became Cardinal Cætano. It cannot be said that the order as a whole was opposed to these institutions, for several of its members favoured the establishment of the montes as has been seen in the case of Monterubbiano, and as was the case at Florence, where Savonarola (1495) reopened the montes which had been established in 1484. Meanwhile other Dominicans, e.g. Annio da Viterbo and Domenico da Imola, wrote juridical opinions in favour of the montes, but the writer who most exerted himself in their defence was the Franciscan Bernardino de Bustis (Defensorium Montis Pietatis). The legal and theological faculties of the universities, as well as individual jurists, gave opinions favourable to the montes. The popes had approved of several of these institutions that appealed to the Holy See, either for its sanction, in general, or for special concessions; Holzapfel (10 sq.) refers to sixteen of these acts, anterior to the Bull "Inter multiplicis" of Leo X (4 May, 1515). By this Bull the pope and the Lateran Council, which took up the case of the montes in its tenth session, declared the institutions in question in no way illicit or sinful, but on the contrary meritorious, and that whosoever preached or wrote against them in the future, incurred excommunication. This Bull also provided that montes established thereafter should obtain the Apostolic approbation. The Bishop of Trani was the only member of the council who spoke against the montes, and Cardinal Cætano, general of the Dominicans, who was absent at that session, subsequently abandoned his position on the subject of these establishments.

The question of moral right having been determined in their favour, the montes pietatis spread rapidly, especially in Italy, where, in 1896 there were 556 of them, with a combined capital of nearly 72,000,000 lire. Outside of Italy the first mons pietatis to be established was at Ypres in Belgium (1534), but the institution did not develop in that country until 1618, when the Lombards were forbidden to receive objects in pawn; since 1848 the law has transformed the montes into municipal establishments. In France the first mons pietatis appeared at Avignon, then a papal possession (1577); the next at Beaucaire (1583); and in 1626, an ordinance prescribed the creation of montes pietatis in all the cities that might need them. However, they were not merely charitable institutions, because they were bound to lend money to all applicants, whether in need or not, while not infrequently the rate of interest was high. They were reorganized by the law of 1851, with the special feature that their directors be appointed by the Government. In Germany and in Austria the montes pietatis were introduced at the end of the fifteenth century. At present they are municipal establishments—although some of them belong to the Government — and their net profits are applied to the account of public charities. The first mons pietatis in Spain was created in 1702 at Madrid. In England this form of charity never obtained a foothold, on the contrary it was held in aversion on account of its connexion with the papacy; an attempt to establish such an institution at London in 1797 failed in less than twenty years, through default on the part of its managers.

The aversion in which montes pietatis are held by many, even in our own day, leads to the question of the advantages and of the defects of these institutions; it is held that they promote carelessness in contracting debts, that they destroy love for labour, incite to theft, are often the cause of financial ruin, and, lastly, that they are contrary to the principle of free competition. On the other hand, they are a necessity; for without them the needy would be exposed either to the extortions of private lenders or to ruin, into which they might be plunged by some misfortune from which a momentary loan might save them. Their disadvantages are undeniable, but disadvantages are common to all human contrivances. For the rest the montes pietatis, besides the relief that they brought to the poor, exerted great influence upon the ideas concerning interest on loans; for the rigid views of the theologians of the Middle Ages in that connexion underwent a first modification, which prepared the way for a generalization of the principle that moderate interest might justly be charged, and also the mere existence of the montes pietatis compelled private speculators to reduce their rates of interest from the usurious rates that had hitherto prevailed.

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