Fenus
（
τόκος). Interest on money.
1. Greek
In Greece the rate of interest on invested capital was not restricted by law, but was left
entirely to arrangement between the parties concerned (
c. Theomn. i. 18). The
average rate, compared with that usually given at the present day, was very high, far higher
than the rent either of houses or land. This is partly explained by the proportionately
greater scarcity of ready money, and by the fact that it was difficult to accumulate a large
amount of capital.
In the time of Demosthenes, 12 per cent. was regarded as a rather low rate of interest, and
higher rates, up to 18 per cent., were quite common. In bottomry (
τὸ
ναυτικὸν δάνεισμα) the ordinary rate of interest at Athens was 20 per cent. In
the event of failure in the payment of interest due, compound interest was charged. In the
computation of interest two different methods were employed. It was usual to specify either
the sum to be paid by the month on every mina (equal in intrinsic value of silver to about
$16.50), or the fraction of the principal which was annually paid as interest. Capital
therefore was said to be invested at a drachma, if for every mina (100 drachmae) there was
paid interest at the rate of one drachma —i. e. 1 per cent. monthly, and
consequently 12 per cent. per annum. Or again, if 12 1/2 per cent. yearly interest was
to be paid, the capital was said to be invested at “one eighth.” In most
cases the interest appears to have been paid monthly, and on the last day of the month; but
payment by the year was not unknown. In bottomry the interest was according to the terms of
the contract.
2. Roman
At Rome, as at Athens, the rate of interest was originally unrestricted, and it was not
until after hard struggles that, by the laws of the Twelve Tables, a regular yearly rate of
interest at one twelfth of the capital, or 8 1/3 per cent., was established. But this and
subsequent legal limitations were all the less effectual for putting down usury, because they
were valid in the case of Roman citizens only, and not in that of foreigners. Usury was
accordingly practised under the name of foreigners up to the end of the second century B.C.,
when the laws against it were extended so as to include aliens. Through intercourse with Asia
and Greece, a change in the payment of interest was gradually introduced, which in the first
half of the first century B.C. was generally adopted. Capital was no longer lent by the year,
but by the month, and monthly interest was paid on the first day of each month; notice of
intention to call in the loan was given on the Ides (the 13th or 15th day of the month), and
reimbursement took place on the first day (Kalends) of the following month. The regular rate
of interest with this reckoning was 1 per cent. monthly, or 12 per cent. per annum. The
accumulation of large fortunes in Rome at the end of the Republic considerably lessened the
rate of interest on safe investments. The chief field for usury was then the provinces, whose
inhabitants were compelled by the exorbitant imposts to be continually raising loans at any
price. The custom, long permitted, of adding the year's unpaid interest to the principal was
first forbidden by the later Roman law. Justinian permanently fixed the rate of interest in
ordinary investments at 6 per cent., in commercial enterprises at 8 per cent., and in
bottomry, in which it had previously been unlimited on account of the risk incurred by the
stock on long voyages, at 12 per cent.
