第19章

Theoppositeistruewhenitfalls。Ifthevalueisequalto2，000，then5%=100；ifitisequalto1，000，then5%=50。Butthisdoesnotaltertheinterestrateinanyway。Therationalpartofthismatterismerelythatgreatermoneyaccommodationisrequiredwhenittakes£；2，000

tosellthesamequantityofcommoditiesthanwhenonly£；1，000arerequired。Butthismerelyshowsthatprofitandinterestarehereinverselyproportionaltoeachother。Forthelowerthepricesofthecomponentsofconstantandvariablecapital，thehighertheprofitandthelowertheinterest。Buttheoppositecanalsobeandisoftenthecase。Forinstance，cottonmaybecheapbecausenodemandexistsforyarnandfabrics；andcottonmayberelativelyexpensivebecausealargeprofitinthecottonindustrycreatesagreatdemandforit。Ontheotherhand，theprofitsofindustrialistsmaybehighpreciselybecausethepriceofcottonislow。Hubbard’stableprovesthattheinterestrateandthepricesofcommoditiesexecutecompletelyindependentmovements，whereasthemovementsoftheinterestrateadherecloselytothoseofthemetalreserveandtheratesofexchange。

TheEconomiststates:”Whenever，therefore，commoditiesareabundant，theinterestofmoneymustbelow。”Preciselytheoppositeobtainsduringcrises。Commoditiesaresuperabundant，inconvertibleintomoney，andthereforetheinterestrateishigh；inanotherphaseofthecyclethedemandforcommoditiesisgreatandthereforequickreturnsaremade，butatthesametime，pricesarerisingandbecauseofthequickreturnstheinterestrateislow。”Whenthey[thecommodities]arescarce，theinterestofmoneymustbehigh。”Theoppositeisagaintrueintheslackperiodfollowingacrisis。Commoditiesarescarce，absolutelyspeaking，notwithreferencetodemand；andtheinterestrateislow。

Inregardtostatement，itisprettyevidentthatanownerofcommodities，providedhecansellthelatteratall，willgetridofthematalowerpricewhenthemarketisgluttedthanhewouldwhenthereisaprospectoftheexistingsupplybecomingrapidlyexhausted。Butwhytheinterestrateshouldfallbecauseofthatisnotsoclear。

Ifthemarketisgluttedwithimportedcommodities，theinterestratemayriseasaresultofanincreaseddemandonthepartoftheownersforloancapital，inordertoavoiddumpingtheircommoditiesonthemarket。

Theinterestratemayfall，becausethefluidityofcommercialcreditmaykeepthedemandforbankcreditrelativelylow。

TheEconomistmentionstherapideffectonratesofexchangein1847oftheraisingoftheinterestrateandothercircumstancesexertingpressureonthemoney-market。ButitshouldbeborneinmindthatthegolddraincontinueduntiltheendofAprilinspiteofthechangeintheratesofexchange；aturndidnottakeplacehereuntilearlyMay。

OnJanuary1，1847，themetalreserveoftheBankwas£；15，066，691；

theinterestrate31/2%；threemonths’ratesofexchangeonParis25。75；onHamburg13。10；onAmsterdam12。31/4。

OnMarch5，themetalreservehadfallento£；11，595，535；thediscounthadrisento4%；therateofexchangefellto25。671/2onParis；13。91/4onHamburg；and12。21/2onAmsterdam。Thedrainofgoldcontinued。Seethefollowingtable:

1847BullionReserveoftheBankofEnglandMoney-MarketHighestThree-MonthRatesParisHamburgAmsterdamMarch2011，231，630Bankdisc。4%25。671/213。93/412。21/2

April310，246，410，，，，5%25。8013。1012。31/2

April109，867。053Moneyveryscarce25。9013。101/212。41/2

April179，329，841Bankdisc。5。5%26。021/213。403/412。51/2

April249，243，890Pressure26。0513。1212。6

May49，337，746Increasingpressure26。4513。123/412。61/2

May89，588，759Highestpressure26。271/213。151/212。73/4In1847，thetotalexportofpreciousmetalfromEnglandamountedto£；8，602，597。

OfthistotheUnitedStates£；3，226，411

France£；2，479，892

Hansetowns£；958，781

Holland£；247，743InspiteofthechangeintheratesattheendofMarch，thedrainofgoldcontinuedforanotherfullmonth，probablytotheUnitedStates。”Wethussee”[saystheEconomist，August2，1847，p。954]”howrapidandstrikingwastheeffectofariseintherateofinterest，andthepressurewhichensuedincorrectinganadverseexchange，andinturningthetideofbullionbacktothiscountry。Thiseffectwasproducedentirelyindependentofthebalanceoftrade。Ahigherrateofinterestcausedalowerpriceofsecurities，bothforeignandEnglish，andinducedlargepurchasestobemadeonforeignaccount，whichincreasedtheamountofbillstobedrawnfromthiscountry，while，ontheotherhand，thehighrateofinterestandthedifficultyofobtainingmoneywassuchthatthedemandofthosebillsfelloff，whiletheiramountincreased……Forthesamecauseordersforimportswerecountermanded，andinvestmentsofEnglishfundsabroadwererealisedandbroughthomeforemploymenthere。Thus，forexample，wereadintheRiodeJaneiroPriceCurrentofthe10thMay，’Exchange[onEngland]hasexperiencedafurtherdecline，principallycausedbyapressureonthemarketforremittanceoftheproceedsoflargesalesof[Brazilian]governmentstock，onEnglishaccount。’Capitalbelongingtothiscountry，whichhasbeeninvestedinpublicandothersecuritiesabroad，whentheinterestwasverylowhere，wasthusagainbroughtbackwhentheinterestbecamehigh。”

ENGLAND’SBALANCEOFTRADE

Indiaalonehastopay5millionintributefor”goodgovernment，”interestanddividendsonBritishcapital，etc。，notcountingthesumssenthomeannuallybyofficialsassavingsfromtheirsalaries，orbyEnglishmerchantsaspartoftheirprofittobeinvestedinEngland。EveryBritishcolonycontinuallyhastomakelargeremittancesforthesamereason。MostofthebanksinAustralia，theWestIndies，andCanada，havebeenfoundedwithEnglishcapital，andthedividendsarepayableinEngland。Inthesameway，Englandownsmanyforeignsecurities——European，NorthAmericanandSouthAmerican——onwhichitdrawsinterest。Inadditiontothisithasinterestsinforeignrailways，canals，mines，etc。，withcorrespondingdividends。RemittanceonalltheseitemsismadealmostexclusivelyinproductsoverandabovetheamountofEnglishexports。OntheotherhandwhatissentfromEnglandtoownersofEnglishsecuritiesabroadandforconsumptionbyEnglishmenabroad，isinsignificantincomparison。

Thequestion，sofarasitconcernsthebalanceoftradeandtheratesofexchange，is”atanyparticularmomentoneoftime。””Practicallyspeaking……

Englandgiveslongcreditsuponherexports，whiletheimportsarepaidforinreadymoney。Atparticularmomentsthisdifferenceofpracticehasaconsiderableeffectupontheexchanges。Atatimewhenourexportsareveryconsiderablyincreasing，e。g。，1850，acontinualincreaseofinvestmentofBritishcapitalmustbegoingon……inthiswayremittancesof1850maybemadeagainstgoodsexportedin1849。Butiftheexportsof1850exceedthoseof1849bymorethan6million，thepracticaleffectmusthethatmoremoneyissentabroad，tothisamount，thanreturnedinthesameyear。Andinthiswayaneffectisproducedontheratesofexchangeandtherateofinterest。When，onthecontrary，ourtradeisdepressedafteracommercialcrisis，andwhenourexportsaremuchreduced，theremittancesdueforthepastyearsoflargerexportsgreatlyexceedthevalueofourimports；theexchangesbecomecorrespondinglyinourfavour，capitalrapidlyaccumulatesathome，andtherateofinterestbecomesless。”(Economist，January11，1851[p。30]。)

Theforeignratesofexchangecanchange:

1)Inconsequenceoftheimmediatebalanceofpayments，nomatterwhatthecause——apurelymercantileone，orcapitalinvestmentabroad，orgovernmentexpendituresforwars，etc。，insofarascashpaymentstherebyaremadetoforeigncountries。

2)Inconsequenceofmoneydepreciation——whethermetalorpaper——

inaparticularcountry。Thisispurelynominal。If£；1shouldrepresentonlyhalfasmuchmoneyasformerly，itwouldnaturallybecountedas12。5

francsinsteadof25francs。

3)Whenitisamatterofarateofexchangebetweencountries，ofwhichoneusessilverandtheothergoldas”money，”therateofexchangedependsupontherelativefluctuationsofthevalueofthesetwometals，sincethesenecessarilyaltertheparitybetweenthem。Thisisillustratedbytheratesofexchangein1850；theywereunfavourabletoEngland，althoughthatcountry’sexportroseenormously。Yetnodrainofgoldtookplace。

Thiswasaresultofamomentaryriseinthevalueofsilverasagainstgold。(SeeEconomist，November30，1850[pp。1319-1320]。)

Parityfortherateofexchangeof£；1is:Paris，25francs20

cent。；Hamburg，13marksbanko10。5shillings；Amsterdam，11florins97

cent。TotheextentthattheParisrateofexchangeexceeds25。20francs，itbecomesmorefavourabletotheEnglishdebtorofFrance，orthebuyerofFrenchcommodities。Inbothcasesheneedsfewerpoundssterlinginordertoaccomplishhispurpose——Inremotercountries，wherepreciousmetalisnoteasilyobtainedwhenbillsofexchangearescarceandinsufficientforremittancestobemadetoEngland，thenaturaleffectistodriveupthepricesofsuchproductsasaregenerallyshippedtoEnglandsinceagreaterdemandarisesforthem，inordertosendthemtoEnglandinplaceofbillsofexchange；thisisoftenthecaseinIndia。

Anunfavourablerateofexchange，orevenadrainongold，cantakeplacewhenthereisagreatabundanceofmoneyinEngland，theinterestrateislowandthepriceforsecuritiesishigh。

Inthecourseof1848EnglandreceivedlargequantitiesofsilverfromIndia，sincegoodbillsofexchangewererareandmediocreoneswerenotreadilyacceptedinconsequenceofthecrisisof1847andthegenerallackofcreditinbusinesswithIndia。Allthissilverhadbarelyarrivedbeforeitfounditswaytothecontinent，wheretherevolutionledtotheformationofmanyhoards。ThebulkofthesamesilvermadethetripbacktoIndiain1850，sincetherateofexchangenowmadethisprofitable。

ThemonetarysystemisessentiallyaCatholicinstitution。thecreditsystemessentiallyProtestant。”TheScotchhategold。”Intheformofpaperthemonetaryexistenceofcommoditiesisonlyasocialone。ItisFaiththatbringssalvation。Faithinmoney-valueastheimmanentspiritofcommodities，faithinthemodeofproductionanditspredestinedorder，faithintheindividualagentsofproductionasmerepersonificationsofself-expandingcapital。ButthecreditsystemdoesnotemancipateitselffromthebasisofthemonetarysystemanymorethanProtestantismhasemancipateditselffromthefoundationsofCatholicism。

Footnotes[14]Theeffectthishadonthemoney-marketisindicatedbythefollowingtestimonyofNewmarch:”1509。Atthecloseof1853，therewasaconsiderableapprehensioninthepublicmind，andinSeptemberofthatyeartheBankofEnglandraiseditsdiscountonthreeoccasions……IntheearlypartofOctobertherewasaconsiderabledegreeofapprehensionandalarminthepublicmind。ThatapprehensionandalarmwasrelievedtoaverygreatextentbeforetheendofNovember，andwasalmostwhollyremoved，inconsequenceofthearrivalofnearly£；5，000，000oftreasurefromAustralia……Thesamethinghappenedintheautumnof1854，bythearrivalinthemonthsofOctoberandNovemberofnearly£；6，000，000oftreasure。Thesamethinghappenedagainintheautumnof1855，whichweknowwasaperiodofexcitementandalarm，bythearrivals，inthethreemonthsofSeptember，OctoberandNovember，ofnearly£；8，000，000oftreasure；andthenatthecloseoflastyear，1856，wefindexactlythesameoccurrence。Intruth，ImightappealtotheobservationalmostofanymemberoftheCommittee，whetherthenaturalandcompletesolventtowhichwehavegotintothehabitoflookingforanyfinancialpressure，isnotthearrivalofagoldship”[B。A。1857]。

[15]AccordingtoNewmarch，adrainofgoldtoforeigncountriescanarisefromthreecauses:4)frompurelycommercialconditions，thatis，ifimportshaveexceededexports，aswasthecasein1836to1844，andagainin1847——

principallyaheavyimportofgrain；2)inordertosecurethemeansforinvestingEnglishcapitalinforeigncountries，asin1857forrailwaysinIndia，and3)fordefiniteexpendituresabroad，asin1853and1854

forwarpurposesintheOrient。

[16]1918。Newmarch。”WhenyoucombineIndiaandChina，whenyoubringintoaccountthetransactionsbetweenIndiaandAustralia，andthestillmoreimportanttransactionsbetweenChinaandtheUnitedStates，thetradebeingatriangularone，andtheadjustmenttakingplacethroughus……thenitistruethatthebalanceoftradewasnotmerelyagainstthiscountry，butagainstFrance，andagainsttheUnitedStates。”——(B。A。1857。)

[17]See，forinstance，theridiculousreplyofWeguelin[B。A。1857]wherehestatesthatadrainoffivemillioningoldissomuchcapitalless，andthusattemptstoexplaincertainphenomenawhichdonottakeplacewhenthereisaninfinitelygreaterincreaseinpricesordepreciation，expansionorcontractionofrealindustrialcapital。Ontheotherhand，itisjustasridiculoustoattempttoexplainthesephenomenadirectlyassymptomsofanexpansionorcontractionofthemassofrealcapital(consideredfromtheviewpointofitsmaterialelements)。

[18]Newmarch(B。A。1857):”1364。ThereserveofbullionintheBankofEnglandis，intruth，thecentralreserveorhoardoftreasureuponwhichthewholetradeofthecountryismadetoturn；alltheotherbanksinthecountrylooktotheBankofEnglandasthecentralhoardorreservoirfromwhichtheyaretodrawtheirreserveofcoin；anditisuponthathoardorreservoirthattheactionoftheforeignexchangesalwaysfalls。”

[19]”Practically，then，bothMr。TookeandMr。Loydwouldmeetanadditionaldemandforgold……byanearly……contractionofcreditbyraisingtherateofinterest，andrestrictingadvancesofcapital……ButtheprinciplesofMr。Loydleadtocertain[legal]restrictionsandregulationswhichproducethemostseriousinconvenience。”(Economist[December11]，1847，p。1418。)

[20]”Youquiteagreethatthereisnomodebywhichyoucanmodifythedemandforbullionexceptbyraisingtherateofinterest？”——Chapman[associatememberofthegreatbill-brokers’firmofOverend，Gurney&；Co。]:”I

shouldsayso……Whenourbullionfallstoacertainpoint，wehadbettersoundthetocsinatonceandsaywearedrooping，andeverymansendingmoneyabroadmustdoitathisownperil。”(B。A。1857，EvidenceNo。5057。)

1894:CapitalIII——Chapter36KarlMarx’sCAPITAL

volumeIII

THEPROCESSOFCAPITALISTPRODUCTIONASAWHOLEpartV

DIVISIONOFPROFITINTOINTEREST

ANDPROFITOFENTERPRISE。

INTEREST-BEARINGCAPITAL。CHAPTERXXXVI

PRE-CAPITALISTRELATIONSHIPSInterest-bearingcapital，or，aswemaycallitinitsantiquatedform，usurer’scapital，belongstogetherwithitstwinbrother，merchant’scapital，totheantediluvianformsofcapital，whichlongprecedethecapitalistmodeofproductionandaretobefoundinthemostdiverseeconomicformationsofsociety。

Theexistenceofusurer’scapitalmerelyrequiresthatatleastaportionofproductsshouldbetransformedintocommodities，andthatmoneyshouldhavedevelopedinitsvariousfunctionsalongwithtradeincommodities。

Thedevelopmentofusurer’scapitalisboundupwiththedevelopmentofmerchant’scapitalandespeciallythatofmoney-dealingcapital。InancientRome，beginningwiththelastyearsoftheRepublic，whenmanufacturingstoodfarbelowitsaveragelevelofdevelopmentintheancientworld，merchant’scapital，money-dealingcapital，andusurer’scapitaldevelopedtotheirhighestpointwithintheancientform。

Wehaveseen(Englishedition:Vol。I，pp。130-34——Ed。)thathoardingnecessarilyappearsalongwithmoney。Buttheprofessionalhoarderdoesnotbecomeimportantuntilheistransformedintoausurer。

Themerchantborrowsmoneyinordertomakeaprofitwithit，inordertouseitascapital，thatis，toexpendit。Henceinearlierformsofsocietythemoney-lenderstandsinthesamerelationtohimastothemoderncapitalist。ThisspecificrelationwasalsoexperiencedbytheCatholicuniversities。”TheuniversitiesofAlcalá；，Salamanca，Ingolstadt，FreiburginBreisgau，Mayence，Cologne，Trè；ves，oneafteranotherrecognizedthelegalityofinterestforcommercialloans。

ThefirstfiveoftheseapprobationsweredepositedinthearchivesoftheConsulateofthecityofLyonsandpublishedintheappendixtotheTraiè；del’usureetdesinté；rê；ts，byBruyset-Ponthus，Lyons。”(M。Augier，LeCrè；ditpublic，etc。，Paris，1842，p。206。)

Inalltheformsillwhichslaveeconomy(notthepatriarchalkind，butthatoflaterGrecianandRomantimes)servesasameansofamassingwealth，wheremoneythereforeisameansofappropriatingthelabourofothersthroughthepurchaseofslaves，land，etc。，moneycanbeexpandedascapital，i。e。，bearinterest，fortheveryreasonthatitcanbesoinvested。

Thecharacteristicforms，however，inwhichusurer’scapitalexistsinperiodsantedatingcapitalistproductionareoftwokinds。Ipurposelysaycharacteristicforms。Thesameformsrepeatthemselvesonthebasisofcapitalistproduction，butasmeresubordinateforms。Theyarethennolongertheformswhichdeterminethecharacterofinterest-bearingcapital。

Thesetwoformsare:first，usurybylendingmoneytoextravagantmembersoftheupperclasses，particularlylandowners；secondly，usurybylendingmoneytosmallproducerswhopossesstheirownconditionsoflabour-thisincludestheartisan，butmainlythepeasant，sinceparticularlyunderpre-capitalistconditions，insofarastheypermitofsmallindependentindividualproducers，thepeasantclassnecessarilyconstitutestheoverwhelmingmajorityofthem。

Boththeruinofrichlandownersthroughusuryandtheimpoverishmentofthesmallproducersleadtotheformationandconcentrationoflargeamountsofmoney-capital。Buttowhatextentthisprocessdoesawaywiththeoldmodeofproduction，ashappenedinmodernEurope，andwhetheritputsthecapitalistmodeofproductioninitsstead，dependsentirelyuponthestageofhistoricaldevelopmentandtheattendantcircumstances。

Usurer’scapitalasthecharacteristicformofinterest-bearingcapitalcorrespondstothepredominanceofsmall-scaleproductionoftheself-employedpeasantandsmallmastercraftsman。Whenthelabourerisconfrontedbytheconditionsoflabourandbytheproductoflabourintheshapeofcapital，asunderthedevelopedcapitalistmodeofproduction，hehasnooccasiontoborrowanymoneyasaproducer。Whenhedoesanymoneyborrowing，hedoesso，forinstance，atthepawnshoptosecurepersonalnecessities。Butwhereverthelaboureristheowner，whetheractualornominal，ofhisconditionsoflabourandhisproduct，hestandsasaproducerinrelationtothemoney-lender’scapital，whichconfrontshimasusurer’scapital。Newmanexpressesthematterinsipidlywhenhesaysthebankerisrespected，whiletheusurerishatedanddespised，becausethebankerlendstotherich，whereastheusurerlendstothepoor。(F。W。Newman，LecturesonPoliticalEconomy，London，1851，p。44。)Heoverlooksthefactthatadifferencebetweentwomodesofsocialproductionandtheircorrespondingsocialordersliesattheheartofthematterandthatthesituationcannotbeexplainedbythedistinctionbetweenrichandpoor。

Moreover，theusurywhichsucksdrythesmallproducergoeshandinhandwiththeusurywhichsucksdrytherichownerofalargeestate。AssoonastheusuryoftheRomanpatricianshadcompletelyruinedtheRomanplebeians，thesmallpeasants，thisformofexploitationcametoanendandapureslaveeconomyreplacedthesmall-peasanteconomy。

Intheformofinterest，theentiresurplusabovethebarestmeansofsubsistence(theamountthatlaterbecomeswagesoftheproducers)canbeconsumedbyusury(thislaterassumestheformofprofitandground-rent)，andhenceitishighlyabsurdtocomparethelevelofthisinterest，whichassimilatesallthesurplus-valueexceptingtheshareclaimedbythestate，withthelevelofthemoderninterestrate，whereinterestconstitutesatleastnormallyonlyapartofthesurplus-value。Suchacomparisonoverlooksthatthewage-workerproducesandgivestothecapitalistwhoemployshim，profit，interestandground-rent，i。e。，theentiresurplus-value。Careymakesthisabsurdcomparisoninordertoshowhowadvantageousthedevelopmentofcapital，andthefallintheinterestratethataccompaniesit，areforthelabourer。Furthermore，whiletheusurer，notcontentwithsqueezingthesurplus-labouroutofhisvictim，graduallyacquirespossessionevenofhisveryconditionsoflabour，land，house，etc。，andiscontinuallyengagedinthusexpropriatinghim，itisagainforgottenthat，ontheotherhand，thiscompleteexpropriationofthelabourerfromhisconditionsoflabourisnotaresultwhichthecapitalistmodeofproductionseekstoachieve，butrathertheestablishedconditionforitspointofdeparture。

Thewage-slave，justliketherealslave，cannotbecomeacreditor’sslaveduetohisposition-atleastinhiscapacityasproducer；thewage-slave，itistrue，canbecomeacreditor’sslaveinhiscapacityasconsumer。

Usurer’scapitalintheformwherebyitindeedappropriatesallofthesurplus-labourofthedirectproducers，withoutalteringthemodeofproduction；

wherebytheownershiporpossessionbytheproducersoftheconditionsoflabourandsmall-scaleproductioncorrespondingtothis-isitsessentialprerequisite；whereby，inotherwords，capitaldoesnotdirectlysubordinatelabourtoitself，anddoesnot，therefore，confrontitasindustrialcapital-thisusurer’scapitalimpoverishesthemodeofproduction，paralysestheproductiveforcesinsteadofdevelopingthem，andatthesametimeperpetuatesthemiserableconditionsinwhichthesocialproductivityoflabourisnotdevelopedattheexpenseoflabouritself，asinthecapitalistmodeofproduction。

Usurythusexerts，ontheonehand，anundermininganddestructiveinfluenceonancientandfeudalwealthandancientandfeudalproperty。

Ontheotherhand，itunderminesandruinssmall-peasantandsmall-burgherproduction，inshort，allformsinwhichtheproducerstillappearsastheownerofhismeansofproduction。Underthedevelopedcapitalistmodeofproduction，thelabourerisnottheownerofthemeansofproduction，i。e。，thefieldwhichhecultivates，therawmaterialswhichheprocesses，etc。Butunderthissystemseparationoftheproducerfromthemeansofproductionreflectsanactualrevolutioninthemodeofproductionitself。

Theisolatedlabourersarebroughttogetherinlargeworkshopsforthepurposeofcarryingoutseparatebutinterconnectedactivities；thetoolbecomesamachine。Themodeofproductionitselfnolongerpermitsthedispersionoftheinstrumentsofproductionassociatedwithsmallproperty；

nordoesitpermittheisolationofthelabourerhimself。Underthecapitalistmodeofproductionusurycannolongerseparatetheproducerfromhismeansofproduction，fortheyhavealreadybeenseparated。

Usurycentralizesmoneywealthwherethemeansofproductionaredispersed。Itdoesnotalterthemodeofproduction，butattachesitselffirmlytoitlikeaparasiteandmakesitwretched。Itsucksoutitsblood，enervatesitandcompelsreproductiontoproceedunderevermorepitiableconditions。Hencethepopularhatredagainstusurers，whichwasmostpronouncedintheancientworldwhereownershipofmeansofproductionbytheproducerhimselfwasatthesametimethebasisforpoliticalstatus，theindependenceofthecitizen。

Totheextentthatslaveryprevails，orinsofarasthesurplusproductisconsumedbythefeudallordandhisretinue，whileeithertheslave-ownerorthefeudallordfallintotheclutchesoftheusurer，themodeofproductionstillremainsthesame；itonlybecomesharderonthelabourer。Theindebtedslaveholderorfeudallordbecomesmoreoppressivebecauseheishimselfmoreoppressed。Orhefinallymakeswayfortheusurer，whobecomesalandedproprietororaslave-holderhimself，liketheknightsinancientRome。Theplaceoftheoldexploiter，whoseexploitationwasmoreorlesspatriarchalbecauseitwaslargelyameansofpoliticalpower，istakenbyahard，moneymadparvenu。Butthemodeofproductionitselfisnotalteredthereby。

Usuryhasarevolutionaryeffectinallpre-capitalistmodesofproductiononlyinsofarasitdestroysanddissolvesthoseformsofpropertyonwhosesolidfoundationandcontinualreproductioninthesameformthepoliticalorganizationisbased。UnderAsianforms，usurycancontinuealongtime，withoutproducinganythingmorethaneconomicdecayandpoliticalcorruption。Onlywhereandwhentheotherprerequisitesofcapitalistproductionarepresentdoesusurybecomeoneofthemeansassistinginestablishmentofthenewmodeofproductionbyruiningthefeudallordandsmall-scaleproducer，ontheonehand，andcentralizingtheconditionsoflabourintocapital，ontheother。

IntheMiddleAgesnocountryhadageneralrateofinterest。

TheChurchforbade，fromtheoutset，alllendingatinterest。Lawsandcourtsofferedlittleprotectionforloans。Interestwassomuchthehigherinindividualcases。Thelimitedcirculationofmoney，theneedtomakemostpaymentsincash，compelledpeopletoborrowmoney，andallthemoresowhentheexchangebusinesshasstillundeveloped。Therewerelargedivergence’sbothininterestratesandtheconceptionsofusury。InthetimeofCharlemagneitwasconsideredusurioustocharge100%。InLindauonLakeConstance，somelocalburgherstook2162/3%in1348。InZurich，theCityCouncildecreedthat431/3%shouldbethelegalinterestrate。InItaly40%hadtobepaidsometimes，althoughtheusualratefromthe12thtothe14thcenturydidnotexceed20%。Veronaorderedthat121/2%bethelegalrate。

EmperorFriedrichIIfixedtherateat10%，butonlyforJews。HedidnotdeigntospeakforChristians。IntheGermanRhineprovinces，10%wastheruleasearlyasthe13thcentury。(Hullmann，GeschichtedesStudtewesens，II，S。55-57。)

Usurer’scapitalemploysthemethodofexploitationcharacteristicofcapitalyetwithoutthelatter’smodeofproduction。Thisconditionalsorepeatsitselfwithinbourgeoiseconomy，inbackwardbranchesofindustryorinthosebrancheswhichresistthetransitiontothemodernmodeofproduction。Forinstance，ifwewishtocomparetheEnglishinterestratewiththeIndian，weshouldnottaketheinterestrateoftheBankofEngland，butrather，e。g。，thatchargedbylendersofsmallmachinerytosmallproducersindomesticindustry。

Usury，incontradistinctiontoconsumingwealth，ishistoricallyimportant，inasmuchasitisinitselfaprocessgeneratingcapital。Usurer’scapitalandmerchant’swealthpromotetheformationofmoneyedwealthindependentoflandedproperty。Thelessproductsassumethecharacterofcommodities，andthelessintensivelyandextensivelyexchange-valuehastakenholdofproduction，themoredoesmoneyappearasactualwealthassuch，aswealthingeneral-incontrasttoitslimitedrepresentationinuse-values。

Thisisthebasisofhoarding。Asidefrommoneyasworld-moneyandashoard，itis，inparticular，theformofmeansofpaymentwherebyitappearsastheabsoluteformofcommodities。Anditisespeciallyitsfunctionasameansofpaymentwhichdevelopsinterestandtherebymoney-capital。Whatsquanderingandcorruptingwealthdesiresismoneyassuch，moneyasameansofbuyingeverything(alsoasameansofpayingdebts)。Thesmallproducerneedsmoneyaboveallformakingpayments。(Thetransformationofservicesandtaxesinkindtolandlordsandthestateintomoney-rentandmoney-taxesplaysagreatrolehere。)Ineithercase，moneyisneededassuch。Ontheotherhand，itisinusurythathoardingfirstbecomesrealityandthatthehoarderfulfillshisdream。Whatissoughtfromtheownerofahoardisnotcapital，butmoneyassuch；butbymeansofinteresthetransformsthishoardofmoneyintocapital，thatis，intoameansofappropriatingsurpluslabourinpartorinitsentirety，andsimilarlysecuringaholdonapartofthemeansofproductionthemselves，eventhoughtheymaynominallyremainthepropertyofothers。Usurylivesintheporesofproduction，asitwere，justasthegodsofEpicuruslivedinthespacebetweenworlds。Moneyissomuchhardertoobtain，thelessthecommodity-formconstitutesthegeneralformofproducts。Hencetheusurerknowsnootherbarrierbutthecapacityofthosewhoneedmoneytopayortoresist。Insmall-peasantandsmall-burgherproductionmoneyservesasameansofpurchase，mainly，wheneverthemeansofproductionofthelabourer(whoisstillpredominantlytheirownerunderthesemodesofproduction)arelosttohimeitherbyaccidentorthroughextraordinaryupheavals，oratleastarenotreplacedinthenormalcourseofreproduction。Meansofsubsistenceandrawmaterialsconstituteanessentialpartoftheserequirementsofproduction。Ifthesebecomemoreexpensive，itmaymakeitimpossibletoreplacethemoutofthereturnsfortheproduct，justasordinarycropfailuresmaypreventthepeasantfromreplacinghisseedinkind。ThesamewarsthroughwhichtheRomanpatriciansruinedtheplebejailsbycompellingthemtoserveassoldiersandwhichpreventedthemfromreproducingtheirconditionsoflabour，andthereforemadepaupersofthem(andpauperization，thecripplingorlossoftheprerequisitesofreproductionisherethepredominantform)thesesamewarsfilledthestore-roomsandcoffersofthepatricianswithlootedcopper，themoneyofthattime。Insteadofdirectlygivingplebeiansthenecessarycommodities，i。e。，grain，horses，andcattle，theyloanedthemthiscopperforwhichtheyhadnousethemselves，andtookadvantageofthissituationtoexactenormoususuriousinterest，therebyturningtheplebeiansintotheirdebtorslaves。DuringthereignofCharlemagne，theFrankishpeasantswerelikewiseruinedbywars，sothattheyfacednochoicebuttobecomeserfsinsteadofdebtors。IntheRomanEmpire，asisknown，extremehungerfrequentlyresultedinthesaleofchildrenandalsoinfreemensellingthemselvesasslavestotherich。Somuchforgeneralturning-points。Inindividualcasesthemaintenanceorlossofthemeansofproductiononthepartofsmallproducersdependsonathousandcontingencies，andeveryoneofthesecontingenciesorlossessignifiesimpoverishmentandbecomesacreviceintowhichaparasiticusurermaycreep。Themeredeathofhiscowmayrenderthesmallpeasantincapableofrenewinghisreproductiononitsformerscale。Hethenfallsintotheclutchesoftheusurer，andonceintheusurer’spowerhecanneverextricatehimself。

Thereallyimportantandcharacteristicdomainoftheusurer，however，isthefunctionofmoneyasameansofpayment。Everypaymentofmoney，ground-rent，tribute，tax，etc。，whichbecomesdueonacertaindate，carrieswithittheneedtosecuremoneyforsuchapurpose。HencefromthedaysofancientRometothoseofmoderntimes，wholesaleusuryreliesupontax-collectors，fermiersgè；nè；raux，receveursgè；nè；raux。Then，theredevelopswithcommerceandthegeneralizationofcommodity-productiontheseparation，intime，ofpurchaseandpayment。

Themoneyhastobepaidonadefinitedate。Howthiscanleadtocircumstancesinwhichthemoney-capitalistandusurer，evennowadays，mergeintooneisshownbymodernmoneycrises。Thissameusury，however，becomesoneoftheprincipalmeansoffurtherdevelopingthenecessityformoneyasameansofpayment-bydrivingtheproducerevermoredeeplyintodebtanddestroyinghisusualmeansofpayment，sincetheburdenofinterestalonemakeshisnormalreproductionimpossible。Atthispoint，usurysproutsupoutofmoneyasameansofpaymentandextendsthisfunctionofmoneyasitsveryowndomain。

Thecreditsystemdevelopsasareactionagainstusury。Butthisshouldnotbemisunderstood，norbyanymeansinterpretedinthemanneroftheancientwriters，thechurchfathers，Lutherortheearlysocialists。

Itsignifiesnomoreandnolessthanthesubordinationofinterest-bearingcapitaltotheconditionsandrequirementsofthecapitalistmodeofproduction。

Onthewhole，interest-bearingcapitalunderthemoderncreditsystemisadaptedtotheconditionsofthecapitalistmodeofproduction。

Usuryassuchdoesnotonlycontinuetoexist，butisevenfreed，amongnationswithadevelopedcapitalistproduction，fromthefettersimposeduponitbyallpreviouslegislation。Interest-bearingcapitalretainstheformofusurer’scapitalinrelationtopersonsorclasses，orincircumstanceswhereborrowingdoesnot，norcan，takeplaceinthesensecorrespondingtothecapitalistmodeofproduction；whereborrowingtakesplaceasaresultofindividualneed，asatthepawnshop；wheremoneyisborrowedbywealthyspendthriftsforthepurposeofsquandering；orwheretheproducerisanon-capitalistproducer，suchasasmallfarmerorcraftsman，whoisthusstill，astheimmediateproducer，theownerofhisownmeansofproduction；finallywherethecapitalistproducerhimselfoperatesonsuchasmallscalethatheresemblesthoseself-employedproducers。

Whatdistinguishesinterest-bearingcapital——insofarasitisanessentialelementofthecapitalistmodeofproduction——fromusurer’scapitalisbynomeansthenatureorcharacterofthiscapitalitself。

Itismerelythealteredconditionsunderwhichitoperates，andconsequentlyalsothetotallytransformedcharacteroftheborrowerwhoconfrontsthemoney-lender。Evenwhenamanwithoutfortunereceivescreditinhiscapacityofindustrialistormerchant，itoccurswiththeexpectationthathewillfunctionascapitalistandappropriateunpaidlabourwiththeborrowedcapital。Hereceivescreditinhiscapacityofpotentialcapitalist。Thecircumstancethatamanwithoutfortunebutpossessingenergy，solidity，abilityandbusinessacumenmaybecomeacapitalistinthismanner-andthecommercialvalueofeachindividualisprettyaccuratelyestimatedunderthecapitalistmodeofproduction-isgreatlyadmiredbyapologistsofthecapitalistsystem。Althoughthiscircumstancecontinuallybringsanunwelcomenumberofnewsoldiersoffortuneintothefieldandintocompetitionwiththealreadyexistingindividualcapitalists，italsoreinforcesthesupremacyofcapitalitself，expandsitsbaseandenablesittorecruitevernewforcesforitselfoutofthesubstratumofsociety。Inasimilarway，thecircumstancethattheCatholicChurchintheMiddleAgesformeditshierarchyoutofthebestbrainsintheland，regardlessoftheirestate，birthorfortune，wasoneoftheprincipalmeansofconsolidatingecclesiasticalruleandsuppressingthelaity。Themorearulingclassisabletoassimilatetheforemostmindsofaruledclass，themorestableanddangerousbecomesitsrule。

Theinitiatorsofthemoderncreditsystemtakeastheirpointofdeparturenotananathemaagainstinterest-bearingcapitalingeneral，butonthecontrary，itsexplicitrecognition。

Wearenotreferringheretosuchreactionsagainstusurywhichattemptedtoprotectthepooragainstit，liketheMonts-de-piè；tè；(1350inSarlinsinFranche-Comtè；，laterinPerugiaandSavonainItaly，1400and1479)。Thesearenoteworthymainlybecausetheyrevealtheironyofhistory，whichturnspiouswishesintotheirveryoppositeduringtheprocessofrealization。Accordingtoamoderateestimate，theEnglishworking-classpays100%tothepawnshops，themodernsuccessorsofMonts-de-piè；tè；[21]WearealsonotreferringtothecreditfantasiesofsuchmenasDr。HughChamberleyneorJohnBriscoe，whoattemptedduringthelastdecadeofthe17thcenturytoemancipatetheEnglisharistocracyfromusurybymeansofafarmers’bankusingpapermoneybasedonrealestate。[22]

Thecreditassociationsestablishedinthe12thand14thcenturiesinVeniceandGenoaarosefromtheneedformarinecommerceandthewholesaletradeassociatedwithittoemancipatethemselvesfromthedominationofout-modedusuryandthemonopolizationofthemoneybusiness。Whiletheactualbanksfoundedinthosecity-republicsassumedsimultaneouslytheshapeofpubliccreditinstitutionsfromwhichthestatereceivedloansonfuturetaxrevenues，itshouldnotbeforgottenthatthemerchantsfoundingthoseassociationswerethemselvesprominentcitizensofthosestatesandasmuchinterestedinemancipatingtheirgovernmentastheywereinemancipatingthemselvesfromtheexactionsofusurers，[23]andatthesametimeingettingtighterandmoresecurecontroloverthestate。Hence，whentheBankofEnglandwastobeestablished，theToriesalsoprotested:”Banksarerepublicaninstitutions。FlourishingbanksexistedinVenice，Genoa，Amsterdam，andHamburg。ButwhoeverheardofaBankofFranceorSpain？”

TheBankofAmsterdam，in1609，wasnotepoch-makinginthedevelopmentofthemoderncreditsystemanymorethanthatofHamburgin1619。Itwaspurelyabankfordeposits。Thechecksissuedbythebankwereindeedmerelyreceiptsforthedepositedcoinedanduncoinedpreciousmetal，andcirculatedonlywiththeendorsementoftheacceptors。ButinHollandcommercialcreditanddealinginmoneydevelopedhandinhandwithcommerceandmanufacture，andinterest-bearingcapitalwassubordinatedtoindustrialandcommercialcapitalbythecourseofdevelopmentitself。Thiscouldalreadybeseeninthelowinterestrate。Holland，however，wasconsideredinthe17thcenturythemodelofeconomicdevelopment，asEnglandisnow。Themonopolyofold-styleusury，basedonpoverty，collapsedinthatcountryofitsownweight。

Duringtheentire18thcenturythereisthecry，withHollandreferredtoasanexample，foracompulsoryreductionoftherateofinterest(andlegislationactsaccordingly)，inordertosubordinateinterest-bearingcapitaltocommercialandindustrialcapital，insteadofthereverse。ThemainspokesmanforthismovementisSirJosiahChild，thefatherofordinaryEnglishprivatebanking。Hedeclaimsagainstthemonopolyofusurersinmuchthesamewayasthewholesaleclothingmanufacturers，Moses&；

Son，dowhenleadingthelightagainstthemonopolyof”privatetailors。”

ThissameJosiahChildissimultaneouslythefatherofEnglishstock-jobbing。

Thus，thisautocratoftheEastIndiaCompanydefendsitsmonopolyinthenameoffreetrade。VersusThomasManley(InterestofMoneyMistaken——ThomasManleywasnottheauthorofthisbook。ItwaspublishedanonymouslyinLondonin1668——Ed。)hesays:”AsthechampionofthetimidandtremblingbandofusurersheerectshismainbatteriesatthatpointwhichIhavedeclaredtobetheweakesthedeniespoint-blankthatthelowrateofinterestisthecauseofwealthandvowsthatitismerelyitseffect。”

(Traitè；ssurleCommerce，etc。，1669，trad。AmsterdametBerlin，1754。)”Ifitiscommercethatenrichesacountry，andifaloweringofinterestincreasescommerce，thenaloweringofinterestorarestrictionofusuryisdoubtlessafruitfulprimarycauseofthewealthofanation。

Itisnotatallabsurdtosaythatthesamethingmaybesimultaneouslyacauseundercertaincircumstances，andaneffectunderothers”(l。c。，p。155)。”Theeggisthecauseofthehen，andthehenisthecauseoftheegg。Theloweringofinterestmaycauseanincreaseofwealth，andtheincreaseofwealthmaycauseastillgreaterreductionofinterest”

(l。c。，p。156)。”Iamthedefenderofindustryandmyopponentdefendslazinessandsloth”(p。179)。

Thisviolentbattleagainstusury，thisdemandforthesubordinationofinterest-bearingcapitaltoindustrialcapital，isbuttheheraldoftheorganiccreationsthatestablishtheseprerequisitesofcapitalistproductioninthemodernbankingsystem，whichontheonehandrobsusurer’scapitalofitsmonopolybyconcentratingallidlemoneyreservesandthrowingthemonthemoneymarket，andontheotherhandlimitsthemonopolyofthepreciousmetalitselfbycreatingcredit-money。

Thesameoppositiontousury，thedemandfortheemancipationofcommerce，industryandthestatefromusury，whichareobservedhereinthecaseofChild，willbefoundinallwritingsonbankinginEnglandduringthelastthirdofthe17thandtheearly18thcenturies。Wealsofindcolossalillusionsaboutthemiraculouseffectsofcredit，abolitionofthemonopolyofpreciousmetal，itsdisplacementbypaper，etc。TheScotsmanWilliamPaterson，founderoftheBankofEnglandandtheBankofScotland，isbyalloddsLawtheFirst。

AgainsttheBankofEngland”allgoldsmithsandpawnbrokerssetupahowlofrage。”(Macaulay，HistoryofEngland，IV，p。499。)”DuringthefirsttenyearstheBankhadtostrugglewithgreatdifficulties；

greatforeignfeuds；itsnoteswereonlyacceptedfarbelowtheirnominalvalue……thegoldsmiths(inwhosehandsthetradeinpreciousmetalsservedasabasisofaprimitivebankingbusiness)werejealousoftheBank，becausetheirbusinesswasdiminished，theirdiscountswerelowered，theirtransactionswiththegovernmenthadpassedtotheiropponents。”(3。Francis，l。c。，p。73。)

EvenbeforetheestablishmentoftheBankofEnglandaplanwasproposedin1683foraNationalBankofCredit，whichhadforitspurpose，amongothers，”thattradesmen，whentheyhaveaconsiderablequantityofgoods，may，bythehelpofthisbank，deposittheirgoods，byraisingacreditontheirowndeadstock，employtheirservants，andincreasetheirtrade，tilltheygetagoodmarketinsteadofsellingthemataloss”[J。Francis，l。c。，pp。39-40]。AftermanyendeavorsthisBankofCreditwasestablishedinDevonshireHouseonBisbopsgateStreet。Itmadeloanstoindustrialistsandmerchantsonthesecurityofdepositedgoodstotheamountofthree-quartersoftheirvalue，intheformofbillsofexchange。Inordertomakethesebillsofexchangecapableofcirculating，anumberofpeopleineachbranchofbusinesswereorganizedintoasociety，fromwhicheverypossessorofsuchbillswouldbeabletoobtaingoodswiththesamefacilityasifheweretoofferthemcashpayment。Thisbank’sbusinessdidnotflourish。

Itsmachinerywastoocomplicated，andtherisktoogreatincaseofacommoditydepreciation。

IfwegobytheactualcontentofthoserecordswhichaccompanyandtheoreticallypromotetheformationofthemoderncreditsysteminEngland，weshallnotfindanythinginthembut-asoneofitsconditions-thedemandforasubordinationofinterest-bearingcapitalandofloanablemeansofproductioningeneraltothecapitalistmodeofproduction。Ontheotherhand，ifwesimplyclingtothephraseology，weshallbefrequentlysurprisedbytheagreement-includingthemodeofexpressionwiththeillusionsofthefollowersofSaint-Simonaboutbankingandcredit。

Justasinthewritingsofthephysiocratsthecuitivateurdoesnotstandfortheactualtillerofthesoil，butforthebigfarmer，sothetravailleurwithSaint-Simon，andcontinuingonthroughhisdisciples，doesnotstandforthelabourer，butfortheindustrialandcommercialcapitalist。”Untravailleurabesoind’aides，deseconds，d’ouvriers；illeschercheintelligents，habiles，dè；vouè；s:illesmetal’oeuvre，etleurstravauxsontproductifs”([Enfantin]Atravailleur(worker)needshelpers，supporters，labourers；helooksforsuchasareintelligent，able，devoted；heputsthemtowork，andtheirlabourisproductive。”

(Religionsaint-simonienne，~eonomiepolitiqueetPoittique，Paris，1831，p。104。)。

Infact，oneshouldbearinmindthatonlyinhislastwork，LeNouveauChristianisme，Saint-Simonspeaksdirectlyfortheworking-classanddeclarestheiremancipationtobethegoalofhisefforts。Allhisformerwritingsare，indeed，mereencomiumsofmodernbourgeoissocietyincontrasttothefeudalorder，orofindustrialistsandbankersincontrasttomarshalsandjuristiclaw-manufacturersoftheNapoleonicera。WhatadifferencecomparedwiththecontemporaneouswritingsofOwen！[24]ForthefollowersofSaint-Simon，theindustrialcapitalistlikewiseremainsthetravailleurparexcellence，astheabove-quotedpassageindicates。

Afterreadingtheirwritingscritically，onewillnotbesurprisedthattheircreditandbankfantasiesmaterializedinthecreditmobilizer，foundedbyanex-followerofSaint-Simon，EmilePereire。Thisform，incidentally，couldbecomedominantonlyinacountrylikeFrance，whereneitherthecreditsystemnorlarge-scaleindustryhadreachedthemodernlevelofdevelopment。ThiswasnotatallpossibleinEnglandandAmerica。TheembryoofcreditmobilizerisalreadycontainedinthefollowingpassagesfromDoctrinedeSaint-Simon。Exposition。Premiereannè；e，1828-29，3meed。，Paris，1831。Itisunderstandablethatbankerscanlendmoneymorecheaplythanthecapitalistsandprivateusurers。Thesebankersare，therefore，”abletosupplytoolstotheindustrialistsfarmorecheaply，thatis，atlowerinterest，thantherealestateownersandcapitalists，whomaybemoreeasilymistakenintheirchoiceofborrowers”(p。202)。Buttheauthorsthemselvesaddinafootnote:”Theadvantagethatwouldaccruefromthemediationofbankersbetweentheidlerichandthetravailleursisoftencounterbalanced，orevencanceled，bytheopportunitiesofferedinourdisorganizedsocietytoegoism，whichmaymanifestitselfinvariousformsoffraudandcharlatanism。Thebankersoftenwormtheirwaybetweenthetravailleursandidlerichforthepurposeofexploitingbothtothedetrimentofsociety。”Travailleurheremeanscapitalisteindustriel。

Incidentally，itiswrongtoregardthemeansatthecommandofthemodernbankingsystemmerelyasthemeansof~idlepeople。Inthefirstplace，itistheportionofcapitalwhichindustrialistsandmerchantstemporarilyholdintheformofidlemoney，asamoneyreserveorascapitaltobeinvested。Henceitisidlecapital，butnotcapitaloftheidle。Inthesecondplace，itistheportionofallrevenueandsavingsingeneralwhichistobetemporarilyorpermanentlyaccumulated。Bothareessentialtothenatureofthebankingsystem。

Butitshouldalwaysbeborneinmindthat，inthefirstplace，money-intheformofpreciousmetal-remainsthefoundationfromwhichthecreditsystem，byitsverynature，canneverdetachitself。Secondly，thatthecreditsystempresupposesthemonopolyofsocialmeansofproductionbyprivatepersons(intheformofcapitalandlandedproperty)，thatitisitself，ontheonehand，animmanentformofthecapitalistmodeofproduction，andontheother，adrivingforceinitsdevelopmenttoitshighestandultimateform。

Thebankingsystem，sofarasitsformalorganizationandcentralizationisconcerned，isthemostartificialandmostdevelopedproductturnedoutbythecapitalistmodeofproduction，afactalreadyexpressedin1697

inSomeThoughtsoftheInterestsofEngland。ThisaccountsfortheimmensepowerofaninstitutionsuchastheBankofEnglandovercommerceandindustry，althoughtheiractualmovementsremaincompletelybeyonditsprovinceanditispassivetowardthem。Thebankingsystempossessesindeedtheformofuniversalbook-keepinganddistributionofmeansofproductiononasocialscale，butsolelytheform。Wehaveseenthattheaverageprofitoftheindividualcapitalist，orofeveryindividualcapital，isdeterminednotbythesurplus-labourappropriatedatfirsthandbyeachcapital，butbythequantityoftotalsurplus-labourappropriatedbythetotalcapital，fromwhicheachindividualcapitalreceivesitsdividendonlyproportionaltoitsaliquotpartofthetotalcapital。Thissocialcharacterofcapitalisfirstpromotedandwhollyrealizedthroughthefulldevelopmentofthecreditandbankingsystem。Ontheotherhandthisgoesfarther。Itplacesalltheavailableandevenpotentialcapitalofsocietythatisnotalreadyactivelyemployedatthedisposaloftheindustrialandcommercialcapitalistssothatneitherthelendersnorusersofthiscapitalareitsrealownersorproducers。Itthusdoesawaywiththeprivatecharacterofcapitalandthuscontainsinitself，butonlyinitself，theabolitionofcapitalitself。Bymeansofthebankingsystemthedistributionofcapitalasaspecialbusiness，asocialfunction，istakenoutofthehandsoftheprivatecapitalistsandusurers。Butatthesametime，bankingandcreditthusbecomethemostpotentmeansofdrivingcapitalistproductionbeyonditsownlimits，andoneofthemosteffectivevehiclesofcrisesandswindle。

Thebankingsystemshows，furthermore，bysubstitutingvariousformsofcirculatingcreditinplaceofmoney，thatmoneyisinrealitynothingbutaparticularexpressionofthesocialcharacteroflabouranditsproducts，which，however，asantitheticaltothebasisofprivateproduction，mustalwaysappearinthelastanalysisasathing，aspecialcommodity，alongsideothercommodities。

Finally，thereisnodoubtthatthecreditsystemwillserveasapowerfulleverduringthetransitionfromthecapitalistmodeofproductiontothemodeofproductionofassociatedlabour；butonlyasoneelementinconnectionwithothergreatorganicrevolutionsofthemodeofproductionitself。Ontheotherhand，theillusionsconcerningthemiraculouspowerofthecreditandbankingsystem，inthesocialistsense，arisefromacompletelackoffamiliaritywiththecapitalistmodeofproductionandthecreditsystemasoneofitsforms。Assoonasthemeansofproductionceasebeingtransformedintocapital(whichalsoincludestheabolitionofprivatepropertyinland)，creditassuchnolongerhasanymeaning。

This，incidentally，wasevenunderstoodbythefollowersofSaint-Simon。

Ontheotherhand，aslongasthecapitalistmodeofproductioncontinuestoexist，interest-bearingcapital，asoneofitsforms，alsocontinuestoexistandconstitutesinfactthebasisofitscreditsystem。Onlythatsensationalwriter，Proudhon，whowantedtoperpetuatecommodity-productionandabolishmoney，[25]wascapableofdreamingupthemonstrouscrè；ditgratuit，theostensiblerealizationofthepiouswishofthepetty-bourgeoisestate。

InReligionsaint-simonienne，è；conomiepolitiqueetPolitique，wereadonpage45:”Creditservesthepurpose，inasocietyinwhichsomeowntheinstrumentsofindustrywithouttheabilityorwilltoemploythem，andwhereotherindustriouspeoplehavenoinstrumentsoflabour，oftransferringtheseinstrumentsintheeasiestmannerpossiblefromthehandsoftheformer，theirowners，tothehandsoftheotherswhoknowhowtousethem。Notethatthisdefinitionregardscreditasaresultofthewayinwhichpropertyisconstituted。”Therefore，creditdisappearswiththisconstitutionofproperty。Weread，furthermore，onpage98，thatthepresentbanks”considerittheirbusinesstofollowthemovementinitiatedbytransactionstakingplaceoutsideoftheirdomain，butnotthemselvestoprovideanimpulsetothismovement；inotherwords，thebanksperformtheroleofcapitalistsinrelationtothetravailleurs，whomtheyloanmoney。”Thenotionthatthebanksthemselvesshouldtakeoverthemanagementanddistinguishthemselves”throughthenumberandusefulnessoftheirmanagedestablishmentsandofpromotedworks”(p。101)

containsthecreditmobilizerinembryo。Inthesameway，CharlesPecqueurdemandsthatthebanks(whichthefollowersofSaint-SimoncallaSystemegeneraldesbanques)”shouldruleproduction。”PecqueurisessentiallyafollowerofSaint-Simon，butmuchmoreradical。Hewants”thecreditinstitution……tocontroltheentiremovementofnationalproduction。”——”Trytocreateanationalcreditinstitution，whichshalladvancethewherewithaltoneedypeopleoftalentandmerit，without，however，forciblytyingtheseborrowerstogetherthroughclosesolidarityinproductionandconsumption，butonthecontraryenablingthemtodeterminetheirownexchangeandproduction。Inthisway，youwillonlyaccomplishwhattheprivatebanksalreadyaccomplishnow，thatis，anarchy，disproportionbetweenproductionandconsumption，thesuddenruinofoneperson，andthesuddenenrichmentofanother；sothatyourinstitutionwillnevergetanyfartherthanproducingacertainamountofbenefitsforoneperson，correspondingtoanequivalentamountofmisfortunetobeenduredbyanother……andyouwillhaveonlyprovidedthewage-labourersassistedbyyouwiththemeanstocompetewithoneanotherjustastheircapitalistmastersnowdo。”(Ch。Pecqueur，Thè；orieNouvelleè；conomieSocialeetPolitique，Paris，1842，p。434。)

Wehaveseenthatmerchant’scapitalandinterest-bearingcapitalaretheoldestformsofcapital。Butitisinthenatureofthingsthatinterest-bearingcapitalassumesinpopularconceptiontheformofcapitalparexcellence。Inmerchant’scapitaltheretakesplacetheworkofmiddleman，nomatterwhetherconsideredascheating，labour，oranythingelse。Butinthecaseofinterest-bearingcapitaltheself-reproducingcharacterofcapital，theself-expandingvalue，theproductionofsurplusvalue，appearspurelyasanoccultproperty。Thisaccountsforthefactthatevensomepoliticaleconomists，particularlyincountrieswhereindustrialcapitalisnotyetfullydeveloped，asinFrance，clingtointerest-bearingcapitalasthefundamentalformofcapitalandregardground-rent，forexample，merelyasamodifiedformofit，sincetheloan-formalsopredominateshere。Inthisway，theinternalorganisationofthecapitalistmodeofproductioniscompletelymisunderstood，andthefactisentirelyoverlookedthatland，likecapital，isloanedonlytocapitalists。Ofcourse，meansofproductioninkind，suchasmachinesandbusinessoffices，canalsobeloanedinsteadofmoney。Buttheythenrepresentadefinitesumofmoney，andthefactthatinadditiontointerestapartispaidforwearandtearisduetotheiruse-value，i。e。，thespecificnaturalformoftheseelementsofcapital。Thedecisivefactorhereisagainwhethertheyareloanedtodirectproducers，whichwouldpresupposethenon-existenceofthecapitalistmodeofproduction-atleastinthesphereinwhichthisoccurs-orwhethertheyareloanedtoindustrialcapitalists，whichispreciselytheassumptionbaseduponthecapitalistmodeofproduction。Itisstillmoreirrelevantandmeaninglesstodragthelendingofhouses，etc。，forindividualuseintothisdiscussion。Thattheworking-classisalsoswindledinthisform，andtoanenormousextent，isselfevident；butthisisalsodonebytheretaildealer，whosellsmeansofsubsistencetotheworker。Thisissecondaryexploitation，whichrunsparalleltotheprimaryexploitationtakingplaceintheproductionprocessitself。Thedistinctionbetweensellingandloaningisquiteimmaterialinthiscaseandmerelyformal，and，asalreadyindicated，((Presentedition:pp。345-50——Ed。)cannotappearasessentialtoanyone，unlesshebewhollyunfamiliarwiththeactualnatureoftheproblem。

Usury，likecommerce，exploitsagivenmodeofproduction。Itdoesnotcreateit，butisrelatedtoitoutwardly。Usurytriestomaintainitdirectly，soastoexploititeveranew；itisconservativeandmakesthismodeofproductiononlymorepitiable。Thelesselementsofproductionenterintotheproductionprocessascommodities，andemergefromitascommodities，themoredoestheiroriginationfrommoneyappearasaseparateact。Themoreinsignificanttheroleplayedbycirculationinthesocialreproduction，themoreusuryflourishes。

Thatmoneywealthdevelopsasaspecialkindofwealth，meansinrespecttousurer’scapitalthatitpossessesallitsclaimsintheformofmoneyclaims。Itdevelopsthatmuchmoreinagivencountry，themorethemainbodyofproductionislimitedtonaturalservices，etc。，thatis，touse-values。

Usuryisapowerfulleverindevelopingthepreconditionsforindustrialcapitalin50farasitplaysthefollowingdoublerole，first，buildingup，ingeneral，anindependentmoneywealthalongsidethatofthemerchant，and，secondly，appropriatingtheconditionsoflabour，thatis，ruiningtheownersoftheoldconditionsoflabour。

INTERESTINTHEMIDDLEAGES”IntheMiddleAgesthepopulationwaspurelyagricultural。Undersuchagovernmentaswasthefeudalsystemtherecanbebutlittletraffic，andhencebutlittleprofit。HencethelawsagainstusurywerejustifiedintheMiddleAges。Besides，inanagriculturalcountryapersonseldomwantstoborrowmoneyexcepthebereducedtopovertyordistress……InthereignofHenryVIII，interestwaslimitedto10percent。lamesIreduceditto8percent……CharlesIIreduceditto6percent；inthereignofQueenAnne，itwasreducedto5percent……Inthosetimes，thelenders……had，infact，thoughnotalegal，yetanactualmonopoly，andhenceitwasnecessarythatthey，likeothermonopolists，shouldbeplacedunderrestraint。Inourtimes，itistherateofprofitwhichregulatestherateofinterest。Inthosetimes，itwastherateofinterestwhichregulatedtherateofprofit。Ifthemoney-lenderchargedahighrateofinteresttothemerchant，themerchantmusthavechargedahigherrateofprofitonhisgoods。Hence，alargesumofmoneywouldbetakenfromthepocketsofthepurchaserstobeputintothepocketsofthemoney-lenders。”(Gilbart，HistoryandPrinciplesofBanking，pp。163，164，165。)”Ihavebeentoldthat10guldenarenowtakenannuallyateveryLeipzigFair，(Theauthorhasinmindtheloanof100guldenwithinterestpayableinthreeinstallmentsattheLeipzigFair，heldthreetimesannyually:

EasterandSt。Michael’sDay)thatis，30oneachhundred，someaddtheNeuenburgFair，thusmaking40perhundred；whetherthatisso，Idon’tknow。Forshame！Whatwillbetheinfernaloutcomeofthis？……Whoevernowhas100florinsatLeipzigtakes40annually，whichisthesameasdevouringonepeasantorburghereachyear。Ifonehas1，000florins，hetakes400annuallywhichmeansdevouringaknightorarichnoblemanperyear’Ifonehas10，000fiorins，hetakes4，000peryear，whichmeansdevouringarichcounteachyear。Ifonehas100，000florins，asthebigmerchantsmustpossess，thetakes40，000annually，whichmeansdevouringone1，000，000

fiorins，hetakes400，000annually，whichmeansdevouringonemightykingeveryyear。Andhedoesnotriskeitherhispersonorhiswares，doesnotwork，sitsnearhisfire-placeandroastsapples；somightalowlyrobbersitathomeanddevourawholeworldintenyears。”(QuotedfromBuchervomKaufhandelundWuchervomJahre1524，Luther’sWerke，Wittenberg，1589，Teil6，S。312。)”FifteenyearsagoItookpeninhandagainstusurywhenithadspreadsoalarminglythatIcouldscarcelyhope’foranyimprovement。Sincethenithasbecomesoarrogantthatitdeignsnottobeclassedasvice，sin，orshame，butachievespraiseaspurevirtueandhonour，asthoughitwereperformingagreatfavourandChristianserviceforthepeople。

Whatwillhelpdeliverusnowthatshamehasturnedintohonourandviceintovirtue？”(MartinLuther，AndiePlarhermwiderdenWucherzupredigen，Wittenberg，1540。)”Jews，Lombards，usurersandextortionerswereourfirstbankers，ourprimitivetraffickersinmoney，theircharacterlittleshortofinfamous……TheywerejoinedbyLondongoldsmiths。Asabody……ourprimitivebankers……wereaverybadset，theyweregrippingusurers，iron-heartedextortioners。”(D。Hardcastle，BanksandBankers，2nded。，London，1843，pp。19，20。)”TheexampleshownbyVenice(inestablishingabank)wasthusquicklyimitated；allsea-coasttowns，andingeneralalltownswhichhadearnedfamethroughtheirindependenceandcommerce，foundedtheirfirstbanks。Thereturnvoyageoftheirships，whichoftenwasoflongduration，inevitablyledtothecustomoflendingoncredit。ThiswasfurtherintensifiedbythediscoveryofAmericaandtheensuingtradewiththatcontinent。”

(Thisisthemainpoint。)Thecharteringofshipsmadelargeloansnecessary-aprocedurealreadyobtaininginancientAthensandGreece。In1308，theHansetownofBrugespossessedaninsurancecompany。(M。Augier，l。c。，pp。202，203。)

Towhatextentthegrantingofloanstolandowners，andthustothepleasure-seekingwealthyingeneral，stillprevailedinthelastthirdofthe17thcentury，eveninEngland，beforethedevelopmentofmoderncredit，maybeseen，amongothers，intheworksofSirDudleyNorth。HewasnotonlyoneofthefirstEnglishmerchants，butalsooneofthemostprominenttheoreticaleconomistsofhistime:”Themoneysemployedatinterestinthisnation，arenotnearthetenthpart，disposedtotradingpeople，wherewithtomanagetheirtrades；butareforthemostpartlentforthesupplyingofluxury，andtosupporttheexpenseofpersons，whothoughgreatownersoflands，yetspendfasterthantheirlandsbringin；andbeingloathtosell，chooserathertomortgagetheirestates。”(DiscoursesuponTrade，London，1691，pp。6-7。)

Polandinthe18thcentury:”Warsawcarriedonalargebustlingbusinessinbillsofexchangewhich，however，hadasitsprincipalbasisandaimtheusuryofitsbankers。Inordertosecuremoney，whichtheycouldlendtospendthriftgentryat8%

andmore，theysoughtandobtainedabroadopenexchangecredit，thatis，creditthathadnocommoditytradeasitsbasis，butwhichtheforeigndraweecontinuedtoacceptaslongasthereturnsfromthesemanipulationsdidnotfailtocomein。However，theypaidheavilyforthisthroughbankruptciesofmenlikeTapperandotherhighlyrespectedWarsawbankers。”(J。G。Bjisch，Theoretisch-praktischeDarstellungderHandlung，etc。，3rded。，Hamburg，1808，Vol。II，pp。232，233。)

ADVANTAGESDERIVEDBYTHECHURCHFROMTHEPROHIBITIONOFINTEREST”TakinginteresthadbeeninterdictedbytheChurch。Butsellingpropertyforthepurposeoffindingsuccourindistresshadnotbeenforbidden。

Ithadnotevenbeenprohibitedtotransferpropertytothemoney-lenderassecurityforacertainterm，untiladebtorrepaidhisloan，leavingthemoney-lenderfreetoenjoytheusufructofthepropertyasarewardforhisabstinencefromhismoney……TheChurchitself，anditsassociatedcommunesandpiacorpora，derivedmuchprofitfromthispractice，particularlyduringthecrusades。Thisbroughtaverylargeportionofnationalwealthintopossessionoftheso-called’deadhand，’allthemoresobecausetheJewswerebarredfromengaginginsuchusury，thepossessionofsuchfixedliensnotbeingconcealable……Withoutthebanoninterestchurchesandcloisterswouldneverhavebecomesoaffluent”(l。c。，p。55)。

NOTES

21。”Itisbyfrequentfluctuationswithinthemonth，andbypawningonearticletorelieveanother，whereasmallsumisobtained，thatthepremiumformoneybecomessoexcessive。Thereareabout240licensedpawnbrokersinthemetropolis，andnearly1，450

inthecountry。Thecapitalemployedissupposedsomewhattoexceedamillionpoundssterling；andthiscapitalisturnedroundthriceinthecourseoftheyear，andyieldseachtimeabout331/2percentonanaverage；

accordingtowhichcalculation，theinferiorordersofsocietyinEnglandpayaboutonemillionayearfortheuseofatemporaryloan，exclusiveofwhattheylosebygoodsbeingforfeited。”(J。D。Tuckett，AHistoryofthePastandPresentStateoftheLabouringPopulatton，London，1846，1，p。114。)

22。Eveninthetitlesoftheirworkstheystateastheirprincipalnurpose”thegeneralgoodofthelandedmen，thegreatincreaseofthevalueofknd，theexemptionof”thenobility，gentry，etc。，fromtaxes，enlargingtheiryearlyestates，etc。”Onlytheusurerswouldstandtolose，thoseworstenemiesofthenationwhohaddonemoreinjurytothenobilityandyeomanrythananarmyofinvasionfromFrancecouldhavedone。

23。”Therichgoldsmith(theprecursorofthebanker)，forexample，madeCharlesIIofEnglandpaytwentyandthirtypercentforaccommodation。Abusinesssoprofitable，inducedthegoldsmith’moreandmoretobecomelendertotheKing，toanticipatealltherevenue，totakeeverygrantofParliamentintopawnassoonasitwasgiven；alsotooutvieeachotherinbuyingandtakingtopawnbills，orders，andtallies，sothat，ineffect，alltherevenuepassedthroughtheirhands’。”(JohnFrancis，HistoryoftheBankofEngland，London，1848，I，p。31。)”Theerectionofabankhadbeensuggestedseveraltimesbeforethat。Itwasatlastanecessity”(l。c。，p。38)。”Thebankwasanecessityforthegovernmentitself，suckeddrybyusurers，inordertoobtainmoneyatareasonablerate，onthesecurityofparliamentarygrants”(l。c。，pp。59，60)。

24。Marxwouldsurelyhavemodifiedthispassageconsiderably，hadhereworkedhismanuscript。Itwasinspiredbytheroleoftheax-followersofSaint-SimonunderFrance’sSecondEmpirewherejustatthetimethatMarxwrotetheabove，theworldredeemingcreditfantasiesofthisschoolthroughtheironyofhistorywerebeingrealisadintheformofatramendousswindleonascaleneverseenbeforeLaterMarxspokeonlywithadmirationofthegeniusandencyclopaedicmindofSaintSimonWheninhisearlierworksthelatterignorestheantithesisbetweenthebourgeoisieandtheproletariatwhichwasjustthencomingintoexistenceinFrancewhenheincludesamongthetravailleursthatpartofthebourgeoisiewhichwasactiveinproduction，thiscorrespondstoFourier5conceptionofattemptingtoreconcilecapitalandlabourandisexplainedbytheeconomicandpoliticalsituationofFranceinthosedaysThefactthatOwenwasmorefarsightadinthisrespectisduetohisdifferentenvironment，forhelivedinaperiodofindustrialrevolutionandofacutelysharpeningclassantagonisms——F。E。

25。KarlMarx，Misè；redelaPhtlosophie，BruxellesetParis，1847——KarlMarx，ZurKritikderpolitischenOekonomie，8。64。

1894:CapitalIII——Chapter37KarlMarx’sCAPITAL

volumeIII

THEPROCESSOFCAPITALISTPRODUCTIONASAWHOLEpartVI

TRANSFORMATIONOFSURPLUS-PROFIT

INTOGROUND-RENTCHAPTERXXXVII

INTRODUCTIONTheanalysisoflandedpropertyinitsvarioushistoricalformsisbeyondthescopeofthiswork。Weshallheconcernedwithitonlyinsofarasaportionofthesurplus-valueproducedbycapitalfallstotheshareofthelandowner。Weassume，then，thatagricultureisdominatedbythecapitalistmodeofproductionjustasmanufactureis；

inotherwords，thatagricultureiscarriedonbycapitalistswhodifferfromothercapitalistsprimarilyinthemannerinwhichtheircapital，andthewage-laboursetinmotionbythiscapital，areinvested。Sofarasweareconcerned，thefarmerproduceswheat，etc。，inmuchthesamewayasthemanufacturerproducesyarnormachines。Theassumptionthatthecapitalistmodeofproductionhasencompassedagricultureimpliesthatitrulesoverallspheresofproductionandbourgeoissociety，i。e。，thatitsprerequisites，suchasfreecompetitionamongcapitals，thepossibilityoftransferringthelatterfromoneproductionspheretoanother，andauniformleveloftheaverageprofit，etc。，arefullymatured。Theformoflandedpropertywhichweshallconsiderhereisaspecificallyhistoricaloneaformtransformedthroughtheinfluenceofcapitalandofthecapitalistmodeofproduction，eitheroffeudallandownership，orofsmall-peasantagricultureasameansoflivelihood，inwhichthepossessionofthelandandthesoilconstitutesoneoftheprerequisitesofproductionforthedirectproducer，andinwhichhisownershipoflandappearsasthemostadvantageousconditionfortheprosperityofhismodeofproduction。Justasthecapitalistmodeofproductioningeneralisbasedontheexpropriationoftheconditionsoflabourfromthelabourers，sodoesitinagriculturepresupposetheexpropriationoftherurallabourersfromthelandandtheirsubordinationtoacapitalist，whocarriesonagricultureforthesakeofprofit。Thus，forthepurposeofouranalysis，theobjectionthatotherformsoflandedpropertyandofagriculturehaveexisted，orstillexist，isquiteirrelevant。Suchanobjectioncanonlyapplytothoseeconomistswhotreatthecapitalistmodeofproductioninagriculture，andtheformoflandedpropertycorrespondingtoit，notashistoricalbutratheraseternalcategories。

Forourpurposesitisnecessarytostudythemodernformoflandedproperty，becauseourtaskistoconsiderthespecificconditionsofproductionandcirculationwhicharisefromtheinvestmentofcapitalinagriculture。