Ethics Of Money Lending

In London it is a custom of a class of small capitalists to lend sncli small capital as will enable a destitnte costermonger to pursnc his trade f or the day - say 2s. sterling, or 50 cents, at an interest of 10 per cent, a day. If we suppose the costermoagers at an average borrow $1, and by its use average a profit of 50 cents, out of which they pay 10 cents for interest, leaving them 40 cents per day on which to live. while it may be & very sad state of facte that London shoirld have any costerinongers so poor as to be obliged to borro w at this high rate of interest, yet in view of the fact that the loan enables them to make a profit or wage several times greaterthan the interest they pay, and to live instead of Blarving, is this loan to bc regarded as a calamity to he borrower or as a boon? If a boon, then the leader is certainly a benefactor. If, raoreover, the nomber of costermongers in London needing such laans were so great that one farthing conld be loaned in this marmer at compound iotarest for a year, the smn wtmld have 5TOW11 in that period (vide Marshall' "Principies of Economics," vol. i, p. 621) to atoiHion poonds sterling in one year. This wonld be a fortnne eqaal to tí aggregate fortunes of the twenty richest men on earth. Yet at what point inAhf continnons lending of this -som to eoetermoDgers, at a rate of interesi orüy one-foartdi as great as the net profitaof borrowing, wonld any cthicaJ in jngtice anse? Certainly the greater tho nnmber of costermongers it wonM save from daüy starvaüon tho gzeater would be the humarrity or divinity of the work. And yet the earnings of the capüalist who began the year with. a fkrfinng wonld give him afortame.at theyear end.af45,000,000,000. And wery dollar Of itwuuld represent ten costermongers resened from want for a day, and enabled to earn forty cents each.