Politics: "a vigorous beginning lapsing as usual into a careless end"
Tacitus on Usury, Interest Rates, and the Money Supply
This is a rather remarkable…from ANNALS, Book VI. (A “tribuncian rogation” is apparently an urgent supplication from the Tribune, not sure if it was enforceable. I am sure that “tribuncian rogation” would make a great band name, however. Emphasis below is original).
The interesting thing is the effect of regulatory policy crashing the money supply by reducing the supply of credit. There is nothing new under the sun.
16 1 Meanwhile, an army of accusers broke loose on the persons who habitually increased their riches by usury, in contravention of a law of the dictator Caesar, regulating the conditions of lending money and holding property within the boundaries of Italy: a measure dropped long ago, since the public good ranks second to private utility. The curse of usury, it must be owned, is inveterate in Rome, a constant source of sedition and discord; and attempts were accordingly made to repress it even in an older and less corrupt society. First came a provision of the Twelve Tables that the rate of interest, previously governed by the fancy of the rich, should not exceed one-twelfth per cent for the month; later a tribunician rogation lowered it to one-half of that amount; and at length usufruct was unconditionally banned; while a series of plebiscites strove to meet the frauds which were perpetually repressed, only, by extraordinary evasions, to make their appearance once more. In the present instance, however, the praetor Gracchus, to whose jurisdiction the case had fallen, was forced by the numbers implicated to refer it to the senate; and the Fathers in trepidation — for not one member was clear from such a charge — asked an indulgence from the prince. It was granted; and the next eighteen months were assigned as a term of grace within which all accounts were to be adjusted in accordance with the prescriptions of the law.
17 1 The result was a dearth of money: for not only were all debts called in simultaneously; but after so many convictions and sales of forfeited estates, the cash which had been realized was locked in the treasury or the imperial exchequer. To meet this difficulty, the senate had prescribed that every creditor was to invest two-thirds of his capital, now lying at interest, in landed property in Italy; the debtor to discharge immediately an equivalent proportion of his liability. The lenders, however, called in the full amounts, and the borrowers could not in honour refuse to answer the call. Thus, at first there were hurryings to and fro, and appeals for mercy; then a hum of activity in the praetor's court; and the very scheme which had been devised as a remedy — the sale and purchase of estates — began to operate with the contrary effect, since the usurers had withdrawn their capital from circulation in order to buy land. As the glutting of the market was followed by a fall in prices, the men with the heaviest debts experienced the greatest difficulty in selling, and numbers were ejected from their properties. Financial ruin brought down in its train both rank and reputation, till the Caesar came to the rescue by distributing a hundred million sesterces among various counting-houses, and facilities were provided for borrowing free of interest for three years, if the borrower had given security to the state to double the value in landed property. Credit was thus revived, and by degrees private lenders also began to be found. Nor was the purchase of estates practised in accordance with the terms of the senatorial decree, a vigorous beginning lapsing as usual into a careless end.