LOANS AND USURY
The medieval attitude toward usury was closely bound up with the doctrine of just price. It is a commonplace to say that usury was forbidden on the grounds that Aristotle had declared money to be barren, and that it was prohibited by the Scriptures and the Fathers of the Church. Aristotle's idea was that it was contrary to nature to exact usury since thereby the lender was making money for its own sake, thus robbing money of its proper function, i.e., that of being a medium of exchange. This idea was handed down to the Middle Ages through the Romans. With regard to the Scriptures we find that the Old Testament was interpreted as permitting usury between Jew and Gentile, but not among Jews themselves. In the New Testament there is apparently only one passage, the interpretation of which is doubtful, which can be considered as forbidding the practice, while the Fathers are vague and contradictory as to their reasons for forbidding it.
At the time of the fall of the Empire some of the Fathers condemned the taking of usury as a sin against charity, but not against justice, and this was the prevailing attitude down to the twelfth century. Nevertheless, civil codes permitted it, and there were not lacking clerics who signified their approval of these codes. In A.D. 1139 the Second Lateran Council ordered excommunication of usurers, and the opposition to the practice was further strengthened by another decree in A.D. 1179. At the same time Pope Alexander III declared it to be a sin against justice, and from this time usury was condemned outright.
The position needed clarification, however. St. Thomas Aquinas drew a distinction between fungibles and non-fungibles, and declared that the loan of a fungible (i.e., something consumed in use) was not a loan but a sale, and that to take usury in this case