Usurious Capital

As the role of money increased , not only the working . masses , but the feudal lords as well found it increasingly necessary to borrow funds . This brought about the appearance of a stratum of individuals who amassed large sums of money and loaned it out at greato interest . In this instance money also turned into money capital , but this was usurious capital . The formula of its circulation is expressed as M – M ‘ , where M ‘ is also greater than M. Merchants could not do without loans , either . This brought about the development of credit and mortgage operations and the establishment of banks . Banks first appeared in the north of Italy , where commodity – money relations were highly developed in the 13th – 14th centuries . The very word ” bank ” comes from the Italian word ” banca ” ( money – changer’s table ) . The word ” bankruptcy ” comes from the expression ” banca rota ” ( the money – changer’s overthrown table ) , for if a usurer was found to be bankrupt , his table was overturned . The banker – usurers also offered their ” aid ” to needy crafts men , thus speeding the impoverishment of many .