medieval In the history of Europe, the Middle Ages or medieval period lasted approximately from the late 5th to the late 15th centuries, similar to the Post-classical, post-classical period of World history (field), global history. It began with t ...

finance Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...

, a gage or gage of land was a usufructory

pledge Pledge may refer to: Promises * a solemn promise * Abstinence pledge, a commitment to practice abstinence, usually teetotalism or chastity * The Pledge (New Hampshire), a promise about taxes by New Hampshire politicians * Pledge of Allegianc ...

real property In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or affixe ...

. The gage came in two forms: * the ''dead gage'' ( Scots ''deid wad'', French ''mort-gage'',

German German(s) may refer to: * Germany (of or related to) **Germania (historical use) * Germans, citizens of Germany, people of German ancestry, or native speakers of the German language ** For citizens of Germany, see also German nationality law **Ger ...

''Totsatzung''); or * the ''living gage'' (

Welsh Welsh may refer to: Related to Wales * Welsh, referring or related to Wales * Welsh language, a Brittonic Celtic language spoken in Wales * Welsh people People * Welsh (surname) * Sometimes used as a synonym for the ancient Britons (Celtic peop ...

''prid'', Fr ''vif-gage'', G ''Zinssatzung''). When a feudal tenant or landlord needed

liquid A liquid is a nearly incompressible fluid that conforms to the shape of its container but retains a (nearly) constant volume independent of pressure. As such, it is one of the four fundamental states of matter (the others being solid, gas, a ...

resources, they could pledge their

estate in land An estate in land is, in the law of England and Wales, an interest in real property that is or may become possessory. It is a type of personal property and encompasses land ownership, rental and other arrangements that give people the right to ...

, as

collateral Collateral may refer to: Business and finance * Collateral (finance), a borrower's pledge of specific property to a lender, to secure repayment of a loan * Marketing collateral, in marketing and sales Arts, entertainment, and media * ''Collate ...

, for a money loan. Since the gaged collateral was typically a piece of real property which generated revenue (e.g. a farm which produced crops, a mill which processed food, a pasture that provided milk or wool, etc.), the lender-gagee received the rents and profits of the land. Under the terms of a living gage, these rents and profits reduced the amount the borrower-gagor owed, while under a dead gage they did not. This meant that if the property was prosperous enough, or the loan small enough, a property in living gage could pay off the debt itself; in other words, it was self-redeeming. On the other hand, with a dead gage, the property's rents and profits did not go toward satisfying the principal, but instead constituted interest on the loan, which made it a form of

usury Usury () is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. The term may be used in a moral sense—condemning taking advantage of others' misfortunes—or in a legal sense, where an interest rate is ch ...

. As a result, dead gages were denounced as immoral/illegal among Catholic theologians.Constance Berman, “Gage”, in: ''Medieval France: an Encyclopedia'', eds., William W. Kibler & Grover Zinn (New York: Garland, 1995), 380.

References

History of finance