ANATOCISM
\ˈanɐtˌɒsɪzəm], \ˈanɐtˌɒsɪzəm], \ˈa_n_ɐ_t_ˌɒ_s_ɪ_z_ə_m]\
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By Henry Campbell Black
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Civil law. Usury, which consists in taking interest on interest, or receiving compound interest. This is forbidden. Code, lib. 4, t. 32, 1, 30; 1 Postlethwaite's Dict.
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Courts of equity have considered contracts for compounding interest illegal, and within the statute of usury. Cas. t. Talbot, 40; et vide Com. Rep. 349; Mass. 247; 1 Ch. Cas. 129; 2 Ch. Cas. 35. And contra, 1 Vern. 190. But when the interest has once accrued, and a balance has been settled between the parties, they may lawfully agree to turn such interest into principal, so as to carry interest in futuro. Com. on Usury, ch. 2, s. 14, p. 146 et eq.
By John Bouvier
