Final answer:
Goldsmiths were able to collect interest on loans because they were trusted with storing and safeguarding people's gold and other valuables.
Step-by-step explanation:
Goldsmiths were able to collect interest on loans because they were trusted with storing and safeguarding people's gold and other valuables.
Since gold and other precious metals were difficult to carry and protect, people would deposit their wealth with goldsmiths, who would then issue receipts as proof of the deposited amount.
Over time, these receipts became commonly accepted as a form of payment, which allowed goldsmiths to lend money to borrowers and charge interest on the loans.
In this way, goldsmiths were able to make money from the interest and continue their business.