USURY (INTEREST). II. In the Christian Church. General Results

Early Ecclesiastical Legislation (§ 1).

Views of the Reformer (§ 4).

Completion and Basis of Ecclesiasti- Modern Practise (§ b). cal Theory (§ 2).

I. Among the Hebrews: By usury is generally meant the employment of another's need to exact from him in return for some service (usually a loan) a disproportionately large remuneration, and the word suggests something morally blameworthy.

In the Bible the word covers the means. Biblical ings attaching to the words " interest

Enactments. and "tribute." The Hebrew words are neshekh, marbith, tarbith, and the Greek is tokos. The laws of the Pentateuch, which so frequently have a philanthropic character, declare that aid to a fellow countryman who is in need is a duty of love (Deut. xv. 17 sqq.). Hence it is forbidden to an Israelite to take from a fellow Israelite interest of any kind in return for a loan (Ex. xxii. 25-27; Lev. xxv. 3rr37; Dent. xxiii. 20), whether of money or food; but from one who is not an Israelite it is permitted by the Deuteronomic law to take interest (xxiii. 20; cf. xv. 6, xxviii. 12). The distinction is not difficult to understand. In the first place, from gentiles there could be no expectation of receiving material help without payment for the service, since these did not display disinterestedness toward their own people. In Egypt loaning for interest seems to have been introduced by Bocchoris of the twenty-fourth dynasty (718-712 s.c.), and the rate was 30 per cent for loans of money and 33j per cent for grain. But the Asiatics who traded in Egypt exacted interest from the natives at a much earlier date. In the earliest time

the Romans demanded only the return of what was lent (Nonius Marcellus, v. 70). In the second place the position of commerce among the gentiles was essentially different from what it was or was intended to be among the Hebrews, the latter not being wholly devoted to it as were, e.g., the Phenicians (see Phenicia, Phenicians). Among the Babylonians as early as 2,000 B.c. the customary rate of interest was for money 20 per cent, for grain 25 or 33T' per cent, and the same rate appears in the New-Babylonian contracts. In the Old Testament the subject is considered in relation to need, and not in connection with commercial transactions. But the legal requirements were carried out in practise only in part. The taking of usury is very often condemned (Prow. xxviii.~8; Ezek. xviii. 13, xxii. 12; Ps. cix. 11); compare the praise of abstention from the practise (Ezek. xviii. 8, 17; Ps. xv. 5, xxxvii. 26). Oppression of the poor is frequently bewailed (Ecclus. xiii. 22-23), especially that arising from insistence upon rights conferred by making a loan (Ezek. xviii. 12; Amos ii. 8; Job xxii. 6, xxiv. 3; cf. Ex. xxii. 26; Deut. xxiv. 6, 10-13). But there is no mention of the rate per cent for loans; for according to Geiger, Guthe, and others, Neh. v. 11 is to be read " and the debt of the money, and of the corn . . ." instead of " the hundredth of the money. . .: ' While this rate of interest (one per cent) for a month is from the modern standpoint conceivable, it would be low for that period in

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history; yet it was wide-spread in Greece, as well as the monthly reckoning, and was customary in the Roman Empire after the year of the city 704, though Justinian set the rate at 6 per cent for money and 12 for grain. No punishment is men

tioned for taking usury, either in Bible or Talmud.

The Talmud also forbids the taking of interest

between Hebrews. An exception is found in Baba

Mezi`a 75a, where Rab Jehuda affirms that to the wise (those who know the law) it is permitted to borrow and pay interest, since that class knows that

usury is forbidden and so make a

z. Talmudic "present" [in place of interest]. The

and Later same rabbi, following Rab Jehuda,

Usage. declared that it is permitted a man

to lend for interest his children and

house-folk in order to let them feel the impres sion of payment of interest. But, the passage goes on, this is wrong, since they may become ac

customed to the practise. In the Mishna (Baba

Mezi'a 5-6) between Israelites and gentiles the ta king of interest is plainly permitted, though in the following Talmudic discussion the privilege is

strongly limited; and it appears from the tract

Makkoth, 24a, that an ideal held forth is to take

no interest from gentiles, where in remarking upon

Ps. xv. 1, 5, it is added " who takes no usury

from a gentile." But the views of later times were various, and apologetic expressions defending the practise are not wanting. It may be men tioned that the prohibition against taking usury from a gentile is reckoned by Maimonides as no.

198 among the commandments, and in the enumer

ation of the commands this prohibition is no: 613.

Some say, again, that one must be guided by his

feelings in the matter; others, that it is commend

able that no one take interest. In the Shulhan

arukh, Yore de's, clix. 1, is the following: " The

Torah permits to loan to a gentile for usury.

The wise have forbidden it except so far as it is necessary for maintenance of life or in the case of a wise man or so far as concerns a gain for

bidden only by rabbis. But now it is permitted."

Biblical law forbids taking usury from Israelites; the wise have also forbidden bargaining for gain or taking it for loans of money or wares. Even yet pious Jews regard the taking of interest from Jews as forbidden, even when the debtor is rich, and

though the gain is regarded as a present (L. Stern,

Die Vorschriften der Thorn, welche Israel in der

Zerstreuung zu beobachten hat, p. 215, 4th ed., Frank fort, 1904). In the training which commerce and intercourse have in the present brought about, com plete observance of the prohibition is not possible; and various ways have been devised in order to keep the letter of the law, as when a sort of partnership is agreed upon. An example of the formula em

ployed in such a case is given in B. H. Auerbach,

Lehrbuch der israelitischen Religion, p. 108 (2d ed.,

Giessen, 1853). The same authority lays down the maxim that from a gentile the Jew is to receive only a moderate rate of interest, such as is permitted by either the law or the custom of the land; a rate disproportionate to the value as judged by the use to be made of the loan is thievery and sinful. But such regulations have not prevented loud outcries concerning Jewish usury, though in many cases these had no basis in fact, since orthodox Jews regard this as heinous sin.

(H. L. Strack.)

II. In the Christian Church: The term usury, being originally equivalent to " fruit," " growth," "increase," and being applied to personal profit or gain, was also used to express the profits derived from money loans. The term, therefore, tallies with the Greek tokos (from teko, " to bear," " to bring forth."

In ancient times interest was paid monthly and grew to vast amounts, insomuch that when paid by the poor, who were practically constrained to accept loans, the operation proved highly

:. Early oppressive. The New Testament,

Ecclesias- while not expressly forbidding the retical Legis- ceipt of interest, yet commends gra-

lation. tuitous lending, in token of neighbor ly love (Luke vi. 34, 35). In the early days of the Church, the taking of interest was re proved, as by Tertullian, Gyprian, Ambrose, Basil the Great, Gregory of Nyssa, Chrysostom, and others. It was only from the enemy, one who may also be slain in war, that interest could be taken rightfully. But as a general rule the practise was prohibited for all Christians, without distinction of persons (canon 20 of the Synod of Elvira, 310 A.D.). But as the fruition of interest was per mitted by civil law, church legislation was confined to regulations forbidding the clergy to enjoy the same, under pain of dismissal (Synod of Arles, 314; Council of Nice, 325, canon xvii.). And in the year 325, again, when Constantine decreed anew that in the case of profits an interest so great as one-half of the loaned amount might be drawn, and in the cane of capital, the hundredth part, that is, one per cent a month, or 12 per cent yearly (Theodosian Code, chap. 1., de usuris, iv. 33), that ecclesiastical prohibition had reference only to the clergy (Council of Laodicea, 372 A.D., canon 4; Third Synod of Carthage, 397 A.D., canon 16). But this nowise pre vented the teachers of the Church from enjoining upon all Christians the duty of lending without in terest, as did Augustine and Jerome. Their exam ple was also followed by Pope Leo L, in a brief of the year 447 to the bishops of Campania, Picenum, Tuscany, and all Italian provinces. Nevertheless, the synodical prohibitions continued to be directed only against the clergy (as at the Second Synod of Arles, 443 A.D., canon 14, and that of Tarragona, 516 A.D., canons 2, 3). The Greek Church, however, so far deferred to temporal legislation, which still permitted the taking of interest though under cer tain restraints, as to relax even the universal inter diction governing the clergy. For in the East they prohibited only the matter of promising interest on loans, whereas they allowed the exaction of in terest when the refunding of borrowed capital was immoderately delayed. This was the import of a ruling by Photius (Nomocanon, tit. IX., xxviii., in conjunction with Justinian's Novelhe, CXXXL, xii.) whereby, for pious ends of the Church, legates were allowed to draw interest arrearages. This construc tion was also favored by later commentators (cf. Balsamon's commentary on the passage cited from Photius). In the Frankish realm, the interdiction

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at first affected only the clergy, though it soon became extended to cover laymen as well. In agreement with this are the decretals of the later popes and the synodical rulings.

The leading idea in all cases is that in both the Old Testament and the New the taking of interest is generally forbidden, as being "avarice and wickedness." Thus Alexander III. de-

z. Comple- clares at the Third Lateran Council, tion and 1179, in canon 25: " Wherefore none

Basis of may be dispensed in favor of drawing Ecclesias- interest." He had previously ruled tical Theory. that the profits derived from the pledged article must be deducted from the loaned capital itself; only the actual object in pawn must be returned to the owner, excepting the case of a church benefice, which might then be ac quired from the hands of a layman and so recovered to the Church. As a general thing it was provided that when interest accrued, it should be assigned to the debtors or to their hers; but if no such claimants existed, it should go to the poor, and that this should be done alike by the creditor himself and by his heirs. The oath rendered by a debtor, pledging him not to reclaim interest, by no means annulled the obligation about refunding the same; and this held where the payment of interest was voluntary, and not expressly stipulated. The church penalties threatened against receivers of in terest are suspension for the clergy and excommu nication for laymen, together with the usual con sequences of refusal of church burial and exclusion from judicial hearings. Procedure against usurers was to be instituted not only on grounds of a formal accusation, but also as a direct official duty. Against Jews who had taken interest of Christians every means of procedure was to be set afoot. Antecedent rulings were augmented by Gregory X. at the Coun cil of Lyons, 1274, canons 26, 27. He forbade the harboring of foreign usurers, even the leasing to them of habitations. Usurers were to be expelled from the land within three months, under pain of suspension in case of prelates, excommunication in the case of other persons, interdict for colleges and corporate bodies, and in the event of resistance at large, interdict upon the given country. Notorious usurers, besides incurring the penalties earlier stated, were also to be debarred as testamentary witnesses, and their own wills were to be invalid. At the Council of Vienne, 1311, Clement V. decreed in ad dition that those municipal statutes which allowed the taking of interest and embodied regulations accordingly were to be null and void; whereas authorities who should draw up such measures or give sentence in accordance with them were to be liable to the ban. For the purpose of providing proof against usurers, these were to be held answer able for submitting their account books. Finally the pope declared, " If any lapse into the error of obstinately and presumptuously affirming that it is no sin to practise usury, we decree that he be punished quite as a heretic."

This ruling essentially terminates the canonical construction of the matter, and even stamps the same with a certain dogmatic sanction. This attitude is supported not only by the medieval doctrine

of the unfruitfulness of money (an economic theory treating money simply as medium of exchange or measure of value), but also by the interpretation which the schoolmen gave to the related passages of Holy Scripture (Alexander of Hales, pars III., quaest. 86, art. 2; Thomas Aquinas, II., 2, quaest. 87, art. 1 ad 2, quaest. 105, art. 3 ad 3). The objection borrowed from the context in Matt. xxv. and Luke xix. is met from the said standpoint. The matter of lending under direct promise of interest has in all times been reproved from the point of view o_ canon law. Benedict XIV. simply repeated as much in consonance with the earlier law, in his brief Vix pervenit of Nov. 1, 1745, while the Curia still maintains that position.

The high rate of interest prevalent in the Middle Ages rendered life exceedingly burdensome to the poor, if they needed a loan; so that the canonical regulations against taking interest at

3. General all were highly acceptable to the comResults. mon people. It is assumed that no usury exists where the object at issue is an ecclesiastical benefice or tenure, such as is not supposed to rest in lay hands, in the nature of the case. The same is true in respect to the purchase o_ a fixed annuity or ground-rent, something essentially distinct from an interest-bearing loan in that the buyer (and creditor) could not lay claim to the principal, whereas the rate of interest itself was moderate. The same applies in the case of deferred interest charges, in so far as the "interest" here in question represented proper compensation. Finally, there was no usury involved in moderate interest paid to loan-houses (Montes pietatis, q.v.), to the benefit of. the poor (Lateran Council of 1517, seas. X.; Tridentine Council, less. XXII., c. 8 de reform.). Moreover, practical requirements were met by other exceptions, and the canon law was either evaded or else modified with manifold qualifications. In the same direction, even the popes allowed usury in the case of the Jews. But, on the other hand, the notion of usury became extended to every line of trade in which a positive profit was the object in view; particularly was this true of exchange business. The canonical prohibition of usury continued to be supported, in the main, by subsequent civil legislation.

The Reformers, in turn, in agreement with the primitive Church, rejected the taking of interest. Luther pronounced against it in his sermons on usury, 1519 and 1524, and in 1540 issued an admonition to pastors to preach against that practise. To his mind, the notion of usury and of interest are one and the same. But Luther extends the notion of usury to the purchase of ground-

4. Views rents, though on this point he was not of the always consistent. For instance, when

Reformers. Jacob Strauss, Evangelical pastor at Eisenach (1523), denounced all interest as void of obligation, Luther and Melanchthon declared, in a formal opinion requested of them, that usury was a great evil and contradictory to love; but that yet not every one should be allowed to withdraw at will from an assumed obligation, or to refuse payment save under forcible compulsion -a course upheld by Strauss. Whether they would

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exact usury or accept it should be left free to the creditors' conscience; only the rate ought not to exceed four or five florins to the hundred; and the interest, again, ought not to be redeemable. Not that the question at large was thus by any means resolved, for many minds were still in doubt and unrest over the admissibility of interest in the shape of rent and income (of. Instruktitm and Befehlsh daratsff die Vit:itatores im Kurfiirstenthum Sachsen abgefertigE seyn, 1527; E. Sehling, Die evangelischen Karchenordnungen, i. 142 sqq., Leipsic, 1902). Melanchthon also was not consistent in the matter of judicially defining the admissibility of taking interest, nor did he always adhere to the view thR:t was first held regarding the absolute reprehensibleness of the said practise. Calvin, however, adopted a different standpoint. He .gave utterance to his views on various occasions (as in Sermon no. .134, in CR, xxviii. 121), and also delivered a special reply to a formal inquiry addressed to him, wherein he allowed the taking of interest in seven contingencies (CR, x. 245 sqq.). Calvin's views have since then been reflected by other Evangelical theologians, regarding the propriety of taking interest; as by Wilhelm Amasius in his work De conseientia et ejus jure vel casibua; by Spener, in his Theologische Bedertken, ii. 227 sqq. (4 vols., Halle, 1700-02); and in modern times by F. V. Reinhard, System der christlichen Moral, iii. 27 sqq. (5 vols., Wittenberg, 1788-1815); C. F. von Amnion, Hartdbuch der christlichen Sittenlehre, iii. 194 sqq. (3 vols., 2d ed., Erlangen, 1838); R. Rothe, Theologische Ethik, iii. § 1, p. 233 (Wittenberg; 1871). Indeed, even Roman Catholic authors reflect similar views (cf. B. Phillips, Lehrbuch des Kirchenreehts, p. 837, Regensburg, 1862: " Forasmuch as the interest prohibitions in the canon law presuppose wholly different social conditions from those of the later age, they have ceased to be valid ").

The force of these reasons was the less to be withstood when supported by the rulings of the Roman law, the authority of which gained wider and wider recognition. There thus grew up a custom contra-

dictory to the canon law; transferring g. Modern the usual 5-per-cent rate of interest

Practise. common to rents and incomes to loans,

with direct pledge of interest; and also occasionally raising the rate to 6 per cent. Dating from the latter third of the sixteenth century, this custom was also legalized in the several German sovereignties and also by the terms of the final decree of the imperial diet of 1654. Thenceforward the notion of " usury " in the sense of " avarice and wickedness " is no longer applied to the drawing of interest in general, but denotes illegal interest, especially that in excess of the legal rate. This alone is viewed as a properly penal transaction; whereas the likewise frequently interdicted practise of drawing interest on interest, or arrears of interest exceeding the principal itself, is accounted, under the civil law, as something merely impracticable. In the broad sense, usury also includes the purely artificial enhancement of the price of commodities in the general market. This practise moved the with special charge of the monastery of St. Albans Reformers to open protest, Luther among them. ~ until an administrator should be appointed. In The contemporary German imperial law has a more 1499 he was chosen auxiliary bishop of Basel, and circumscribed conception of usury. The same, or a similar practise, according to the laws of May 24, 1880, and.June 19, 1893, occurs only where one takes advantage of the straitened circumstances, thoughtlessness, or inexperience of another, in the case of a loan, or postponement in settling an ac- ,

count due on demand, or some other legal transaction with reciprocal bearings, all tending to the economic ends of borrowing and lending, i.e., where the eredifor contrives to extort and secure for himself or some intermediate third party such pecuniary profits as not only transcend the usual interest rate, but also reach glaring disproportion in comparison with the service rendered. Usury of this kind is requited with penal severity, and the transactions involved are null and void by terms of the civil' code, § 138, division 2.

The judicial estimation of usury from the standpoints of Church and State has been divergent. And though .the Evangelical church has rejected the inflexible attitude of the Church of. Rome in this matter, still, the Evangelical church,can not assent to the repeal of all usury laws. At all events, it may not desist from counseling the members of its communion respecting the duty laid upon them in the words of the Lord (Luke vi. 34; 3d5).

E. Sehling.

Bibliography: For the Biblical aide consult: J. D. Michaelis, Syntapma commentatiof:um, ii. 1 sqq., 08ttingen, 1789; idem, Mosaisches Recht, ii. 87 sqq., 8 vols., 2d ad., Frankfort, 1771-75, Eng. trannl., Commentaries on the Laws of Moses, 4 vols., London, 1814; J. L. 9saisohSts, Dan moaaische Reeht. Pp. 183-184, 277-278, 888-8b7, Berlin, 1883; M. Dusohak, Dae maeaiach-talmudische BtraJrecht, pp. 48-60, Vienna, 1889; H. Ewald, Antiquities of Israel, pp. 181-1sb, Boston, 1878; J. M. Rabbinowios Legislation civiEe du Thatmoud, iii., pp. ad.-sxaiii., Paris, 1878; A. Bertholet, Die Btellung der lametiten and Juden eu den Fremden, Freiburg, 1898; J. Heiel, Des olttestamentliche Zinaverbot im Lichte der ethnoZopischen Juriaprudenz, ib. 1907; Benzinger, Archäologie, pp. 292-293; DB, i. 579b80; EB, iii. 2727-28, 3791-93; JE, sii. 388-391.

On the relation of the Church to usury consult: Binghem, Origines, VI., ii. 8, XYL, aii. 13; W. Endemann, Die nationoltikonomischen f3rundaatze der kanoniatischen Lehra, Jena, 1883; idem, Studien in der romaniaeh-karwnialischen Wirtschafta- and Rechtslehre, 2 vols., Berlin, 1879-1883; M. Neumann, Geschichte den IVuchera in Deutschla3uE, Halle,.1885; F. X. Funk, Geschichte den kirchEichen Zinaverhotea, Tübingen, 1878; W. Cunningham, Christian Opinion on Usury, London, 1884; R. F. Crawford, Lettern on Usury, ib. 1889; L. Cioldsehmidt, Univeraalgeschichte den landelarechta, i. 137 sqq., Stuttgart, 1891; W. Blissard, The Ethic of Usury and Interest, London, 1892; L. Caro, Der Wuche', Leipsic, 1893; E. W. Mason, Forgotten Teaching and Neglected Discipline of the Church as to Usury, Leicester, 1960; F.. Schneider, in Featpahe far Heinrich Pinks, Münster, 1904; F. Schaub, Der Kampj pagan den Zinawucher, Freiburg, 1905; DCA, ii. 2008-08.