Rose the churches and usury or the morality of five per cent

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THE CHURCHES AND USURY
OR

THE MORALITY OF FIVE PER CENT.



THE CHURCHES AND
USURY
OR

The

Morality of Five per Cent.

BY

H.

SHIELDS ROSE

LONDON
T.

SEALEY CLARK &
i,

Co., Ltd.

RACQUET COURT, FLEET STREET,

E.G.



Man

is born with his hands clenched
he dies with
hands wide open. Entering life, he desires to
grasp everything leaving the world, all that he posThe Talmud.
sessed has slipped away.
;

his

;

CONTENTS
CHAPTER
I.

II.

III.

IV.

V.

VI.
VII.

VIII.
IX.

PAGE

DEFINITION OF USURY

INTRODUCTORY.

THE BIBLE AND USURY

PAGAN PHILOSOPHERS AND CHRISTIAN FATHERS

USURY

IN

ENGLAND

CHURCHES

-

USURERS

AS

-

-

25

32

39
57

THEORIES PARTLY ABANDONED

62

ARGUMENT

70

AS TO

NATURAL INCREASE

ADDED VALUES FROM PRODUCTION AND EX-

78

X.

DISGUISED INTEREST

XI.

THE ETHICAL VIEW

84
95

MUTUALITY OF ADVANTAGE

-

105
-

in

ALLEVIATIONS AND REMEDIES

-

120

FINAL WORDS

-

130

-

141

XIII.

VICTORY OVER ONE'S NEIGHBOUR

XIV.

XV.

17

PERIODS OF TRANSITION

CHANGE

XII.

9
-

THE

LIVING

-

WAGE

-

-



THE CHURCHES

AND

USURY;

OR THE

MORALITY OF FIVE PER CENT.
CHAPTER

INTRODUCTORY.

Make
which

is

I.

DEFINITION

OF

USURY.

for thyself a definition or description of the thing
presented to thee, so as to see distinctly what

kind of a thing it is, in its substance, in its nudity, in its
complete entirety, and tell thyself its proper name, and
the names of the things of which it has been compounded,
and into which it will be resolved. For nothing is so productive of elevation of mind as to be able to examine
methodically and truly every object which is presented to
thee in life, and always to look at things so as to see at
the same time what kind of universe this is, and what kind
of use everything performs in it, and what value everything has with reference to the whole, and what with
reference to man, who is a citizen of the highest city, of
which all other cities are like families what each thing is,
and of what it is composed, and how long it is the nature
of this thing to endure.
Marcus Aurelius Antoninus.
;

Good and bad results cannot be accidental, but must be
necessary consequences of the constitution of things, and
it is the business of moral science to deduce from the laws
of life and the conditions of existence what kinds of actions
necessarily tend to produce happiness and what kinds to
produce unhappiness.

Herbert Spencer.

SOME time

ago, in a leading evening newspaper, I
saw a paragraph headed, " The Magic of Figures."
The writer stated that if in the first year of the
9


THE CHURCHES AND USURY

io

Christian era a coin equal to an English penny had

been invested
it

at

compound

would have amounted, by

interest at five per cent.,
this time, to a

sum

repre-

sented not by seven figures, not by the symbol for a
mere million, but by many more than seven a sum
so great that

express

The

it

would require

thirty-nine figures to

it.

writer went on to point out that,

if

we took

the population of the world to be

1,483,000,000
which the penny would
by this time have grown would have afforded an income in every second of time to every man, woman
souls, the

and

immense amount

child

in

world

the

to

which

only be
in other words,
could

expressed by twenty-one figures

that we should all have been multi-millionaires.

Truly,
hint

it

mind

it

was an overpowering

picture.

What

a

gave of the state of society that to the modern
would indeed be beatific! As I read the

paragraph, in which the writer betrayed no glimmering of consciousness that without labour on the part

of somebody not even the smallest fraction of this
immense income could arise, I really wondered why
the calculation was

Christian era.
Fall of

Man

made from

the beginning of the

had been made from, say, the
the figures would have worked out to
If

it

an even more startling result

and the date would

have been much more appropriate.


n

A VISION BEATIFIC

suppose that to most of us the prospect of
the realisation of any vision such as this is still far
Well,

I

We

off.

must go on suffering from the neglect of

our remote ancestors in not investing that penny, or
rather its then equivalent, at the right time and in
the right way.

But there are some of us who

in

been doing their best to
make up for the past neglect. And since we have
I
started on our inquiry with the Christian era
recent days have,

am

I

fear,

going to consider how far the Churches have been

helping us to get into this particular heaven, or
It may also be

hindering us from seeking to enter.
necessary to consider whether
at all,

and not a very

To my mind

it

of

real sort

is

indeed a heaven

hell.

nothing more curious and
significant in the history of the Christian Churches
than has been their teaching and practice in relation
to usury.

And

there

is

here, before

in its historical aspect, let

that I
its

mean by

fullest,

time,

me

I

glance at the subject

say precisely what

the term usury.

I

use the term in

widest, most accurate, and,

most ancient

sense,

to

it is

at the

same

denote any sort of

personal and individual payment for money or goods
lent apart from any consideration of present labour

by the recipient but simply as a return for the use of
that which is lent.
In modern times the habit has grown of drawing


12
a

THE CHURCHES AND USURY
distinction

interest.

It

between loans

usury and loans at
a distinction which has, however,

is

at

A

neither an orthographical nor an ethical basis.

may denote

transaction at usury
pects a

that the lender ex-

A

reward for the use of that which he lends.

transaction at interest

may denote

that the lender

interested in, or a party to, the concern

the gain

is

is

from which

There may be a
expected to be made.
form of the transactions and in the

difference in the

degree of risk, but in both cases there is the expectation of payment for the loan, and in neither case is
there the exertion of present labour
lender.

Hence

on the

strictly correct to

it is

part of the

apply the term

usury to both transactions.

Though it is anticipating
subject I may observe that

the historical part of the
the carelessly

drawn and

vague distinction which has been made in recent days
between usury and interest is not scientific; and is
responsible tor

much

our inquiry.

Hut

habit of

making

it

loose thinking on the subject of
is

how

the

come about.

It

not difficult to see

the distinction has

has arisen troni various conditions which affect the

popular perception of the oppressive results of predatory lending.
It will be
my business to show that
increase

is

anti-social

degree of oppression

is

and

all

lending for

oppressive.

not in

all

cases in

But

the

its

true


A FALSE DISTINCTION
extent

Some forms of lending which

obvious.
are

13

most

are

less

obviously
than
other
forms
which
oppress in only a
oppressive
minor degree. Their precise operation is obscured
actually

oppressive,

by the complications of our modern commercial and
industrial system.

In former times

on

when lending

transactions rested

a very simple basis the effects of usury

to recognise.

to all thoughtful

cance which the

synonym

were easy

Their anti-social character was known

men.

Hence

word usury

the peculiar signifi-

became a

It

acquired.

So

for oppression in business relations.

it

remains to this day.
But the conditions of modern
life are such that countless transactions which are in
their nature usurious are not popularly recognised to

be such.

The

sophistries

of

economy have helped

certain

schools

of

political

to increase the obscurity

which

now customary but
and deceptive distinction between usury and
So far, however, as the element of oppresinterest.

has secured acceptance for the
false

sion

is

recognised, so far as

forms of lending are
apply the term usury
himself

absolutely

it

is

seen that certain

anti-social,

we

to them.

If a lender guards

against

risk,

readily

both

as

enough
to

his

principal and the proposed increase, by requiring the
deposit of securities which are more than equivalent


i

THE CHURCHES AND USURY

4

to the value of the loan our present practice will

sanction the application of the

Whether

the transaction.

word usury

to describe

for the use

the

payment
100 per cent, or 2^ per cent. we
still
apply the term usury because, no risk having
been undertaken by the lender, we suspect, if we do
is

large or small

not always really perceive, that there
one-sided in the operation.

is

something

Again, there are cases in which, owing to the
absence of security or of adequate security, there may

Yet
admittedly be risk on the part of the lender.
because it is easy to trace oppression
it
may be some
obvious and horrible grinding of the faces of the
poor, or inconsiderate readiness of the lender to take
advantage of a failure on the part of the borrower
to

comply with the conditions

usurious transaction.
low, though

in

most

The

we

say that

rate of interest

cases of this kind

it is

"

is

a

be

may

not low;

simply because oppression is apparent,
"
Usury and thus stigmatise the lender.

yet,

it

we

cry

shareholding transactions are in reality of
But usurious shareholding
the last-named category.
is a
complicated business in comparison with simple

Many

money-lending on good security for increase. The
oppression to which it gives rise is not obvious at all
to the great majority of people.
is

very rare that the

term usury

From
is

this cause

it

applied to trans-


USURIOUS SHAREHOLDING
actions of this kind.

there

is

no

however,

Strictly speaking,

justification for not applying

the element of oppression, which

the distinction between
transactions at interest,

is

it.

15

As

regards
taken to justify

usury and

should not for a moment

transactions at
it

be inferred that a shareholding transaction is in the
very nature of the case less oppressive than a simple
money-lending transaction for increase. The consciousness which a

mere shareholder has

that

his

uncertain or liable to fluctuation and that

dividend

is

even his

capital is risked leads

him, sometimes, at

pranks before high Heaven
to be even more oppressive than the money-lender

any

rate, to play strange

who knows

at

in his

it is

practically

guarded by the
adequate, and that

that his interests are

deposit of a security which

The

any time.

recent years of

power

is

to close the transaction

accounts which

Congo

atrocities

we have had

in

need only be cited

by way of illustration.
The question of risk of loss in the various transactions
still

a question of detail

is

detail

which we

shall in

important

due time

detail,

but

discuss, as

is

which superintendence is
the question of wages for the labour of
exercised
But I cannot here anticipate what
superintendence.

also

I shall

in

those

cases

in

have to say on these and other features of the

problem.


1

6

THE CHURCHES AND USURY

So far as the immediate question of definition is
concerned, what we have to keep in view is that both
in simple

money-lending on security and

in share-

holding investments there is, in general, the aim
with the lender or investor to obtain payment for the
use of that which

is

from any
own; in other

lent or invested apart

consideration of present labour of his

words, to use the fruits of past labour in order to

escape from labour and to live on the labour of somebody else, and that this is of the very essence of
usury.

Perhaps

it is

not without an underlying conscious-

ness of the essential likeness between usury as

now

popularly understood and the investments which, like
those in public companies, we do not now habitually

speak of as usury that the reward in both cases goes
by the same name and is spoken of as interest.

Having now indicated with
what I mean by usury I am free
historical part

of our subject.

sufficient

clearness

to proceed with the


CHAPTER

THE

II.

AND USURY.

BIBLE

Did not the Seer see indeed?
Did not the Christ-voice tell
That having each one little life
We needs must live it well?
With simple measurement of good
That reckons not by time,
But deems life-worthy each firm step
Of man's progressive climb?
Louise S. Guggenberger.
Religion ought to direct society towards the great end
of ameliorating, as rapidly as possible, the condition of
the numerous and least wealthy class.
St. Simon.

IT

is

usury

not

my

purpose to review the whole history of

in detail.

I

am

fully conscious that unless

we

can base our conclusions respecting usury on other
grounds than those of an appeal to the authority of
old

Hebrew

prophets, of great pagan teachers, and

of the Fathers of the Christian Church

do much to secure

we

shall

intellectual conviction in these

of independent thought.

It

not

days

must be apparent, how-

where for some thousands of years of the
of the world the greatest teachers and law-givers

ever, that
life

who have

question have
uniformly come to a particular conclusion there is at
considered

a

particular

17

B


1

THE CHURCHES AND USURY

8

are right in

doubt whether, after all, we
approving opinions and adopting practices

at variance

with their teaching. Wise, supremely wise,

least reason for serious

as

we

that

believe ourselves to be, there

we may be wrong.

is

If but

just a possibility

from the point

of view of determining what it was that the men of
olden time really taught in this matter a brief
historical retrospect at least is desirable.

In days past the voices of priests, prophets, and
teachers were emphatic on this question of usury.

What

Old Testament teaching was we most of us
The Hebrew word for usury is in itself

the

know.

sufficiently expressive of the point

ancient

writers.

It

"

of view of the
"
a word

biting

signifies

much more
which

truly descriptive of the transaction to
applies than is our modern word interest.

it

Let us look

at the

Old Testament

references.

If thou lend to any of my people that is poor by thee,
thou shalt not be to him as an usurer, neither shalt thou
Exod. xxii. 25.
lay upon him usury.
And if thy brother be waxen poor, and fallen in decay
with thee then thou shalt relieve him
yea, though he
be a stranger, or a sojourner; that he may live with thee.
Take thou no usury of him, or increase. Lev. xxv. 35-36.
:

;

Thou

shalt not lend upon usury to thy brother, usury
money, usury of victuals, usury of anything that is lent
Unto a stranger thou mayest lend upon
upon usury.
but
unto
thy brother thou mayest not lend upon
usury;

of

usury.
I

Deut.

xxiii.

19-20.

rebuked the nobles, and the

rulers,

and said unto


THE HEBREW TEACHING
them,
I

"

Ye

exact usury, every one of his brother."

set a great
I

assembly against them.

pray you leave

off this

usury.

Neh.

Restore,

v.
I

19

And

7.

pray you,

to them, even this day, their lands, their vineyards, their
olive yards, and their houses, also the hundredth part of

the money,* and of the corn, the wine, and the oil, that
Neh. v. 10-11.
ye exact of them.
Lord, who shall abide in thy tabernacle? ... He that
Ps. xv. i, 5.

putteth not out his money to usury.
He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor.
Prov. xxviii. 8.
Woe is me, my mother, that thou hast borne me, a man
I
of strife and a man of contention to the whole earth
have neither lent on usury, nor have men lent to me on
usury; yet every one of them doth curse me. Jer. xv. 10.
He that hath not given forth upon usury, neither hath
taken any increase, that hath withdrawn his hand from
iniquity, hath executed true judgment between man and
man, hath walked in my statues, and hath kept my judgments, to deal truly he is just, he shall surely live, saith
the Lord God.
Ezek. xviii. 8-9.
If he hath given forth upon usury, and hath taken in!

;

shall

crease;
xviii.

he then

live?

he shall not

live.

Ezek.

13.

Thou hast taken usury and

increase, and thou hast
greedily gained of thy neighbours by extortion, and hast
Behold, therefore, I
forgotten me, saith the Lord God.

have smitten mine hand at thy dishonest gain which thou
hast made.
Ezek. xxii. 12-13.

There are one or two other passages of like purBut those which are quoted above are more
port.
than sufficient to show what was the
*

me,

One

per cent, of interest, reckoned, as

for periods of

a month.

Hebrew

teaching

one authority informs


THE CHURCHES AND USURY

20

And we must

on usury.

bear in

mind

that they

do

not relate to one particular period in Hebrew life.
They range over a period of not less than one

thousand years, and, therefore, are sufficiently indicative of continuity of opinion and policy.

Rather strangely some people who have collated

the various Old Testament utterances on this subject

have concluded that the Hebrew law did not

prohibit usury absolutely

that

it

did no more than

prohibit the imposition of rigorous terms for the loan

of

money

or goods, and the exaction of those terms

without respect to the condition of the borrower
without it being considered whether poverty occasioned his borrowing or whether there was a visible
prospect of gain by employing the borrowed money
or goods, or whether in the result the borrower really
Cruden, for example, on a review of
gained or lost.
the various passages, favours this interpretation and
makes the general statement, " This law in the strict-

seems to have been peculiar to the Jewish

but in the equity of it, it obligeth us to show

ness of
state;

it

we have advantage against, and to be
content to share with those we lend to in loss as well
Even this as
as profit, if Providence cross them."
mercy

to those

an ideal would sternly rebuke modern practice. But,
in my opinion, this is an unduly limited interpretation of the

Hebrew

law.


LENDING TO THE STRANGER

21

from the language of the law-givers and

It is clear

prophets that

usury in general which they con-

it is

demned, and equally is it clear that by usury they
meant the exaction of anything of the nature of increase

where a loan was made. That

tions they so frequently referred

in their denuncia-

more

particularly to

the oppression of the poor and needy was but natural,
for where a practice

weakest are those

is

in itself evil

who must

suffer

and oppressive the
from it most, and

who, therefore, most require protection.

Nor

is it,

in

my

opinion, to be supposed that these

old law-givers and prophets gave an implicit sanction
to the principle of usury inasmuch as in the Mosaic

pronouncement on the subject there is a permission
to lend to the stranger. The Mosaic Law was accommodated, as

all

the people to

wise law must be, to the condition of

whom

their evil courses

it

applied; hindering

and aiding them

in their

them

in

advance-

ment, pointing to an ideal yet not enforcing more
than was compatible with
conditions.
present
"
of
of
the
hardness
because
Moses,
your hearts,

suffered

you

to put

away your wives,"

said Jesus.

We
"

can well imagine that he might have said also,
Moses, because of the hardness of your hearts,

suffered

you

to take usury

from a stranger."

But

And

since

the ideal that underlies the law

under the Christian dispensation

is clear.
it is

required of us