Another Sin We Don’t Want to Hear About

 

This piece is paired with another view of usury from an Austrian economics perspective, also running today.

The Catholic Church is always condemned for condemning sins. Since we are all sinners, sin is the last thing we want to hear about. But of course, if we don’t confess our sins and flee from our sins, sin is the last thing we will hear about.  That’s why the Church has a certain obligation to keep bringing these things up.

The Church has to do the hard and thankless work of condemning sins.  There are few folks—well, more than a few—who do not consider the Church a trustworthy authority on the subject of sin.  They are quick to point out that priests and bishops and even popes have turned out to be guilty of the same sins they have condemned.  But this excuse for questioning the authority of the Church doesn’t wear well.  It is hypocritical to criticize hypocrites.  The more interesting challenge is this: do sins change? Or rather, does the Catholic Church condemn something as being a sin in one age, but excuse it as not being a sin in another age?  This is an argument that is often used against the Church’s moral teaching.

In the 1960s many people in the Catholic Church were anticipating that Pope Paul VI would issue an encyclical that would permit contraception.  Some argued that there was precedent for such a change in the Church’s teaching.  After all, the Church once condemned usury as a sin, but no longer did.

But the encyclical Humane Vitae surprised and infuriated a lot of people: the Pope upheld the Church’s teachings instead of altering them.  He also warned about what would happen if the world embraced a contraceptive mentality: it would lead to abortion, divorce, and sexual perversion.  Turned out he was right.

But in the social and religious chaos of the second half of the 20th century, most everyone missed an important point that is now coming to bear on the economic chaos of the early 21st century: the Church also never changed her teaching on usury.  Like contraception, usury is still a sin.

It was condemned right from the beginning. In Psalm 15, which is read on the 16th Sunday in Ordinary Time, we hear: “Lord, who may abide in your tent?  Who may dwell on your holy mountain?  Whoever walks without blame, doing what is right, speaking truth from the heart…who keeps an oath despite the cost, lends no money at interest…”  Take a look also at Exodus 22:24, Leviticus 25:36-27, Deuteronomy 23:20, all of which clearly forbid usury.

Usury was also condemned by the Pagan philosophers Plato and Aristotle.

The theme was taken up by St. Jerome, St. Ambrose, St. Augustine, and other Church Fathers, who attacked usury in no uncertain terms.  Several popes, including St. Leo the Great, Gregory IX and Innocent III spoke out against usury.  In the 14th century, Pope Benedict XIV issued an encyclical specifically upholding the condemnation against usury, saying the Church had not changed her position (just as Pope Paul VI made clear with regards to contraception).  At least five Church Councils condemned usury, including the famous Council of Nicaea, which gave us our Creed, and the Second Lateran Council, which called usury “despicable and blameworthy by divine and human laws.”
The great Doctor of the Church, St. Thomas Aquinas, makes it clear: “To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this…leads to inequality which is contrary to justice.”  He argues that economic exchange is necessary to maintain a society, but unjust exchange will destroy a society, and usury, as he points out, is an example of unjust exchange.

Even Chaucer wrote that usury is “hateful to Christ and to His company.”

The Church did not change her position against usury. The problem is the world changed its position.  As G.K. Chesterton says, during the highpoint of Christian society, usury was “everywhere denounced and forbidden.”  But now it is “everywhere flattered and condoned.”  What was condemned by all of Western civilization for centuries, led by the Church, was suddenly embraced by that civilization in the wake of the Reformation and the Enlightenment—and the rejection of faith and reason.  Chesterton points out that as we have grown “much vaguer about usury being usury,” we have grown much vaguer about all the other sins being sinful.

And what do we have to show for our ignoring this teaching of the Church?  A $12.86 trillion consumer debt.  More than 20 percent of home mortgages that exceed the value of the property.  A government that keeps spending money that it does not have.  A borrowing mentality that never considers how it is going to pay anything back.  Economic collapse.  As Chesterton warns, echoing the popes and the saints before him, usury devours and destroys: “It is a gigantic heap of debt, like a heap of dirt. It is a heap of debts hoarded until they have gone bad.  It is now a heap of bad debts which a little more bad debt will send toppling into the mire.”

Interestingly enough, there is a connection between contraception and usury.  Both are a form of taking the pleasure without paying for it, of being irresponsible and selfish, rather than fruitful and charitable.  “Usury,” says Chesterton, “is in its nature at war with life.”

But just as most people don’t want to hear about the sin of contraception, most people don’t want to hear about the sin of usury.  Because most people don’t want to hear about sin.  That continues to be a problem.  But prophets like Chesterton remind us about these things, even if we don’t listen.  “Though men may grow used to usury, and even practise it without shame under the present professional standard, yet God does not grow used to usury, any more than to murder or to devil-worship…”  Strong words.

And to anyone who would make the argument that our economy and our society depend on ignoring this Church teaching, Chesterton offers an equally stern rebuke: “It is a lie to say that the monstrous complicated accumulation of modern finance is essential to civilization, or the social and moral well-being of ordinary men and women.”

How do we get out of the mess we are in?  Looks like I’m out of space!  I will suggest, however, that we could start by praying the Our Father, and considering its literal meaning, which is: “Forgive us our debts as we forgive our debtors.”

Dale Ahlquist

By

Dale Ahlquist is the president and co-founder of the American Chesterton Society. He is the creator and host of the Eternal Word Television Network series, "G.K. Chesterton: The Apostle of Common Sense." Dale is the author of G.K. Chesterton: Apostle of Common Sense and the recently published The Complete Thinker. He is also the publisher of Gilbert Magazine, and associate editor of the Collected Works of G.K. Chesterton (Ignatius). He lives near Minneapolis with his wife and six children.

  • Bill Bannon

    Dale has not really looked into this much. The Church’s official Bible is the Vulgate. In Deuteronomy therein, God promises the Jews in part that if they obey His commandments, they will lend at interest (fenerate) to others nations:

    Deuteronomy 28:12. “et fenerabis gentibus multis et ipse a nullo fenus accipies.”

    Lending without interest is not a reward but a source of potential loss which Aquinas ignored in stretching fenerabis to mean lending simply…so that his idol, Aristotle, could be correct on money being barren.
    Calvin did well in 1545 to ignore Aquinas and to permit moderate interest on personal loans to the affluent….the position (moderate interest) which the Vatican permitted in the 1830’s in answer to dubia.

    • Torkay

      Apparently you have not looked into the Bible much. Deut. 28:12 reads as follows:

      “The Lord will open his excellent treasure, the heaven, that it may give rain in due season: and he will bless all the works of thy hands. And thou shalt lend to many nations, and shalt not borrow of any one.” (Douay Rheims)

      Note the absence of the phrase “at interest.”

      • Bill Bannon

        Tokay
        Use your intellect with your eyes. Go to Deut.23

        21
        You may demand interest from a foreigner, but not from your countryman, so that the LORD, your God, may bless you in all your undertakings on the land you are to enter and occupy.

        • Patrick B

          Bill, take note that the verse that you are quoting specifies “…from a foreigner…” People outside of the chosen people of God were subject to the demands of usury. Since the New Covenant handed down to us by Christ was established, all Christians are the chosen people of God, and while you could make the argument that that makes them subject to usurious lending, we are still bidden to love and be merciful to them. The most Christian comment that Mr. Ahlquist made in his article was his reminder to us all to “Forgive us our debts as we forgive our debtors.”

          • Bill Bannon

            Patrick B
            If moderate interest is a sin, the entire Church, the Catechism and all recent Popes stand in negligence of not mentioning it. How likely is that?

            • Alan Church

              The Church was fearful of interest being used to enslave people. And this fear became a reality generation after generation in history. She was in principle against gain without work. However, such by itself was not necessarily sinful.

            • Anthony Santelli, Ph.D.

              Bill,

              From a practical standpoint, there isn’t much difference between moderate interest (as long as it does not compound over a long period of time) and a fee for risk. Because of this, the Church leaders have been conflating the two and, to that extent, have been negligent, or more properly, deceived.

  • Well, the problems you mention are not due to interest (usury). They are due to fiat money, central banking, and a government gone wild.

    Pretty much all you need to know about this subject was in last week’s Gospel reading on the parable of the talents.

    • Nicholas C. Hosford

      Mr. Tucker, the problems you mention (fiat money, central banking, and a government gone wild) are endemic in a society that structures its economics around the philosophy that greed is good.

      In a society where usury is commonplace, it is not difficult to imagine fiat money being created by a central bank that neurotically micromanages interest rates.

      The alternative is a loan system based on flat fees.

      Thank you for the Gospel reference. According to St. John Chrysostom, the parable you mention is “delivered against those who will no assist their neighbors with money [among other things]…but hide all they have.” That interpretation seems to support an argument against usury.

    • Mitchell Button, MSC ECON

      These “problems” haven’t curbed the wild success of western economic life in the last 90 years. Every single modern economy has government debt, Central Banks and fiat money, and economic life hasn’t suffered for it.

      • Anthony Santelli, Ph.D.

        Economic life has not suffered for it? Mitchell, where have you been these past 4 years?

        The economic crisis and sovereign debt crises is all a result of usury!

        The success of the western economies has nothing to do with usury and everything to do with human ingenuity and technology. Usury simply has concentrated the wealth into fewer hands than would otherwise be the case without usury. Because of this, usury is a root cause of the welfare system. Far less welfare would be needed in a social order where usury was banned.

        • Mitchell Button, MSC ECON

          None of these institutions commit the sin of usury(except perhaps some government loan programs).

          The Central Bank’s have been operating under a low interest rate policy environment for the last 25 years. The last 5 years have seen a 0 rate environment (where it should be kept permanently), one can hardly call that usurious. Additionally, the Fed grows and shrinks its balance sheet of assets, but it does not receive profit, so its not as if Bernanke is gaining anything from Open Market Operations.

          If Fiat currency has any marginal difference from commodity currencies it is that it cheapens credit. Gold Standards and other elusive “real values” invariably tighten credit and allow those with scarce money to lord it over those who don’t, and always at a usurious rate. There is no reason for money to be scarce, money is merely a measurement of Aggregate Demand.

          Government debt has always been around, and will continue to be around, but I don’t see how the government debt would be any morally different than the act of taking a mortgage.

          All three institutions have historically proven that they are more than capable of facilitating the growth in the standard of living. A decent case can be made that robust economic life cannot happen without them. I can not think of a single example economy that has thrived in the past 100 years that did not employ 2 of the 3 of these economic institutions. And probably all three.

          • Anthony Santelli, Ph.D.

            Michael,

            If it compounds it is usury. The rate is irrelevant. 1% compounded over 2000 years is thousands of times greater than a 100% annual fee for 2000 years. That’s not a typo. It says ONE percent compounded for 2000 years is greater than a one hundred percent annual fee for 2000 years.

            You seem to assume that a low rate of compound interest is not usury. That is an error. Although it is true that, over a short period of time, a low rate of interest closely apporximates a low annual fee.

            I agree with your points about the Fed and Bernanke not making profits, and also that there need be no reason for money to be scarce.

            Government debt is different than a mortgage in a number of ways. First, personal debt does not compound after you die. Government debt compounds forever. This is the core reason why the governments of the western world are now bankrupt. Their debt has compounded at a low rate of interest for too long. Do the math yourself and you will see that it is impossible to pay back any amount of debt, even $1, if it compounds at a low rate (say 6%) for a thousand years or so. Make that $1 trillion, and the US is finished in less than 100 years.

            Additionally, governments almost always (the last 4 years is not an exception if we are only looking at the private sector) borrow at rates of interest that exceed the growth rate of the economy. This mathematically guarantees that those who lend to governments continually have their wealth grow at a faster rate than that of the economy as a whole. So, wealth is mathematically guaranteed to concentrate into the hands of the rich in a system of usury.

            If usury were banned, you would see a wider distribution of wealth, a smaller if not non-existent welfare state, lower taxes, a smaller less intrusive government, and many many more people running their own businesses and developing new technologies. The standard of living (of the median person) would be far higher. Although it is complex, this can be shown mathematically.

            • Mitchell Button, MSC ECON

              Your point about compound interest would be true if money was scarce, but as you agreed it is not, therefore I don’t see how debt for governments can be unsustainable. A significant case can be made that government debt is undesirable, or not socially and politically efficient. But unsustainable is a bit of stretch. The American economy has had levels of debt much higher post-WWII than we have currently as a percentage of GDP and we payed for our supposed financial crimes with the veritable vacation of the 50’s and 60’s.

              Usury does create economic inequalities for the reasons you elucidated earlier. Which invariably drags on aggregate demand as the haves accumulate more and more money from usurious financial practices, and then force the have-nots to pay ever higher “risk premium” as the poor become indebted to them. So in my view, usury is bad but certainly not unsustainable.

  • Cord Hamrick

    I don’t know whether Dale Ahlquist is likely to respond to combox posts here.

    But if he will…Mr. Ahlquist, I’d love to hear your response to the following concerns about the doctrine of forbidding loans-at-interest:

    (Note: This is a slightly-altered reprint of my comment on the Jeffrey Tucker’s piece, which takes the opposing viewpoint to Mr. Ahlquist’s.)

    —–

    In the comments replying to Mr. Tucker’s piece, Bill Bannon offers the following quote from Benedict XIV as an example of more-recent Church teaching prohibiting loans-at-interest:

    “The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan.”

    I am a little confused by the use of the term “equality” in this quote…or else, perhaps Benedict XIV was confused about it?

    Mr. Tucker correctly notes that $1000 now is less valuable than $1000 ten years from now. This is true for various reasons: Inflation and the risk that the issuer of the currency may radically devalue their currency before the repayment; the risk the borrower will not be able or willing to repay when the time comes; the opportunity cost of what I myself could have done with that money in the interim.

    So, if I give a man $1000 now, and he gives me $1000 back ten years from now, he has cheated me: That given and that returned are not equal.

    Isn’t Benedict XIV’s argument therefore an argument either…

    (a.) in favor of lending with interest, so that what is returned is truly “equal” with what has been borrowed; or,

    (b.) against lending of any kind whatsoever except as a form of almsgiving?

    Since Benedict XIV intended his words as an argument against lending-at-interest, it seems to me that (b.) is the most probable explanation of any teaching which forbids interest altogether: Moneylending is to be understood not as an economic transaction of the usual kind, but as a form of almsgiving. One may either give the fellow $1000 now and ask to have it returned in ten years when it’ll only be worth 700 of today’s dollars, or one can simply give him $300 right now and save oneself the effort at bookkeeping. It’s the same transaction either way: A charitable gift from a benefactor to one in need, not an equal-footing economic transaction.

    That we should all give alms when we can (and sometimes when we think we can’t) is obvious. That we, already giving a minimum of 10% of our pre-tax income to the Church and more above that directly to the needy, should also be directed to forgo a certain kind of economic transaction in favor of replacing it with a sort of disguised almsgiving is…less obvious. (Why is it wise to disguise from the recipient the fact that we’re giving him alms? Are we trying to deceive him about his need and our beneficence?)

    One other thought: What about rentals of property?

    If, for example, I say, “I’ll charge you $100 up front plus an additional $10 per year to rent this piece of equipment,” and you say, “Fine, here’s $100 now and I’ll give you $10 at the end of each rental year,” then at the end my total cash receipts from you are $200 ($100 plus 10 years times $10). But at the end of the rental period I also get back the equipment, and if it isn’t in perfect working order, I’ll charge you whatever it takes to restore it to perfect working order.

    Now let’s suppose the equipment at the beginning was something you could have bought for yourself for $1000, if you’d had the money on hand. (But you didn’t, which is why you opted to rent it from me.)

    In that case, what is the moral difference between you renting a $1000 piece of equipment from me, returning it at the end of the rental term, and paying me $200 over time for the privilege of having used it…and simply “renting” one thousand dollar bills from me right now, and paying me back $1200 over the life of the loan?

    It seems to me that if the Church forbids the one, it must forbid the other, especially since property rentals represent a pretty easy and obvious route for circumventing the ban on interest-bearing loans. Ban only money “rentals” without banning property “rentals,” and all that’ll happen is someone will find a kind of property that’s relatively fungible — animal skins or bolts of silk or lamp oil or gasoline or booze or what-have-you — and rent it round-’n’-round in lieu of money.

    The only difference will be that the infrastructure required for storing larger and more unwieldy pieces of property will be greater than the pockets and wallets required for storing money; and, as a result, money-borrowing will become impossible for the poor and will become a province of the wealthier merchant-classes alone. This will, of course, make entrepreneurship amongst the middle and lower class citizens more difficult, and certain kinds of entrepreneurship impossible, thus limiting upward mobility in society overall. A great way to oppress the poor, that is!

    Anyhow, I suppose a proponent of the Church’s ban on loans-at-interest must think that I have made some kind of error in how I’m thinking about these things.

    But if there is, I’m at a loss to find it.

    Perhaps you can show me what I’m missing, Mr. Ahlquist?

    • Bill Bannon

      Cord,
      I’m on my way out the door but put simply: Benedict 14
      (Vix Pervenit was a local Italian bull) was incorrect and was following Aquinas who followed Aristotle that money was barren…lend 10 dollars on a personal loan and getting back anything but equality was sin. They had circumventions in that both Aquinas and Benedict said in commercial loans, you could have extrinsic titles…reasons for charging a fee for the use of the money. Personal loans they saw as having no extrinsic titles. What they didn’t see was that on personal loans there could also be extrinsic titles since one could call it a fee for risking. You lend your cousin $1000 to go on vacation to Columbia where he might be kidnapped and you bear that risk of his never returning or paying by charging interest or call it an extrinsic title for your insecurity.
      In any event, the Vatican in 1830 bypassed Aquinas and Vix Pervenit and permitted moderate interest on personal loans.

    • Michael PS

      Your example of the ten-year loan raises a number of questions If you lend the money for ten years, then you have two contracts, a mutuum for $1,000, under which only $1,000 can be recovered and a “pactum de non petendo,” namely an agreement not to demand repayment for ten years. This is plainly an onerous agreement and you can require compensation for your forbearance, in the form of interest (interesse). This is an example of an extrinsic title

      Even without an agreement, a debtor who failed to pay on demand had to pay interest until repayment.

      • Anthony Santelli, Ph.D.

        Michael,

        A fee for risk, or a late fee, is something the lender can legitimately demand. Not compound interest. It is important that we do not confuse these two.

    • It is not usury to charge interest for loaned money. Usury is the excessive, above-the-prevailing-rate type of interest. We sometimes refer to “loan sharking” when we really mean “usury”. We need to get these terms in perspective.
      Another phrase that is frequently abused is, “Money is the root of all evil”, when it is really, “The LOVE of money is the root of all evil”.

      • Anthony Santelli, Ph.D.

        Rosemary,

        That is the current legal definition. The Church has always taught that ANY compound interest is usury. Fees for risk, fees for lateness, and fees that cover the cost of originating a loan are legitimate.

        If $1 were compounded at a supposed non-usurious rate of 6% interest for 2000 years, the borrower would owe more money than there is in all the world. This is not justice. It is immoral. Therefore, any prevailing rate that compounds, even something seemingly low, is immoral.

    • Anthony Santelli, Ph.D.

      Cord,

      There is option C. Benedict intended to show that no compound interest can be earned, but one can structure a contract as a hedge against inflation. For example, if the price of oil today is $100/bbl, and you wanted to borrow $1000, the lender could structure the contract such that you must pay him back the monetary equivalent of 10 barrels of oil. Whatever the price of oil is when your debt is to be paid back, you owe 10 x that. So, if oil goes to $200/bbl, you would owe $2000. If it drops to $50/bbl, you would owe $500. This type of contract is and has always been considered legitimate.

      The principle is: the lender has the right to be made whole.

      Justice to the lender is equally as important as justice to the borrower.

      Extrinsic titles are only legitimate for 3 reasons: 1. to cover the cost of making the loan (origination fees); 2. To cover for the risk of loss; 3. to cover actual losses in the case of late repayments. And, it is either 2 or 3, not both, otherwise the lender is being compensated twice for the same risk. And these are all FEES that do not compound, never compounding interest. Again, compound interest would be compensating the lender multiple times for the same risk. The lender has the right to be made whole, but not more than whole. If the lender wants more, he needs to make an investment and get a percentage of the profits (or losses)

  • Michael PS

    It is worth noting that, in Latin, ther is no word for loan. There is “commodatum,” which is a loan for use and “mutuum,” which is a loan for consumption (corn, wine, oil, money)

    As the Roman jurists recognised, the two transactions are quite different. In commodatum, the lender remains owner of the thing lent. If the thing perishes without fault on the part of the borrower, the loss is the lender’s (res perit domino). The lender can sue for damage to the thing and can recover it from a third party. The ownership and the use are clearly distinct and what is lent is the use.

    In mutuum, the borrower is bound to restore, not the thing itself, but its equivalent. He becomes the owner of the thing and his obligation to restore is unaffected by its accidental destruction. The ownership and the use are indistinguishable.

    The 1917 Code of Canon Law (c 1543) repeats the doctrine of Vix Pervenit “If a fungible thing is given to someone in such a way that it becomes his and later is to be returned only in the same kind, no gain can be received by reason of the contract itself; but in the payment of a fungible thing, it is not in itself illicit to contract for the gain allowed by law, unless it is clear that this is excessive, or even for a greater gain, if a just and adequate title be present” This is clear evidence of how the matter was understood at the time.

  • Bill Bannon, you placed Calvin above Aquinas. Thank you. The rest of us can now safely ignore everything you have to say.

    • Bill Bannon

      You’re letting your Irish temper blind you to the fact that I said that in regard to one topic. Catholicism in real life follows Calvin’s 1545 position on moderate interest.
      I read the entire Summa T. It is great and once you read it, you will see that Aquinas had a weakness for certain authorities on certain subjects….Augustine on sex e.g. which led both men into being wrong on the Immaculate Conception…both wrong on asking for the marriage debt as venial sin if children not willed explicitly…and both wrong on women being lesser helps than men in all things but procreation. Once you read the enire Summa T., you will see what I mean.

      • Michael PS

        No Canonist ever suggested that extrinsic titles could not apply to personal loans: a very common example was the Post-Obit bond, where an expectant heir undertook to repay out of the inheritance. Here the lender ran the risk of the heir dying first (periculum sortis) and interest could properly be charged. Also the postponing of the right to demand repayment (mora) furnished an extrinsic title. According to the Roman Jurists, a right of repetition is intrinsic to all real contracts – deposit, pledge, loan for consumption, loan for use and any variation of it justified the lender in demanding compensation. The canonists agreed.

        Nothing in Vix Pervenit contradicts this, rather, “By these remarks, however, We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract. Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made…”

        • Bill Bannon

          Michael PS
          What you ‘re saying in your unique way is that there never was any usury if one could come up with a reason for a fee. People who couldn’t think of “fee for death risk”..e.g… were usurers and people who could think of such extrinsic titles were in grace. In 1830, tired of the simple gloing to hell and the clever entering heaven, the Vatican said not to disturb those taking moderate interest…..which means that then henceforth, one need not be clever
          to be in grace…..extrinsic titles be damned.

          • Michael PS

            But, as I said earlier, the 1917 Code of Canon Law (c 1543) repeated the doctrine of Vix Pervenit “If a fungible thing is given to someone in such a way that it becomes his and later is to be returned only in the same kind, no gain can be received by reason of the contract itself; but in the payment of a fungible thing, it is not in itself illicit to contract for the gain allowed by law, unless it is clear that this is excessive, or even for a greater gain, if a just and adequate title be present”

            This is clear evidence of how the matter was understood at the time and it included the requirement of an extrinsic title.

    • Timbot2000

      Nice argument Sean, typical par for the course for distributists.
      How to be a Distributist:
      1. Imagine a perfect society of universal property ownership and social solidarity.
      2. Cherry pick medieval history to support your vision (or if necessary, just make stuff up)
      3. Never, ever, subject your proposals to apriorist study. Philosophic argumentation is of the devil.
      4. Remember, if the great Chesterbelloc (PBUH) said it, it must be true
      5. Remember, poisoning the well, character assassination, moving of goalposts, and tu quoque are valid modes of argumentation (for you anyway)
      6. When cornered, shout “Modragon Corporation!” or “Emiglia Romana!” and disappear in a puff of smoke.

  • Jim S

    I remember the nuns in school in the 1950’s and 1960’s teaching us that usury was the charging of “excessive” interest. I seem to remember explanations like about how the type of interest that S&L’s charged for mortgages was okay, but that loan-sharking was usury and sinful. I don’t remember if I even knew what loan-sharking was at the time, but I did get the idea that there was a difference between excessive and not excessive. So were the nuns wrong?

  • Chris M

    An excellent look at usury from a Catholic law professor:
    http://works.bepress.com/cgi/viewcontent.cgi?article=1005&context=brian_mccall

  • Tom

    What does the Vatican Bank do?

  • Pat B

    I am not a distributist but I think that Mr. Ahlquist raises a good point. Some argue that Social Teaching is a separate category from faith and morals but that makes no sense to me. Isn’t the condemnation of usury a teaching on morals? I would be entirely happy to accept either the position that moderate interest is moral or that it is always immoral but I want to make sure I am standing on firm and faithful ground. Could someone with more expertise explain the difference, if any, between Social Teaching and faith and morals?

    • Bill Bannon

      Pat B
      The topic is a moral issue and if moderate interest were a sin then every Pope and every clergy person in your lifetime is unaware of it and is warning no one. How likely is that?
      All interest on home and car purchases would be usury ergo the Church should forbid Catholics from all real estate jobs and all new car related employment. Preposterous.

      Deut.23:20 to the Jews only…
      “You shall not demand interest from your countrymen on a loan of money or of food or of anything else on which interest is usually demanded.
      21
      You may demand interest from a foreigner, but not from your countryman, so that the LORD, your God, may bless you in all your undertakings on the land you are to enter and occupy.

  • Donald Morgan

    Gee Dale, looks like you kicked over the wrong idol!

    • Bill Bannon

      Or he is adding to God’s commands which is forbidden…

      Deut.23:21
      “You may demand interest from a foreigner, but not from your countryman, so that the LORD, your God, may bless you in all your undertakings on the land you are to enter and occupy.”

  • Steve

    “I will write My law upon their hearts” “Do unto others as you would have others do unto you” You know when you are taking advantage of someone,

  • John Zmirak

    Is this an argument of Natural Law, or a point that came from Divine Revelation, which ended with the death of St. John the Evangelist? If the former, then we are free to argue about it, and no Church teaching CAN be infallible (just as Cardinal Ratzinger permanently ruled out an ex cathedra statement re-affirming Humanae Vitae). We must submit with religious deference to Church readings of Natural Law, but they rest on human reason not divine guarantees. Church councils do not have a permanent source of ongoing inspiration, which permits them to create new revelations. (We’re not Mormons.) So, the issue is whether the condemnations of usury are a) comprehensive and b) authoritative interpretations of scripture (and hence universally binding) OR if they are c) The best opinions offered by good men on how to interpret the Natural Law. If c) they could be wrong, and Jeff Tucker’s argument suggests that they were. So do 200 years of papal practice, the silence of Pius XII concerning any absolute ban on usury in his radio address to bankers, the absence of such a statement in the recent Catechism, etc.

    So either the Church has been woefully, criminally remiss for 200 years in neglecting a point of Divine Revelation–whose violation is the very basis of the modern economy….

    Or… the absolute ban on lending at interest is an intellectual mistake, a piece of imperfect Natural Law reasoning which more informed minds corrected, with the Church’s acquiescence.

    Pick one.

    Also: “lastly, Noonan wrote his book on Usury with contraception in his mind — he said so himself. He sought to show that the Church has changed her position on one dogmatic issue, and therefore, she can change it on another. He wanted the Church to change her position against contraception, and he later wrote a book on that.” This is completely irrelevant. Noonan was making Natural Law arguments in both cases. If you think they fail, argue against them on their merits. The thinker’s intention has no bearing on the validity or invalidity of logical propositions.

  • Peter Freeman

    Any chance we ought to be reading the prohibition on usury in a mostly figurative sense, especially given that the 21st century economic terrain probably bears very little resemblance to that of ancient Israel?

    • Mitchell Button, MSC ECON

      Apparently, the people of Ancient of Isreal had enough moral common sense to know when your being taken advantage of, and when you are taking advantage.

  • Matthias

    Mr. Zmirak,

    1. Accepting your premises, there is a third alternative:

    The RELAXATION of the absolute ban on lending at interest is an intellectual mistake, a piece of imperfect Natural Law reasoning which more informed minds might correct in the future, with the Church’s acquiescence.

    2. Even if usury is “the very basis of the modern economy,” should that fact necessarily have merit in this debate?

    3. “The thinker’s intention has no bearing on the validity or invalidity of logical propositions.”- Correct, but the light that could be shed on that thinker’s social agenda is surely significant.

    Personally, I’m still looking for terra firma on this matter.

  • Chris Ferrara

    It is not an intellectual mistake, but a recognition that the absolute ban no longer makes sense because the very nature of money has changed. Moral theology consists of principles applied to facts. If the facts change, the principle remains the same but the conclusion is different.

    Today, currency is merely a paper claim on goods and services whose purchasing power fluctuates from day to day. If someone who borrows ten dollars from me returns it a year later, I am able to purchase less with that claim than before, so justice would warrant some premium, even if charity or more perfect virtue would counsel waiving the premium.

    The return of money loaned today can be likened to the return of a loaned car with additional miles on it. It would not be immoral to request mileage compensation, even if it would not be very charitable. In many factual scenarios, it is like that with money in modern economies.

  • Joshua

    Benedict the XIV was an 18th century pope, not 14th. That should be corrected in the article.

    Vix pervenit was indeed addressed to the Italian bishops. But a dubium from the Holy Office clarified that its teaching and instruction applied to the whole Church (July 29, 1836). To a earlier commenter, I point out that it was an Encyclical and not a Bull.

    We do need to be careful. We do not make the same distinctions made by the scholastics or by Benedict XVI often. We call many different sorts of transactions “loans.” What is talked about by Benedict the XIV is a “mutuum” This is when a fungible good is transferred to another’s ownership, with the expectation of being paid back. It is indeed usury and a sin to charge interest on such a contract in and of itself. However, the pope goes on to state that interest may be charged even in this type of contract due to “external titles.” Classically, it was allowed that interest be charged when the lending party occurred an actual loss, as when a friend being tardy to pay me back at the agreed time causes me to be late on rent and incur a fee. He owes me recompense for that. It seems reasonable, as well, that the loss of real value through inflation falls under the same reasoning, as well as the cost of providing such a service. As an individual making a single loan I incur no costs as it were. But a bank has to hire tellers, accountants, etc. The key word of the pope is “gain” here. There is no just claim for any profit off such a loan.

    The case is different when a loan is given to start a business, to buy productive property, etc. In any case, usury properly so-called applies only to the lending of a fungible good that is consumed in first use. Somethings, say my lending a tractor, are not consumed in their use (at least not totally). It had been fairly universal that money is considered something that must be consumed in its use. It was considered as a means of exchange. Those theologians who talked about the question of usury in the modern context (as can be seen in various moral manuals) discuss in depth at times whether the nature of money has changed, or is to be understood differently, as something not always totally consumed in its first use, but rather like the tractor something that could remain in being used (thus generating a profit). If that were the case, then most lending of money could be considered like to what in Latin is “societas” which is, morally at least, not distinguished from an investment. As when I loan you money for that tractor, which is capital for your farm. Until you pay me back, I have claim to some profit insofar as in some sense I own some of that productive property, or rather have a claim against it.

    I think before people go dismissing a 2000+ yr old teaching that indeed could not change, they should take time to realize that it is a bit more nuanced than simply “no interest, ever.” Belloc and Chesterton would agree with reasonable interes on productive loans for instance.

    • Michael PS

      ” Some things, say my lending a tractor, are not consumed in their use (at least not totally)…”

      That is not mutuum, but commodatum, a different type of contract entirely. Mutuum is a loan for consumption and commodatum is a loan for use. The lender of the tractor remains owner of the tractor; the lender of the money, or other fungible, like corn, wine or oil, does not remain owner of the money

      • Joshua

        You do realize I gave that example as being opposed to a mutuum?

        “In any case, usury properly so-called applies only to the lending of a fungible good that is consumed in first use. Somethings, say my lending a tractor, are not consumed in their use (at least not totally).”

        Clearly stating that such a loan is not the same type?

        Anyhow, look at the comments more closely, am curious where Mr. Bannon got the idea that the Church made any decision in 1830 to allow moderate interest, when in 1836 the Church said Vix pervenit applied to everyone

        • Bill Bannon

          Joshua,
          I am citing from “A Church That Can and Cannot Change” John T. Noonan Jr./ University of Nortre Dame Press/2005/ page 141:

          ” In 1830 during the brief Pontificate of …Pius VIII, a formula emerged: ” Non esse inquietandum”
          _the penitent who was profiting from a loan was
          “not to be disturbed”. The formula became standard in the 1830’s under Gregory XVI.”

          The weird thing is that these two threads contain more human energy on this topic by people with no authority….than the CDF put into the catechism’s two small references to this topic. It needs a clear definition and condemnation within one or several pages in a catechism. Otherwise it is clicks at a web site. Why should catechism readers think usury is still an issue if it is virtually invisible therein?

  • Forgive me my ignorance in these matters. A couple questions:

    1) Could interest simply be justified as charging money for a service (the service being letting you borrow money) and that charge happens to be calculated based on X percent of the amount borrowed?

    2). Has anyone taken the time to go back to the councils and encyclicals and find the condemnations to which the author made reference? If so, has anyone analyzed the text in question to determine whether or not the references to this concept were necessarily protected by the Church’s gift of indefectibility?

  • mdepie

    A couple of points: First:
    1) Pat b asks for someone to explain the diff if any, “between Social Teaching and faith and morals?

    There is really none, that is the the basic principals have the same force in terms of being part of the ordinary magesterium and thus binding. I disagree with Mr Zmirak, that the natural law can not be declared infallibly, the cathechism clearly states that it is part of the ordinary magisterium. ( see 2036 “The authority of the Magisterium extends also to the specific precepts of the natural law, because their observance, demanded by the Creator, is necessary for salvation. ”
    Still if one reads most of the material concerning social doctrine like most commandments which are positive in nature how we specifically carry it out involves prudential judgements about which we can disagree. ( this is in contrast to aspects of the natural law that are prohibitions. So it is a moral teaching that direct killing ot the innocent are intrinsic evils, since they are intrisinic evils they are never permissible. The social teaching involves things that are more complex. One example is the teaching on war, there is an overarching teaching on whst constitutes a “just war” but the analysis of the specific facts and the application of the principles to specific cases is a prudential judgement that there can be debate about and is not part of the magisterium. ( Since to analyze specific cases requires access to specific facts and at times specific expertise) Many of teh economic principles in the social teaching are similar. We have a duty to support public policies which help the poor, but what specific economic policies do this involve is an empiric question that involves the evaluation of objective evidence. This can not be covered by teh magisterium, anymore than what specific medication a doctor uses to treat a patient could be dictated by the Church, alhough some basic principles ( doctors should be conscientious) can be said.

    The teaching on usury has not changed, but rather the understanding of the nature of loans in our modern economy has changed. That is the nature of how money is used and what kind of thing it is has changed, therefore , In modern economies that use money in the way we use money the transactions that involve taking interest no longer meet the definition of usury at least according to the Church.

    Joshua in his post does an excellent job of describing this.

    In any case the distributists out there are living in an alternative reality. For the most part we need an economic system similar to our modern capialist system, because most of the things we rely on which makes modern life less dangerous, painful etc rely on huge investments of capitol that distributionism could not provide for. So if you want anti cancer drugs, vaccines, cell phones, television, electric cars, devices computers, safe forms of mining natrual gas, farming that produces large amounts of wheat that we can use to feed others etc.. you need large organizations aka corporations to produce, and these folks need investment that allows capitol formation, all this means loans and interest on the loans. Finally the distributionists need to remind themselves that Chesterton did not write in the age when the majority of people in fact owned stock in corporations via mutual funds if not directly, indirectly through pension funds and the like.

    • Pat B

      Thanks for the response. I think that your position, that usury is wrong but that which Mr. Ahquist thinks is usury may not in fact be usury makes sense.

  • mdepie

    I think its pretty clear that currently the Church would not call taking interest a sin ( the 1917 code of canon law authorized the Church to take interest on its own investments. So the only real issue is how to explain the “change” in teaching. There have been several approaches to this, Joshua in his post does a good job if illustrating one. The situations that made taking interest on loans no longer apply so the this practice is no longer usury

    • Michael PS

      Yes it did, whilst affirming the principle ““If a fungible thing is given to someone in such a way that it becomes his and later is to be returned only in the same kind, no gain can be received by reason of the contract itself”

      “By reason of the contract itself” are the vital words; gain can be lawfully made under an extrinsic title.

  • Michael PS

    Etienne Bauny, ((1564-1649) the celebrated Jesuit moral theologian, in his “Somme des péchés qui se commettent en tous états” [Summary of sins committed in all walks of life] (Paris, 1634) having declared usurers “infamous in life and unworthy of Christian burial in death,” offers the following advice: –

    “The person from whom the loan is asked must answer, then, in this manner: I have got no money to lend, I have got a little, however, to lay out for an honest and lawful profit. If you are anxious to have the sum you mention in order to make something of it by your industry, dividing the profit and loss between us, I may perhaps be able to accommodate you. But now I think of it, as it may be a matter of difficulty to agree about the profit, if you will secure me a certain portion of it, and give me so much for my principal, so that it incur no risk, we may come to terms much sooner, and you shall touch the cash immediately.”

    He concludes: “Such, in my opinion, is an excellent plan by which a great many people, who now provoke the just indignation of God by their usuries, extortions, and illicit bargains, might save themselves, in the way of making good, honest, and legitimate profits.”

    Small wonder that Père Bauny’s obituary describes him as “a skilful guide of souls, full of charity towards sinners, prudent in the management of affairs…”

  • Condemning all interest for being usury is a little like condemning all methods of spacing, including NFP, for being contraception. One word by itself is not necessarily descriptive of what is being condemned by the Church.

    Consider this: suppose I have an object of value and I lend it to someone and they make money off of it. Don’t I deserve some kind of compensation for that loan? Like if I have a model car that is used in a movie, and I “lend” it to a friend, and that film is a blockbuster because of the car, am I not entitled to some kind of financial recompense for having been nice enough to lend the car? If you lend something, and someone makes money off of it, it seems logical to me that the lender is entitled to the fruit of the profit. It seems to me that charging interest for a profitable loan is completely acceptable.

    • Michael PS

      The car remains yours, even after you lend it – a property right and, of course, you can charge for the use. If you lend a horse and it dies of an aneurysm, the loss is yours, not the borrower’s

      If you lend money, you no longer own it; you have a mere personal right to repayment

  • by model I meant “antique” car.

    • Bill Bannon

      I drove a red 1961 MGA sports car (hard top) for two years and it could be crank started in the front. Costly repair bills at a garage just for antique MG’s…made me give up on it. The bills were seriously usurious….just kidding…don’t correct me…bills can’t be usurious.

  • Gabriel Austin

    A fascinating exchange; but it avoids a major point: the definition of usury. Is 3% usury? 5%? 20%? 50%?

    What is usury – specifically? The lack of a clear and precise definition is what leads to unending discussion – and bad tempers.

    A side note: the efforts to denounce r describe Distributists as retrograde [that is a fairly polite example] merely provoke irritation. One may not like the Middle Ages, but it would be helpful to have a clear idea of what is meant by the Middle Ages. I note that the praised Modern Economy [Commercialism as GKC named it] is not doing too well. As it seems to have done always, it swings between exaggeration and depression. There is a touch in the arguing of “comfortable academics secure in their tenure”.

    In my opinion Belloc’s THE SERVILE STATE is far clearer than the Austrian School, and far more comprehensive [and not written in obscure German]. He argues simply that the modern economies are heading in the direction of wage slavery – trading liberty for security.

    • Michael PS

      Usury is defined as taking money for the use of money, or other fungible thing. It comes from the Latin word “utere,” to use.

  • Rick DeLano

    Thank you, Dale. You have correctly pointed to the crucial and dispository fact underneath all the noise: there is no subsequent magisterial teaching amending or reversing “Vix Pervenit”. The cessation of enforcement of this teaching is a prudential matter, just as its promulgation is not. Its promulgation represents an authoritative employment of the Church’s heaven-protected magisterium. Its subsequent abandonment does not. Very soon now we shall all have abundant occasion to weep and gnash our teeth over the folly consequent upon substituting the best thinking of men, for the Truth of God.

  • Doc

    The Fifth Lateran Council defined what usury is:

    “For, that is the real meaning of usury: when, from its use, a thing which produces nothing is applied to the acquiring of gain and profit without any work, any expense or any risk.”

    • Bill Bannon

      Fifth Lateran was not Ecumenical. Check a list. Too few Bishops attended. Not an infallible venue. All Bishops must attend for infallibility.

      • Mitchell Button, MSC ECON

        If that is the criterion then the Council of Nicea is not infallible. Because though 1000 bishops were invited only 200-275 showed.

        • Bill Bannon

          Mitchell,
          Quick guess. I think if you research it the ones that didn’t show may have been de facto Arian. This was the century (4th) when Cardinal Newman maintained that nearly all the hiearchy went Arian in fact and that Athansius and largely the laity held to the true faith….”On Consulting the Faithful in Matters of Doctrine” had this Bishop apostasy as it’s key to it’s theme.

          • Mitchell Button, MSC ECON

            But being a heretic bishop makes you no less a bishop, consecrated with the fullness of the sacrament of holy orders. The whole point of the council was to address the nature of Christ and the heresy of Arianism. The Church had NOT dogmatically defined the divinity of Christ to that point or yet anathematized the Arians. The Council should have given the Arians MORE of a reason to attend. Because being good heretics, they aren’t trying to destroy the Church, but corrupt it with lies.

            The fifth Lateran Council is an Ecumenical Council.

            • Bill Bannon

              Mitchell
              I stand corrected having checked multiple lists. It is ecumenical but I would think incapable of infallibility due to missing orthodox but contentious Bishops. It would be nice if Catholic blogdom had a dogmatic theologian patrolling and sitting next to a copy of the Enchiridion Symbolorum.

  • Rick DeLano

    Bill: The Council of Vienna was ecumenical. Its Decree #29 states:

    “If indeed someone has fallen into the error of presuming to affirm pertinaciously that the practice of usury is not sinful, we decree that he is to be punished as a heretic”.

    • Bill Bannon

      Doesn’t define what usury is (immoderate interest or any interest)….New Catholic Encyclopedia….Holy See puts its money out at interest and requires ecclesiastical administrators to do the same..page 499…lower right bottom.

  • Rick DeLano

    Bill: Precisely defines what usury is:

    “I. The nature of the sin called usury has its proper place and origin in a loan contract. This financial contract between consenting parties demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.

    II. One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions. The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made.

    “New Catholic Encyclopedia” does not constitute a category of magisterial teaching, and possesses precisely zero authority to overturn, reverse, or amend a magisterial teaching.

    The magisterium is protected by heaven when defining matters concerning the Faith. It is not so protected in matters of disciplinary enforcement or prudential decisions concerning general governance.

  • Bill Bannon

    Rick
    Why did you leave out your source quote’s name? LOL. You are a nice guy who is not sufficiently reading dogmatics. Heaven only perfectly guides the infallible….see Brian Harrison in the second torture essay and Ludwig Ott’s Fundamentals Intro on line….oops….you saw that already but forgot it straightway.

  • Rick DeLano

    Bill: It is really shatteringly simple. The Church has anathematized the taking of interest (usury). She has also explicitly taught that those who pertinaciously deny that usury is sinful are heretics.

    I understand how difficult this teaching is under present circumstances, and especially how utterly anomalous the fact that the teaching has been abandoned in practice is.

    These conditions certainly mitigate the actions of Catholics who may be unaware, or confused, concerning the truth of our faith concerning interest-taking (usury).

    But the Catholic who is serious about forming their conscience in accordance with the Truths of our Faith will prefer those Truths to all of the best thinking of men.

  • Bill Bannon

    No the Church is moving toward the original sense: what effect is the degree of interest having on the poor. You saw Deut.23:20….it allowed interest. It’s actually from Heaven….lol…..and Vix Pervenit is ultimately from Aquinas and thus from Aristotle….with a Vatican office affirming it in 1836 and 1917 in canon law. Canon law from the 13th century til 1917 supported the slave status of a child born to a slave mother…see Aquinas/ST/ Supplement/ Marriage/marriage of a slave. Aquinas gives the canons involved. Adios.

  • Rick DeLano

    Bill: Deuteronomy states the principle: “To thy brother thou shalt lend that which he wanteth, without usury: that the Lord thy God may bless thee in all thy works in the land, which thou shalt go in to possess.”

    It is important to reflect upon a question Jesus was asked in another context:

    “Who is my neighbor”?

    If you can find someone who is not your neighbor, then explain to Christ that you have exacted usury from him on that basis, Bill.

    If not, then do as the Lord directs.

    Go thou and do likewise, Bill.

  • If my friend comes to me a says, “Please loan me £100. I’m skint and need the money to buy seed potatoes to plant to feed my family.” I agree to the load.

    Six months later my friend returns my £100.00 and says, “I had such a good harvest that I want to give you ten sacks of potatoes from my abundance for your kindness.”

    Have I and my friend both committed mortal sin? I for taking a return on a loan, an he for tempting me to do so?

  • Rick DeLano

    Graham: It is not a return on the loan. It is a gift. Hardly sinful. Of closures, if this were all a ruse, concocted to Pharisaically workaround the proscription against usury, then the arrangement would have been established in advance.

    In that case it would be usury, and mortally sinful.

    But precisely as you recount the matter, both of you have acted in perfect accord with the Gospel.

  • Alan Church

    This is a prudential judgment of the Church subject to easing and tightening. It is not a dogma. The Church was fearful of interest being used to enslave people. And this fear became a reality generation after generation in history. This is what the popes and councils were condeming by usury. Even the parable of talents says the lazy one should have put his talent in the bank for interest (or usury in older translations). The Church was in principle against gain without work. However, such by itself was not necessarily sinful.

  • Rick DeLano

    Alan: Here is what the Church has authoritatively taught to be sinful:

    “I. The nature of the sin called usury has its proper place and origin in a loan contract. This financial contract between consenting parties demands, by its very nature, that one return to another only as much as he has received. The sin rests on the fact that sometimes the creditor desires more than he has given. Therefore he contends some gain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.

    II. One cannot condone the sin of usury by arguing that the gain is not great or excessive, but rather moderate or small; neither can it be condoned by arguing that the borrower is rich; nor even by arguing that the money borrowed is not left idle, but is spent usefully, either to increase one’s fortune, to purchase new estates, or to engage in business transactions. The law governing loans consists necessarily in the equality of what is given and returned; once the equality has been established, whoever demands more than that violates the terms of the loan. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made.”

    Now these words are very clear. They represent the last word of the magisterium on usury to the present day.

    It is true that the enforcement of the teaching is a matter or prudential decision.

    It is also true that the Church’s prudential governance is not protected against error in a similar way that Her magisterium is protected.

    Lastly, it is true that the objective obligation of the Catholic to form their conscience based upon the authoritative teaching of the magisterium is not in the slightest degree set aside by any prudential decision concerning enforcement.

    • Mitchell Button, MSC ECON

      Just as a bookkeeping matter. Which Church document did you quote this from?

    • Michael PS

      The following paragraph should also be noted:

      “III. By these remarks, however, We do not deny that at times together with the loan contract certain other titles-which are not at all intrinsic to the contract-may run parallel with it. From these other titles, entirely just and legitimate reasons arise to demand something over and above the amount due on the contract”

      The Latin has “innate and intrinsic to the nature of mutuum or loan for consumption” [naturæ mutui minime innatos et intrinsecos]

      And he continues: “Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made.”

      Obviously, it would be impossible for any magisterial document to deal with every variety of contract that individuals might devise. That is why Vix Pervenit recommends “those who desire to keep themselves free and untouched by the contamination of usury and to give their money to another in such a manner that they may receive only legitimate gain should be admonished to make a contract beforehand. In the contract they should explain the conditions and what gain they expect from their money.”

    • Alan Church

      Thank you Rick DeLano. Can you please tell me what your quote is from?

    • Alan Church

      Rick, the document you quote was a pastoral letter not to the whole Catholic Church…. but to the local Italian clergy.

      It is hardly authoritative, as you claim we are all bound by it.

      • Alan Church

        Sorry…. I should have read the beginning:) It is an encyclical to the whole Church…

  • Rick DeLano

    Vix Pervenit.

  • Rick DeLano

    Yes, Michael, the little bit in there about “contracts differing entirely from loans” would have saved us, had it been observed.

    Interest is forever, which is why extrinsic titles are not interest.

    Woe to us for having surrendered the Truths of our Faith to the best thinking of men.

    There will be abundant occasion to repent, and very soon.

    • John Zmirak

      This should end the discussion: Deuteronomy 23 allows the Jews to charge interest of foreigners, but not of Jews. If Jews could demand interest from ANYONE, then it doesn’t violate the Natural Law. It isn’t intrinsically evil. Period. God never gave permission for intrinsic evils, even to His chosen people during emergencies.

      So, charging interest is not unjust, but MAY be uncharitable if practiced against fellow Christians.

      I don’t grant this point, but even if I did, it would have zero application to politics. It would be a violation of religious liberty for us to impose a positive command of charity on non-believers using the coercive power of the State. We have no right to stop Protestants from eating meat on Fridays in Lent, or to force Muslims to eat pork. So we have no right to impose canonical, intra-Catholic restrictions on our fellow citizens.

      Only the Natural Law may be enforced by the State without injustice to non-believers, and if God explicitly permitted Jews to charge interest to ANYONE, it can’t be intrinsically evil or contrary to Natural law in itself.

      We might say that EXCESSIVE interest is unjust, and regulate interest rates and contracts to promote greater justice. But we have no more right to demand Charity at gunpoint (e.g, through the State) than we do to impose Faith or Hope.

  • BillyHW

    Gosh my Church embarrasses me sometimes.

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