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14525Re: Usury or the Charging of Interest on Money Lent

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  • multiplose
    Apr 15, 2006
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      Dear Chris,

      Thanks for your thoughtful replies up to this point.

      Your first argument deals with the testimony of faithful church
      courts, and uses the argument that because they never condemned
      usury, it is therefore their testimony that it is allowable. Not
      knowing a great deal about the operation of church courts, I am
      hardly able to dispute the underlying assumption here (that a lack
      of condemnation of a particular practice is equivalent to an
      approval thereof), however, a number of responses come to mind.

      1. Could not the opposite argument be made? Couldn't I say that
      because usury was never authorized by faithful church courts, it is
      therefore condemned by those same courts? And if this can be taken
      to mean either, then is not your argument ambigious and inconclusive?

      2. Don't church courts need an actual case in order to rule on a
      particular issue? Wouldn't they need a particular example of the
      practice of usury in order to condemn? Nehemiah condemned usury
      when it arose in the Israelite society, but not before. So
      likewise, civil courts in the U.S. cannot rule on an issue
      arbitrarily, without an actual case. What makes church courts any

      3. The testimony of the church for 100's of years was unanimously
      against usury. It is needless to point to particular examples; the
      plain and simple fact is that usury has only been commonplace for a
      relatively short time.

      So, in response, I would say that even if your argument could defend
      its underlying assumption (that lack of a condemnation of a
      particular practice is equivalent to an authorization of the same),
      you still have some 1500 years of church history to refute your
      initial premise.

      4. You mentioned that the usury spoken of in Q142 of the Larger
      Catechism refers to an exorbitant amount of usury. I answer that...

      i. The original sense of the word usury had nothing to do with
      exorbitant amounts of interest. It include all interest whatsoever,
      anything beyond the principle (see Calvin Elliot's book
      entitled "Usury: A Scriptural, Ethical, and Economic View," pages 7-
      10, provided free at http://fax.libs.uga.edu/HB539xE46/1f/usury.pdf).

      ii. Even if it did refer to exorbitant interest, are you prepared
      to accept the consequences of that judgment? This would mean that
      Israelites (and Christians) are forbidden from charging exorbitant
      interest from one another, but that they are allowed (so far as I
      understand your interpretation of the Deut. 23:19,20) to charge
      exorbitant interest from strangers and non-Christians. But that
      seems contrary to common sense; an exorbitant amount is by its very
      definition avaricious and oppressive. Is this what you mean to say?

      iii. The connotation of the word "bite" implies not huge bites of
      interest, but small ones, which multiply exponential (as compound
      interest does). Even a "moderate" amount of interest, as Gill calls
      it, is sufficient to compound and increase exponentially. We tend
      to view small amounts of money as almost having completely different
      principles as larger amounts. But really this is ridiculous. If I
      steal a penny from my friend, I am just as obligated to restore it
      as I am to restore $100 stolen from the same friend. In fact, in
      the case of $100, I am merely restoring 10,000 pennies, each,
      individually, but as a whole sum. Remember, Nehemiah told the
      Israelites to restore the "hundredth part."

      iv. The qualification of charging interest not to the poor in the
      passage does not lie in the actual passage. While certain texts
      bring up the issue of a poor brethren, Psalm 15:5 does not, neither
      does Deuteronomy 23:19,20, nor can it fairly be interpreted that way.

      In response to Gary North's argument regarding renting money vs.
      renting property, I say, that is the exact distinction to be made.
      In the case of charging interest, you are charging interest on
      money, and money is not a commodity, but a means of exchange.
      Property is a commodity, and is subject to being lent, leased, or
      rented. Money, on the other hand, is barren. But since I have not
      studied this aspect of the issue enough to make a sound exposition,
      I will save that for another time, and qualify what I have said
      already with my relative ignorance on the matter. Suffice it to
      say, seeing as I am young and only 17, I do not lease, rent, or do
      any of the activities you mentioned. So that would make your ad
      hominem argument to none effect :)! But I do support the
      distinction anyway, so I will hopefully respond to that argument in
      a future post.

      Your last paragraph is troubling to me. In what way have I sounded
      socialistic and Marxian to you? Are you drawing implications or
      making observations?

      I suppose I ought to confess, I have not read a great deal about
      economics. But I have read my Bible, and I try to base my economic
      theories on its teachings. Furthermore, I have studied certain
      economists and have discussions with one of my teachers on the
      matter. But whether any of this really matters to the substance of
      our debate, I think not.

      May God richly bless you in all that you do,
      Your brother in Christ,
      Julian R. Gress

      --- In covenantedreformationclub@yahoogroups.com, "forisraelssake"
      <c_tylor@...> wrote:
      > > Do you mind expounding upon your position with historical
      > > In particular, I want to know more about this, "I believe it is
      > > contrary to the known historical testimony of faithful church
      > > which never abolished commercial interest-bearing loans (so
      > > far as I know)."
      > >
      > >
      > Well my friend, how can I expand on it--by pointing to the lack of
      > examples of faithful Reformed churches judicially outlawing usury
      > all cases everywhere? Well I just did that. Can you point to an
      > example where that did happen? Isn't it be more your job to find
      > relevant sections from the subordinate standards of the RPNA that
      > justifies your all-usury-without-exception-is-wrong line of
      > The usury that is forbidden in Q142 of the Larger Catechism points
      > Ps. 15:5 where the term signifies unlawful interest, or that which
      > got by taking advantage of the necessity of a distressed neighbor
      > not 'interest' simpliciter).
      > In John Gill's commentary on that passage, which is certainly
      > representative of the larger Calvinist community of thought (cf.
      > Geneva Bible, Adam Clarke, Matthew Henry, Charles Spurgeon,
      > he writes:
      > Psa 15:5 - He that putteth not out his money to usury,.... To the
      > poor, in an extravagant and exorbitant way, by which he bites,
      > devours, and destroys his little substance, and sadly afflicts and
      > distresses him; see Exo_22:25; otherwise, to lend money on moderate
      > interest, and according to the laws, customs, and usages of
      > and to take interest for it, is no more unlawful than to take
      > for houses and land; yea, it is according to the law of common
      > and equity, that if one man lends money to another to trade with,
      > gain by, that he should have a proportionate share in the gain of
      > a trade; but the design of this passage, and the law on which it is
      > founded, is, to forbid all exactions and oppressions of the poor,
      > all avaricious practices, and to encourage liberality and
      > and such who are covetous, and bite and oppress the poor, are not
      > for church communion; see 1Co_5:11
      > The point is that while the bible outlaws usury on charitable
      loans (a
      > charitable loan is not optional but morally compulsory) to
      brothers in
      > the faith and to aliens who voluntarily live under God's laws, it
      > not forbid interest-bearing commercial loans.
      > Interest on charitable loans forbidden:
      > Exodus 22:25 "If you lend money to any of my people with you who
      > poor, you shall not be like a moneylender to him, and you shall
      > exact interest from him.
      > Charitable loans declared morally compulsory:
      > Deuteronomy 15:7-8 "If among you, one of your brothers should
      > poor, in any of your towns within your land that the LORD your
      God is
      > giving you, you shall not harden your heart or shut your hand
      > your poor brother, (8) but you shall open your hand to him and
      > him sufficient for his need, whatever it may be.
      > Gary North has a good observation on how the critics of interest on
      > commercial loans don't seem to apply their same logic to opposing
      > on land:
      > "...The critics of usury have generally viewed rent on land as
      > legitimate. If I loan someone 20 ounces of gold and charge him one
      > ounce per year in interest, I am viewed as a usurer and somehow
      > morally questionable. If, on the other hand, I let the same person
      > my farm land, which is worth 20 gold ounces, and I charge him one
      > ounce of gold per year as rent, I come under no criticism. Why this
      > difference in opinion? In both cases, I give up something valuable
      > a period of time. I can either spend the gold or invest it in a
      > business venture. Similarly, I can either sell the farm or plow it,
      > plant it, and reap a crop. In both cases, I allow someone else to
      > my asset for a year, with which he can then pursue his own goals. I
      > charge him for this privilege of gaining temporary control over a
      > valuable asset. I charge either interest or rent because I do not
      > choose to give away the income which my asset could generate during
      > the period in which the other person controls it.
      > "To expect me to loan someone my 20 ounces of gold at no interest
      > the same, economically speaking, as to expect me to loan him the
      > of my farm land on a rent-free basis."
      > Do you require property must be bought outright or do you permit
      > renting? Or to use an Ad Hominem Tu Quoque, do you rent or lease
      > a house or apartment, a car or any other equipment? If so Julian,
      > you rebut North's argument?
      > I strongly recommend reading North's paper that I linked to
      > Unfortunately if I might say so, you don't seem very familiar with
      > sound economic writers, or the role interest plays in allocating
      > and services between individuals with competing time preferences.
      > use phrases like economic justice (which is a perfectly fine
      > in theory when supporting the natural law rights of property owners
      > against tyranny, coercion, and fraud) in ways that sound
      > socialistic and Marxian. I don't think you have any leg to stand on
      > with the historical testimony of the faithful in condeming
      > loans as a moral evil, and I am still interested in seeing if you
      > condemn the institution of renting/leasing as well or if you are
      > willing to rethink your entire economic paradigm. I pray you are.
      > Chris
      > Edmonton, AB
      > RPNA
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