Uury

U'ury (נֶשֶׁך, neskek, lit. a biting, i.e. extortion; όκος, yield; twice [Ne 5:7,10] מִשָּׁא, mashsha, debt) is used in the A.V. in the Old-English sense of interest for money loaned, and not necessarily in the odious and later signification, all unlawful contract for the loan of money, to be returned again with exorbitant increase. By the laws of Moses the Israelites were forbidden to take usury from their brethren upon the loan of money, victuals, or anything else; not, it has been observed by Michaelis, as if he absolutely and in all cases condemned the practice, for he expressly permitted interest to be taken from strangers, but only out of favor to the poorer classes. In other words, he did not mean to represent that the taking of interest for the loan of money was in itself sinful and unjust; butt as at that period the Israelites were comparatively a poor people and strangers to commerce, they borrowed, not with a view to profit, but from poverty, and in order to procure the common necessaries of life. It would therefore have been a hardship to have exacted from them more than was lent. The Israelites were, however permitted to take usury from strangers, from the Canaanites and other people devoted to subjection. This was one of the many means they adopted for oppressing and reining the Canaanites who, remained in the land. The Israelites were not a commercial people, nor were the laws and regulations under which they were placed framed with a view to encourage them to become such, but rather to preserve them in the possession of their family inheritances, and in the cultivation of a simple, unostentatious, frugal mode of life. Among themselves, therefore, only such lending as ministered help to the struggling poor, and served to tide them over trials and difficulties, was consistent with the spirit of the old economy; not such as tended to embarrass their circumstances, and at their expense enabled a griping neighbor to enrich himself. This last is the only kind of usury forbidden in the law, and the avoiding of this is sometimes given among the characteristics of the upright and godly man (Ps 15:5; Jer 15:10). It is also that which when practiced was denounced as a crying inequity and exposed those who did it to judicial condemnation (Pr 28:8).

The practice of mortgaging land, sometimes at exorbitant interest, grew up among the Jews during the Captivity, in direct violation of the law (Le 25:36-37; Eze 18:8,13,17). We find the rate reaching 1 in 100 per month, corresponding to the Romanu centesimae usurae, or 12 percent per annum — a rate which Niebulhr considers to have been borrowed from abroad, and which is, or has been till quite lately, a very usual or even a minimum rate in the East (Niebuhr, Mist. of Rome, 3, 57, Eng. transl. Volumy, Trv. 2, 254, note; Chardin, Voy 6:122); but under Turkish misrule it now often reaches 40 or 50 per cent. (Codnier, Teit Work in Palest. 2, 268). Yet the law of the Koran, like the Jewish, forbids all usury (Lane, Mod. Egypt, 1, 132; Sale, Koran. c. 30). The laws of Menu allow 18 and even 24 percent as an interest rate; but, as was the law in Egypt, accumulated interest was not to exceed twice the original sum lent (Laws of Menu, 8:140, 141, 151; Jones [Sir W.], Works, 3, 295; comp. Diod. Sic. 1, 9, 79). This Jewish practice was annulled by Nehemiah, and an oath exacted to insure its discontinuance (Ne 5; Ne 3-13; comp, Selden, De Jun Nat. 6:10; Hoffmann, Lex. s.v. "Usura"). Our Savior denounced all extortion, and promulgated a new law of love and forbearance: "Give to every man that asketh of thee, and of him that taketh away thy goods, ask them not again." "Love ye your enemies, and do good, and lend, hoping for nothing again" (Lu 6:30,35).

The practice of usury was severely censured by the ancient Church and strictly forbidden to the clergy. One law prohibited a usurer from ordination. Many of the ancient canons condemned it in unmeasured terms. One of the canons of Nice says, Forasmuch as many clerks, following covetousness and filthy lucre, and forgetting the Holy Scriptures (which speak of the righteous man as one that hath not given his money upon usury), have let forth their money upon usury, and taken the usual monthly increase, it seemed good to this great and holy synod that if any one, after this decree, shall be found to take usury, or demand the principal with half the increase of the whole, or shall invent any such methods for filthy lucre's sake, he shall be degraded from his order, and have his name struck Out of the roll of the Church." The same practice is censured by the Apostolical Canons; the Council of Eliberis; the first and second councils of Aries; the first and third of Carthage; the Council of Laodicea and of Trullo. Usury was of various kinds; sometimes it was called centesimae, the hundredth part of the principal being paid every month. This was allowed by the civil law, but it was generally condemned by the Church. Another form of usury was called seculum; that is, the whole and, half as much more. This was condemned by a law of Justinian and reprobated by the Church. Other forms of lower interest were allowed, such as half or third of the centesimal interest. See Bingham, Eccl. Antiq. p. 200-201, 1014, etc.

But the taking of usury in the sense of receiving a reasonable rate of interest for the use of money; employed in merchandise belongs to a different category, and is nowhere forbidden; nor is it more contrary to the law of love than the plying of merchandise itself for the sake of gain. Hence it is referred to in New Test. Scripture as a perfectly understood and allowable practice (Mt 25:27; Lu 19:23) a practice which the Jews of all ages, from the time of the Exile, when they began to be in a manner driven to commerce for their support, have felt themselves at liberty to carry on. That it may be, and often has been, carried on by them as well as others in a way far from consistent with the great principles of equity, there can be no doubt; but this belongs to the abuse not to the use of the liberty in question, and is to be condemned on commercial as well as moral grounds. Applied-to Christian times, the spirit of the old enactments regarding usury finds its fulfillment in the frank and timely ministration of pecuniary, help from those who can give it to persons on whom misfortune and poverty have fallen, and, as regards commercial transactions, in the maintenance of upright and honorable dealing.

The exaction of an exorbitant rate of interest for the loan of money was first prohibited in England during the reign of Edward the Confessor but that law is considered to have become obsolete, as in. 1126 usury was forbidden only to the clergy, and in 1138 it was decreed by the Council that "such of the clergy as were usurers and hunters after sordid gain, and for the public employment of the laity, ought to be degraded." In 1199, the last year of the reign of Richard I, the rate of interest for money was restricted to 10 percent, which continued to the market rate until the reign of Henry VII. In 1311, Philip IV fixed the interest that might be exacted in the fairs of Champagne at 20 per cent. James of Arragon, in 1242, fixed it at 18 percent. In 1490 the rate of interest in Placentia was 40 percent. Charles V fixed the rate of interest in his dominions at 12 percent. In 1546-the rate in England was fixed at 10 percent in 1624 it was reduced to 8; in 1651 to 6; and in 1714 to 5 percent, at which it remained until 1833. By 3 arid 4 William IV, c. 98, bills not having more than three months to run were exempted from the operation of, the laws against; usury, and by 1. Victoria, c. 80, the exemption was extended to bills payable at twelve months. By 2 and 3 Victoria, c. 37, it was enacted that bills of exchange and contracts for loans or forbearance of money above £10 shall not be affected by the usury laws. Five percent is still left as the legal rate of interest for money, unless it shall appear that any different rate was agreed upon between the parties. In most of the United States a certain rate (now generally six per cent.) is fixed by law, and penalties are, imposed for exacting a higher rate. SEE LOAN.