With the Barbarian conquest of Rome, the centralized control that Rome had over virtually the entire then-known world was broken. Broken along with the control also was the trade and commerce that rode upon the imposed unity of the state. The Barbarian clans were pagan, independent, and had very narrow loyalties. As well, they were virtually self-sufficient in their chosen way of life. Trade among them was sparse, and trade among others that required the transportation of goods through the regions which the Barbarians controlled was nearly impossible and
highly risky. Thus, Europe plunged back into a “natural economy”. Coinage virtually disappeared. The Mediterranean Sea still provided an avenue for trade in the Near East, but the emergence of Islam about this time proved to hamper trading expeditions. What was left of Rome reorganized around Constantinople as Byzantinum, and was distinctly Christian in makeup. Both Islam and Byzantinum held their respective religious values and principles in higher esteem than anything that cooperative trade could have brought them, and their intense rivalry severely hampered the former highly active trade.
The Byzantine empire achieved a high degree of Christianization, relative to ancient societies as a whole. Economically, she had repudiated the dishonest weights and measures of coin debasement, and maintained a coinage of integrity for generations. The Byzantine Emperor, Justinian, authored a body of law which preserved much of old Roman law and incorporated a distinctly Christian conscience. However, Justinian’s approach to the matter of usury was more Babylonian than Christian. Rather than prohibit usury, he attempted to regulate it. Perhaps it was that he failed to correct the toleration of usury that was present in Roman law at the time of her fall. Islam, on the other hand stood rigidly opposed to usury. Traditional Islamic law prohibits usury to this day. It would be simplistic to say that for this reason alone Islam eventually won out over Byzantinum, however it is at least interesting to note that those who came to dominate trade in the Near East at this time were those who were committed to carry it on without usury.
Meanwhile, in Europe, the decentralization of Barbarism was offset only by the tight unity of the church that persisted over the continent. Continuing the position of the ancient “Church Fathers” and the decrees of the early councils, the church remained adamantly opposed to usury. However, church censure of usurers remained directed mainly to the clergy. Usury persisted among the laity without any specific censure by the church. As was pointed out above, this was not due to any lack of conviction on the matter, but because the church was reluctant to
contradict the toleration of usury in the Roman law. This eventually was corrected during the reign of Charlemagne.
Charlemagne’s rule was like an oasis amid the confusion and backwardness of the early Middle Ages. He ascended by means of military conquests. In Roman fashion he imposed unity upon the splintered European states. Being a man of faith, he utilized his great power to assure the growth of the church, and with it also there grew a close church-state alliance. On Christmas day, 800 AD. Pope Leo III crowned Charlemagne Emperor of what was considered a reorganized Roman Empire. Charlemagne’s civil laws, the Capitularies, repeatedly prohibited usury. An enhancement of what had been the church’s position all along was that Charlemagne extended the censure to include laymen. As Cleary put it, “The great characteristic of the period was the prohibition of the practice of usury even for the laity. In 789 it was decreed at Aix-Ia-Chapelle ‘that each and all are forbidden to give anything on usury’; and a capitulary of 813 reinforces the prohibition.
‘not only should the Christian clergy not demand usury, laymen should
not.‘ ” Punishments for usurers were severe, but this did not eliminate usury. The close unity of the state, however, kept the ravages of usury to a minimum.
In Charlemagne’s rule there was great promise of fulfillment of the ideals of “The City of God”. This was evident not only in the case of usury, but in the character of his reign on the whole. He combated illiteracy, established schools through the monasteries, and directed their masters: “Take care to make no difference between the sons of serfs and of freemen, so that they might come and sit on the same benches to study grammar, music, and arithmetic. ” Durant further characterizes the Emperor himself: “he gave himself also, with never aging enthusiasm, to science, law, literature, and theology; he fretted at leaving any part of the earth, or any section of knowledge, unmastered or unexplored … there was in his thought and speech a directness and honesty seldom permitted to statesmanship. ” It is little wonder that he came to be known as “Charlemagne”, an adaptation of the Latin “Charles the Great”. In his old age he divided his kingdom between three
___________
Rev. P. Cleary, The Church and Usury (1914; Hawthorn: The Christian Book Club of America, 1972), p.60
Will Durant, The Story of Civilization (New York: Simon & Shuster. 1954).
Vol.IV. p.466
IBID, p.470
sons. Two of them died before their father, and the third, though incompetent, ascended to the Emperorship months before Charlemagne’s death. Charlemagne’s shoes proved too large for anyone to fill. The unity and character that his kingdom had achieved began to crumble. Barons took advantage of the ineptness of his successors to reassert their own lordship and the serfdom of their tenants. Trade and commerce that had begun to revive in the context that Charlemagne’s rule provided now began to falter. Though he had reinstituted a silver coinage modeled after the old Roman system, his single lifetime was not enough to revive a “money economy”. Europe was once again fractured into hundreds of feudal manors. These manors were mostly self-sufficient in their production of goods and in their legal
structures. Trade was once again virtually impossible. Transportation was difficult because of a lack of security, and because of the ill-repair of roads. Each manor exacted a toll for the passage of goods, so goods could not go very far without being consumed by tolls. Without a unified state, the decree of the church against usury could not be enforced. Men of conscience, citizens of the “City of God”, voluntarily could abide by the teaching of the church, but these were pitifully few. Most proved themselves to be inhabitants of Babylon, “the earthly city”, and found ways to indulge in usury while escaping the stigma of church censure. Two popular schemes were the “repurchase agreement” and the “gift”. Earlier, the “repurchase agreement” was described. The lender “buys” some article from the borrower, “cash on the barrel head”, and then “sells” it back to him for a higher price, to be paid in installments over a period of time. In the second case, usury is disguised as a “gift”. The loan is made out to be without usury, but by prior agreement the borrower bestows a “gift” on the lender to expression his “appreciation” to the latter for his making the loan. These and other equally subtle tricks were used by the covetous to keep usury alive during this time of its universal unpopularity.
A blessing in disguise was the threat of Islam in the East in the 9th and 10th centuries, for conquests which they had begun to make into Europe provided the necessity for Europe to unify against a common enemy. The sum of European trade at the time was carried on as barter among feudal manors at periodic “fairs”. Usury was producing the typical social stratification and debtor misery, and was not financing anything in the way of commercial enterprise. However, there was a
manifest necessity to finance the enterprise of the Crusades, to secure safety for life and honor for the Christian religion. Usury was so high that no one would voluntarily enter into debt. Those who did acted out of desperation, to meet an urgent need. In order to gather the resources needed to carry out the expeditions, loans were offered at no usury. The Crusades were successful to the extent of driving Islam out of Europe. The Crusade expeditions also served to unify Europe politically. The various nations of the continent began to take form, providing more uniform government and laws over wider regions.
With a stronger state came also a stronger church. The church, relentless through the centuries in her opposition to usury, began to speak out once again. Typical of her outspokenness in this period is a decree from the second Lateran Council of 1139, “We denounce that detestable and disgraceful rapacity condemned alike by human and divine law, by the Old and the New Testament, that insatiable rapacity of usurers, whom we hereby cut off from all ecclesiastical consolation; and we order that no archbishop, that no bishop, or abbot, or cleric, shall presume to receive back usurers except with the very greatest caution, that on the contrary usurers are to be regarded as infamous and shall if they do not repent be deprived of Christian burial.” A third Lateran Council in 1179 issued a similar denunciation, adding: “… we ordain that manifest usurers shall not be admitted to communion, nor if they die in their sins receive Christian burial, and that no priest shall accept their alms.”
This was the period of the “Scholastics” in the church, notable among whom was Thomas Aquinas. Aquinas addressed virtually every theological and legal topic in his voluminous writings, and not surprisingly addressed the topic of usury as well. Characteristic of the work of the Scholastics as a whole was the revival of classical ideologies. They drew liberally upon the Greek philosophers and Roman law. Aquinas has been charged with polluting the faith by attempting the marriage of Scripture and Aristotle. The present writer concurs with this analysis of Aquinas, yet critics generally agree with supporters that Aquinas had a keen and penetrating intellect, and spoke with great learning on a vast variety of subjects. His treatment of usury was characterized by both his great insight and his appeal to classical thought. He drew upon Aristotle’s argument concerning the barrenness of money
in order to provide some theoretical underpinnings to the church’s opposition to usury. Up to his day, opposition to usury consisted merely of expressions of outrage over the ruthlessness of creditors and the misery of debtors. The only theoretical basis for this opposition was a simple appeal to the law of God. As was noted earlier, Aristotle’s argument was not very developed, and Aquinas elaborated upon it, drawing also upon Roman law.
_____________
Cleary, p.64
IBID
for one such thesis see Francis A. Schaeffer, Escape From Reason (Downers Grove: IVP,1968)
Aquinas’ analysis set a new tone for the discussion of usury, for he treated it as a problem of law; “… it is by its very nature unlawful to take payment for the use of money, which payment is known as usury: and just as a man is bound to restore other ill-gotten goods, so is he bound to restore the money which he has taken in usury.” The former estimation of usury, that was focused on the emotional impact of its character, did not distinguish various legal circumstances under which usury was exacted. Under Roman law, the loan had become a civil contract, and the code distinguished four different kinds of loans. John T. Noonan, Jr.explains: “The Roman law had known two parallel gratuitous contracts and two parallel onerous contracts: the commodatum by which a good was freely and temporarily transferred as to its use, and the mutuum by which a good was freely and temporarily transferred as to its ownership; the locatio, in which the commodatum was replaced by a charge for the use, and the foenus , in which by an added, positive stipulation a premium was charged for the loan.” The name “mutuum” was a play on words in Latin. It was a contraction of the words “Mine” and “Thine”. The essence of the contract of mutuum was that “mine becomes thine”. In other words, the good loaned transferred not only as to use, but as to possession and ownership as well.
The nucleus of Aquinas’ argument was that usury (foenus) was unwarranted in the case of mutuum because the use of the good cannot be separated from the good itself. For example, the loan of bread is a contract of mutuum since the use of the bread cannot be carried out without consuming the bread. One cannot sell the use of the bread to another while retaining ownership of it himself. In the case of loaning bread “mine becomes thine”. Repayment of the loan restores a like quantity and quality of bread to the lender, but, assuming the bread was used, it would not be possible to restore to the lender the very bread that was used. The class of such goods is what is termed “fungibles”. It was argued that money belongs to this class since no borrower uses money (according to its normal use) without divesting himself of it, and no creditor expects to receive back the very coins that were loaned. Since
Aquinas, the condemnation of usury typically has been reserved to contracts of mutuum .
____________________
Aquinas, Summa Theologica, II, q78-1
Noonan, The Scholastic Analysis of Usury (Cambridge: Harvard University Press, 1957), pAD
In the case of non-fungible goods, their use may be distinguished from their substance, according to Aquinas. One may think of a house or a horse. One loaning a horse expects to receive back the same horse that was loaned. He does not consider the horse as becoming the property of the borrower while the borrower has use of it, but always considers it to be his horse. This difference in the nature of the property loaned was supposed to justify the imposition of a fee for the use of such property. The perceptive reader will have noticed that the locatio, charging a fee for the use of non-fungible property, is within the definition of usury that was
proposed at the outset of this discussion. It is at this point that the controversy of definition begins to escalate. Aquinas’ exposition of Roman law provided that subsequent condemnations of usury on loans of money stood side by side, in numerous writings, with endorsements of the “rental” of non-fungible property.
There are theoretical problems with the Roman law categories of loans, and with Aquinas’ treatment of them. Yet, rather than to distract the pursuit of the history of usury any further with this point, the reader is referred to a following discussion of rent for a more comprehensive .treatment of this controversy. It would be helpful to add that even if the point were to be conceded to Aquinas and the modern day defenders of rents, this would not avert the case against usury a great deal at all, since by far the biggest problem with usury is in the case of money loans. By no
stretch of the imagination can a loan of money be considered under
commodatum or locatio.
Meanwhile, coincident with the Scholastics, trade and commerce were reviving from the stifling effects of feudalism. Strong centralized governments provided for safe and swift transportation. Most European states were reinstituting silver and gold coinage. Trade routes to the Near East were left in the wake of the Crusades. The church/state alliances experienced some glories via the emotional fervor of the Crusades, but the state has always proved to be fairly pragmatic and fickle. Those in control of the sword saw that
1) the more vigorous the trade and commerce, the more benefit to the realm,
2) the more liberally loans were made, the more vigorous the trade and commerce, and
3) the more usury accruing to the moneylenders, the more liberally loans were made. So, the ideals of “the City of God” once again were set aside in favor of temporal pleasure and trinkets.
However, the church had succeeded in instilling either a Christian conscience or the fear of God (probably both) in the population, and it was not an easy task to recruit a sufficient number of usurers of sufficient means to drive commerce at the pitch desired. As was mentioned, it was common for men to engage in usury by means of a variety of subtle schemes, but such schemes were designed to get around the condemnation of usury. They did not afford commerce the volume of loans that would make its acceleration possible. For this purpose, bold and open lending and usury were required. A solution was to look outside the church, in
particular to the Jews. The Jews already were hated for the typical reasons connected with moneylending. A revenue-generating scheme was to offer them royal protection in return for a share of their loot. In the case of England, they became the chattel property of the King. Under royal protection they extended loans charging usury at above 40%. As Herrick put it, “They have been well likened to ‘sponges’ which, having soaked up the money of the nation, were squeezed by the king. The Jews fleeced the subjects of the realm as the king fleeced them.” Some commerce was financed, and the royal treasury fattened, but as well there resulted the inevitable misery and suffering, as ever larger segments of the population fell more deeply into debt than they could possibly hope to
pay. When Edward the First ascended to the throne, the situation was very bad indeed. Wisely, he outlawed usury and cancelled many debts. However, the Jews found it impossible to leave off usury and assimilate into English society. That was the reality, regardless of whether they were not permitted to assimilate, or sincerely could not do so due to a deeply ingrained culture or habit. In any case, public sentiment against them would not subside, and in 1290 they were expelled from England, more than 16,000 in number. They similarly were expelled from many countries of Europe. including France, Germany, and Spain. There is no
doubt that they were cruelly used by the kings to generate revenues and credit. But as well, their usurious practices caused much misery. In their absence, usury continued under Christians, and more pressure was brought to allow usury in certain cases, in particular the “business loan”.
The enhanced arguments against usury provided by the Scholastics, the strict outlawing of usury in the civil sphere, and the expulsion of usurers from much of Europe, together made the prospects of moneylenders appear rather dim indeed. Economic theory of usury had not even begun to develop at this point, and it was difficult for anyone to argue with the new contention that usury was necessary in order for commerce to carry on, or that usury on “business loans” does not “bite”,
__________________
C.A. Herrick, History of Commerce and Industry (New York: Macmillan Co.
1920), p.145
W. Cunningham, The Growth of English Industry and Commerce (1910; New
York; A.M. Kelly, 1968), VoLl, p.199-208,286
and therefore ought not to be censured. There was a perverse sense in which it did not seem “fair” that one who loaned money for a business enterprise should not share in the profits of the venture. (Of course, the same fair-minded concern was not so quick to call upon the moneylender to share also in the losses of a venture that failed.) With no economic theory in place, on which one might judge these notions, it was difficult indeed not to succumb to their reasonings. One by one, special allowances were made by which a moneylender might legitimately claim a payment over and above the principal, which was not to be considered usury and
not liable under the usury laws. These allowances came to be known as “Extrinsic Titles”.
Cleary explains: “If any surplus might be taken, its legality arose not from the contract of mutuum, but from a collateral contract, express or implied, entitling the lender to compensation for losses incurred through special circumstances extrinsic to the nature of the fundamental contract.” Principally, there were four such titles: Damnum Emergens (accrued damages), Lucrum Cessans (lost profit), Poena Conventionalis (penalty by agreement, basically a late fee), and Periculum Sortis
(compensation for risk). Theologians had debated these “Extrinsic Titles”
for centuries, but it was the late Middle Ages before they came into general acceptance in the church and into popular usage. The first two were entitlements to compensatory payments based on, first, damages suffered by the lender because he made the loan, and second, the loss of profits the lender might have realized if the loan was not made. Payment under both of these titles was known as “interess”. That word ought to look vaguely familiar to the average reader. It means literally, “compensatory payment”12 , and is the source of the term “interest”. It came into usage under Extrinsic Titles in order to distinguish such payments from usury. Today, the term “interest” is used to mean precisely what “usury” meant in the medieval era. Compensatory payments are not wrong or usurious in principle, but become so when they leave the lender with more than what he loaned. If an article loaned is damaged by the borrower, then return of the article plus a recompense for damages will leave the lender the equivalent of what he had in the first place. Appeal to these titles in order to reap gains on loans was simply usury in disguise.
Poena Conventionalis was a late blooming title which stipulated that the lender was due a fine if the borrower did not repay the loan by an agreed upon due date. This one was particularly abused by the usurers. As soon as it was recognized as a
_______________
Cleary, P. 144
Oxford English Dictionary
legitimate claim to compensation, moneylenders began to grant loans with no usury on the condition that they were to be repaid the next day. The borrower generally needed the loan and readily agreed to such terms. Of course, the loan was not repaid on time, the compensatory payments began, and the usurer was guiltless
before the letter of the law. That is how it works in “the earthly city”, but such still is usury before God, for it is usury that emanates from such a lender’s heart. It is the hearts of His people on which God writes His laws, and it is the heart which He searches as Convictor and Judge. This title operated solely as an excuse for usury, for there is no quantifiable damage that arises in missing a due date. If the lender suffers other damages because the loan was not repaid on time, that is another matter. Examples would fill many pages, as each case would require individual
consideration. However, the tardiness of repayment itself cannot entitle the lender to anything in addition to the principal.
Last to be accepted as a legitimate title, and for good reason since it is so far fetched, is Periculum Sortis, or compensation for risk. The eventual acceptance of this was a cause of celebration for usurers whose pragmatism had prevented them from “risking” the practice of usury amid the powerful sentiments against it. Now everyone could be a usurer who wanted to be one, for anyone who granted a loan bore a risk. But, by what logic does the risk bourne by the lender take precedence over the risks experienced by the borrower? Herrick reports that conditions of trade were so hazardous in the Middle Ages, that “Some held that if money was loaned and at the end of a given period it was returned, an obligation was due from the lender, for the borrower had been subject to the danger and inconvenience of keeping the money, and therefore the lender should pay interest”. A discussion to follow will handle this matter of risk in greater detail. It will suffice in the present discussion simply to assert that compensation on the basis of risk is unfounded.
This liberalization of usury laws under “Extrinsic Titles” was not unopposed, nor was it without its own difficulties. Cunningham reports that loans at usury for business purposes became a stumbling block to many young, inexperienced traders. They easily became over-extended, and many bankruptcies resulted.l4 The reasoning that usury was good for trade held together as long as traders who owed usury were successful. Those whose ventures failed found themselves deeply in debt, and the usurer who wanted to justify his claim to a share of the profits now became only a creditor demanding payment. Also, this idea of the necessity of usury for trade was not totally without critics. Roger Fenton contended as
_______________
Herrick, p.l44
Cunningham, VolJI,p.145
convincingly as was possible at the time that usury enriches the usurer at the expense of the community. For him, an argument to justify usury because of an alleged necessity was incredible. Circumstances do not define good and evil. Since God’s word already had defined usury to be sin, Fenton rightly wonders, “if men or estates have drawne a necessity of sinning upon themselves by the custome of sinne; doth this extenuate or aggravate the fault?”15 The obvious reply is that
none of the contingencies of human life may be regarded as “extenuating
circumstances”, and thus our responsibility before God remains.
The significance of the Renaissance and Reformation on the matter of usury is not great. The importance of the Renaissance is the secularization of culture. Well known Renaissance figures did not contribute significantly to economic issues. The Reformation of the church, however, saw a mitigation of the strict anti-usury position, which the church had held for centuries. The contribution of the Reformers is unimpressive because inconsistent. The Heidelberg Catechism (1563)
took at traditional view of usury. Addressing the question, “What does God forbid in the eighth commandment?”, the catechism says, “Not only such theft and robbery as are punished by the magistrate, but God views as theft also all wicked tricks and devices whereby we seek to draw to ourselves our neighbor’s goods, whether by force or with show of right, such as unjust weights, ells, measures, wares, coins, usury, or any means forbidden of God …” However, such a position was not consistently maintained in the writings of individual reformers. Though Martin Luther spoke against usury with an eloquence and outrage that rivaled the early “church fathers”, he nevertheless compromised his position later in his life. In a letter to the Duke of Frederick, Luther advised, “1 would say that it is very necessary to have uniform regulations governing the charging of interest throughout our German lands. To forbid it altogether would not be right, for it may be justifiable under certain conditions.”
Calvin was disappointingly accommodating of usury. More has been made of Calvin’s views on the subject of usury than they are worth. Because of his well deserved stature as a Reformer, and because of the appeals that are made to him in an attempt to justify usury, his views are treated at length in a later discussion. The ideals of the “City of God”, insofar as usury is concerned, were carried on more
___________
Roger Fenton, A Treatise of Usurie (1611; Norwood: Walter Johnson, Inc.,
1975), p.122
cited in Philip Schaff,Creeds of Christendom (1877;Grand Rapids: Baker, 1977), Vol. III, p.347
cited in Ewald M. Plass, ed., What Luther Says (Saint Louis: Concordia, 1959), Vou, p.445
faithfully among the Puritans in England than the Continental reformers. Notable among the Puritans were Roger Fenton and Henry Smith. Cunningham reports that
Henry Smith had gained the reputation as a “silver-tongued lecturer”,
He further says of Smith that he was an “extremist”, because he was unrelenting in his strict stand against usury amid a tide of compromise.
By far the most important factor in the liberalization of usury in the Middle Ages was the growth of commerce, and the incessant cry for credit to finance it. As highly developed as commerce and banking had become in the ancient world, it never attained the height of enterprise that Europe did, for it was without the Christian conscience that would so order society and motivate men to bring it about. However, the gains of lawful trade and commerce became a temptation to achieve even greater heights unlawfully. Experiencing a new power, men became preoccupied with what might be done, if only enough capital were available, and lost sight of what ought to be done, within the parameters of the law of God. In the “City of God”, men pursue dominion over the world because they hold that as their calling from God. It is for Him and for His glory that they so act. Hearts which are fixed on that purpose, and which are instructed by God’s law and sustained by His grace, can overcome the temptation to do whatever they might do, and discipline themselves to do what they ought to do. They judge all things according to a righteous standard. If usury seems necessary to them for some mode of commerce, this necessity cannot legitimize what God has condemned, rather, the standard of the unlawfulness of usury serves to eliminate from consideration any activity that would require usury. In “the earthly city”, however, it is not so. Inhabitants of Babylon feel alone in the world, and so they must make a name for themselves. They must build a great monument to themselves, for they know no law and ascribe no glory outside themselves. They might decide in their own minds what sort of commerce ought to take place, and if it requires usury in order to succeed,
then this does not serve in their minds to condemn the mode of commerce they have chosen, but rather to sanction usury. The church in medieval times fought many battles, and suffered many trials and purgings. It is not to be expected that those who have gone before us ought to have accomplished everything. The present generation ought to be thankful for their accomplishments, but there is more that must be done. The plague of usury still is with us. Ours is a terribly blind and impotent age. If the church today accomplishes only one thing, she would do well to purge usury from her heart.
_____________
Cunningham, Vol.II, p.154
At the close of the medieval period, Europe was exposing herself as thoroughly Babylonian in economy. More and more voices were added to the chorus calling for the liberalization of usury laws, that commerce and industry might have loans. Christians began to speak openly and vigorously in defense of usury. Theorists were in the process of devising discreet economic theories for the first time. Theories of “interest” emerged which provided the first real development since the Scholastics’ elaboration of Aristotle. Bentham in England and Turgot in France
ascended as the most influential in reversing the theoretical consensus concerning usury. For instance, Turgot said of the old theories,
“Having discussed inequality, they allege as an example of inequality the fact that the borrower, in returning more than the principal, gives back more than he received; and they infer that this is unjust. Such reasoning takes it for granted that the money received today and the money which is to be returned in a year, are two things perfectly equal. Is there not, on the contrary, an obvious difference between the two values – so obvious as to be recognized by the proverb, “A bird in the hand is worth two in the bush”?
The modern case for usury proved at its outset to be so abstract as to be only esoterically intelligible. The point of the proverb is well taken, but it must be noted that it is true as long as the two birds remain in the bush. If one should owe a bird in repayment of a loan, and if he should obtain one from a bush and put it into his creditor’s right hand, there is no reason why the creditor should value the bird in his right and any differently than he values a bird in his left hand. If he does value them differently, it can only be for entirely subjective reasons, which cannot
bind the debtor as guilty of any lawlessness.
With the dawn of the modern era, the old dialectic that was observed by Cleary, that theory was opposed to usury, while practice was in favor, gave way to a unity of theory and practice in favor of usury. All of the old reasons for being theoretically and practically opposed to usury remain, only now they are obscured by complicated theories and arguments that require treatment such as the present writing in order to rebuff them.
The interface between the medieval and modern eras is rather fuzzy. The beginning of the modern era may be marked with the Industrial Revolution, the colonization of the New World, or a number of other historical pointers. For the present purposes, modern times shall begin with the advent of modern banking. The
______________
cited in F.W. Ryan, Usury and Usury Laws (New York: Houghton Mifflin, Co, 1924), p.49·50
development of banking had begun along with the recovery of trade in the late Middle Ages, and with changes in national monetary systems. The next discussion shall cover these developments in order to provide some continuity to the account of modern banking and the impact it has on the problem of usury.