MONEYLENDING

The Religious Context

BIBLICAL PERIOD

Deuteronomy 23:20–21 states: "You shall not lend on interest to your brother, interest of food or money or anything on which interest can be charged. You may charge interest to a foreigner, but not to your brother that the Lord, your God, may bless you in all you put your hand to in the land into which you are going, to possess it." This text has become the subject of much discussion and controversy for nearly two millennia. Within the framework of the so-called Book of the Covenant, another law on moneylending is to be found, in Exodus 23:24: "If you lend money to my people, to the poor with you, you shall not act toward him like a creditor. You must not lay interest [neshekh] upon him." In this verse, nosheh ("creditor") is philologically and semantically equivalent to the Assyrian rašu ("creditor"), the professional moneylender. A third pentateuchal law on interest-bearing loans occurs in Leviticus 25:35–38, in a context usually referred to as the Holiness Code: "If your brother has become poor and cannot support himself with you, you shall assist him [as] a resident alien [ger ve-toshav], and he shall live with you. You shall not give him your money on interest [be-neshekh], nor give him your food for increase [be-marbit]. I am the Lord, your God, who brought you forth out of the land of Egypt, to give you the land of Canaan, to be your God." Usually the difference between neshekh and tarbit or marbit is explained as a difference between interest on capital and interest on food. The passage in Deuteronomy, however, also refers to interest on food (neshekh okhel) and it is possible that the two codes employ a slightly different terminology.

Many attempts have been made to answer questions on the literary form and the dates of these pentateuchal laws, but during the last decades detailed study of the various Ancient Near Eastern codes from the 19th to the 12th centuries B.C.E. has enabled scholars to substantiate their opinions on the Sitz im Leben of the Hebrew law collections more accurately than hitherto possible. The Book of the Covenant is generally considered the oldest of the pentateuchal codes, because of the social and economic structure it presupposes. No urban life or king is referred to, and there is no organized state or priesthood. There is, moreover, ethnological evidence of many similarly primitive units, among whom all loans of money and food were given free of interest, usually up to the time of the next harvest when they could be paid back by the debtor. Such legislation could not, of course, apply to the alien (nokhri), who was not a permanent resident.

In comparison, there are some similarities but also major differences between the pentateuchal law codes and their Ancient Near Eastern antecedents. The latter mirror a society much more fully developed than that of the still half-sedentary Hebrews. Thus, the tamkarum appears as a professional moneylender in various sections of the Code of Hammurapi, where rates of interest are specified for food as well as for money loans. Even in relatively late strata of the Bible, it is the Canaanite rather than the Israelite or the Hebrew, who is represented as the merchant or the trader. Had the nucleus of the Hebrew Codes been compiled at the time of the monarchy, they would have reflected quite different socio-economic conditions. Their literary form is of equal importance. In his Urspruenge des israelitischen Rechts (1934), 69ff., A. Alt distinguishes between casuistic law, characteristic of the Ancient Near Eastern codes, and apodictic law, more frequently, although by no means exclusively, found in comparable Israelitic source material. Exodus 22:24 is a mixture of both. The casuistic beginning, "If you lend money to my people…," which would logically be followed by a reference to the rate of interest or to the punishment to be meted out to a defaulting debtor, concludes apodictically with: "You shall not act as a creditor."

The Holiness and the Deuteronomic Codes are normally assigned to a much later date than that of the Book of the Covenant. The problem of their editing and ultimate incorporation into the Pentateuch is a difficult one, but as far as the laws on interest are concerned, all of them have elements in common, which stress, directly or indirectly, a special covenant between God and Israel and the consequent obligations of brotherhood between the members of the community. Just as biblical history with its predominantly theological tendencies has been described as Heilsgeschichte, much of biblical law may be classified as Heilsgesetz, addressing itself to the pre-state sacred institution of the 12 tribes. Moreover, Ancient Near Eastern codes do not claim divine inspiration, while all Hebrew laws are presented as having been revealed by God to Moses, even if, as in the case of the prohibitions against taking interest from a brother, no guidance is given as to judicial procedures against ruthless exploitation of the poor. The few other passages in the Bible which refer to money-lending confirm the impression that the relevant pentateuchal ordinances were interpreted by the prophets, psalmists, wisdom-writers, and chroniclers more as moral exhortations than as laws (cf. Hab. 2:6; Ezek. 18; Ps. 15:5; Prov. 28:8; II Kings 4:1–2; and Neh. 5:1–11; for apocryphal and pseudepigraphical literature, see Ecclus. 20:15;29 and IV Macc. 2:8). Neither indignation nor pious hopes could replace the jurisdiction of established courts.

Documentary evidence of the nonobservance of these pentateuchal admonitions comes only from the Diaspora, but affords an even clearer picture of prevailing conditions. Thus, the Aramaic Papyri show that the Jews of the military colony in Elephantine lent each other money on interest at the rate of 60 percent per annum in the fifth century (cf. Cowley, Aramaic nos. 10 and 11). In the Tebtunis Papyri, numbers 815, 817, and 818, loans at interest between Jews are also referred to. These documents belong to the third and second centuries respectively, and reflect typical Hellenistic usage in their formulation (cf. Tcherikover, Corpus, 1 (1957)). In the talmudic period such documents would be invalid. Aristotle had expressed contempt for the taking of interest in a well-known utterance in his Ethics (4:3), basing his opinion on the nature of money which is in itself not subject to physical growth. In addition, on several occasions during the last few pre-Christian centuries, popular resentment against impoverishment through usury forced Greek and Roman legislators to forbid the taking of interest altogether, although enactments of this sort did not remain in force for long. Among Jewish Hellenistic writers, Philo appears to have been the first to add his own comment to Deuteronomy 23:20, by extending the prohibition about taking interest from the brother to anyone of the same citizenship (astos), or nation (homofulos) in De Virtutibus, 82. He is, however, not quite consistent and keeps himself closer to the biblical text in De Specialibus Legibus (II, 73ff. and 122).

THE TALMUDIC PERIOD

After the destruction of the Temple, halakhists and aggadists determined the development of Jewish religious law proper, at least until the 17th century. The tannaitic Midrash Sifrei Deuteronomy 23:20f. understands la-nokhri tashikh as a positive commandment; i.e., you shall lend at interest to a foreigner. Although this is possible on philological grounds, heavy oppression under Roman rule in the first part of the second century may have led to such an interpretation, particularly since R. Akiva was closely connected with the revolt of Bar Kokhba and with the editing of the Sifrei. The contemporary Mekhilta of R. Ishmael offers a different explanation on the related passage in Exodus 22:24. Interest-free money should be lent to Jews and gentiles alike, although a Jew should be given preference. In addition, one commentator states that it is only toward the poor that one should not act as a professional moneylender, but one may do so toward the rich. From the third century onward, the prohibition against taking interest had been accepted as applicable to every Jew, rich or poor. The Mekhilta on Exodus 22:24, ends with a homiletic statement by R. Meir: "He who lends on interest… has no share in Him who decreed against taking interest." Similar denunciations occur frequently in halakhic and aggadic Midrashim, in Mishnah, Tosefta, baraita, and the Babylonian and Jerusalem Talmuds. Transgressors against the ever growing injunctions are called robbers and murderers. They are likened to those who rear pigs, described as denying the fundamental tenets of the Jewish faith and declared to be unfit as witnesses. The frequency of such utterances implies the frequency of the offenses. It is to be stressed, however, against apologetic tendencies that still prevail in the relevant literature, that views of this kind refer to inter-Jewish transactions only, unless the gentile is explicitly included in the prohibition. The expression "even interest from a non-Jew" (afillu ribbit de-goi) implies that the difference between them is still clearly felt.

As to inter-Jewish transactions, discussions continue as to whether paid interest, fixed or unfixed, can be taken back for the debtor by the judges. Also proposed are the relinquishment of the principal and the rescinding of written contracts or shetarot on which interest was specified. The Mishnah (BM 5:6) says quite plainly that one may lend to and borrow from gentiles at interest. In the course of the debate in the Gemara (ad loc.) R. Naḥman transmits Rav Huna's objection to taking interest from anybody, but it is, apparently again for apologetic reasons, generally overlooked that his view is challenged by Rava on the basis of the Deuteronomic law and the Mishnah which precedes the Gemara. R. Ḥiyya replies that money may only be lent on interest to the non-Jew, as far as it is necessary for the sustenance of the Jew (bi-khedei ḥayyav). Ravina maintains that the reason for this restriction is based on religious self-protection. The lender should reduce his contact with the alien to a minimum, lest he learn from the debtor's deeds (shema yilmad mi-ma'asav; see also Rashi on Mak. 24a, S.V. afillu le-akkum). The Jewish scholar, on the other hand, is allowed to take interest from non-Jews, even where there is no economic necessity, because he would not be influenced by the practices of the latter.

There is one further aspect regarding money-lending at interest in talmudic literature which calls for attention – the regulations against the employment of a non-Jewish intermediary, a device sometimes resorted to in order to make illegal inter-Jewish loan transactions possible. A number of tannaitic traditions have a bearing on the subject (cf. BM 71bf. and TJ, BM 10c; Tos., BM 5:15). This convention has a prehistory in Roman law. Livy mentions that at the beginning of the second century B.C.E., Roman creditors had found a device (fraus) for collecting interest by transferring the ownership of accounts to citizens of allied states, who thus became the real or fictitious lenders without being subject to internal Roman legislation (ed. by E.T. Sage (1935), 10:18). That such evasive tactics were current among Jews of the talmudic period is evident not only from the various halakhot, but also from the following homiletic statement in Bava Meẓia 61b: "Why did the All-Merciful mention the Exodus from Egypt in connection with the law on interest?… The Holy One, blessed be He, answered: 'I, who distinguished between the firstborn and those who were not firstborn in Egypt, shall in future punish him who hangs his money on a gentile and lends it on interest to a Jew.'"

THE GEONIC PERIOD

This period lasted from about the seventh to the 11th centuries. During that time, the main autonomous center of Jewish life was in Babylonia, although the decisions of the geonim were considered binding in the remotest communities of Europe and Africa. The Jews were active as artisans, builders, merchants, and as experts in agriculture and horticulture in many parts of the new Islamic world. Yet the Koran (4:160) is the first source to accuse them of usury. Contemporary halakhic compendia offer little original material on the subject. Only one responsum of the ninth century, by Amram Gaon (Sha'arei Ẓedek, 1792, p. 40a), forbids any money-lending on interest, permitting only such as would come about in a credit transaction involving the exchange of money and fruit. He adds that Muslims, too, allow this according to their law. The strong anti-usury legislation of Islam as well as the almost unrestricted professional facilities then open to Jews prompted him to be stricter than the traditional rulings on Jewish-gentile money transactions. In an anonymous responsum of the tenth century, biblical and talmudic ordinances are stressed again, and it is left to the discretion of the pious to refrain from money-lending altogether.

THE EARLY RABBINIC PERIOD

The center of Jewish life shifted toward Europe. The academies of Babylonia were gradually replaced by famous schools in France, Germany, and Spain. Monographs on the various European countries contain detailed accounts of the general and specific in their history. Two factors, however, stand out: growing anti-Jewish legislation and the development of the feudal system with its demand for a Christian oath on the acquisition of land. As a result, Jews were increasingly cut off from landownership. Yet even in countries like Spain and Italy, where Jewish urbanization took place less rapidly than in England and Germany, the Jews themselves no longer desired close contact with the soil, although they complained more and more about the shrinking opportunities to support themselves. An often quoted responsum by the French 11th-century scholar, Joseph b. Samuel Tov Elem *Bonfils, illustrates the change. Leah, the questioner, expresses dissatisfaction with the fact that taxes for which the community was responsible to the government were evenly distributed among the Jewish owners of fields and among merchants and traders. She is assessed for the ground she holds and for the crops it yields. In addition, the rulers of the land take their share from it. In contrast, money lent on interest is profitable, because the pledge remains in the hand of the creditor, and the principal increases without effort or expense. Joseph Tov Elem agrees with Leah's arguments against those who wish to assess her (cf. Responsa of Meir of Rothenburg, 1895, no. 941). Generally it must be said that early medieval rabbinic legislation cleared the path for a great variety of gentile-Jewish and inter-Jewish money transactions. Especially the authority of Jacob b. Meir Tam, Rashi's grandson, carried great weight with his contemporaries and successors. He summarizes the reasons for a number of his decisions in the following way: "Today people usually lend money on interest to gentiles… because we have to pay taxes to the king and princes and everything serves to sustain ourselves [kedei ḥayyenu]. We live among the nations and it is impossible for us to earn a living unless we deal with them. It is, therefore, no more forbidden to lend at interest because 'one might learn from their deeds' than it is to engage in any other business" (cf., e.g., Tos., BM 70b, 71b and Av. Zar. 2a).

Menahem b. Solomon Meiri, an eminent 13th-century scholar, gives an account of the position in Provence: "In our days nobody cares about refraining from business dealings with and loans to gentiles, even on their festivals – not a Gaon, not a rabbi, not a scholar, not a pupil, not a ḥasid ["pious man"], and not one who pretends to be a ḥasid. All these laws refer only to idolators and their images, but all transactions with Christians are perfectly legal." Meiri coined a special phrase for this group: "nations who are restrained by the paths of their religion" (cf. J. Katz, in: Zion, 18 (1953), 18ff.). He thus differs implicitly or explicitly, with most of his predecessors, including Maimonides. Only the Ḥasidei Ashkenaz, German-Jewish pietists and some Spanish kabbalists of the beginning of the 13th century, viewed the new development with anxiety and disfavor. According to them, interest should not be charged to gentiles if a living could be made from the fields, although they no longer ventured to state this in terms of a legal prohibition. Contemporary Jewish commentators on the Bible follow the same distinctions as halakhic literature. In addition, they reflect full awareness of Christian polemics against the ever increasing number of Jewish moneylenders. David *Kimhi of Narbonne says the following about Psalms 15:5: "…the Hebrew must not overreach or rob the alien or steal from him, but interest which he takes by full agreement [with a non-Jewish lender] is permitted… If the gentile is kind to the Jew, the Jew must certainly be kind and good to him…" He adds explicitly that his views should serve as an answer to those Christians who maintain that David did not distinguish between the Israelite and the gentile.

Meir b. Simeon's only partly edited manuscript (Parma 2749) Milḥemet Mitzvah ("Obligatory War") contains by far the richest source material on Jewish-gentile moneylending transactions. His attempts to defend old and established practices show greater knowledge of former privileges granted by popes, emperors, and feudal lords than that of any of his predecessors, and he makes the widest possible and often ingenious use of practically all biblical and talmudic data on the subject. One or two generations older than David Kimḥi and also from Narbonne, he had frequent discussions with the lower and higher clergy, including two archbishops, the second of whom was probably Guido Fulcodi, who later became Pope Clement IV.

It was on this occasion that Meir was confronted with the same accusations about gentile disadvantages in Jewish law as those which had been made in the famous Paris disputation in 1240 at the palace of Louis IX. No Latin record of his disputation appears to be extant, and it is doubtful whether he could have said all he wrote down in the diary of his public activities. The whole historical background of his time is unfolded in his work – anti-Jewish legislation, persecutions, expulsions, and his able and often successful efforts to counter them. His sharp criticism of the release of interest and sometimes even of the principal, owed to Jews by the Crusaders, is of special significance. Fearless defense and daring attack are often juxtaposed. Thus, Joseph b. Nathan ha-Mekanne *Official, a contemporary and fellow-citizen of Meir b. Simeon, refutes the attacks against Jewish money-lending with the by now usual arguments, and subsequently adds: "You lend money at high rates… of 100%… and take reward for delayed payment" (Z. Kahn, in: Birkhat Avraham… Berliner (1903), 89).

Jewish moneylenders in England acted, as far as one can judge from their documents, in exactly the same way as those on the continent – i.e., in accordance with the ordinances of the sages (ke-tikkun ḥakhamin), even if there are certain peculiarities which seem to be influenced by non-Jewish legal practice. Thus, ribbit ("interest"), unless used in connection with ribbit al yedei goi ("inter-Jewish interest charges, made possible through a gentile proxy"), occurs only four out of about 30 times in M.D. Davis' Hebrew Deeds (1888). Instead of ribbit, shevaḥ ("profit") is used. In some inter-gentile promissory notes, too, the expression lucrum ("gain") is found for fenus ("usury"). There is also the sudden emergence of the formula "if the stipulated time for repayment of the loan is over" (im ya'avor zeman) in Hebrew shetarot ("promissory notes" see *Shetar) of English provenance. According to talmudic law, there is no justification for this, but contemporary regulations of civil and canon law had adopted the Roman concepts of lucrum cessans and damnum emergens. They may well have found their way into inter-Jewish transactions, although still under the proviso that creditor A allow creditor B to borrow from a gentile, to indemnify the lender against damage or loss of gain.

In Spain, too, similar practices, perhaps even without the gentile intermediary, seem to have become customary during the 13th century, as is known from a responsum by Solomon b. Abraham Adret (ed. Hanau, 1600, 172b). He declares such convention to be forbidden, but adds that, strictly speaking, we have in this case to deal with a penalty (kenas) and not with interest. Officially, at least, Max Weber's distinction between Binnen and Aussen-Moral retained its validity in talmudic and rabbinic law. Similar Christian differentiations between the "brother" and the "other" can be traced back to the Church Father Ambrose of the fourth century. According to him, the Jew must be loaded with such a burden of usury that by the very punishment of the charges imposed upon him, he is compelled to move more quickly toward righteousness (De Tobia, 1, Migne, P.L. 14 (1845), 799; and T.P. Mc-Laughlin, Medieval Studies, 1 (1939), 92, 137).

THE LATE RABBINIC PERIOD

The Jewish analogue of this position was expressed by the 14th-century French philosopher and exegete, *Levi b. Gershom, who also holds that it is a positive commandment to lend money to an alien on interest, "if he needs it…, because one should not benefit an idolator… and cause him as much damage as possible without deviating from righteousness," i.e., without demanding from him exorbitant rates of interest (see his commentary on Deut. 23:21). Such sentiments are extreme, though not isolated (cf. R. Tam on BM 70b and Maimonides' uncensored comment on Av. Zar. chs. 3 and 4). Sometimes the passion of the spirit gave way to the demands of economic necessity, and periods of quasi-normal business relationships between believers and non-believers interrupted the cold or actual war between them. More often the force of faith, never quite unconnected with the relatively high proportion of Jewish moneylenders, broke through and led to their persecution and expulsion. An ultimate judgment on the priority of powers which determine political and ideological reality remains difficult, if not impossible. The situation differed from country to country, from province to province, and even from town to town. Yet an analysis of the uneven and widely dispersed Jewish and Christian source material, ranging from the 14th to the 17th centuries, reveals an astounding development from unyielding medieval thought patterns to their integration with new economic theories, and leads almost to a breakdown of denominational barriers.

In his Ikkarim, the Spanish philosopher Joseph *Albo declares that the "brother" in the Deuteronomic law refers to everyone who is not an idolator. Interest is, therefore, only to be taken from one who belongs to the "seven nations of old" – for instance, from an Amorite or Amalekite: "If it is permitted to take his life, surely one may take his property" (Im gufo muttar mamono kol she-ken; ed. Husik, 3 (1946), 237). Albo's words are an almost literal translation of Ambrose's "ubi enim jus est belli, ibi est usurae" (cf. also Plato's Laws, 10:909). In a position of defense vis-à-vis the archbishop of Narbonne, Meir b. Simeon had advanced a similar argument. Albo's statement is not part of the public disputation in Tortosa (1413) in which he was one of the Jewish spokesmen, but a record of another encounter with a Christian opponent. It is clear, however, that he did not refer to current halakhic practices, although some talmudic proof texts can be found in their support. Other Jewish writings, not concerned with interdenominational altercations, do not question the legality of charging interest from gentiles. Thus, Joseph Colon, who came from France and held a distinguished position in the Italian rabbinate during the second part of the 15th century, states casually that the Jews of both countries hardly engaged in any other business (Resp. Maharik 118, 132). Abraham b. Mordecai Farissol (1451–1526) confirms Colon's assessment of circumstances prevailing in Italy. Conditions of this kind were bound to bring about irregularities, but they were not restricted to Jews. Early propaganda of the Franciscans was, in fact, not specifically directed against the Jews. Hebraei et Christiani usurarii were the target of Bernardino da Feltre.

The establishment of Jewish loan banks was subject to a license of the papal administration or of the local rulers or of both. The stipulations of these condotte varied from time to time and from place to place. They were often changed unexpectedly, and as a result the insecurity of the Jewish moneylender increased, however much he might have profited from an occasional boom. Matters came to a climax through the propaganda for the establishment of Christian loan-banks, the montes pietatis, which were originally meant to work on a nonprofit basis. Particularly during the Lenten period "the friars [ha-doreshim] are a strap of castigation for Israel and preach every day to destroy us… Their hand is heavy upon us… and the situation reaches a point when both body and property are endangered" (Colon, ed. princeps, no. 192).

Isaac Abrabanel's view on interest-bearing loans to gentiles is laid down in his commentary on Deuteronomy 23:21, and forms part of his elaborate exegesis of the whole book, which was completed in Monopoli in 1496 and published in uncensored form in Sabbioneta in 1551. He expounded his theories "before Christian scholars and the masters of the land." The first three of his arguments offer nothing new; only the fourth is straightforward and assailable on philological and historical grounds. At the same time, it foreshadows the general development toward capitalism, so characteristic of the 16th century: "There is nothing unworthy about interest… because it is proper that people should make profit out of their money, wine, and corn, and if someone wants money from someone else… why should a farmer… who received wheat to sow his field not give the lender 10% if he is successful, as he usually should be? This is an ordinary business transaction and correct…. Interest-free loans should only be given to the coreligionist, to whom we owe special kindness." Abrabanel sums up with an assurance to his readers that what he had said in the first three paragraphs was only meant "to promote peace. What a Jew should really believe is laid down in the tradition of the sages."

Shortly before the completion of Abrabanel's commentary on Deuteronomy, Abraham b. Mordecai Farissol had a disputation in Ferrara at the famous Palace of Ercole d'Este I, again attended by many prominent people (cf. Magen Avraham, ch. 73, ed. by D.S. Loewinger in: HHY, 12 (1928), 290ff.). Some of Farissol's answers also represent a definite opposition to medieval economic concepts. His formulations might well be borrowed from the views of contemporary civil lawyers. In contrast to the opinion of the canonists and of Levi b. Gershom who, like Aristotle, considered money as barren metal, a distinction is now drawn between primitive and advanced society: "After society had expanded and people began to be distinguished from one another by their views… there followed a new Nature and another Order. The custom of giving another person something for nothing ceased unless the person was poor. Thus, the law has developed to pay rent for houses… and to make loans… All comes for a price… Sometimes credit is even more important than lending an animal or a house. Hence… it is appropriate to give some compensation for a loan. A proof for this argument is that even the ba'alei hadatot [canonists] have agreed that one may pay up to 5% for the lending of money." Farissol seems to refer especially to the montes pietatis, which were forced to charge a small amount for the maintenance of their administration. As to the rates of interest charged, "one need not ponder over them, because they are agreed upon by the communities who require money from the Jews. They fluctuate according… to the availability or scarcity of silver and gold and the demand for it."

In 1588 the physician David de Pomis published his De Medico Hebraeo Enarratio Apologetica, in which he set himself the task of putting on record the devoted services of distinguished Jewish doctors in the past. The book, written in Latin, also contains his views on money-lending to gentiles. His effusive flattery about the relationship between Christianity and Judaism makes it unnecessary to refer to the first part of his arguments. Only in the last paragraph of the relevant section does he return to the practical aspects of the problem: "If the Jews do sometimes take interest from Christians, it can either be maintained that they abuse the law or…" and here his statements are almost identical with those of Farissol, "…their transactions represent an official agreement between the parties concerned… A Jew could effect the same transaction with another Jew according to recent rabbinic authorities." One form is technically called tarsha and the other hetter iska (cf. Sh. Ar., YD 167, 177). Both concessions represent developments dictated by the general change of economic conditions. In practice, de Pomis' labored defense came late. It was Calvin who challenged the Deuteronomic differentiation between the "brother" and the "alien" on principle. According to him, interest is forbidden only insofar as it is contrary to equity and charity. Otherwise, "nous sommes frères sans aucune distinction." The enunciation of his program became the decisive formula for the new spirit of capitalism.

FROM OTHERHOOD TO BROTHERHOOD?

From the 17th century onward, the collapse of the traditional Christian exegesis of Deuteronomy 23 is apparent in Europe and in the U.S. On the Jewish side, too, responsa on the subject become less frequent; even the records of the Council of the Four Lands have relatively little to say on the matter. The hetter iska (see *Usury) had opened the path to a mercantilistic interpretation of talmudic law. Nevertheless, on the readmission of the Jews to England, Manasseh Ben Israel, in his Humble Address to His Highness the Lord Protector of the Commonwealth of England, did not deem it necessary to revoke the ancient distinction: "For to lay out the money without any profit was commanded only toward their brethren of the same nation of the Jews, but not to any other nation" (cf. B.N. Nelson, Idea of Usury (1949), 73–109). In spite of occasional regressions, a gradual improvement of the position of the Jews in Western Europe became noticeable. Money-lending still remained one of their main occupations, but they also traded, sometimes simultaneously, in all kinds of merchandise, or they earned their living as craftsmen and artisans. Above all, there was the ascendancy of the Court Jew who, in spite of his fluctuating fortunes, played an important part in the economic administration of the estate of many a duke and king in peace and war (cf. H. Schnee, Die Hoffinanz und der moderne Staat, 6 vols., 1953–67). The Age of Reason further contributed to the disappearance of barriers between the various denominations. Although Leopold I expelled the Jews from Vienna and Lower Austria in 1670, Joseph II issued his Toleranzpatent only about 100 years later.

In 1807, the ecclesiastical and lay representatives of French, Italian, and German Jewry assembled in Paris to attend a meeting that had been convened by Napoleon. Bearing the proud title, "Grand Sanhedrin," it concluded a development of 2,000 years and to many of those who had come seemed to open a new era. Two of the 12 questions they were asked concerned the problem of inter-Jewish and Jewish-gentile loan transactions. Although eminent rabbinic scholars of personal integrity were present, the answers, Décisions Doctrinales or, in their Hebrew version, takkanot, reveal neither any depth of historical understanding nor sincerity on the part of those who were responsible for their formulation. Neshekh, for example, is defined as a rate of interest to be determined by the Code Civil (Code Napoleon) of France. Such interest may be charged by one Jew from another, provided that the lender share the risk of loss and the chance of gain, and that the debtor give indemnification to the creditor in the case of damnum emergens. Only the poor Jew must be charged no interest at all. Gentiles, particularly those living in France or Italy, are to be considered as brothers of the Jews, and there must not be any difference between them if charity is required. Those who disregard this ordinance will be called sinners and transgressors of the law of the holy Torah. All this may, to a degree, be defensible from the standpoint of the halakhah, but a complete renunciation of Jewish autonomy is implied. Jews have become Frenchmen of the Israelite persuasion. The law of the State (ḥok ha-medinah) sets the tone and the "Grand Sanhedrin" decides accordingly (Takkanot ha-Sanhedrin shel Paris (1958), 56–67). Ishmael b. Abraham Isaac ha-Kohen of Modena, who also received an invitation to the Paris Sanhedrin, was too old to make the journey, but gave his answers to each question in writing. Although gentle and dignified in his reply, he disassociates himself from the views expressed in the Décisions Doctrinales: "To deny permission to lend money on interest to gentiles is against all exegetes, against the Gemara, and against the literal understanding of the Bible" (cf. J. Rosenthal, in: Talpioth, 4 (1950), 583).

Events of the last 150 years belied the identification of the "brother" and the "other," and in all probability the reaction of the old rabbi of Modena and those who thought like him, even at the beginning of the 19th century has not disappeared from Jewish life. The full awareness of covenantal relationship between God and Israel and Jew and Jew is still strongly felt. Until this day many Jewish banks both in and outside Israel display a notice to the effect that it is understood that business and loan transactions between Jews will be conducted according to hetter iska regulations.

[Siegfried Stein]

The Historical Context

The biblical injunctions against usury relate neither exclusively nor mainly to money-lending on interest. Their spirit reflects a nomadic and village society where the borrowing of goods is the norm, and moneylending the exception. Yet the so-called archives of the *Murashu house discovered at Nippur show Jews in Babylonian regions engaged in extensive financial operations. The Talmud largely treats the problem of usury and interest from the point of view of product loans, though financial operations are also dealt with in this connection. There is evidence that as Jews moved in the city life of the Roman Empire, some of them gave loans on interest.

With the development of an urban economy in the caliphate of the ninth century, the financing of the ever-growing needs of trade, of crafts, and of the state, became a pressing need. Jews financed the business of their coreligionists through participating in various ways as partners, both in financing and in profits. While some of these means of participation were actual, others were formal only, devised to evade the prohibitions on usury. In the tenth century, large-scale Jewish financiers appear, like the *Netira family, who loaned large sums to the state on interest, against the collateral of state incomes. These loans were evidently the accumulated savings of middle- and small-scale Jewish merchants, deposited with Jewish state bankers for greater income and security. When (up to the 15th century) the majority of the Jewish people lived in Islamic lands and in Christian Spain, money-lending was one of the occupations of Jews, as of other city dwellers. While in Northwestern Europe Jews first came mainly as international traders, when some of them later turned to local trade (1000 C.E.), they engaged in credit operations. The impact of the First Crusade (1096–99) on the status and livelihood of the Jews in France, Germany, and England drove them out of trade through the lack of security arising from the inimical attitude of society in general; at the same time, Jewish merchants and craftsmen were denied any share in the Christian towns and *guilds which were rapidly evolving as the only social framework for trade and crafts in those countries. This crystallized at a time when European trade, agriculture, and building were expanding and in need of financing. Ready cash – which then meant precious metals – was scarce. Available means in Christian hands were channeled into credit for merchant ventures and other relatively creative loans, in which it was also easier to formulate partnerships that evaded the stigma of usury. Under such circumstances the Church found it easy to act in accordance with the agricultural ethos of its upper strata, and to insist on the prohibition of usury. There remained the field of loans for consumption – the need for which arose in cases of illness, litigation, and unforeseen expenses – for which Christian capital was not readily available and where usury was least avoidable. Deprived of its former uses, Jewish capital entered this field, as well as granting any other possible loan. Hence among the Jews of the region between the Pyrenees and Scotland, between the Atlantic and the Elbe, usury became the main source of livelihood from about the 12th to the 15th centuries. They were not the only people to lend money on interest in that region: there were also the Cahorsins of southern France, the Catalans, and the Lombards. But religious enmity, the social separateness of the Jews, and their hateful image, combined to identify Jew with usurer in the western Christian imagination. In those countries Jews sometimes lent on a debt deed only, without surety. Medieval Hebrew sources from those regions described this kind of loan as be-emunah ("on trust"), a practice usually reserved for established and proved clients. Most loans were given on the double surety of a written deed and a collateral (Heb. mashkon). Since repayment of a loan for consumption was often difficult, the needy debtor came to hate the infidel Jewish creditor who, out of his own need, had helped him. Many anti-Jewish persecutions hence acquired an economic as well as a religious character, the instigators being no less anxious to destroy incriminating bonds than to eliminate accursed infidels.

In England the extent as well as the problems of Jewish money-lending were seen at their clearest. The most common interest rate was two pence in the pound a week (43 1/3 annually), though half and twice as much were also common. There were many partnerships, often between members of the same family; this form was utilized by the extremely wealthy *Aaron of Lincoln. To supervise Jewish lending, to insure maximum tax exactions from the Jewish lenders, and to make certain that debt deeds would not be lost even in times of massacres, the *Archa system was introduced. In the 13th century Jewish money-lending was conducted through tenants of the commons and of the middle class, whose bonds were bought up, on default, by the nobility and ecclesiastical institutions. This too, aroused the enmity of the commoners toward the Jews. In 1275 Edward III passed severe anti-usury laws, at the same time exacting extremely high tallages and calling in Italian moneylenders to replace the Jews. Some of the latter turned to coin-clipping, which led in part to the total expulsion in 1290.

Though in the heterogeneous Holy Roman Empire money-lending practices varied greatly according to time and place, the history of Jewish money-lending in *Regensburg may be typical of Rhenish and south German cities. Until about 1250 the municipality was the chief beneficiary of Jewish loans; until about 1400 the nobility and clergy were the main recipients; while after 1400 knights, burghers, and artisans pawned objects for short terms, and borrowed small sums at high rates of interest. This latter situation eventually became the focus of lower-class enmity toward the Jews and contributed to their expulsion in 1519.

Interest rates in Germany fluctuated greatly in practice and even in their legal norms. Frederick II of Austria fixed the Jews' maximum interest rate at 173⅓% in 1244; in the more developed cities of the Rhineland and south Germany 43⅓% was more common, though this rate did not apply in the case of foreigners or peasants; 86⅔% was also common and acceptable. An investigation in 1676, motivated by anti-Jewish feeling, in the electoral Palatinate in western Germany, showed that an interest rate of 14.5% was honored there by the Jewish moneylenders. The Christian rulers who exploited Jews as their agents for usury – and then extorted from them a large part of their usurious gains, especially when the Jews became impoverished – used to proclaim moratoriums on the individual, partial, or total debts to Jews. The respective treasuries all profited by such measures, the best known being those of Emperor Wenceslaus in 1385 and 1390, which utterly impoverished the Jews while barely alleviating the burdens of the treasury. Likewise, total and bare-faced confiscation was often resorted to, as was expulsion, which left the field open to the Jews' remaining competitors. Because of the collateral in their hands Jewish moneylenders frequently engaged in related occupations, such as the repair and upkeep of clothes, armor, and precious objects, and in their sale when pledges were not redeemed, a frequent occurrence. Hence the rudiments of certain crafts, as well as the sale of *secondhand goods, were an integral part of this occupation. Articles regulating moneylending constituted the core of all charters issued to Jews in medieval Germany from the 12th century. They determined not only the rates of interest, but also ensured the rights of the creditor to the collateral, even if it had been stolen. The moneylender had to take an oath that he had received it in good faith and in daylight whereupon the legal owner of the collateral had to repay him the amount loaned on the pledge. This right clashed with Germanic legal conceptions, which demanded the return of the object to the rightful owner without any payment; hence the misconception that the charters allowed the Jews to act as fences.

When it became apparent in Italy that the citizens had need of cash loans, the activities of Jewish moneylenders were regulated by means of the condotta, conditions set out in charter treaties between municipalities or rulers and Jewish moneylenders, first signed in the late 13th century in Umbria. The interest rate varied between 15% and 25% and was never to exceed the value of the pledge. The profit of the loan banks in 15th-century Florence was approximately 4% (see also *Monti di Pietá).

The first privilege granted to Jews in Poland in 1264 regarded them mainly as moneylenders. However, under favorable conditions, Jews soon took part in other economic activities, so that within a century money-lending became only one of their many-sided economic functions in the Polish cities and countryside. The *arenda system, for example, stems from a change from lending to leasing. By the end of the 16th century, Jewish trade demanded more capital than the Jews themselves possessed, so that many Jewish traders became indebted to Christians. Lending on interest between Jews was explicitly initiated and legalized there, in the institution hetter iska, a legal device which created a formal partnership between creditor and debtor. Interest rates inside the Jewish business community in the latter half of the 17th century were between 25% and 33⅓%, whereas the Christians loaned at 6%–10%, and interest rates between Jews and Christians ranged between these two figures. Jews also developed their own system of credit bonds – the mamran (membranum) – used mainly at the great fairs of Poland-Lithuania. With the rise of modern *banking, Jewish money-lending of the conventional type gradually decreased in importance, though in Western Germany and in *Alsace-Lorraine it was sufficiently widespread to be detrimental to *emancipation of the Jews during the French Revolution, and later on to influence the attitude of Napoleon *Bonaparte to Jewish emancipation. It likewise was one of the causes of the anti-Jewish *Hep! Hep! disturbances of 1819, as well as 1830 and 1848.

When Jews moved to western countries in the late 19th-early 20th centuries, moneylending was a frequent occupation, especially in the first and second generation, and the Jewish moneylender became a familiar stereotype.

BIBLIOGRAPHY:

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