Usury, Interest and the Reformation (review)

This slim volume, written with a measure of scholarly indignation, aims to set the record straight about the history of usury during the sixteenth and seventeenth centuries. Many modern scholars have so far misinterpreted the teachings of the Protestant reformers as to make them appear to have broken with the medieval tradition that forbade usurious loans of money. The truth is quite otherwise. The reformers condemned usury. The medieval law had long drawn a distinction between usury and legitimate interest. For example, more than the amount of a loan could lawfully be paid where the borrower and lender shared the risk of a venture financed by the loan. Similarly, where a lender was harmed in his own affairs by a delay in repayment, he could lawfully be compensated by being paid for the delay. However, this was not usury. These were examples of interest. Protestant writers drew the same distinction. What was condemned was the increase in the amount to be repaid when no more than a simple loan was at issue. This practice was considered as "sterile" in contemporary thought, and almost all Protestant theologians were as strong in condemning it as were contemporary (or medieval) Catholic thinkers. However much they disagreed about theological issues, both camps recognized the difference between usury and interest. There may have been some confusion or slight changes in terminology among the Protestants, but this should not have misled scholars about the substance.

The author pursues this theme with energy, conviction, and examples. The first half of the book lays out the argument, providing separate chapters for Continental thought and the English treatment with usury. The author also provides his own helpful commentary. The book's second half consists of thirty-eight excerpts from the writing of contemporary commentators. John Calvin, Philip Melanchthon, Martin Luther, and Huldreich Zwingli figure most prominently.

For the reviewer (admittedly a lawyer), one persistent query arose. It was common ground among the commentators of the sixteenth and seventeenth centuries that unlawful usury might be "cloaked" by a variety of subterfuges and that in fact many cunning men made use of such subterfuges. The distinction between legitimate interest and unlawful usury was always a thin one. How did one determine on which side of the line any specific transaction lay? Was there a practicable test? Did subjective intent matter? The author of this useful book does not take up these questions, and in this he seems to be following his sources. The writers under discussion were theologians, not jurists. Nonetheless, the questions of implementation of the prohibitions against usury must have arisen often in practice, and it would have mattered how the distinction was established for practical purposes.