Dear Frank

Following your message.

Hello Francois.  Would you be so kind as to view this and share your insights with us?  There is something here.

FM

My comments:

Bad translations from Rome.

Example in the recent papal encyclical Caritas in Veritate…

Pawnbroking is not monte di pietà…

Can we translate the concept hospital by bordel  or brothel or whorehouse?

65. … Furthermore, the experience of micro-finance, which has its roots in the thinking and activity of the civil humanists — I am thinking especially of the birth of pawnbroking —
should be strengthened and fine-tuned. This is all the more necessary
in these days when financial difficulties can become severe for many of
the more vulnerable sectors of the population, who should be protected
from the risk of usury and from despair. The weakest members of society
should be helped to defend themselves against usury, just as poor
peoples should be helped to derive real benefit from micro-credit, in
order to discourage the exploitation that is possible in these two
areas. Since rich countries are also experiencing new forms of poverty,
micro-finance can give practical assistance by launching new initiatives
and opening up new sectors for the benefit of the weaker elements in
society, even at a time of general economic downturn.

Real translation and its importance: 

A
mount of piety is an institutional pawnbroker run as a charity in
Europe from the later Middle Ages times to the 20th century, more often
referred to in English by the relevant local term, such as monte di
pietà (Italian), mont de piété (French), or monte de piedad (Spanish).

In
Switzerland,  e.g. the cantons of Bern and Zürich enacted elaborate
laws for the regulation of the business. In Zürich the broker must be
licensed by the cantonal government, and the permit can be refused only
when the applicant is known to be a person underserving of confidence.
Regular books have to be kept, which must be at all times open to the
inspection of the police, and not more than 1% interest per month may be
charged, just to cover the costs and not for profits, as asked by the
Church, i.e. permitted by Medici Pope Leo X’s
usury-for-a-good-cause: the Monte di pieta, so-called “charity banks”
operated in the Renaissance in the name of the poor, with no profits. A
loan runs for six months, and unredeemed pledges may be sold by auction a
month after the expiration of the fixed period, and then the sale must
take place in the parish in which the article was pledged. No more than
two persons at a time have ever been licensed under this law, the
business being unprofitable owing to the low rate of interest. In the
canton of Bern there were once two pawnbrokers. One died and the other
put up his shutters. The Zürich cantonal bank, however, conducts a
pawnbroking department, which lends nothing under 4s. or over £40
without the special sanction of the bank commission. Loans must not
exceed two-thirds of the trade value of the pledge, but 80% may be lent
upon the intrinsic value of gold and silver articles. The swiss
establishments make practically no profit.

Fribourg in Switzerland and Rerum Novarum, 

http://www.vatican.va/holy_father/leo_xiii/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum_en.html

3…The
mischief has been increased by rapacious usury, which, although more
than once condemned by the Church, is nevertheless, under a different
guise, but with like injustice, still practiced by covetous and grasping
men….

Hunger
in the world, population growth, wars, bad distribution of wealth, and
the ever-increasing gap between the rich and the poor, call for a
neutral and objective reflexion. We admit that there will always be
disparities, but the present situation calls for urgent solutions, and
most of the problems are yet to receive any beginning of efficient
realization, except for a few rare exceptions.

After
years spent studying the recent demographic phenomena, and because of
their relationship with the present banking crisis, I can affirm that
the following facts are of the utmost importance, their seriousness
having been anticipated by only a few civilizations in the past. The
non-respect of natural laws inscribed in nature will cost a high price,
and the more we wait, the higher the bill will be for us, our children,
and our grandchildren.

The main facts

The
present demographic crisis in Europe is the most serious in history.
One of the worst situations is that of Italy, with an average fertility
rate of 1.2 children per woman, even 0.8 in Northern Italy. Soon Spain
will beat Italy in this demographic pit. In the near future, Europe will
have to consecrate more than half of its Gross National Product to the
elderly. The European States will be ruined because of the lack of young
people. The European economy is already declining. In an absurd
reaction against this, some voices are raised in the mass media to
promote the active euthanasia of the elderly and disabled. (Laws along
this line have already been voted in in Zurich and the Netherlands.)

Most
of the Western Nations can no longer manage to pay the interest on
their debts nor control them, to the detriment of primary tasks. For
example, Italy is socially bankrupt because of its taxes. There is
widespread corruption, a decline of the GNP, the failure of the school
system, young people on drugs, and the ever-increasing cost of health
care (more than 50 billion Swiss francs in Switzerland alone): all of
these facts carry a heavier burden on society. National pensions plans
are going bankrupt.

The productivity due to robots and computers could save us, but it will have to be redistributed in a just way.

The role of credit and its demographic consequences

Today’s
economy is based on loans. The public does not know that banks take
huge liberties with the loans they make. If, for example, there are 100
dollars in deposits, the U.S. banking system lends a hundred times this
100 dollars, which makes $10,000, or a creation of $9,900 out of
nothing. This creation of money is possible thanks to the trust in the
banks and the law of large numbers, which says that it is never all of
the depositors who will withdraw their savings at the same time. The
globalization of the world economy aggravates this situation of the
“miraculous” creation of money by the banks, which creates skyrocketting
debts.

Since
human nature has its limits, many people have begun to realize the
limit of this system of the creation of money out of thin air, and its
human cost, especially regarding unborn babies. There is a shortage of
babies in every western nation, and the present crisis is due to this
shortage. If all the depositors in the world wanted to withdraw their
savings all at once, there would be a huge financial crisis. This is
going to happen in developed nations because of the ageing of the
population. We should be smart enough to prevent this fall, and prepare
alternative solutions, by favoring families.

The role of interest rates

Through
sudden raises of the interest rates and money creation, banks become
gradually the owners of the real wealth of the nations, since all the
fictitious money they lend has to return to them, plus the interest.

Families
or small businesses borrow when the interest rates are low, and most
often, are forced to pay back these loans when the rates are high. The
consequence is the absence of children and the collapse of the economy.

In
some nations, the real rate of interest is 7% per month, which amounts
to 125% per year (shylocking), whereas the inflation rate is 9%. These
rates are usurious, and are the plain representation of greed. And there
are even worse systems.

The
interest plays an even more pernicious role, when money is lent to
developing nations. In this case, these loans are granted with
advantageous rates, provided the creditor nations apply birth control
policies (like China’s one child policy, which brings about forced
abortions and the massacres of girls). This is the beginning of a
vicious circle, with debts causing the sacrifice of human persons to the
modern Moloch. Human rights and freedoms are crushed by the economic
system.

Taxes and the social budget

Nations
have borrowed from private banks huge sums of money which, for the most
part, is scriptural money created out of nothing. This money is based
on the wealth of the whole nation. This creation of money out of thin
air is legalized, but immoral, just like abortion which, even legalized,
remains a crime in the sight of God. These huge sums of borrowed money
bring about ever-increasing debt payments, which take an increasing part
of government budgets, leaving less money for health, education and
other services, creating unemployment, cuts, stress, quarrels, divorces,
downsizing, restructuration plans, etc.

The
solution is obvious: the State must create its own money, interest
free. Savage capitalism eats up its own children, but so slowly that
some people actually get used to it.

Interest and usury condemned

Cardinal
Ratzinger recently said that there are over 40 million (declared)
abortions per year in the world. This means that if one counts the
abortions through coils and abortive pills (undeclared), for the last
ten years, there have been one billion human beings killed, not to
mention those who were not conceived because of the prevailing
contraception mentality. This slaughter is the worst of history. What
are the causes?

In
the Old Testament, God and the Church have always condemned any
interest on the loan of money as usury, and not just high rates of
interest, especially through the teachings of St. Thomas Aquinas. (See
also Josue 3:15 and 4:18, Chronicles 12:15, Isaias 8:7 and 24:2, Daniel
8:16, Exodus 22;25, Nehemias 5:5, Leviticus 25:36, Psalms 15:5, Jeremias
15:10, Ezechiel 18:8, Proverbs, and in the New Testament, Matthew 25:27
and Luke 19:23.) In the Lord’s Prayer (the “Our Father”), which
Christians recite every day, the Latin version uses the words “debita
nostra” (reported in Matthew 6:12: “forgive us our debts”), which has
also to be understood in the literal sense, as taught by the Catechism
of the Catholic Church.

There
is no difference between interest and usury, for it is the very
principle of charging interest on time that is pernicious. Besides, it
is obvious that the higher the interest, the more harmful it is. The
condemnations of greed by Pope Pius II are very harsh: “heretical
theories that are appaling and abominable.”

The
penalty for this type of crime is the same as for all those who take
part in an abortion: excommunication. Popes Paul II, Sixtus IV, Innocent
VIII, Alexander VI, Julius II, and Leo XIII in Rerum Novarum also strongly condemned interest. ( an other form of voracious usury…)

The encyclical Vix Pervenit

On November 1, 1745, Pope Benedict XIV issued the encyclical letter Vix Pervenit,
addressed to the Bishops of Italy, about contracts, and in which usury,
or money-lending at interest, is clearly condemned. On July 29, 1836,
Pope Gregory XVI extended this encyclical to the whole Church. It says:

“The
kind of sin called usury, which lies in the loan, consists in the fact
that someone, using as an excuse the loan itself — which by nature
requires one to give back only as much as one has received — demands to
receive more than is due to him, and consequently maintains that,
besides the capital, a profit is due to him, because of the loan itself.
It is for this reason that any profit of this kind that exceeds the
capital is illicit and usurious.

“And
in order not to bring upon oneself this infamous note, it would be
useless to say that this profit is not excessive but moderate; that it
is not large, but small… For the object of the law of lending is
necessarily the equality between what is lent and what is given back…
Consequently, if someone receives more than he lent, he is bound in
commutative justice to restitution…”

The interest in one of the factors that triggers inflation, and not the opposite. Pope John Paul II’s encyclical letter Veritatis Splendor reminds
us that there are intrinsic evils and absolute sins. To ignore them may
suppress personal sin (according to St. Thomas Aquinas, the borrower
commits no sin), but society pays for this misdeed, even at the cost of
its own disappearance, and those who favor the ignorance of the sin of
usury are responsible for endangering the survival of the population.

What
comforts us, however, is that this condemnation of usury is repeated in
the new Catechism of the Catholic Church, at the end of the comments on
the Seventh Commandment.

Impossible contracts are null

It
is impossible to pay back interest-bearing loans, either they are
compound or not. Take the following example: Croesus borrows a principal
of 100 at the birth of Christ. If one applies an interest rate of 10%,
the sum to be paid back in the year 2000 is (100 x 1,12000), or six
times ten to the power of eighty-four, or a number with 84 zeros, which
simply blows the mind… It would represent 10 to the power of 68 houses
for every person on earth. It is obvious that it is impossible to
respect such a contract.

A
French mathematician, M. Levy, showed that, after a while, all the
wealth in the world will be owned by the banks, through the simple
application of mathematical rules.

Money
is a human creation which, if the interest is admitted, begets more
money. This money is not only a sign; it really causes deaths and
injuries, in every area. It is more prudent to forbid any new organism
that is self-reproducing (like viruses, the development of new species
in vitro, etc.), including abstract concepts like money that have
consequences in real life. The common good called “money” is in the
hands of people without scruples. It is a duty for society to take back
control over the issuance of money.

It
is said that everything has a cost, and so the interest would be the
cost of money. However, money is not a thing, a commodity, but a sign, a
common good that belongs to all, just like water or air. It is
precisely the dream of the greedy to make people pay for the air and
water they consume. Money is a universal, and to leave its creation into
the hands of the supporters of death is a crime.

Today,
money is more and more invested in labor-saving technology rather than
in creating jobs. The interest causes the repayment of loans to the
banks to go before the wages of workers, and to prefer to lay off these
workers instead of paying them. This is how human rights work today:
money, a sign or abstraction, comes before the human person, a reality.
Where is the dignity of the fathers of families, who are not bankers?
Besides, bankers do not have large families, for money comes even before
their own children.

Abortion: a sacrifice to Moloch

This
swindle of the “creation” of money by the banks, and the widespread use
of interest on the loan of money, favor economic crises and abortion
when loans have to be paid back. In Switzerland, the first reason given
by women who had an abortion is the repayment of loans, contracted by
themselves or their families. We know that there are other reasons
(hedonism, selfishness, fashions, social pressure, frivolity, ignorance,
etc.), but to shut up our eyes and do nothing against one of the causes
is neither scientific nor Christian. To let the people who earn money
without working (by collecting the interest on their loans) crush the
poor who are defenseless, is ridiculous. However, to defend the poor is
far from being ridiculous.

History
of ancient Egypt shows the close link between mortgage rates and the
decline, even disappearance, of the population. (See the analysis of
Belgian historian Pirenne on the 20% rates that caused the deadly
exposition of children to the sun.)

The
new Catechism of the Catholic Church maintains the condemnation of
interest and its harmful role at the end of the comments on the 7th
Commandment, which forbids to steal. As lay people, we must make this
condemnation understood by all, for it is a liberation for the poor;
moreover, an economy based on investment in real developments and
improvements (and not simply hoarding money through
the gimmick of the interest rates), is much more dynamic, and favors a
reduction of prices, while rewarding those who take risks in investing
in new developments.

Justice
is necessary to achieve holiness. It is too easy to wash one’s hands of
the matter by saying that one understands nothing in economics.
Economics is not so complicated, especially when one takes the trouble
to humbly study solutions that are finally more practical than those who
manipulate public opinion want to make you believe.

For
many centuries, the Church has been suffering, because her sons are
prisoners of a huge disinformation campaign. Maurice Allais, 1988 Nobel
Prize winner in Economics, wrote that the present international
financial system is the biggest disinformation system in human history.
The sons of darkness control this disinformation and crush the weak,
often with the help of the ignorant of good faith. Let us unmask them,
to give some fresh air amidst this general atmosphere of corruption.

What to do?

Why
not react now? The human race has survived for centuries without this
so-called creation of money at interest by banks, and even with no banks
at all. So, why not abandon these inhuman and outrageous interest rates
that know no limits and steal time from us as educators of our
children? The interest is time stolen from fathers and mothers.

Nations
spend billions for research in physics. Let us spend a few million to
study more carefully the social doctrine of the Church and the practical
solutions it entails in favor of a sound economy. Let us create a
center of studies and formation for social action.

Let
us make the promise made to Abraham possible. The earth is huge and
generous, as well as the seas. All the serious experts, after long
studies (cf. Julius Simon), admit that our planet can feed all the
population to come in the future. In fact, those who believe that the
earth is overpopulated neither believe in God nor in His promise. Let us
learn again to utter this greeting of the sons of Abraham: pax, peace,
shalom, salam… This peace, as Blessed Mother Teresa of Calcutta said,
will come on earth only if abortions are stopped, and if we accept those
who are different, the disabled.

A salary for housewives

Housewives,
mothers who stay at home, work just as hard as those who are hired in
the workforce. They deserve a real salary, which will create more job
opportunities, boost consumption and the economy, and allow the Gross
National Product to double. It was possible to finance two world wars,
so there is no reason why it would not be possible to finance this wage
to housewives. In Canada, it is estimated that the work of housewives
represents 46% of the GNP. So it is simple justice, as Pope John Paul II
said, to reward them with a salary.

Is is true that:

The less the children in a family, the less vocations to sharing and generosity?

The best school to teach the principle of subsidiarity is a large family?

The main flaw in world politics is this generosity in the existence of intermediary bodies?

The contraception mentality is directly aimed against large families?

The system of interest directly attacks the family?

The interest is a theft of time and children?

The creation of money through interest is a lie and a swindle, a theft to the detriment of future generations (unborn children)?

Can any person of good will take part in this slaughter, by action or omission? Can we stand up and stop this mechanism?

Is
the teaching of St. Thomas Aquinas on usury still valid today? Can the
time that belongs to God be stolen? This is a good explanation for
stress.

Any
human invention that has no limits is monstrous; the system of interest
rates has no limits. Moreover, a means of exchange, or unit of
measurement, cannot multiply by itself. If money breeds more money
today, it is at the expense of our own children. This is criminal!

It
is easy to show that the present crisis is in large part due to this
search for zero population growth, based on flawed facts and analysis.
What a mistake it is to think that the earth cannot support all of the
present population, whereas Europe alone could feed many times the
world’s population, not to mention the resources of the oceans that are
barely developed.

For
those who say: “We will have to change the way our deposits are managed
in banks,” I reply: “This is true, and you will be rewarded a
hundredfold, for a dynamic economy will benefit all, unless your
selfishness make you sad to see others happy. How sad it would be it you
were in such a situation, especially since you risk eternal damnation.

All
this work is done with the hope that a few simple economic concepts can
be explained for the good of the poor, the unborn, especially in
Third-World countries. Don’t believe those who complicate everything to
keep their control over the economy, for billions of human beings will
never be born because of this control. True love cannot accept interest,
but it can accept just profit. Let us entrust the future of mankind to
the family, with mothers having for their model, Mary.

François de Siebenthal

World demographic winter

 www.DemographicWinter.com.


 

“The Church has not changed her teaching

on usury and one can make a reasonable

argument for the validity of the intrinsic

injustice of usury itself.”

https://docs.google.com/document/d/1uYyRKsZjhAtv0TjM79c8VCp-Elvomd2OFacXsJEHcEM/edit?usp=sharing

1. Introduction

In order to know whether usury is still a sin we must first understand

what it is. Although today usury commonly means charging

excessive interest on loans, or perhaps merely on loans intended for

consumptive purposes,1 the classical doctrine of the Church on usury

and the debates among some of her outstanding theologians were

concerned with another question. For usury as it was understood for

centuries meant the charging of any interest on a loan simply by

virtue of the loan contract, that is, without any other justifying cause

except that money is being loaned. The most recent relatively

complete papal discussion of usury occurred in Pope Benedict XIV’s

encyclical of 1745, Vix pervenit. The pope stated:

448 Thomas Storck

The nature of the sin called usury has its proper place and origin

in a loan contract . . . [which] demands, by its very nature, that

one return to another only as much as he has received. The sin

rests on the fact that sometimes the creditor desires more than he

has given . . . , but any gain which exceeds the amount he gave

is illicit and usurious.

One cannot condone the sin of usury by arguing that the

gain is not great or excessive, but rather moderate or small;

neither can it be condoned by arguing that the borrower is rich;

nor even by arguing that the money borrowed is not left idle, but

is spent usefully . . . .

Although, as we will see, in this same encyclical Benedict expressly

allows for the possibility that there can be legitimate titles to interest

which do not fall under the head of usury, the central question is

simply whether interest is ever justified merely by virtue of a loan

contract, and we should keep this point in mind as we proceed.

Usury is a question that arises at the intersection of theology,

philosophy, economics, and law, and has implications for each.

Considering the weight of the Church’s consistent and centurieslong

condemnation of usury, obviously there arises a theological

question of development of dogma, as well as of the validity of

venerable arguments in scholastic moral theology and moral

philosophy, in canon law, and in the teachings of economic theory.

I will treat the subject mainly, however, from the standpoint of

moral philosophy and theology, which, along with canon law, is

where historically most of the controversy was conducted.

2. Historical background and development

Since the usury question has an unusually long and rich

history, I think that it is necessary to sketch this background,

without which both the importance of the controversy and the

weight of the intellectual argumentation on behalf of the Church’s

traditional position might not be clear. In addition, an historical

approach will help to show how gradually the essential features of

the condemnation of usury were worked out.

The negative judgment upon usury in the early Church

occurs against a backdrop of wide condemnation by Greek and

Roman writers as well as in the Old Testament. The list of classical

pagan authors who disapproved of it is impressive and includes

Is Usury Still a Sin? 449

2Laws, bk. V, 742.

3Politics, bk. I, 10, 11. Since Aristotle’s opinion on usury was the one most cited

of all pagan authors during the Middle Ages, I reproduce it here: “The most hated

sort [of wealth-getting], and with the greatest reason, is usury, which makes a gain

out of money itself, and not from the natural object of it. For money was intended

to be used in exchange, but not to increase at interest. And this term interest,

which means the birth of money from money, is applied to the breeding of money

because the offspring resembles the parent. Wherefore of all modes of getting

wealth this is the most unnatural” (1258b, Oxford translation). Too much stress

should not be put on his statement about “the breeding of money” taken in

isolation, for the question of whether money can be fruitful is in large part a

semantic question.

4Clouds, 1283ff.

5De Beneficiis, bk. VII, 10.

6William C. Morey, Outlines of Roman Law, 2nd ed.(New York: G. P. Putman’s,

1914), 355–56.

Plato,2 Aristotle,3 Aristophanes,4 and Seneca.5 In addition to a general

condemnation of usury by some of the best minds of the classical

world, Roman law provided the legal concept from which canon

law would later draw its fundamental analysis of the usury question.

This was the Roman law contract of mutuum, and one can hardly

overestimate its importance for understanding the usury question in

the medieval period and thereafter.

The subject-matter of the mutuum must consist of things that can

be measured, weighed, or numbered, such as wine, corn, or

money; that is, things which being consumed can be restored in

genere . . . . From the nature of this contract the obligation is

imposed upon the borrower to restore to the lender, not the

identical thing loaned, but its equivalent—that is, another thing

of the same kind, quality, and value . . . .

With regard to the responsibility for loss, since from the

peculiar character of the contract the right of consumption passes

to the borrower, the latter is looked upon as the practical owner

of the thing loaned, and he therefore holds it entirely at his own

risk . . . .6

The two characteristics of the mutuum contract that were to figure

so greatly in subsequent discussions about usury were the fact that in

such a loan the actual good loaned was not returned but consumed

in some manner by the borrower, and therefore the borrower was

considered as the owner of the borrowed goods for all practical

450 Thomas Storck

7Exodus 22:25, Leviticus 25:36–37, Deuteronomy 23:19–20, Nehemiah 5:7–10,

Psalm 15:5, Proverbs 28:8, Jeremiah 15:10, Ezekiel 18:8, 13, 17, and 22:12.

8“The modern Rabbis give an extremely interesting explanation of the Torah

permission. There was, they say, at that time no law amongst the Gentiles which

prohibited the practice of usury; and it was only equitable that the Jews should be

entitled to exact usury of a people who might exact it of them. In this way, by a

system of compensation the Jews were secured against impoverishment by the

payment of usury, since what was paid in usury by some, was recovered by other

members of the race” (Cleary, The Church and Usury, 7).

9That an atmosphere of disapproval of usury existed throughout the Jewish and

Christian spheres of intellectual influence is clear also from the denunciations of

usury in the Koran. See 2:275–6, 3:130, 4:161, 30:39.

10On the pre-scholastic period, see John T. Noonan, The Scholastic Analysis of

Usury (Cambridge: Harvard University, 1957), 12–17, and Cleary, The Church and

Usury, 37–62. Noonan’s work is exhaustive in its historical details, but he clearly

holds a bias in favor of the ultimate vacuity of the usury prohibition as such, and

this bias often shows in the manner in which he presents the opinions of

theologians and canonists. Most seriously, he states (57) that St. Thomas limits the

usury discussion only to money, whereas in fact in both the Summa theologiae II–II,

q. 78 and the De Malo, q. 13, Thomas spends most of his time talking about wheat

and wine. Noonan quotes from the latter work, but omits the section on food and

drink.

purposes. This is in contrast to the loan or rent of something that

will be physically returned, such as a house or a car.

The Old Testament also contains numerous strictures against

usury.7 Although those in the Pentateuch limit the prohibition only

to fellow Israelites, the later passages, for example Psalm 15 and

Ezekiel, are phrased as if they are meant to apply universally. I think

that the way to regard both the pagan and Jewish usury prohibitions

is to see them as part of a general framework of disapproval of usury,

without stressing too much the reasons given in any particular text

or even, as in the Pentateuch, the question of whether usury was

prohibited only to fellow Jews.8 Usury was suspect, it had a bad

odor, the upright did not exact it. This somewhat vague condemnation

of usury was the inheritance of the Church and explains the fact

that some of the early canons seem to condemn usury only when

taken by clerics, although there are also decisive prohibitions of it as

intrinsically unjust.9

The Church first manifests her opposition to usury during

the patristic period.10 Numerous writers condemn usury, including

Apollonius, Clement of Alexandria, Tertullian, Cyprian, Basil,

Is Usury Still a Sin? 451

11Arthur Vermeersch, “Usury,” The Catholic Encyclopedia (New York: Robert

Appleton, 1912), vol. 15, 235. The authenticity of the condemnation by Elvira of

lay usury is doubtful.

12Cf. Cleary, The Church and Usury, 48–56.

13Denzinger, 280–81.

14Noonan, The Scholastic Analysis of Usury, 15.

Gregory of Nyssa, Ambrose, Augustine, Jerome, and John Chrysostom.

In addition, the Apostolic Canons, dating in their final form to

around 380, in their 44th canon prohibit the taking of usury by the

clergy, as do the Council of Arles in 314 (12th canon) and the First

Council of Nicaea in 325 (17th canon), while the Council of Elvira,

305 or 306, the First Council of Carthage in 345 (12th canon) and

the Council of Aix in 789 (36th canon) prohibit it to the laity also.11

Many of the patristic utterances against usury are in the form

of denunciations of exploitation of the poor and thus do not state

whether usury is an offense against justice or simply charity, or even

whether it is simply prohibited by the positive law of the Church.12

But among the patristic strictures on usury two deserve special

mention. The first is the letter of Leo the Great, Ut nobis gratulationem,

addressed to the bishops of Campania, Picene, and Tuscany in

October 443.13 This contained a section dealing with usury, known

from its opening words, Nec hoc quoque. John Noonan calls it “the

single most important document of the early Church on usury.”14 It

is important because it proceeds from the supreme ecclesiastical

authority, because it clearly includes the laity in its prohibition and

because it singles out usury as intrinsically unjust, not simply one of

a number of uncharitable practices which exploit the poor.

The second item is a remarkable statement known as Ejiciens,

once attributed to St. John Chrysostom, but now thought to be from

the fifth century. It was later incorporated by Gratian in the

Church’s canon law and anticipates the classical form of the

argument against usury given by St. Thomas, and presents the

clearest rationale for the usury prohibition of any of the early

documents. It is worth quoting at length.

Of all merchants, the most cursed is the usurer, for he sells a good

given by God, not acquired as a merchant acquires his goods

from men; and after the usury he reseeks his own good, taking

both his own good and the good of the other. A merchant,

452 Thomas Storck

15As quoted in Noonan, The Scholastic Analysis of Usury, 38–39.

16In De Malo, q. 13, ad 4, Thomas rejects the “wear and tear” argument. But

despite this, it seems to me to fit well with Thomas’ understanding of the question,

as we will see.

however, does not reseek the good he has sold. One will object:

Is not he who rents a field to receive the fruits or a house to get

an income similar to him who lends his money at usury?

Certainly not. First, because money is only meant to be used in

purchasing. Secondly, because one having a field by farming

receives fruit from it; one having a house has the use of inhabiting

it. Therefore, he who rents a field or house is seen to give

what is his own use and to receive money, and in a certain

manner it seems as if he exchanged gain for gain. But from

money which is stored up you take no use. Thirdly, a field or a

house deteriorates in use. Money, however, when it is lent, is

neither diminished nor deteriorated.15

Ejiciens makes the crucial distinction between goods which must be

returned to their original owner after being used, and goods such as

money, which are returned only in amount and kind, the subject of

a contract of mutuum. The first type of good normally deteriorates in

use and the owner can rightly charge something for the use and, of

course, expect the original thing back also. But with a good which,

as the saying goes, is consumed in its use, it is hard to see how one

can charge for wear and tear.16

The reasoning of Ejiciens is not altogether clear in every

respect, and there are more than hints of some of the popular

grounds for opposing usury which were ultimately rejected because

they did not stand up to examination, such as the idea that time

could not be sold and that money was purely a measure. Nevertheless,

we have here a very early and solid grasp of the Thomistic

argument, at least in germ.

Before we proceed to the scholastic period with its rich and

complex discussions of usury, we would do well to sum up where

we stand. Usury is clearly condemned by the Old Testament, several

notable classical pagan authors, and the early Church. But many of

these sources seem to condemn usury as a sin against charity, not

necessarily against justice, in the sense at least that they include it in

general denunications of acts that exploit the poor. There is usually

no clear reason given in these statements for saying that usury is

wrong, and most of them tend toward the rhetorical rather than

Is Usury Still a Sin? 453

17Noonan, The Scholastic Analysis of Usury, 16.

18Ibid., 17.

being rational examinations of what usury is and why it is wrong.

But no one could read this mass of material and come away without

understanding that usury offends against Christian morals, whatever

the ultimate basis of its depravity might be.

Next we turn our attention to the elaborate development of

theories about usury that began tentatively in the early middle ages

and lasted till around the middle of the eighteenth century. The

scholastic analysis of usury by no means ended with the end of the

medieval period, for the same kind of reasoning and arguments, even

if sometimes with different results, were employed for several

centuries afterwards. In discussing this period I will proceed as

follows: after some preliminary remarks I will set forth the scholastic

usury teachings that have the most force, chiefly official pronouncements

by the Church and the opinions of St. Thomas Aquinas. Then

I will discuss the kinds of contracts that became increasingly

common as means either to avoid or evade the usury prohibition,

noting in particular any official reactions to them. This will bring us

to the end of the period in which scholastic reasoning could be said

to be taken for granted in the world of Catholic theology and

philosophy, a period that, for our purposes, conveniently coincides

roughly with Benedict XIV’s encyclical, Vix pervenit. We should

keep in mind that throughout this period hardly any Catholic

attempted to justify the taking of usury as such; on that there was no

controversy to speak of. The controversy and the complex arguments

that characterize this period concern not whether it was licit

to take interest simply by virtue of a contract of mutuum, but why

this is so, and especially whether various other contracts do or do not

constitute usury and whether and when extrinsic titles can be

invoked by which one may justly receive interest on a loan.

During the Carolingian period both ecclesiastical and civil

authorities had promulgated numerous decrees against usury,

including excommunication for laymen guilty of usury.17 Scholastic

analysis proper may be said to begin with St. Anselm of Canterbury,

“the first medieval author to suggest the similarity of usury and

robbery . . . one of the earliest indications that usury is to be

considered a sin against justice.”18 In the high middle ages the

discussion of usury became more focused and clear. At the same time

454 Thomas Storck

19For a somewhat different interpretation of the natural law basis of the usury

prohibition, see Christopher A. Franks, “The Usury Prohibition and Natural Law,

a Reappraisal,” The Thomist 72, no. 4 (October 2008): 625–60.

20See also the De Malo, q. 13, a. 4.

writers sometimes took as the basis for their reprobation of usury a

ground that was subsequently to be disavowed or at least to fail to

find much support in other authors, for example, the selling of time,

which was held to occur in usury; the Aristotelian doctrine that

money was not fruitful or that money was purely a measure; and the

idea that a loan had to be gratuitous (cf. Lk 6:35) and thus the lender

could not hope for or receive any recompense beyond a return of

the principal. But the bases that were to provide the best means of

understanding the sinfulness of usury were also frequently mentioned,

and in the case of St. Thomas, constituted his principal

argument against it. These bases are chiefly the consumptible nature

of money, and hence the fact that in loaning money the same thing

is not returned but something of the same kind and value, and thus

ownership in a sense passes to the borrower. The important point

about the development of scholastic doctrine on usury is that almost

all writers sought to ground the Church’s prohibition in the natural

law itself, however variously they explained it.19

St. Thomas’ most mature discussion of usury is in the Summa

theologiae II-II, q. 78.20 I will quote extensively from the Respondeo

from article 1, which contains his theory in a nutshell.

I answer that to receive usury for money loaned [mutuata] is in

itself unjust, because that is sold which does not exist, by which

clearly an inequality is constituted which is contrary to justice.

For the evidence of which it must be known that there are

certain things the use of which is the consumption of those

things; as we consume wine by using it for drinking or we

consume wheat by using it for food. Whence in such things the

use of a thing ought not to be computed separately from the

thing itself; but to whomever is granted the use from that fact

itself is granted [possession of] the thing; and on account of this

in such things through the loan [mutuum] ownership is transferred.

If anyone therefore wishes to sell separately the wine, and

again wishes to sell the use of the wine, he would sell the same

thing twice, or he would sell that which does not exist; whence

clearly he would sin by injustice. And by a similar reason he

commits injustice who loans [mutuat] wine or wheat seeking to

be given two recompenses; one indeed the restitution of an equal

Is Usury Still a Sin? 455

21Canon 13 forbids Christian burial to usurers (Denzinger, 716).

22Denzinger, 906. “The Council of Vienne presents a variety of difficulties. With

the exception of some fragments, the acts of the Council have perished . . . .

Joannes Andreas . . . tells us that Pope Clement V made very considerable

modifications in the constitutions . . . hence it is difficult to decide what decrees

were passed in the Council” (Cleary, The Church and Usury, 74–75).

23On the contractus trinus, see Noonan, The Scholastic Analysis of Usury, 202–29,

and Cleary, The Church and Usury, 126–32.

amount of the thing, the other, on the other hand, the price of

the use which is called usury.

Below I will consider this argument in more detail and attempt to

show how it provides a solid intellectual justification for the

proposition that in a loan of mutuum nothing may be asked except

the principal, unless some other title to interest is also present.

In addition to numerous papal condemnations and those by

local councils, it is worth mentioning the several condemnations of

usury by ecumenical councils during this period, including Lateran

II in 1139,21 Lateran III in 1179, Lyons II in 1274, Vienne in

1311–12,22 and Lateran V in 1512–17. I will mention this latter again

in connection with the question of the montes pietatis.

Although as I said, in view of the repeated condemnations of

usury by the Church, it was extremely rare for anyone directly to

defend the practice during the scholastic period, the needs of

business, or it may be the greed of men, sought ways to ensure a safe

and guaranteed return and yet avoid the sin of usury or at least the

severe canonical penalties to which usurers were subject. One such

method was the contractus trinus or triple contract.23

Briefly, a contractus trinus was a three-fold contract existing

between two business partners. The first contract was the simple

contract of partnership by which one partner undertook to provide

the funds and the other to do the trading. The second contract was

a contract of insurance by which the active partner insured the

principal of the inactive partner, and the third contract, similarly a

contract of insurance by which the inactive partner was guaranteed

a profit, smaller than the enterprise was likely to make, but guaranteed,

whereas the profit of the partnership itself was always in some

doubt due to uncertain business conditions, the possibility of loss,

etc. The silent partner paid for the two contracts of insurance by

forgoing the difference between the profit he might have made as a

456 Thomas Storck

24On the census, see Noonan, The Scholastic Analysis of Usury, 230–48, and Cleary,

The Church and Usury, 121–26.

25On implicit contracts, see Noonan, The Scholastic Analysis of Usury, 269–80, and

Cleary, The Church and Usury, 153–55.

full partner and what he would receive as guaranteed profit, say the

difference between an expected 8% and a guaranteed 4%. Thus even

if the enterprise miscarried the active partner would be required to

restore the principal plus a guaranteed profit to the inactive partner.

Although a bull of Sixtus V in 1586 could be interpreted as condemning

the contractus trinus, it was largely without effect. Theologians

argued that it did not ground its condemnation of the triple

contract in natural law, but was merely positive legislation on the

part of the pope, and in addition that its apparent ambiguity left

doubt as to exactly what contracts were included in its strictures.

During the sixteenth century it became widely used even without

definitive approval by the Church.

The other popular contract used to avoid usury was the

census or rent-charge.24 The census was a curious sort of contract, at

least to modern ears. In its original form someone would buy the

right to receive the income, or even the actual produce, from some

definite thing, such as a farm. Later, with the personal census, this was

extended to be merely the right to a return from the work of a

certain person, or a census could be established based upon the tax

revenue of a city or even upon the income from another and prior

census. In addition, the census contracts had many variations, for

example, some provided that the census could be terminated at the

call of the buyer or of the seller or of either party. Pope Martin V in

1425 approved the more conservative types of the census, but the

more exotic and speculative kinds never received official approval,

although they were defended by some theologians.

Both the contractus trinus and the census assumed many forms

according to the needs or wishes of merchants. Even more remarkable,

however, was the growth of the notion of implicit contracts.25

Merchants, and even the notaries who drew up contracts, often did

not take the trouble to put them in the form required by theological

authority, e.g., to specify clearly and distinctly the three parts of a

contractus trinus, so that a contract document that was phrased

ambiguously might appear on its face to be a contract of mutuum,

Is Usury Still a Sin? 457

26Duke William V of Bavaria in 1581 had tried to stop this movement toward

easy acceptance of loosely-worded contracts by drawing up several model contracts

for use by his subjects. See Cleary, The Church and Usury, 154–55.

27Noonan, The Scholastic Analysis of Usury, 279.

with the guaranteed return simply an instance of usury.26 This too

found its theological defenders who developed the theory, which

became generally accepted, that if a contract, no matter how its

wording ran, could be analyzed into some acceptable type, then it

was licit, and that merchants needed to have only an implicit

intention of entering into some kind of licit contract, even if they

could not state what that was. “Not only were the effects of the

triple contract and census those of a loan, but even their form did not

need to be explicitly different from a loan, if the form could be

analytically reduced to a licit contract.”27

Although among Catholics usury as such still found almost

no defenders in the sixteenth and seventeenth centuries, theological

opinion working hand in hand with the inventiveness of merchants

and lawyers had succeeded in furnishing several substitutes that

allowed for both safety of the principal and a guaranteed return. But

before discussing the dramatic, if confusing, turn of affairs after 1745,

we must look at the titles to legitimate interest on loans that had

been developing since the middle ages, and that ultimately became

of more significance than either the contractus trinus or the census,

because they could be applied to a loan contract directly and without

any necessity for using a particular form of words in drawing up the

contract. These were the titles to legitimate interest that were

considered extrinsic to the mutuum contract itself, that is, they might

or might not exist depending on extrinsic circumstances, even if

some of these circumstances were nearly always present. These were

chiefly lucrum cessans and damnum emergens.

Lucrum cessans and damnun emergens are in a sense two sides of

the same coin. The first refers to the profit that someone might have

made with his money had he not instead made a loan of mutuum, and

the second is damage or loss that a lender suffered or might suffer

because he did not have access to his money for the duration of a

loan. Admitted in principle, at least in isolated cases, early in the

debate, they become generally accepted later. One point to note,

however, is that here the question of one’s intention in making a

loan, a point that loomed large at certain times in the usury debates

458 Thomas Storck

28On the montes, see Cleary, The Church and Usury, 106–13, Noonan, The

Scholastic Analysis of Usury, 294–310, and Umberto Benigni, “Montes Pietatis,” in

The Catholic Encyclopedia, vol. 10, 534–36.

29For the text of the decree, see Denzinger, 1442–44.

and that we have not looked at, must be mentioned. If a merchant

accustomed to trading used a sum of money for a loan of mutuum

instead of in a business venture, then clearly he could claim lucrum

cessans, since he was always engaged in profitable activities with his

money. But what of someone who simply wanted a safe means of

earning a return? It is true that theoretically he could engage in

trade and therefore would qualify for lucrum cessans, but in many

cases there was no real likelihood that he would do so, either

through inexperience or fear of loss, for example. I raise this point

here in connection with the extrinsic titles, and we will look at it

again when we discuss the moral questions of lending in today’s

economy.

One last subject that must be mentioned in our historical

review are the montes pietatis.28 These were institutions, sponsored

usually by municipal governments or the Church, which made loans

at low rates of interest to provide an alternative to usurers. They had

some similarities to pawn shops in that they required that a pledge

be left to cover the possibility of the loan not being repaid. As a rule

they charged interest to cover their expenses, including salaries of

their employees. Was this interest usury, and therefore despite the

good intentions of their founders were the montes illicit? Previously

it had been generally held that a loan of mutuum could be made only

by a merchant who diverted funds to a loan, and probably out of

charity toward the borrower. To justify the montes seemed to open

the way for justification of lending itself as a business, for if the

montes could charge for their employees’ salaries, why could not a

private pawnbroker do the same? Because of considerations such as

this, they had many opponents, but the popes gave their approbation

to numerous individual montes throughout Italy, and definitive

approval came in 1515 with their acceptance by the Fifth Lateran

Council, despite opposition by the famous Thomistic commentator,

Cardinal Cajetan.29 We will see that this approval of interest charges

for expenses figures in our discussion below of licit and illicit

interest.

Is Usury Still a Sin? 459

30Noonan, The Scholastic Analysis of Usury, 357.

31Denzinger, 2546–50.

Questions concerning what was and was not usury continued

to be debated, sometimes bitterly, by theologians throughout

Catholic Europe down to the middle of the eighteenth century. At

this point (1745) there appeared the papal encyclical, Vix pervenit,

already mentioned. Vix pervenit was the most extended discussion of

usury ever to come forth from a pope, and it reaffirmed the essentials

of the traditional teaching, while at the same time giving express

allowance for extrinsic titles. Although originally addressed only to

the bishops of Italy, and thus not a teaching binding on the entire

Church, “it was extended to the universal Church by a decree of the

Holy Office of July 28, 1835.”30 Since it is the controlling authority

for our discussion, I will quote it again and more fully.

The nature of the sin called usury has its proper place and origin

in a loan contract [in contractu mutui]. This financial contract

between consenting parties demands, by its very nature, that one

return to another only as much as he has received. The sin rests

on the fact that sometimes the creditor desires more than he has

given. Therefore he contends some gain is owed him beyond

that which he loaned, but any gain which exceeds the amount he

gave is illicit and usurious.

One cannot condone the sin of usury by arguing that the

gain is not great or excessive, but rather moderate or small;

neither can it be condoned by arguing that the borrower is rich;

nor even by arguing that the money borrowed is not left idle, but

is spent usefully, either to increase one’s fortune . . . or to engage

in business transactions. The law governing loans consists

necessarily in the equality of what is given and returned; once the

equality has been established, whoever demands more than that

violates the terms of the loan . . . .

By these remarks, however, We do not deny that at

times together with the loan contract certain other titles—which

are not at all intrinsic to the contract—may run parallel with it.

From these other titles, entirely just and legitimate reasons arise

to demand something over and above the amount due on the

contract.31

Shortly after the appearance of Vix pervenit occurred the

series of events, chiefly responses from various Roman congregations,

which seem to some to constitute the Church’s repudiation

460 Thomas Storck

32On developments in the early nineteenth century, see Noonan, The Scholastic

Analysis of Usury, 377–82, and Cleary, The Church and Usury, 168–77.

33Some of these are reproduced in Denzinger, 2743 and 3105–09.

34In addition, in a letter to an Irish priest in 1823, Rome specifically reaffirmed

the doctrine of the encyclical. Cleary, The Church and Usury, 169–72.

35This is numbered as section 2 of the Paulist transation as published in Seven

Great Encyclicals and elsewhere. The Latin text runs, “Malum auxit usura vorax,

quae non semel Ecclesiae judicio damnata, tamen ab hominibus avidis et

quaestuosis per aliam speciem exercetur eadem.” The characterization of usury as

vorax was traditional and goes back at least to the Roman poet Lucan, Pharsalia, bk.

I, 181.

of its hitherto constant teaching.32 The decisions emanated from

either the Holy Office, the Sacred Penitentiary, or the Sacred

Congregation of Propaganda, beginning in 1822,33 some of them

with explicit approval by the reigning pope. They were addressed to

confessors and their general tenor was the same: persons demanding

interest on loans within the limits allowed by civil law should be left

undisturbed and not denied absolution. Sometimes the proviso was

added that penitents should be prepared to submit to any future

decision of the Holy See. At the same time Rome never retracted

the doctrine of Vix pervenit and even reaffirmed and applied it to the

entire Church, as we saw above.34

After this period of acquiescence in the practice of taking

interest on loans without any clear extrinsic title we come to more

recent times, where the first thing to mention is the condemnation

of usury in 1891 by Leo XIII in the encyclical Rerum novarum.

Rapacious usury has increased the evil [of unrestrained competition,

etc.] which, more than once condemned by the Church, is

nevertheless, under a different form but in the same way,

practiced by avaricious and grasping men.35

Although Leo does not explain what he means by “under a different

form,” I think it is clear that what he terms usury is simply what the

Church always meant by it, especially since he states that it has been

“more than once condemned.” Thus we can see this as a simple

reaffirmation of the traditional doctrine as stated previously in Vix

pervenit.

Then the 1917 Code of Canon Law (canon 1543) reads,

Is Usury Still a Sin? 461

36The footnotes to canon 1543 refer to the decrees of Lateran V, to the encyclical

Vix pervenit, and to decisions of Roman congregations on usury in 1821 and 1878.

Of course, the 1917 Code, since it has been abrogated by the 1983 Code, is now

simply a witness to official understanding of doctrine at the time.

37Like Pope Leo, Benedict does not say what he means by the term “usury.” But

there is reason to think that he had in mind the historical rather than the modern

notion. In the same section of the encyclical, the English version when speaking of

“the experience of micro-finance,” goes on to make mention of “the birth of

pawnbroking.” This might seem a strange thing to bring up until one looks at the

Latin text of the encyclical, as well as the versions in the Romance languages (all

available on the Vatican website). Instead of “the birth of pawnbroking,” the Latin

text has “de Montibus Pietatis constitutis,” while the French has “la création des

Monts de Piété,” the Italian, “alla nascita dei Monti di Pietà,” and the Spanish, “el

origin de los Montes de Piedad.” Clearly Pope Benedict was thinking of medieval

conditions and institutions in this section.

If a fungible thing is given to someone in such a way that it

becomes his and later is to be returned only in the same kind, no

gain can be received by reason of the contract itself; but in the

payment of a fungible thing, it is not in itself illicit to contract for

the gain allowed by law, unless it is clear that this is excessive, or

even for a greater gain, if a just and adequate title be present.36

Here again we see a restatement of the doctrine of Vix pervenit,

followed, it is true, by words that seem to deny much significance to

the doctrine. Finally in the very recent encyclical of Benedict XVI,

Caritas in veritate (2009), in section 65, after noting the necessity of

reorienting the financial sector toward the common good, the pope

twice mentions protecting and helping to defend “the more

vulnerable” or the “weakest members of society” from usury.37 But

let us now conclude our historical treatment and enter upon a

discussion of whether and how the usury doctrine still binds

consciences today.

3. Was there a change in the Church’s teaching?

Without question the vast majority of those who are at all

aware of the usury question would say that there was at least some

change or evolution in the Church’s teaching, however they might

want to explain it. For certainly it appears that usury is no longer a

sin that Christians need to worry about. But there is something

curious about saying the Church’s teaching has changed. When did

462 Thomas Storck

38“Development in Moral Doctrine,” Theological Studies 54, no. 4 (December

1993): 663.

this occur? When did usury in the sense which we mean by it here

cease to be a sin? If we look in the first half of the nineteenth

century as the best place to locate such a change, we find no

statement by the Church during that time that says anything about

repudiating the teaching of Vix pervenit, but rather the contrary, as

we saw. Then in Rerum novarum we have a matter-of-fact reminder

of the evil of usury, in the 1917 Code a bald-faced assertion of the

medieval doctrine in its full rigor, followed by qualifications whose

meaning and significance we will look at below, and most recently

another denunciation of usury in Caritas in veritate. Even John

Noonan, in an article written expressly for the purpose of proving

that there had been changes, or developments as he called them, in

moral doctrine, admits: “Formally it can be argued that the old usury

rule, narrowly construed, still stands: namely, that no profit on a loan

may be taken without a just title to that profit.”38 It is true that he

continues, “in terms of emphasis, of perspective, of practice, the old

usury rule has disappeared.” What this means and what, if anything,

can or should be done about this we will take up subsequently. But

I do not think that there is any special difficulty in saying that Pope

Benedict XIV’s teaching from 1745 still retains its force today. One

can certainly find a nearly universal practical neglect of the question

of usury, but one looks in vain to find that the Church ever

retracted, abrogated, or substantially altered her teaching on usury.

Something of course did occur, and that we will try to understand

and explain, but no one should have any hesitation about proclaiming

the doctrine of Vix pervenit as the doctrine of the Catholic

Church.

We have seen that beginning in the sixteenth century interest

began to be routinely justified on loans by one or more of the

extrinsic titles, and that about the same time the contractus trinus and

the census allowed a lender pretty much the same security that he

might seek in a simple loan at interest. Moreover, by the late

sixteenth century these contracts did not even have to be correctly

drawn up in order to avoid the stigma of usury, for an implicit good

intention was widely accepted as sufficient. There is no doubt that

theologians, well before the nineteenth century, while formally

upholding the condemnation of usury, allowed for much that their

Is Usury Still a Sin? 463

39Aquinas, for example, had denied lucrum cessans because of the merely

speculative quality of the lost gain. See Summa theologiae II-II, q. 78, a. 2, ad 1.

40Noonan, The Scholastic Analysis of Usury, 317.

41John F. Cronin, Catholic Social Principles: the Social Teaching of the Catholic Church

Applied to American Economic Life (Milwaukee: Bruce, 1950), 44–45. Apparently this

was nothing new, though, since Domingo de Soto (d. 1560) complained that few

theologians of his day understood the details of the banking system. Cited in

Noonan, The Scholastic Analysis of Usury, 336.

medieval predecessors would have looked askance at.39 Although in

some instances these developments were sanctioned by Rome, by no

means all of them were. The real change, not in doctrine, but in the

application of that doctrine to economic life, came during these

centuries and not in the 1820s or 1830s. Let us try to understand

what took place.

When one reads the subtle analyses of usury by the theologians

of the Baroque era, one cannot help but be impressed by their

painstaking efforts. Nevertheless, the increasing complexity of

commercial life made it difficult to say with any assurance what was

and what was not usury. Even in the fifteenth century, Fra Santi

(Pandolfo) Rucellai, who had been a banker before entering the

Dominican order and who, at Savonarola’s request, wrote a treatise

on the morality of exchange banking, was unable to give a definite

opinion on certain points.40 And things did not improve as time

went on and as contracts and commercial practices grew more

exotic. By the beginning of the nineteenth century, or so it appears

to me, the Roman authorities basically threw up their hands and

decided it was better to allow penitents to take moderate rates of

interest on loans than to continue to analyze contracts and reach

decisions on matters more and more opaque, especially because in

many or most cases probably some kind of just title to interest did

exist. In general moralists and moral theology textbooks began to

retreat from an engagement with the facts of economic life. Fr. John

Cronin notes this as follows:

Our moral theology texts were, in general, hopelessly out of date

in applying moral principles to economic life. Apparently few

moralists knew enough about economic facts to work out a

realistic and complete solution. Hence moral teaching generally

confined itself to obvious justice and injustice and clearly defined

motives.41

464 Thomas Storck

42Francis X. Funk in the middle of the nineteenth century suggested such an

explanation based on the changed use of money. Cf. Noonan, The Scholastic

Analysis of Usury, 385–87. Heinrich Pesch proposed that the “expansion of

production and commerce” and the fact that “everyone who has the necessary

funds at his disposal could actively participate in commercial life” justified routine

interest taking. Lehrbuch der Nationalökonomie/Teaching Guide to Economics, translated

by Rupert J. Ederer (Lewiston: Edwin Mellen, c. 2003), vol. 5, book 2, 197–99.

John A. Ryan stated, “The money in a loan [today] is economically equivalent to,

convertible into, concrete capital” (Distributive Justice, 3rd ed. [New York:

Macmillan, 1942], 124).

In other words, it was easier to say of those involved in transactions

the usurious nature of which was doubtful, that they ought not to be

disturbed, than either to try to apply the principles of the usury

doctrine to the complex facts of the situation or still less to make the

gigantic efforts required to orient the economy away from financial

speculation and emphasis on individual enrichment toward an

economy based on production for use and a recognition of the

claims of society as a whole.

This change in the Church’s approach to usury did not pass

unnoticed. Various authors explained it in various ways, commonly

arguing, however, that in modern times the nature of economic

activity or the function of money differed essentially from what

obtained in the middle ages.42 In our last section we will try to

understand what really happened when we try to understand what

the Church’s teaching on usury should mean for Christians today.

4. Argumentation in support of scholastic doctrine

Before proceeding to look at the significance for us today of

the Church’s prohibition of usury, I want to argue anew for the

correctness of the teaching of Vix pervenit, based on St. Thomas’

argumentation, which looks to the consumptible nature of money

as the key point. I do this so that we might approach the question of

the meaning of the usury rule with a positive appraisal of the

scholastic doctrine and regard it as something that must be understood

rather than disregarded as a relic of the past.

We might remember that as far back as Ejiciens thinkers had

distinguished between something loaned that “deteriorates in use”

and something that, “when it is lent, is neither diminished nor

Is Usury Still a Sin? 465

43I noted above that St. Thomas rejected the “wear and tear” argument;

however, this argument seems to me the best reason why it is licit to charge for the

use of something such as a house, whose ownership is separable from its use.

44Ryan, Distributive Justice, 176.

deteriorated.”43 Money is certainly the most common representative

of the latter class, but is not the only one. As we saw, St. Thomas

based his argument on the more general class of consumptible things.

And I think that if we look at more humble consumptibles, such as

food or drink, we might be able to look at the question afresh and

understand the Church’s doctrine better. Let us consider the

following analogy.

Suppose we have a small businessman who owns a catering

service, catering food and drink, and let us suppose further that all

the supplies that accompany the food and drink are disposable, such

as plastic forks, paper napkins, etc., so that there is nothing he

provides to his customers that he must reuse. Now what may he

licitly charge his customers for? For the replacement cost of the food

and drink and the other disposable supplies, certainly. In addition, he

may charge each customer for a share of the overhead for his shop,

including rent, utilities, etc., his delivery van, for wages for any

employees, for any legitimate interest payments he must make, and

for a “return for his labor of organization and direction, and for the

risk that he underwent.”44 But as regards the food and other

consumptibles that he provides, it is hard to see how he can charge

a customer for more than the amount purchased. If he furnishes 100

bottles of wine, the caterer may charge what it will cost him to

replace a similar kind and amount of wine. Anything he charges a

customer in addition must come from one of the other titles I

mentioned above, such as costs incident to the running of his

business and wages for his employees and for himself.

This last is what is generally called profit, a term that is often

used loosely and inexactly. As we see here, Ryan reduces it to the

proprietor’s labor, plus his entrepreneurial abilities and risks. It is not

an open-ended invitation to charge as much as the market will bear,

but rather there must exist some title of justification such as Ryan

enumerates here. Looked at in this way the limiting of the reimbursement

for the consumptibles sold seems obvious. Of course the

caterer cannot charge for 110 bottles of wine if he delivers only 100.

His profit, in reality his salary and compensation for risk, etc., comes

466 Thomas Storck

45“The great majority of businessmen in competitive industries do not receive

incomes in excess of their reasonable needs. Their profits do not notably exceed the

salaries that they could command as hired managers, and generally are not more

than sufficient to reimburse them for the cost of education and business training,

and to enable them to live in reasonable conformity with the standard of living to

which they have become accustomed” (Ryan, Distributive Justice, 190).

46Pesch, Lehrbuch der Nationalökonomie/Teaching Guide to Economics, vol. 5, bk. 2,

200.

47Another way of looking at this example that yields the same conclusion is to

regard a mutuum of money as a sale. As in the case of the caterer who provides 100

otherwise and is not gained at the expense of expecting more in

return than what he supplied.

We can now easily apply this analogy to loans of mutuum.

Supposing someone is in the business of making loans, then similar

expenses could justly be taken from customers. The montes pietatis

acted in similar fashion. Of course the montes were not profit-making

in the sense that they intended to earn more than their expenses,

including salaries. But according to Ryan’s analysis of business, no

business is profit-making in the sense that it can justly seek as wide

profits as it can obtain. The owner can seek a fair “return for his

labor of organization and direction, and for the risk that he underwent.”

Although one cannot calculate such returns with mathematical

exactness, neither can one maintain that they have no theoretical

limit.45 And even if one were to argue that there should be no limit

on such a return for labor, skill and risk, still that is not the same as

saying that usury for the lending activity itself may be taken, for we

have seen that here the entrepreneur can require only the same

amount as the consumptible good that he has provided, “the equality

of what is given and returned,” as Benedict XIV taught.

Of course in the case of our caterer he receives immediate or

nearly immediate payment for his expenditure on food and other

consumptibles. A loan, however, is generally paid back after a period

of time, or gradually during such a period. Is not the lender entitled

to some compensation on account of this delay? No, for “the mere

time differential by itself does not cause a difference in value. There

must be added the possibility of earning a profit in the intervening

time period.”46 In other words, one must have a title such as lucrum

cessans or damnum emergens to justify receiving interest, for the mere

fact of delay by itself does not equate to the right to contract for

more than the principal.47

Is Usury Still a Sin? 467

bottles of wine and receives as part of his total payment the price of the 100 bottles,

no more and no less, if we look at money loaned as a sale of money we see that the

price of $100 is obviously $100. Any other just charges come from the same titles

as the caterer had, such as overhead expenses, wages, etc. For the product provided,

money, one can charge only what it is worth, which is always its face value.

I have argued both that the Church has not changed her

teaching on usury and that one can make a reasonable argument for

the validity of the intrinsic injustice of usury itself. On both these

points, it seems to me, assent to the scholastic teaching is not where

the real difficulty is. That lies elsewhere, in the question, what does

it mean? Or better, does it have any meaning except as an empty and

antiquated formalism? Assuming that we accept at least some of the

extrinsic titles and other practices that grew up during the Renaissance,

would adherence to the usury prohibition today make any real

difference in our economic and legal practices?

5. Application of usury theory to contemporary economies

If what I have said is correct—if, based both on arguments

from reason as well as on a failure to find that the Church ever

retracted her papal and conciliar teaching on usury, it is the case that

the “law governing loans consists necessarily in the equality of what

is given and returned”—then there are two chief questions that

concern us in this last section. In the first place, returning to my title,

Is Usury Still a Sin?, we have to ask what effect the intrinsic evil of

usury should have on the moral conduct of the Christian. Is there

anything that Christians should do or avoid in their financial or

economic behavior as a result of the sinfulness of usury? Secondly,

what meaning does usury have in an economy hopelessly enmeshed

in all kinds of interest-bearing transactions as a matter of course and

without a thought as to any justifying title? Given that for centuries

theologians have found it easy to justify most forms of interest, are

we committing the Church to a ridiculous anachronism, a relic of

the past? Are we hankering after a silly formalism in order to justify

something that it is easier and more honest simply to call interest on

a loan?

In regard to our first question, in light of the various Roman

decisions of the nineteenth century and of the 1917 Code, no one

468 Thomas Storck

48“Even higher rates of interest are not unheard of, as one Indiana payday lender

offered a loan of $100 with interest of $20 per day—an APR of 7,300%” (John

Skees, “The Resurrection of Historic Usury Principles for Consumption Loans in

a Federal Banking System,” Catholic University Law Review 55, no. 4 [Summer

2006]: 1132). As late as the mid-1970s most state usury laws set a limit of 10%, and

the model Uniform Consumer Credit Code proposed a maximum of 18%

(Lawrence P. Galie, “Indexing the Principal: the Usury Laws Hang Tough,”

University of Pittsburgh Law Review 37, no. 4 [Summer 1976]: 764).

49The 1978 Supreme Court decision, Marquette National Bank v. First of

Omaha Service Corp., 439 U.S. 299, made inevitable the eventual demise of state

laws regulating interest rates.

can be condemned for taking the legal or customary rate of interest

on a loan, provided that it is not excessive. The reason for this, I

argued above, is that the complexity of modern finance renders it

safer simply to allow moderate interest than to engage in probably

fruitless endeavors to determine the presence or absence of extrinsic

titles. The Church presumes these titles to exist generally and makes

the judgment that even if in some cases they do not, it is better for

the sake of consciences to ignore that fact. The remedy always exists,

moreover, for restitution to be made via almsgiving in case a

penitent is troubled or there seems a well-founded and probable case

of real usury.

Of course, it should go without saying that the interest rates

of loansharks and others on so-called payday or similar loans, which

can reach even 500% per annum, have clearly no justification in any

extrinsic title, and no Catholic can lawfully have anything to do with

such loans.48 Such usury is a serious offense against justice and ought

to be strictly prohibited by the civil law. Unfortunately, since 1978

in the United States judicial decisions and the gradual repeal of state

laws regulating usury have allowed such gross injustices to flourish.49

The ecclesiastical decisions of the 1820s and 1830s were

addressed to confessors and did not purport to change the usury

doctrine as expressed in Vix pervenit. So even though no one can be

criticized for taking moderate interest, I think that in some cases one

can detect the presence of usury in modern interest. For example,

while it is certainly correct to point out that today there is usually

opportunity for productive investment, and that therefore those who

put money out at mutuum but would otherwise invest it in some

manner are entitled to claim lucrum cessans, this reasoning does not

always hold. In certain cases of depression or recession, “the profit

Is Usury Still a Sin? 469

50Paul Samuelson, Economics, 9th ed. (New York: McGraw-Hill, 1973), 336.

51John F. Cronin, Economics and Society (New York: American Book Co., 1939),

131.

52John P. Kelly, Aquinas and Modern Practices of Interest Taking (Brisbane: Aquinas

Press, 1945), 33.

53Summa theologiae II-II, q. 78, a. 2, ad 2.

expectations of businessmen are likely to be so low that they would

not employ men and machines on new investment projects even if

you let them borrow temporarily at a zero interest rate.”50 In such

cases “some savings will follow the sterile path of debt-financed

consumption, with eventual repayment at the expense of current

consumption.”51 In other words, in such situations a lack of

consumer demand makes spending on productive investment

unprofitable, so it is likely that someone putting money out at

mutuum is not truly forgoing investment profit, because no profit is

to be had for the time being. Thus when there is excess savings with

no outlet for profitable use, it is hardly in accord with the common

good to reward those who choose to loan by giving them a rate of

interest based on a merely hypothetical opportunity cost.

We must remember that since the extrinsic titles were never

given official approval except as compensation for lost opportunities

for investment earnings “they can never be advanced as a justification

of a general loan system based on motives of profit.”52 Thus it

seems hard to justify lucrum cessans for those who have no real

intention of making investments, simply because such opportunities

are readily available to all. What of ordinary savers who desire to put

their money into insured savings accounts at banks and who because

of inexperience or fear of loss have no desire to invest in business

ventures, even to buy shares of stock or mutual funds? They are not

undergoing a real loss of investment income on account of their loan

of money to the bank, since otherwise they might have simply

hidden the money in a mattress. I do not see how the merely

theoretical possibility that they could make gains from investments

applies to them, since they are too risk-averse to do so. Can they

licitly claim interest on bank accounts and under what title? I think

there is a reason for thinking such interest just, but it is not one of

the extrinsic titles that theologians approved. It is the mere fact of

inflation. “He who receives a loan of money . . . is not held to pay

back more than he received by the loan”53—but with our ability to

470 Thomas Storck

54Garrick Small, “Rapacious Usury: Fact or Fiction?” unpublished paper

presented at the Campion Fellowship meeting in Toongabbie, Australia, in January

2002, p. 7. Used with permission of the author.

monitor the level of inflation in an economy, we realize that money

simply left alone, as in a mattress, will actually diminish in value.

Therefore payment for inflation for money deposited in a bank or

credit union seems just.

Moreover, it does seem possible to roughly distinguish a just

rate of interest, anything above which would be usury. If we

consider the rate of interest on government bonds, historically the

safest investment possible, as risk-free for all practical purposes, we

can then examine other interest rates in their light. The following

discussion refers to Australian interest rates.

For example, on 5 January 2002, the ten year government bond

rate was 5.21%, and home mortgages were 6.3% while inflation

was about 2.5%. The gap between home mortgage rates and

government bonds of about 1.1% was due to the riskiness of

lending to home buyers compared to the government. By

subtracting inflation, the government bond rate is reduced to

about 2.7% which is known as the real rate of interest. Markets

anticipate a fall in rates, so there is a negligible liquidity preference

effect. This means that 2.7% of the loan interest on government

bonds, home mortgages and all other lending is purely the

result of the expectation of the lender for a return in excess of the

principle. That looks suspiciously like usury.54

This analysis justifies the interest paid on government bonds only on

the basis of inflation, apparently without considering the presence or

absence of any extrinsic title. Nevertheless it suggests an interesting

way of approaching the question. Another method of analysis is to

recall that interest legitimately taken is compensation for an investment

opportunity forgone. Thus a just rate of interest could in

principle be formulated based on the expected return of an investment

which the lender had the opportunity of profiting by, assuming

that it was possible to specify a general rate of profit for any particular

place and time.

Abstracting from statutory regulation of interest, and from any

special expense or risk of loss incurred by a lender . . . the

criterion [of a just rate of interest] is the just rate of profit from

investment. This does not mean that the just rate of interest is

Is Usury Still a Sin? 471

55Lewis Watt, “Usury in Catholic Theology” in Readings in Economics, ed.

Richard Mulcahy (Westminster, Md.: Newman, 1959), 278.

56Kelly, Aquinas and Modern Practices of Interest Taking, 20.

57“The Idea of a Christian Society” in Christianity and Culture (San Diego:

Harcourt, Brace Jovanovich, [1939] 1977), 77.

58Pope Benedict also commends credit unions in his encyclical, Caritas in veritate,

65.

exactly the same as the just rate of profit . . . [for] the profits of

any business are due, at least in part, to the activities of those who

are running it; and also that ordinary investment involves

financial risks which are not inherent in loans of money. Consequently

. . . the just rate of interest will be lower than the just

rate of profit. How much lower? Evidently by as much as

corresponds to the differential advantage of lending rather than

investing.55

We must remember that “the modern world . . . has ordered

its economic affairs with little reference to moral scruples, and in

such a world it is exceedingly difficult to assess the moral implications

of loan contracts.”56 Often we will agree with T. S. Eliot’s

confession: “I seem to be a petty usurer in a world manipulated

largely by big usurers.”57 The point of these last examples is simply

that even in an economy that gives and receives interest as a matter

of course we can at times distinguish what might be legitimate

interest from what is probably usury. Although the praxis of the

Church for the past two hundred years has been not to disturb

consciences on the subject, that does not mean that there is anything

wrong with discussion of the matter and with attempts to identify

usury where it is present. An increased consciousness of the evil and

the ubiquity of usury today (cf. Rerum novarum) cannot but help to

make Christians more aware of what to our ancestors was one of the

greatest of sins.

Another benefit of discussion of the presence of usury in

today’s financial transactions is that it might lead to steps to establish

institutions which avoid or minimize usury. One possible means of

overcoming loansharking, for example, is an institution with some

resemblance to the medieval montes pietatis, the credit union.58 A

commercial bank has stockholders who expect to receive a return on

their investment. If establishing a commercial bank can be considered

as a legitimate investment activity, then some return for the

472 Thomas Storck

59One very important topic which space prevents me from taking up is the

question of bank-created money. Although it would be possible for a banking

system to work otherwise, ours operates by creating money as debt. Most of the

money supply today originates in this way. The banking system creates money out

of nothing and yet banks charge interest on this money as they loan it out to

borrowers. Almost all of the interest on such loans seems to be nothing but usury.

See Rupert J. Ederer, “Is Usury Still a Problem?” Homiletic & Pastoral Review 84,

nos. 11–12 (August–September 1984): 18–20.

60Islamic banks claim to engage in risk-sharing agreements with their borrowers,

although there is some dispute about whether in fact they do that as much as they

claim. See Timur Kuran, “Islamic Economics and the Islamic Subeconomy,”

Journal of Economic Perspectives 9, no. 4 (Fall 1995): 155–73. Kuran claims that the

whole notion of Islamic banking originated with Maududi (or Mawdudi), an

Indian/Pakistani Moslem theorist of the mid-twentieth century. But see the two

bibliographies on Islamic banking, part of a bibliography on Islamic law, the first

of which lists works earlier than Maududi’s activity: Law Library Journal 78, no. 1

(Winter 1986); the section on Islamic banking is at 161–62. The update appeared

in the same journal, vol. 87, no. 1 (Winter 1995); the section on banking appears

at 122–25.

bank stockholders is just. But still, whatever the stockholders receive

must be paid for by higher interest rates on loans and higher bank

fees. This is not the case with credit unions, which are not profitmaking

institutions in that sense. Of course they pay wages to their

employees, as did the montes pietatis, and for the necessary expenses

of providing loans.59

Today the only financial institutions that operate with the

goal of avoiding usury altogether are Islamic banks.60 If usury is

unjust, why are Christians not as active in promoting these sorts of

financial institutions as Moslems? Let us in conclusion look briefly

at a few more financial practices and institutions which Christians

might promote were we to recover the zeal for economic justice that

characterized Catholics at an earlier period.

The whole Christian doctrine of property with its responsibilities

of ownership which the modern world has forgotten is wrapped

up in this question of money and the taking of interest thereon.

If I am in possession of money, I am in possession of something

that is vital to the society in which I live. I, as a Christian,

therefore, have very definite responsibilities with respect to the

ownership of that money. Christian morality knows of no theory

of an unqualified and unconditional ownership of property of any

description. Property must be used according to its true end and

purpose and in the case of money that true end and purpose is as

Is Usury Still a Sin? 473

61Kelly, Aquinas and Modern Practices of Interest Taking, 46–47.

62Pius XI, Quadragesimo anno, 49 (Paulist translation).

a means of exchange. Therefore, the wrongful withholding of

that money from circulation for the purpose of making a profit

by waiting is a misuse of property.61

Such a doctrine of money is akin to Paul VI’s doctrine of property

in Populorum progressio.

[P]rivate property does not constitute for anyone an absolute and

unconditioned right. No one is justified in keeping for his

exclusive use what he does not need, when others lack necessities

. . . . If certain landed estates impede the general prosperity

because they are extensive, unused or poorly used, or because

they bring hardship to peoples or are detrimental to the interests

of the country, the common good sometimes demands their

expropriation. (23–24)

Clearly expropriation of funds that are being used merely in idle

usury should be a last resort, and normally the law will use financial

incentives and penalties to direct such funds toward uses more in

accord with the common good. But no Catholic need be afraid to

acknowledge that “the public authority, in view of the common

good, may specify more accurately what is licit and what is illicit for

property owners in the use of their possessions.”62 A Christian

society, then, by outlawing true usury completely, and by forbidding

or discouraging the kinds of contracts that during the Renaissance

helped undermine the usury prohibition among both theologians

and merchants, would seek to direct money toward its proper use.

Some form of credit union might be adequate to provide financing

for non-productive consumer loans. The demand for commercial

credit could be satisfied either by merchants diverting funds from

investments, and licitly claiming lucrum cessans, or by some form of

commercial credit union run by associations of businesses.

Just as in the Great Depression of the 1930s, so also now

events are forcing theologians and moralists to turn their attention to

the economy. But in reality, Catholics should have as lively a sense

of the demands of the moral law relative to the economy as they do

relative to sexuality or war.

474 Thomas Storck

63Cronin, Catholic Social Principles: the Social Teaching of the Catholic Church Applied

to American Economic Life, 43.

In the Middle Ages, it was taken for granted God’s law applied

to the totality of life. The idea of a double standard of morality,

with a strict code for private life and a minimum of moral

obligation for business and public life, is an innovation based on

philosophical and religious individualism of the eighteenth

century.63

However far we are today from a Christian society or a Christian

economy, the goal “to impress the divine law on the affairs of the

earthly city” (Gaudium et spes, 43) is always present. With respect to

usury the Church has been clear in setting forth a principle, a

principle it is true that must be intelligently applied to the complex

circumstances of financial life, but which nonetheless is a standard for

both individual and social conduct. The doctrine on usury establishes

a social goal, and even if we cannot fully achieve that now there are

various intermediate goals that we can work toward implementing. G

THOMAS STORCK is the author of The Catholic Milieu, Foundations of a

Catholic Political Order, Christendom and the West and numerous articles and

reviews on Catholic culture and social teaching. He is a member of the editorial board

of The Chesterton Review.

Maurice Allais, a french Nobel price, described the ex nihilo ( ex nihilo means out of nothing, out of thin air, out of a pen, out of a computer, out of a subtle robbery from your pocket…) creation of money by the banking

system as identical to the creation of money by “counterfeiters,”
the only difference being that those who profit are different.

He proposed, therefore, that although all banks would be
private, except for the Central Bank, all income derived by the

Central Bank’s creation of money should be returned to the
State, enabling the latter, under present circumstances, to do
away with practically the whole of the progressive tax on income.
This would eliminate the present circumstance where profits

and their beneficiaries are not transparent. Such revenues, he
wrote, “merely generate inflation, and by encouraging investments
that are not really profitable for the community…

The Wall Street Pentagon Papers: Biggest Scam In World History Exposed – Are The Federal Reserve’s Crimes Too Big To Comprehend ?

By David DeGraw, AmpedStatus

What
if the greatest scam ever perpetrated was blatantly exposed, and the US
media didn’t cover it? Does that mean the scam could keep going?
That’s what we are about to find out.

I understand the importance of the new WikiLeaks documents. However,
we must not let them distract us from the new information the Federal
Reserve was forced to release. Even if WikiLeaks reveals documents from
inside a large American bank, as huge as that could be, it will most
likely pale in comparison to what we just found out from the one-time
peek we got into the inner-workings of the Federal Reserve. This is the
Wall Street equivalent of the Pentagon Papers.

I’ve written many reports detailing the crimes of Wall Street during
this crisis. The level of fraud, from top to bottom, has been
staggering. The lack of accountability and the complete disregard for
the rule of law have made me and many of my colleagues extremely cynical
and jaded when it comes to new evidence to pile on top of the mountain
that we have already gathered. But we must not let our cynicism cloud
our vision on the details within this new information.

Just when I thought the banksters couldn’t possibly shock me anymore… they did.

We were finally granted the honor and privilege of finding out the
specifics, a limited one-time Federal Reserve view, of a secret taxpayer
funded “backdoor bailout” by a small group of unelected bankers. This
data release reveals “emergency lending programs” that doled out $12.3
TRILLION in taxpayer money – $3.3 trillion in liquidity, $9 trillion in
“other financial arrangements.”

Wait, what? Did you say $12.3 TRILLION tax dollars were thrown around
in secrecy by unelected bankers… and Congress didn’t know any of the
details?

Yes. The Founding Fathers are rolling over in their graves. The
original copy of the Constitution spontaneously burst into flames. The
ghost of Tom Paine went running, stark raving mad screaming through the
halls of Congress.

The Federal Reserve was secretly throwing around our money in
unprecedented fashion, and it wasn’t just to the usual suspects like
Goldman Sachs, JP Morgan, Citigroup, Bank of America, etc.; it was to
the entire Global Banking Cartel. To central banks throughout the world:
Australia, Denmark, Japan, Mexico, Norway, South Korea, Sweden,
Switzerland, England… To the Fed’s foreign primary dealers like Credit
Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland
(U.K.), Barclays (U.K.), BNP Paribas (France)… All their Ponzi players
were “gifted.” All the Racketeer Influenced and Corrupt Organizations
got their cut.

Talk about the ransacking and burning of Rome! Sayonara American middle class…

If you still had any question as to whether or not the United States
is now the world’s preeminent banana republic, the final verdict was
just delivered and the decision was unanimous. The ayes have it.

Any fairytale notions that we are living in a nation built on the
rule of law and of the global economy being based on free market
principles has now been exposed as just that, a fairytale. This moment
is equivalent to everyone in Vatican City being told, by the Pope, that
God is dead.

I’ve been arguing for years that the market is rigged and that the
major Wall Street firms are elaborate Ponzi schemes, as have many other
people who built their beliefs on rational thought, reasoned logic and
evidence. We already came to this conclusion by doing the research and
connecting the dots. But now, even our strongest skeptics and the most
ardent Wall Street supporters have it all laid out in front of them, on FEDERAL RESERVE SPREADSHEETS.

Even the Financial Times, which named Lloyd Blankfein its 2009 person of the year,
reacted by reporting this: “The initial reactions were shock at the
breadth of lending, particularly to foreign firms. But the details paint
a bleaker and even more disturbing picture.”

Yes, the emperor doesn’t have any clothes. God is, indeed, dead.
But, for the moment at least, the illusion continues to hold power. How
is this possible?

To start with, as always, the US television “news” media (propaganda)
networks just glossed over the whole thing – nothing to see here, just
move along, back after a message from our sponsors… Other than that
obvious reason, I’ve come to the realization that the Federal Reserve’s
crimes are so big, so huge in scale, it is very hard for people to even
wrap their head around it and comprehend what has happened here.

Think about it. In just this one peek we got at its operations, we
learned that the Fed doled out $12.3 trillion in near-zero interest
loans, without Congressional input.

The audacity and absurdity of it all is mind boggling…

Based on many conversations I’ve had with people, it seems that the
average person doesn’t comprehend how much a trillion dollars is, let
alone 12.3 trillion. You might as well just say 12.3 gazillion, because
people don’t grasp a number that large, nor do they understand what
would be possible if that money was used in other ways.

Can you imagine what we could do to restructure society with $12.3 trillion? Think about that…

People also can’t grasp the colossal crime committed because they
keep hearing the word “loans.” People think of the loans they get. You
borrow money, you pay it back with interest, no big deal.

That’s not what happened here. The Fed doled out $12.3 trillion in
near-zero interest loans, using the American people as collateral,
demanding nothing in return, other than a bunch of toxic assets in some
cases. They only gave this money to a select group of insiders, at a
time when very few had any money because all these same insiders and
speculators crashed the system.

Do you get that? The very people most responsible for crashing the
system, were then rewarded with trillions of our dollars. This gave
that select group of insiders unlimited power to seize control of assets
and have unprecedented leverage over almost everything within their
economies – crony capitalism on steroids.

This was a hostile world takeover orchestrated through economic
attacks by a very small group of unelected global bankers. They
paralyzed the system, then were given the power to recreate it according
to their own desires. No free market, no democracy of any kind. All
done in secrecy. In the process, they gave themselves all-time
record-breaking bonuses and impoverished tens of millions of people –
they have put into motion a system that will inevitably collapse again
and utterly destroy the very existence of what is left of an economic
middle class.

That is not hyperbole. That is what happened.

We are talking about trillions of dollars secretly pumped into global
banks, handpicked by a small select group of bankers themselves. All
for the benefit of those bankers, and at the expense of everyone else.
People can’t even comprehend what that means and the severe consequences
that it entails, which we have only just begun to experience.

Let me sum it up for you: The American Dream is O-V-E-R.

Welcome to the neo-feudal-fascist state.

People throughout the world who keep using the dollar are either A)
Part of the scam; B) Oblivious to reality; C) Believe that US military
power will be able to maintain the value of an otherwise worthless
currency; D) All of the above.

No matter which way you look at it, we are all in serious trouble!

If you are an elected official, (I know at least 17 of you subscribe
to my newsletter) and you believe in the oath you took upon taking
office, you must immediately demand a full audit of the Federal Reserve
and have Ben Bernanke and the entire Federal Reserve Board detained. If
you are not going to do that, you deserve to have the words “Irrelevant
Puppet” tattooed across your forehead.

Yes, those are obviously strong words, but they are the truth.

The Global Banking Cartel
has now been so blatantly exposed, you cannot possibly get away with
pretending that we live in a nation of law based on the Constitution.
The jig is up.

It’s been over two years now; does anyone still seriously not
understand why we are in this crisis? Our economy has been looted and
burnt to the ground due to the strategic, deliberate decisions made by a
small group of unelected global bankers at the Federal Reserve. Do
people really not get the connection here? I mean, H.E.L.L.O. Our
country is run by an unelected Global Banking Cartel.

I am constantly haunted by a quote from Harry Overstreet, who wrote the following in his 1925 groundbreaking study Influencing Human Behavior:
“Giving people the facts as a strategy of influence” has been a
failure, “an enterprise fraught with a surprising amount of
disappointment.”

This crisis overwhelmingly proves Overstreet’s thesis to be true. Nonetheless, we solider on…

Here’s a roundup of reports on this BernankeLeaks:

Prepare to enter the theater of the absurd…

I’ll start with Senator Bernie Sanders (I-Vermont). He was the
senator who Bernanke blew off when he was asked for information on this
heist during a congressional hearing. Sanders fought to get the
amendment written into the financial “reform” bill that gave us this
one-time peek into the Fed’s secret operations. (Remember, remember the
6th of May, HFT, flash crash and terrorism. “Hey, David, Homeland Security is on the phone! They want to ask you questions about some NYSE SLP program.”)

In an article entitled, “A Real Jaw-Dropper at the Federal Reserve,” Senator Sanders reveals some of the details:

At a Senate Budget Committee hearing in 2009, I asked Fed
Chairman Ben Bernanke to tell the American people the names of the
financial institutions that received an unprecedented backdoor bailout
from the Federal Reserve, how much they received, and the exact terms of
this assistance. He refused. A year and a half later… we have begun to
lift the veil of secrecy at the Fed…

After years of stonewalling by the Fed, the American people are
finally learning the incredible and jaw-dropping details of the Fed’s
multi-trillion-dollar bailout of Wall Street and corporate America….

We have learned that the $700 billion Wall Street bailout… turned out
to be pocket change compared to the trillions and trillions of dollars
in near-zero interest loans and other financial arrangements the Federal
Reserve doled out to every major financial institution in this
country.…

Perhaps most surprising is the huge sum that went to bail out foreign
private banks and corporations including two European megabanks —
Deutsche Bank and Credit Suisse — which were the largest beneficiaries
of the Fed’s purchase of mortgage-backed securities….

Has the Federal Reserve of the United States become the central bank of the world?… [read Global Banking Cartel]

What this disclosure tells us, among many other things, is that
despite this huge taxpayer bailout, the Fed did not make the appropriate
demands on these institutions necessary to rebuild our economy and
protect the needs of ordinary Americans….

What we are seeing is the incredible power of a small number of
people who have incredible conflicts of interest getting incredible help
from the taxpayers of this country while ignoring the needs of the
people. [read more]

In an article entitled, “The Fed Lied About Wall Street,” Zach Carter sums it up this way:

The Federal Reserve audit is full of frightening
revelations about U.S. economic policy and those who implement it… By
denying the solvency crisis, major bank executives who had run their
companies into the ground were allowed to keep their jobs, and
shareholders who had placed bad bets on their firms were allowed to
collect government largesse, as bloated bonuses began paying out soon
after.

But the banks themselves still faced a capital shortage, and were
only kept above those critical capital thresholds because federal
regulators were willing to look the other way, letting banks account for
obvious losses as if they were profitable assets.

So based on the Fed audit data, it’s hard to conclude that Fed
Chairman Ben Bernanke was telling the truth when he told Congress on
March 3, 2009, that there were no zombie banks in the United States.

“I don’t think that any major U.S. bank is currently a zombie institution,” Bernanke said.

As Bernanke spoke those words banks had been pledging junk bonds as collateral under Fed facilities for several months…

This is the heart of today’s foreclosure fraud crisis. Banks are
foreclosing on untold numbers of families who have never missed a
payment, because rushing to foreclosure generates lucrative fees for the
banks, whatever the costs to families and investors. This is, in fact,
far worse than what Paul Krugman predicted. Not only are zombie banks
failing to support the economy, they are actively sabotaging it with
fraud in order to make up for their capital shortages. Meanwhile,
regulators are aggressively looking the other way.

The Fed had to fix liquidity in 2008. That was its job. But as major
banks went insolvent, the Fed and Treasury had a responsibility to fix
that solvency issue—even though that meant requiring shareholders and
executives to live up to losses. Instead, as the Fed audit tells us,
policymakers knowingly ignored the real problem, pushing losses onto the
American middle class in the process.” [read more]

Even the Financial Times is jumping ship:

Sunlight Shows Cracks in Fed’s Rescue Story

It took two years, a hard-fought lawsuit, and an act of Congress, but
finally… the Federal Reserve disclosed the details of its financial
crisis lending programs. The initial reactions were shock at the breadth
of lending, particularly to foreign firms. But the details paint a
bleaker, earlier, and even more disturbing picture…. An even more
troubling conclusion from the data is that… it is now apparent that the
Fed took on far more risk, on less favorable terms, than most people
have realized. [read more]

In true Fed fashion, they didn’t even fully comply with Congress. In
a report entitled, “Fed Withholds Collateral Data for $885 Billion in
Financial-Crisis Loans,” Bloomberg puts some icing on the cake:

For three of the Fed’s six emergency facilities, the
central bank released information on groups of collateral it accepted by
asset type and rating, without specifying individual securities. Among
them was the Primary Dealer Credit Facility, created in March 2008 to
provide loans to brokers as Bear Stearns Cos. collapsed.

“This is a half-step,” said former Atlanta Fed research director
Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc.
in Sarasota, Florida. “If you were going to audit the facilities, then
would this enable you to do an audit? The answer is ‘No,’ you would have
to go in and look at the individual amounts of collateral and how it
was broken down to do that. And that is the spirit of what the
requirements were in Dodd-Frank.” [read more]

See also:

Fed Data Dump Reveals More Contradictions About its $1.25 Trillion MBS Purchase Program

Fed Created Conflicts in Improvising $3.3 Trillion Financial System Rescue

Meet The 35 Foreign Banks That Got Bailed Out By The Fed

Ben Bernanke’s Secret Global Bank

Here’s the only person on US TV “news” who actually covers and
understands any of this, enter Dylan Ratigan, with his guest Chris
Whalen from Institutional Risk Analytics. This quote from Whalen sums
it up well: “The folks at the Fed have become so corrupt, so captured by
the banking industry… the Fed is there to support the speculators and
they let the real economy go to hell.”

The Progressive’s Matthew Rothschild has a good quote: “The financial bailout was a giant boondoggle, undemocratic and kleptocratic to its core.”

Matt Stoller on NewDeal 2.0:

End This Fed

The Fed, and specifically the people who run it, are responsible for
declining wages, for de-industrialization, for bubbles, and for the
systemic corruption of American capital markets. The new financial
blogosphere destroyed the Fed’s mythic stature…. With a loss of
legitimacy comes a lack of public trust and a vulnerability to any form
of critic. The Fed is now less respected than the IRS…. Liberals should
stop their love affair with conservative technocratic myths of monetary
independence, and cease seeing this Federal Reserve as a legitimate
actor. At the very least, we need to begin noticing that these people do
in fact run the country, and should not. [read more]

In case anyone is confused into believing that this is just another
right vs. left partisan issue, enter Fox Business host Judge Andrew
Napolitano with his guest Republican Congressman Ron Paul, who is, of
course, a longtime leading Fed critic. Paul hopes to see some Wikileaks
on the Federal Reserve:

The Sunlight Foundation shines a light on Bank of America and the Federal Reserve’s brother money manager BlackRock:

Federal Reserve Loan Program Allowed Bank of America to Benefit Twice

Bank of America was one of several banks that was able to play both
sides of a Federal Reserve program launched during the 2008 financial
crisis. While Bank of America was selling its assets to firms obtaining
loans through the Fed program, the investment firm BlackRock—partially
owned by Bank of America—was potentially turning a profit by using those
loans to buy assets similar to those sold by Bank of America. [read more]

Gretchen Morgenson at the New York Times jumps into the act:

So That’s Where the Money Went

How the truth shines through when you shed a little light on a subject….

All of the emergency lending data released by the Fed are highly
revealing, but why weren’t they made public much earlier? That’s a
question that Walker F. Todd, a research fellow at the American
Institute for Economic Research, is asking.

Mr. Todd, a former assistant general counsel and research officer at
the Federal Reserve Bank of Cleveland, said details about the Fed’s vast
and various programs should have been available before the Dodd-Frank
regulatory reform law was even written.

“The Fed’s current set of powers and the shape of the Dodd-Frank bill
over all might have looked quite different if this information had been
made public during the debate on the bill,” he said. “Had these tables
been out there, I think Congress would have either said no to emergency
lending authority or if you get it, it’s going to be a much lower number
— half a trillion dollars in the aggregate.” [read more]

Welcome to the “global pawnshop:”

The Fed Operates as a “global pawnshop:” $9 trillion to 18 financial institutions

What the report shows is that the Fed operated as a global pawnshop
taking in practically anything the banks had for collateral. What is
even more disturbing is that the Federal Reserve did not enact any
punitive charges to these borrowers so you had banks like Goldman Sachs
utilizing the crisis to siphon off cheap collateral. The Fed is quick
to point out that “taxpayers were fully protected” but mention little of
the destruction they have caused to the US dollar. This is a hidden
cost to Americans and it also didn’t help that they were the fuel that
set off the biggest global housing bubble ever witnessed by humanity. [read more]

“No strings attached.” Financial reporter Barry Grey unleashes the truth:

Fed report lifts lid on Great Bank Heist of 2008-2009

The banks and corporations that benefited were not even obliged to
provide an account of what they did with the money. The entire purpose
of the operation was to use public funds to cover the gambling losses of
the American financial aristocracy, and create the conditions for the
financiers and speculators to make even more money.

All of the 21,000 transactions cited in the Fed documents―released
under a provision included, over the Fed’s objections, in this year’s
financial regulatory overhaul bill―were carried out in secret. The
unelected central bank operated without any congressional mandate or
oversight.

The documents shed light on the greatest plundering of social
resources in history. It was carried out under both the Republican Bush
and Democratic Obama administrations. Those who organized the looting of
the public treasury were long-time Wall Street insiders: men like
Bush’s treasury secretary and former Goldman Sachs CEO Henry Paulson and
the then-president of the New York Federal Reserve, Timothy Geithner….

The Fed documents show that the US central bank enabled banks and
corporations to offload their bad debts onto the Fed’s balance sheet.
Now, in order to prevent a collapse of the dollar and a default by the
US government, the American people are being told they must sacrifice to
reduce the national debt and budget deficit.

But as the vast sums make clear, the “sacrifice” being demanded of
working people means their impoverishment―wage-cutting, mass
unemployment, cuts in health care, Social Security, Medicare, Medicaid,
etc.

The very scale of the Fed bailout points to the scale of the
financial crash and the criminality that fostered it…. The entire US
capitalist economy rested on a huge Ponzi scheme that was bound to
collapse…

The banks were able to take the cheap cash from the Fed and lend it
back to the government at double and quadruple the interest rates they
were initially charged―pocketing many billions in the process….

The ongoing saga of the looting of the economy by the financial elite
puts the lie to the endless claims that “there is no money” for jobs,
housing, education or health care. The ruling class is awash in money. [read more]

Here’s an old Jim Rogers interview from two years ago when this whole thing was originally going down:

Here are two videos that I made last year, with an assist from Alan Grayson and Dylan Ratigan:

The Wall Street Economic Death Squad – Part I

The Greatest Theft in History – Wall Street Economic Death Squad – Part II

And on a final note, you may as well rock out to this new song while Rome burns…

WORLD PREMIERE ~ Ben Bernanke: Public Enemy #1 – Mr. Big Shot (((Music Video)))

Ben Shalom Bernanke is wanted for violating the
United States Constitution, committing acts of financial terrorism and
crimes against humanity. As a leading member of the Global Banking
Cartel, he is considered a highly dangerous enemy combatant. Citizens of the United States hereby demand that he be properly detained under the laws and customs of war.

After Cardinal Agré and Archbishop Concessao, a new Cardinal, Cormac Murphy O’Connor, says credit crisis has killed capitalism.

After Cardinal
Bernard Agré and Archbishop Concessao, a new Cardinal, Cormac Murphy
O’Connor, says credit crisis has killed capitalism…

The leader of the Roman Catholic Church in England and Wales has declared that capitalism is dead because of the credit crunch.

http://www.michaeljournal.org/agree.htm
http://www.michaeljournal.org/concessao.htm

 http://ferraye.blogspot.com/2008/12/cardinal-bernard-agr-il-faut-passer.html

By Andrew Pierce
Last Updated: 11:46PM GMT 05 Jan 2009

http://www.telegraph.co.uk/news/newstopics/religion/4125339/Cardinal-says-credit-crisis-has-killed-capitalism.html

The
Cardinal has set up a £3 million appeal for Westminster Cathedral which
he fears will be forced to close within a decade if cash is not found
for urgent repairs
Photo: HEATHCLIFF O’MALLEY

Cardinal Cormac Murphy O’Connor, 76, made the astonishing claim at a
lavish fund-raising dinner at Claridges which secured pledges of
hundreds of thousands of pounds for the catholic church.

The Cardinal, dressed in his full clerical regalia, said in a speech at
the black tie dinner that he had worried whether the dinner should
go ahead because of the troubled economic times.

But he went on to say that in 1989, with the collapse of the Berlin
wall, that “communism had died”. In 2008, he said, ” capitalism had
died”.
The remarks will cause dismay in
Downing Street as the Cardinal’s remarks will be interpreted as a
signal that the entire economic order has collapsed.

The Government has clashed with the Cardinal before over homosexual
adoption, abortion and the Embryology Bill. One Whitehall source
said: “We would like the church to work with us, not against us.”

The remark caused astonishment in the ballroom, where the dinner was
held, to launch an £8 million Faith in the Future appeal for money
for the work of the bishops in England and Wales.

One guest who was present, who declined to be named, said: “I could
hardly believe my ears. The Cardinal announced that, in his view, that
Communism had died in 1989 and capitalism had died in 2008 because of
the credit crisis.
“His remarks were
part of a carefully considered thesis that it was capitalism that had
got us into this mess and had died because of it. It was not just
remarkable that he thinks that but it was remarkable that he said it
in a room packed with some of the richest and most influential catholics
in the land. Those same capitalists pledged a six figure sum to the
church appeal.”
The four course
dinner, with a champagne reception, had been provided free of charge
by Derek Quinlan, the property developer, who owns Claridges who is
worth an estimated £60 million.
Sir
Rocco Forte, the hotelier and prominent Roman Catholic, was in charge of
the decoration. He decked out the ballroom in red flowers and red
lights to match the Cardinal’s clerical outfit.

The guest list included Baroness Williams, the Lib Dem peer and former
Labour Cabinet minister, Lord Brennan, the Labour peer, Lord Guthrie,
the former Chief of Defence staff, the Conservative MP Nicholas
Soames, and a clutch of bishops from England and Wales.

Nicola Benedetti, the violinist, serenaded the guests and Julie
Etchingham, the presenter of the ITV News at 10, compèred the
proceedings.
Last month the Cardinal,
76, issued a statement on the economic crisis which said: “Religious
leaders are not normally economists, however, they cannot ignore the
damaging human consequences of the rise and fall of economic
indicators. Behind the gloomy headlines are cities, neighbourhoods,
families, individuals deeply affected by the economic breakdown; and the
hardest hit will be the poor: those already struggling to survive.
Christians have a paramount concern for the poor. This “preferential
option for the poor” is a constant theme in Catholic social teaching”.

A sopokesman for the Cardinal said: “They were private remarks at a private dinner.”

The Cardinal has also set up a £3 million appeal for Westminster
Cathedral which he fears will be forced to close within a decade if
cash is not found for urgent repairs.

Parts of the building, which opened in 1903 but has never been
completed, are in danger of structural collapse. The cathedral is
recognised as one of the finest examples of Victorian architecture
and Byzantine art.
The remarks by the
Cardinal come as leading bishops in the Church of England have
launched a withering attack on the Government, questioning the morality
of its policies.
Five of the Church’s
most senior figures said the Government now presided over a country
suffering from family breakdown, an unhealthy reliance on debt and a
growing divide between rich and poor.

The Rt Rev Nigel McCulloch, the Bishop of Manchester, accused Labour of
being “beguiled by money” and “morally corrupt”. He said: “The
Government believes that money can answer all of the problems and has
encouraged greed and a love of money that the Bible says is the root
of all evil. It is morally corrupt because it encourages people to
get into a lifestyle of believing they can always get what they
want.”
The Rt Rev Tom Wright, the Bishop
of Durham, said: “Labour made a lot of promises, but a lot of them
have vanished into thin air,” he said. “We have not seen a raising
of aspirations in the last 13 years, but instead there is a sense of
hopelessness.
“When a big bank or car
company goes bankrupt, it gets bailed out, but no one seems to be
bailing out the ordinary people who are losing their jobs and seeing
their savings diminished.”
The bishops of Hulme, Winchester and Carlisle joined in the attacks.

Kucinich “…the manipulation of the Federal Reserve!”

http://www.youtube.com/watch?v=NsLiS8UlZyo&NR=1

Kucinich: Federal Reserve No More “Federal” Than Federal Express!

http://www.youtube.com/watch?v=AR2EtMteHCg&feature=channel_page

Kampf der kathol. Kirche in Oesterreich gegen den Liberalismus (=Kathol. Stimmen aus Oesterreich N. Ausz. (H. 1) ) 1873

http://stabikat.de/DB=1/FKT=1016/FRM=Blome,%2BGustav%2Bvon/IMPLAND=Y/LNG=DU/LRSET=1/MAT=/SET=1/SID=67d3b9a5-1/SRT=YOP/TTL=1/SHW?FRST=3

http://www.youtube.com/watch?v=jT0grvk16NI&feature=player_embedded