Mount Saint Mary’s Seminary Emmitsburg, Maryland

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Mount Saint Mary’s Seminary

Emmitsburg, Maryland

The Church and Usury:

Error, Change or Development?

A Research Paper Submitted

in Partial Fulfillment of the Requirements for

the Degree of Master of Arts in Theology


Father Gary L Coulter

Submitted August 15, 1999

This Research Paper was approved by the director on (date):

Signature of Director:

Table of Contents

Page #
Preface 1
Introduction 3

The Church once condemned usury as the taking of profit on a loan, yet today it allows profitable investment. Did the Church teaching change?

Yes, the Church teaching changed:

Chapter One 6

The Church reversed its erroneous moral teaching, and thus is not a reliable teacher of morals.
Chapter Two 15

Something about the nature of the usury teaching allowed it to be changed by the Church.

No, the Church teaching remains the same:

Chapter Three 23

Interest was permitted as an exception to the rule. When the economic system changed, the exception became the norm, but did not change the basic teaching.
Chapter Four 32

The nature of the financial transaction itself changed. Interest is justified on loans for production because money is now productive.

Chapter Five 40

The Church’s prohibition of usury is still identical with the teaching of the middle ages, but it is being completely ignored and violated today.

Conclusion 48
Epilogue 54

The Roman Pontiff, head of the college of bishops, enjoys [this] infallibility in virtue of his office, when, as the supreme pastor and teacher of all the faithful, he proclaims in an absolute decision a doctrine pertaining to faith or morals. For that reason his decisions are rightly said to be irreformable by their very nature and not by reason of the assent of the Church.... For in such a case the Roman Pontiff does not utter a pronouncement as a private person, but rather does he expound and defend theteaching of the Catholic faith as the supreme teacher of the universal Church, in whom the Church’s charism of infallibility is present in a singular way.1

The Catholic Church, in asserting to be the one true Church of Jesus Christ, holy, catholic and apostolic, claims the characteristic of indefectibility. This means that being founded by Christ, she will always remain, in duration and immutability, the institution of salvation. Being indefectible “affirms that the Church is essentially unchangeable in her teaching, her constitutions, and her liturgy. It does not exclude modifications that do not affect her substance.”2

In close connection with the Church’s indefectibility is her infallibility. This is the guarantee that the universal Church will be free from error in teaching on matters of faith and morals. Through the guidance of the Holy Spirit, the Pope and Bishops in union with him are protected from misleading the people of God. Thus Catholics believe that the Church maintains the entire deposit of faith; listening, guarding, explaining, and transmitting everything received from Christ and the Apostles withoutcorruption or error.3

Yet it seems to be in vogue today to find ways to attack the Church, calling it too hierarchical and oppressive, patriarchal and domineering in wielding its power over its members. To support such a position, many often look to those cases in history where the Church may have been mistaken in its judgments and teachings (e.g. that the sun revolved around the Earth) or when some of its individual members may have been excessive (e.g. the crusades, inquisition, book burning, etc.)

Then we move to the case of morals, where the Church is accused of arbitrarily deciding that certain actions are sins while others are not. In particular, it holds onto those teachings of the “dark”Middle Ages which are simply the result of prudery, oppressing the freedom of the moderns who want to express themselves.

As a believer and member of the Catholic Church, I am often confronted with these two very opposite positions. Trusting in the Holy Spirit and the Church’s indefectibility and infallibility, I thus attempt to defend my faith and the Church against such attacks. In fact, many of these accusations are usually greatly tempered with a simple objective look at the actual facts of history. Yet there is one such attack that seems to come up again and again, one for which there seems to be no clear answer. This is the case of usury, that teaching of the Church (for at least 1500 years) which condemned the taking of interest on loans as a sin.

Did the Church err or change in its teaching on usury? This paper is the result of my search for the answer.

Usury today is a dead issue and except by a plainly equivocal use of the term, or save in the mouths of a few inveterate haters of the present order, it is not likely to stir to life.4
Judge JohnNoonan is a Harvard educated lawyer, a former professor of the Notre Dame Law School, a judge on the United States Court of Appeals (Ninth Circuit), and a prominent lay Catholic intellectual with reputable knowledge in the areas of philosophy, history and law. In 1957 he published a book that is seen as the definitive history on a rather obscure and innocuous topic, The Scholastic Analysis of Usury. He then published another respected history in 1966 on a much more prominent and controversial subject, Contraception: A History of Its Treatment by Catholic Theologians and Canonists.5

What do these two unrelated topics have in common? Almost nothing, until one reads his now-famous article also published in 1966, “Authority, Usury, and Contraception”.6 This article sets the groundwork for two claims that will be made by numerous authors who follow Noonan’s conclusions: first, the Church’s teaching on usury changed with changing circumstances; second, we should expect its teaching on contraception to undergo a similar change. To be fair to Noonan’s contributions, it must be recognized that this article was produced at a time when the question of the morality of new forms of contraception was still undecided by the Church.

Such a claim made by an eminent and respected Catholic (who was an observer and advisor at the Second Vatican Council) was not unnoticed by the theological community. Whether his intention or not, the topic of usury has since often been associated with attacks against the Church. As only one example, when Pope Paul VI released Humanae Vitae in 1968, reaffirming the Church’s teaching on birth control, a group of over two hundred theologians, led by Charles Curran, published an article in the New York Times the very next day, rejecting the Papal teaching on contraception. The text of their argument included this claim:

The encyclical is not an infallible teaching. History shows that a number of statements of similar or evengreater authoritative weight have subsequently been proven inadequate or even erroneous. Past authoritative statements on religious liberty, interest-taking, the right to silence, and the ends of marriage have all been corrected at a later date.7

More recently Judge Noonan has also written an article entitled “Development in Moral Doctrine” which he begins, “That the moral teachings of the Catholic Church have changed over time will, I suppose, be denied by almost no one today. To refresh memories and confirm the point, I willdescribe four large examples of such change in the areas of usury, marriage, slavery, and religious freedom, and then analyze how Catholic theology has dealt with them.”8 A very familiar sounding argument, one we will need to examine more closely.

What do these authors mean when saying the Church teaching on usury changed? Due to modern English usage, the terminology used can present a difficulty to many readers if not properly clarified. The modern definition of usury is the taking of interest at a rate that is excessive, exorbitant, or illegal. This is a fairly recent definition brought into our common usage by economists of the seventeenth and eighteenth centuries.9 The moral problem expressed by the modern idea of usury as excessive interest is not specifically addressed by this paper, but when it is mentioned, it will be properly called excessive interest.

The word usury in this paper is defined solely in its older, original sense, viz. any return taken on a loan which exceeds the original amount of the loan (principal). Used in this way, usury is very much equivalent to our modern usage of the word “interest”. (The term “interest” is also a technical term which will be discussed in the third chapter.) Notice that the word usury does not specify if the amount taken was small or large, justified or excessive, legal or illegal. Usury was a charge for the use of money lent. As hard as it is for us to imagine, usury is “profit on a loan,”and this is what was prohibited and condemned by the Church until the beginning of the nineteenth century. This is why so many say the teaching on usury has changed.

Unfortunately, many - even well educated - Catholics do not understand the problem of the usury prohibition, for they think the Church has always condemned usury in the modern usage of the word, excessive interest. This kind of thinking only confuses the argument by saying, “At one time, the Latin word usura was a word of broad meaning covering excessive interest or, in some cases, any interest at all.”10 (Again, see chapter three for the correct etymology of the word usury.) This makes no distinction between the obvious difference in the Church’s teaching then and now, a real difference that many will use to attack the Church, as seen in the next chapter.

Chapter One
The sources of this foolish and ancient law are not hard to discover: a Christian opposition to temporal prosperity, an anti-Semitic distrust of Jewish methods, an ignorant reverence for Aristotle’s maxim that money is barren, and a worldly love of present pleasure and hatred of the abstemious lender.11
Many people today cite usury as the primary example where the Church changed it own teaching, contradicting its previous condemnation of usury. Included in this group are of course numerous non-Catholics, but we also see this argument used by Catholics who disagree with the teaching authority of the Church. This chapter will examine the various arguments being made by these groups, introduce the basic history of the usury teaching, and examine the topic of change in Church teaching.

There are some who wish to “prove" that the Catholic Church is not the one true Church founded by Jesus Christ. Primary among those are Protestants that are trying to justify the Reformation. Some have even claimed that the Church misinterpreted the scriptures until the Reformation finally overturned the Church’s long-standing prohibition of usury.12 In addition, the rationalist critics of the Church in the nineteenth century also saw usury as an opportunity to show that the Church had been proved wrong. “The usury rule was, for these literal readers of the ancient texts, the classic example of an about-face by the Church which disproved forever its vaunted claim to be the infallible arbitrator of morals.”13

Take as a representative example of both of these groups a work with the inimical title Syllabus of Papal and Magisterial Errors, which claims, “The Roman Church has changed, or developed, its teaching on many occasions. Few are as clear as the case of Usury.”14 Making a briefest review of the history of this teaching, this work cites the undeniable references in the Old Testament, Church Councils, Fathers and Medieval theologians which all prohibited usury. “There is no doubt that council after council, and pope after pope condemned usury.”15 He cites as his final proof the 1745 encyclical of Benedict XIV, Vix Pervenitwhich Halsall claims forbids all interest.16

The Church then “flip-flops” in 1830 when the Holy Office, with the approval of Pius VIII, allows the justifiable taking of interest. Not only is the taking of interest now allowed, but the 1917 Code of Canon Law even said that religious orders were to keep their assets on deposit in interest bearing accounts.17In addition, the new Catechism of the Catholic Church makes no mention of usury. Its section on love for the poor (under the Seventh Commandment) only mentions as a historical fact that there were several Old Testament juridical measures showing concern for the poor, which included the “prohibition of loans at interest.”18 What is the logical conclusion one draw from these facts? “I cannot think of other issues as important as usury where the church has done such an about face.... The Church can, has, and does, change its teaching on vital points of ethics.”19

How does such a change take place in such a short time? One nineteenth century overview claimed that the Church “began a series of amazing attempts to reconcile a view permitting usury with the long series of decrees of popes and councils forbidding it.”20It was through a struggle of right reason over the theological opposition that reversed this policy by which “the whole evolution of European civilization was greatly hindered.”21

In another overview of the Church’s teaching, Noonan delves more deeply into the sources, citing Ambrose, Jerome and Augustine as three Western (Latin) Fathers who give a representative sample of the many patristic writings on usury.22 In a series of sermons collected in the treatise De Tobia, St. Ambrose denounced the taking of anything on a loan, stating that “whatever is added to the principal is usury”23and is a violation of the law of God, prohibited by the prescriptions of both “the Old and Divine law.”24St. Ambrose primarily bases his argument on the prohibitions of usury in the Old Law, Exodus 22:25 and Leviticus 25:36.25

St. Jerome similarly defines usury, “One calls anything whatsoever usury and surplus if one has collected more than one has given.”26In his commentary on Ezekiel, he sees usury prohibited not only by the Law, but also by the Prophets. In addition, Jerome specifically cites Luke 6:35, “lend, expecting nothing in return...”27This passage becomes the basis for emphatically showing that the New Law of the Gospel also contains a commandment against usury. To these Augustine will add other biblical arguments such as Psalm 14,28showing again that God does not will money to be given at usury. Similar prohibitions, using these same scriptural passages, were also taught by numerous Eastern (Greek) Fathers.

Yet there is only one exception to this seemingly universal prohibition being made by the Fathers: the fact that the early Church councils do not seem to make these prohibitions binding for all. Originally, the practice of usury is forbidden to clerics, but only later is the prohibition extended to the laity as well. Nicea makes the prohibition on the taking of usury for clerics in 325 A.D.29When is it universally prohibited for all members of the Church? While the earliest Fathers clearly teach that usury is sinful for all, there does not seem to be any corresponding canons of a major synod or provincial council until a much later date. While some have dubiously claimed a prohibition as early as 300 A.D., it does not seem to be until the eighth and ninth century that the usury rule is obligatory for all Christians.30

Most authors cite three ecumenical councils as clearly teaching universally, with the Church’s infallible authority, against the taking of usury: Lateran II, Lateran III, and the Council of Vienne. In 1139 the Second Lateran Council enacted this canon:

Furthermore, we condemn that practice accounted despicable and blameworthy by divine and human laws, denounced by Scripture in the old and new Testaments, namely, the ferocious greed of usurers; and we sever them from every comfort of the church, ...let them be held infamous throughout their whole lives and, unless they repent, be deprived of a Christian burial.31

Lateran III reiterated these same teachings in 1179, and also denied Christian burial to manifest usurers. In addition, both of these councils teach, at least indirectly, that usury is condemned by the Scriptures. Not only are usurers to be excommunicated, but in 1314 the Council of Vienne considers those who promote usuryto be enemies of the faith. “If indeed someone has fallen into the error of presuming to affirm pertinaciously that the practice of usury is not sinful, we decree that he is to be punished as a heretic”.32Based upon these canons, Noonan seems to be correct in saying that the sinfulness of usury “is proximate to being a matter of faith.”33

As a final summary of the Church’s early teaching on usury, we have the decrees of Gratian composed shortly after the year 1140. This Concordia discordantium canonumis essentially a summary of the ancient law of the Church, and embodies the teachings of the first ten ecumenical councils. Gratian’s commentary established the following points:

To demand or receive or even to lend expecting to receive something above the capital is to be guilty of usury; usury may exist on money or something else; one who receives usury is guilty of rapine and is just as culpable as a thief; the prohibition against usury holds for laymen as well as clerics but, when guilty, the latter will be more severely punished.34

This historical overview brings out the most basic and indisputable facts concerning the history of the Church’s usury teaching. Though once taught by Scripture, the Fathers, and the Magisterium, it appears that the Church has now changed its teaching by its complete acceptance of modern interest banking. This is why so many continue to use the subject of the usury teaching as a means to criticize the Church.

There is yet another criticism, perhaps even more dangerous, that comes from those Catholics who see usury as proof that the Church can change its moral teaching. These people are not trying to discredit the Church as founded by Christ, but as mentioned in the introduction, they usually have serious disagreement with some moral teaching of the Church, and so are trying to weaken the credibility of the Church as a moral guide. Usually known as revisionist or dissenting theologians, often these people think the Church erred in its prohibition of contraception. They seek to prove that the Church has erred and changed before, fostering a hope that the Church’s teaching on contraception also will now be able to change.

In attempting to legitimize their dissent, usury is used as the primary example of the Church contradicting herself, an example of one of the “erroneous teachings of the the hierarchical magisterium.”35 Their repetitious arguments often talk about how “the official Church has changed its teachings in other matters – e.g. religious liberty and usury.”36 Yet these authors will provide little support for such vaunted claims, looking only superficially at these issues. Until one examines more deeply, the Church appears to have changed its teaching.

Others do not so blatantly charge the Church with erroneous teachings, rather usury is “used by scholars to illustrate the fact that the church does have an evolving theology on some matters.”37Usury is used as a prime example to support the claim that all of the Church’s teachings are historically conditioned. Usury shows that Church teachings only apply for the time they were made. “What may have been perceived as morally wrong in one set of circumstances - e.g. charging interest on a loan in the Middle Ages - would be regarded as morally justifiable in another situation - e.g. charging interest on a loan today, in the context of modern commercial life.”38

“Historically conditioned” and “new experience” have become the new buzz-words for legitimizing change in the Church’s teaching. “Human beings do not reach moral conclusions apart from the whole web of language, custom, and social structure surrounding them.... Only as social structures changed did moral mutation become possible.”39Arguments such as this one would make all teaching open to change and revision, for these arguments claim that the Church cannot teach a universally applicable moral teaching.

Most of these claims which say that all teachings are “historically conditioned with new experiences” are based on a subjectivism and individualism which do not have a consistent view of man, truth and divine revelation. They bring up issues much too broad to be properly addressed here, including: the existence of a constant and unchanging human nature, which is common to men of different times and cultures; the existence of objective truth, which man can know from revelation and human reason; the existence of the natural law, the ability of man to discern good from evil by the light of reason.

“The Church maintains that beneath all changes there are many realities which do not change and which have their ultimate foundation in Christ, Who is the same yesterday and today.”40Pope John Paul II has addressed all of these problems (and more) in his encyclical on “The Splendor of Truth:”

The great concern of our contemporaries for historicity and for culture has led some to call into question the “immutability of the natural law” itself, and thus the existence of “objective norms of morality” valid for all people of the present and the future, as for those of the past.41

The pope answers this position by saying that man is not completely defined by culture. There is something in man which transcends culture, and this “something” is precisely human nature. In this way, man “asserts his personal dignity by living in accordance with the profound truth of his being.”42

Another argument dissenters will invoke is the ‘experience of the faithful’, a theological principle often called the sensus fidelium. As taught by Vatican II, “the entire body of the faithful, anointed as they are by the Holy One, cannot err in matters of belief.”43 Thus some claim that this consensus of the faithful helped the Church see that “changing factors made the old condemnation obsolete. The experience of lay Christians had to be heeded.”44This claim might seem to have some strength because we see historically a sizable number of Christians who violated the prohibition by practicing banking.

Some might go so far as to say that there was a “partial non-acceptance” of the Church’s teaching, based on the number of Catholics in financial centers who rejected the prohibition. As Pope Alexander III observed, “the crime of usury has become so firmly rooted that many practice usury as if it were permitted, and in no way observe how it is forbidden.”45There was a real divergence between the usury rule and the practice of the faithful, but this does not necessarily mean that the teaching was wrong or changeable. I think most would agree with Noonan that such a way of thinking “runs too much the risk of making moral law in the Church depend on democratic adhesion.”46

Even if we reject each of these positions, it is plainly clear that they have an important element of truth, for something has changed in the usury teaching. Thus the question must be asked: can there be a legitimate development in the Church’s moral teaching? The concept of development in Church teaching was cogently treated by John Henry Newman in his 1845 Essay on the Development of Christian Doctrine. His basic conclusion was that yes, we can and should expect to find development in Christianity, as the faith has been developed and refined since the time of the Apostles. This argument leads Noonan to claim that “Newman’s approach is adaptable to the development of moral doctrine.”47This claim is verified by Pope John Paul II in 1994:

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