Forbidden by legal enactments and con demned by the moralists it was but natural that the practice of usury should be just as severely censured by the Fathers of the Early Church. They not only held the custom up to detesta tion, but they passed regulations prohibiting a usurer from obtaining ordination, while the Council of Nice, one of the many councils which took action upon the subject, carried its decree to such an extent as to stipulate that (if anyone, after this decree, shall be found to take usury, or demand the principal with half the increase of the whole, or shall invent any such methods for filthy lucre's sake, he shall be degraded from his order and have his name struck out of the roll of the The importance of ecclesiastical disapprobation in such matters is shown by the fact that all the decrees of the Apostolic Canons; the Council of Eliberis; the first and second councils of Arles; the first and third councils of Carthage, and the Council of Laodicea and of Trullo, had great effect in discouraging the practice of usury among the Christian races.
The natural consequences of this general condemnation of usury by the highest tribunals of the Church was the excuse for the adoption of the usurious methods by the Jews. In their case the laws prohibiting extortionate interest had so far become a dead letter that the race question was never considered when the matter of loaning money was under discussion. Had the Jews still adhered to the ancient Mosaic law, however, its provisions which permitted them to charge interest to the stranger and to collect both principal and interest from him under the most extreme penalties for failure to meet such obligations would have been suffi cient authority for them to have become the money lenders of Europe. Moreover, since the begining of the Christian era the term (usury) had also been applied in the sense of receiving a reasonable rate of interest for the use of money loaned, and as this had long been re garded as an allowable practice, one which was no more contrary to the Hebrew law of love than the ordinary acts of buying or selling merchandise for gain, they felt themselves at perfect liberty to enter this field of commerce which had so conveniently been deserted by the Christians. That they often abused their privileges and conducted their business in a manner that was far from consistent with the Hebrew principles of equity, even when ap plied to the stranger, is, of course, beyond question; hut these were the abuses of a system which time had made necessary and it was such abuses that have been responsible for much of the Jewish persecution which has darkened so many pages of history, for it was undoubt edly largely on account of their practice of money-lending and the determination shown by them in the collection of the last penny of both principal and interest that made the race so heartily detested and liable to such gross ill treatment at the hands of the people. An in teresting illustration of this popular animosity was exhibited at the time when Henry HI granted the charters to Newcastle and Derby, for by these documents Jews were forbidden to live in either place, and as late as 1290 they were expelled in a body from the kingdom and were not permitted to return until the days of Cromwell, in spite of the fact that, long before their banishment, Christians had already com menced to accept interest upon money loaned and that the business of money lending had ceased to be exclusively a right of the Jews.
The history of usury in England begins dur ing the reign of Edward the Confessor, for it was at this time that the exaction of exorbitant interest was first prohibited. By 1126 that law had so far become obsolete that the practice of usury was forbidden only to the clergy. In 1199 Richard I decreed that the rate of interest should be restricted to 10 per cent and this re mained the legal rate until 1624, when it was reduced to 8 per cent. In 1651 a still further reduction to 6 per cent was made, and, in 1714, the rate was established at 5 per cent, remaining unchanged until 1833, when, during the reign of William IV, bills not having more than three months to run were exempted from the operation of the laws against usury. Under Victoria this exemption was extended to hills payable in 12 months, and later it was enacted that bills of exchange and forbearances of money above flO should not be affected by the usury laws. At present the legal rate of interest in Great Britain is 5 per cent, unless it can be shown that a different rate was agreed upon between the contracting parties. Even then the debtor can claim relief in court from a °harsh and unconscionable)) agree ment.
Usury in the United States.— Usury was one of the subjects which received early atten tion at the hands of the legislatures of the various States. In most instances the crime is defined as ((the illegal profit required and re ceived by the lender of a sum of money from the borrower for its use.. To constitute a usurious contract it is required that there be a loan under an agreement that the money shall be returned to the lender, together with interest greater than that fixed by law." Of course, the laws in relation to usury vary under the statutes of the different States, but, in almost every case, by the addition of a bonus to the interest in which the sum is greater than the legal interest, the contract is held to be usurious, and, in the absence of any statute re garding such usury, relief may be obtained through courts of equity. In every State, how ever, care has been taken to distinguish be tween usury, applying the word in the modern sense of ((unjust exaction,D and interest on capi tal, for the progress of society has been in such a direction that the position of borrower and lender has now assumed an entirely different aspect. To-day the borrowing for commercial purposes represents transactions of overwhelming importance to the financial world, whereas the act of borrowing for purposes of necessity has become comparatively unimportant. As the re sult circumstances have so changed that the old laws would be useless in dealing with any present-day usury evil, and the statutes enacted by the various States are of the character which seems best fitted to cope with the conditions of the times.
These laws, briefly summarized for tabula tion, are as follows: Jeremy Bentham's 'Defense of Usury' (1816) ; Bohm-Bawerk, 'Capital and Interest' (London 1890) ; Hume's 'Essay on In terest' ; Interest'_ 'History of (Lon don 1875; Palgrave, R. H. I., 'Dictionary of Political Economy,' article Interest and Usury' (London 1910) ; White, A. D. W., 'History of the Warfare of Science with Theology in Chris tendom' (New York 1896) ; also Martin Luther's sermon, °Von dem ((The Usurer,' 1519). See INTEREST.