Usury

[LittleLes]

[quote name='Aloysius' date='Jul 25 2005, 12:36 PM'] except that my argument on usury has not just fallen like a house of cards and right now that's not what we're talking about, we're talking about USURY.  I have shown to you the consistency of it, you have shown me nothing contradictory in any statement.  I explained how the parallel deal idea works, you have not responded. 

okay, I know you love using this as a red herring to the discussion of infallibility, but right now all we're talking about is usury.  We are also not talking about slavery, JUST USURY.  I refuse to talk to you if you do not stay on topic and perhaps respond to my last two posts where I polverized your contention that paralel titles were a change in teaching. 

It would really gain you a lot of credibility to just admit that there is no contradiciton in the teaching (as I showed there isn't)

just the magisterium hasn't said anything about it recently because it lost the battle and society's reliance upon usury seems irreversable at this point in time.  by the definition of the Fifth Lateran Council Usury, interest asked for on any unproductive loan, is still infallibly held by the Catholic Church to be immoral.

don't talk to me about slavery.  don't talk to me about infallibility.  talk to me about usury.
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RESPONSE:

The question having to do with usury has been answered and that answer is supported by the evidence.

Vix Pervenit : "The nature of the sin called usury has its proper place and origin in a loan contract. 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 TH AMOUNT HE GAVE is illicit and usurious."

Q.E.D.


Perhaps you should stay on topic. We are NOT debating the issue of the morality of usury. We are discussing the Church's original teaching. If you want to debate the morality of charging interest, a separate topic, may I suggest that you start a separate thread.

Simply put, the Catholic Church revoked its earlier teaching on usury.
Slavery also!

[Aloysius]

You are confused. The definition of the Fifth Lateran Council clearly limits it to unproductive loans, the encyclical you continue to cite allows for productive parallel titles alongside a loan that is unproductive so that the lender has an avenue of profit that gives him incentive to do business with the borrower. this avenue of profit is not intrinsic to the unproductive loan at all but rather to the productive loan.

And the topic was started asking about the morality of usury. While the original teaching (which I have upheld) comes into play, the issue of whether or not the Church ever changes its teaching and whether it is infallible is another question altogether. So is slavery, another topic.

I have proven myself with the Lateran Councils and showed the continuity that your offered encyclical offers. You have not shown anything from the Church to contradict the Lateran Councils.

The End. unless you bring up some new point, I bid you good day.

[track2004]

The topic didn't start because I wanted to know the morality of usury. I know what I think about my father's occupation. I know what I think about loans and interest and credit. Mostly I wanted to see whether the Church's position had in fact changed over the years. Seems like it has, though the unproductive loan thing is a valid point. Along the unproductive laon thing though, my credit card is usuerous if I don't pay it off monthly. Anyway I need to get to work. Good day.

[Aloysius]

This was buried in my response to Littleles, but this was my answer:

"Anyway, to the original question, I answer with Aquinas

[quote]To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice....

Now money, according to the Philosopher (Ethics v, Polit. i) was invented chiefly for the purpose of exchange: and consequently the proper and principal use of money is its consumption or alienation

whereby it is sunk in exchange. Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury: and just as man is bound to restore ill-gotten goods, so is he bound to restore the money which he has taken in usury....

A lender may without sin enter an agreement with the borrower for compensation for the loss he incurs of something he ought to have, for this is not to sell the use of money but to avoid a loss. It may also happen that the borrower avoids a greater loss than the lender incurs, wherefore the borrower may repay the lender with what he has gained. But the lender cannot enter an agreement for compensation, through the fact that he makes no profit out of his money: because he must not sell that which he has not yet and may be prevented in many ways from having....

[b]It is lawful to borrow for usury from a man who is ready to do so and is a usurer by profession; provided the borrower have a good end in view, such as the relief of his own or another's need.[/b] [i][emphasis mine][/i][/quote]


I would, based on the last sentence, think your father is fine because it is not his decision to lend based on usury, but the bank who is "ready to do so" and your father is simply applying the bank's policies with a good end in view, helping those who need loans."

If I were a loan officer for a bank I would probably put that bold quote up in my office somewhere lol but that's just my crazy self

[LittleLes]

[quote name='Aloysius' date='Jul 25 2005, 01:49 PM']You are confused.  The definition of the Fifth Lateran Council clearly limits it to unproductive loans, the encyclical you continue to cite allows for productive parallel titles alongside a loan that is unproductive so that the lender has an avenue of profit that gives him incentive to do business with the borrower.  this avenue of profit is not intrinsic to the unproductive loan at all but rather to the productive loan.

And the topic was started asking about the morality of usury.  While the original teaching (which I have upheld) comes into play, the issue of whether or not the Church ever changes its teaching and whether it is infallible is another question altogether.  So is slavery, another topic.

I have proven myself with the Lateran Councils and showed the continuity that your offered encyclical offers.  You have not shown anything from the Church to contradict the Lateran Councils.

The End.  unless you bring up some new point, I bid you good day.
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RESPONSE:

The question was if the Church had changed her moral teachings. It has. This was demonstrated by the quotation from Vix Pervenit.

[Aloysius]

[quote name='track2004' date='Jul 25 2005, 03:07 PM']The topic didn't start because I wanted to know the morality of usury.  I know what I think about my father's occupation.  I know what I think about loans and interest and credit.  Mostly I wanted to see whether the Church's position had in fact changed over the years.  Seems like it has, though the unproductive loan thing is a valid point.  Along the unproductive laon thing though, my credit card is usuerous if I don't pay it off monthly.  Anyway I need to get to work.  Good day.
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yes, credit cards tend to be usurious. I still answer that with that last sentence in my Aquinas quote.

[Aloysius]

[quote name='LittleLes' date='Jul 25 2005, 03:31 PM']RESPONSE:

The question was if the Church had changed her moral teachings. It has. This was demonstrated by the quotation from Vix Pervenit.
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sorry, it hasn't. anyway, I'm not attempting to convince you, but to convince any audience who happens to read this discussion, because I know you'll never give this topic up as it is a perfect red herring to muddle up the entire discussion for you any time the topic of infallibility comes up.

[Aloysius]

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to get your very own view of this spectacular site: [url="http://www.phatmass.com/phorum/index.php?act=usercp&CODE=ignore&uid=2442"]click here[/url]

[LittleLes]

[quote name='LittleLes' date='Jul 25 2005, 02:31 PM']RESPONSE:

The question was if the Church had changed her moral teachings. It has. This was demonstrated by the quotation from Vix Pervenit.
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ADDED RESPONSE:

"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; and we strictly enjoin on local ordinaries and inquisitors of heresy to proceed against those they find suspect of such error as they would against those suspected of heresy."

[Pope Clement Vth at the Oecumenical Council of Vienne (1311-1312) Canon 29]

[Aloysius]

Yeah... and Vix Pervenit does not say that the practice of usury is not sinful. It is sinful, under the definitions of the Lateran Councils I offered. Interest asked for on an unproductive loan is sinful on the part of the person who decides to ask for interest on the unproductive loan.

There can be side deals of investing on productive ventures in which both lender and borrower profit. That is not usury.

[Aloysius]

Vix Pervenit itself even warns against what you say it allows for. It warns against attempting to simply use in name only the idea of a parallel contract to mask the action of usury:

[quote]V. But you must diligently consider this, that some will falsely and rashly persuade themselves-and such people can be found anywhere-that together with loan contracts there are other legitimate titles or, excepting loan contracts, they might convince themselves that other just contracts exist, for which it is permissible to receive a moderate amount of interest. Should any one think like this, he will oppose not only the judgment of the Catholic Church on usury, but also common human sense and natural reason. Everyone knows that man is obliged in many instances to help his fellows with a simple, plain loan. Christ Himself teaches this: "Do not refuse to lend to him who asks you." In many circumstances, no other true and just contract may be possible except for a loan. Whoever therefore wishes to follow his conscience must first diligently inquire if, along with the loan, another category exists by means of which the gain he seeks may be lawfully attained.[/quote]

[Aloysius]

[quote]"I know well, dear friends, the difficulties that you face. But I know that you are determined and united in fighting this serious social evil. Continue to combat usury, giving hope to individuals and families who are its victims. The Pope encourages you to pursue your generous work to build a more just society, one of solidarity, and more attentive to the demands of the needy."[/quote]

[color=red]Pope John Paul the Great[/color][color=blue]; April 14, 1999[/color]

[quote]VATICAN CITY, NOV. 22, 2000 (ZENIT.org).- John Paul II made an urgent
appeal this morning against the "worrying phenomenon of usury," and called
for help for victims of "this spreading plague."

At the end of the general audience, attended by 40,000 faithful, the Holy
Father raised his voice and appealed for "generous commitment in the battle
against this merciless abuse of others' need."

Among the faithful were members of the Italian Association of Foundations
Against Usury and delegates of several regional foundations. Addressing
them, the Pope said: "Usury is a social plague that is spreading and it is
totally necessary to go to the aid of all those who are trapped in this net
of injustice and grave sufferings."

"I sincerely hope that, in the context of the Jubilee Year, thanks to the
contribution of all, concrete steps may be taken to eliminate this grave
scourge," the Pope said.

John Paul II has spoken on several occasions against this abuse and has
exhorted banks to be inspired in the principles of cooperation and
solidarity to combat this phenomenon.

On Nov. 11, when he met with directors and employees of Bank of Rome, the
Pontiff asked the credit institutions to commit themselves even more to the
struggle against usury. He exhorted them to resolutely support people with
financial problems, and not just seek the highest profit.

Usury is extensive in Italy, due, in part, to its banking system. A few
days ago, the Supreme Court condemned some Italian banks for imposing
interest rates on clients with overdrawn accounts that were "higher" than
those of "usury."[/quote]

The Church still condemns usury LittleLes! I know you were concerned, but don't worry, the infallible teaching is safe and secure :

[LittleLes]

[quote name='Aloysius' date='Jul 25 2005, 02:44 PM']Yeah... and Vix Pervenit does not say that the practice of usury is not sinful.  It is sinful, under the definitions of the Lateran Councils I offered.  Interest asked for on an unproductive loan is sinful on the part of the person who decides to ask for interest on the unproductive loan.

There can be side deals of investing on productive ventures in which both lender and borrower profit.  That is not usury.
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RESPONSE:

According to Vix pervenit, charging ANY interest on ANY loan is sinful. And the councils didn't contradict this at all.

"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, to purchase new estates, 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. Therefore if one receives interest, he must make restitution according to the commutative bond of justice; its function in human contracts is to assure equality for each one. This law is to be observed in a holy manner. If not observed exactly, reparation must be made. "


But then a way was thought up to get around this sin. What you might term "the side deal."

" 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. Nor is it denied that it is very often possible for someone, by means of contracts differing entirely from loans, to spend and invest money legitimately either to provide oneself with an annual income or to engage in legitimate trade and business. From these types of contracts honest gain may be made"

This changed the original teaching on the prohibition for charging ANY interest on ANY loan.

Perhaps you will want to reread your Lateran Councils!

[Aloysius]

The definitive decision of the tenth session of the Fifth Lateran Council states:

[quote]"For that is the real meaning of usury: when, from its use, a thing which [b]produces nothing[/b] is applied to the acquiring of gain and profit without any work, any expense or any risk."[/quote]

it is ANY interest on an UNPRODUCTIVE loan.

if a lender lends money to a borrower on a productive venture, the profit that is produced by that loan can be shared by the lender because he caused that profit to be created. doing that on the side of an unproductive loan works.

any level of interest on an unproductive loan is wrong. but when the lender is sharing in the profit produced by the loan, that is not arbitrary interest and as such is morally acceptable. both the lender and the borrower caused that profit to be produced, so they are both entitled to a part of that profit.

moreover, Vix pervenit warned against guising real usury under the veil of a side title and clarified that it must be investing for productive ventures:

[quote]V. But you must diligently consider this, that some will falsely and rashly persuade themselves-and such people can be found anywhere-that together with loan contracts there are other legitimate titles or, excepting loan contracts, they might convince themselves that other just contracts exist, for which it is permissible to receive a moderate amount of interest. Should any one think like this, he will oppose not only the judgment of the Catholic Church on usury, but also common human sense and natural reason. Everyone knows that man is obliged in many instances to help his fellows with a simple, plain loan. Christ Himself teaches this: "Do not refuse to lend to him who asks you." In many circumstances, no other true and just contract may be possible except for a loan. Whoever therefore wishes to follow his conscience must first diligently inquire if, along with the loan, another category exists by means of which the gain he seeks may be lawfully attained.[/quote]

there is no change. The Fifth Lateran Council makes it quite clear that usury is defined as interest on unproductive loans.

[LittleLes]

[quote name='Aloysius' date='Jul 25 2005, 04:05 PM'] The Fifth Lateran Council makes it quite clear that usury is defined as interest on unproductive loans.
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RESPONSE:

No. It is your misinterpretation of what the 5th Lateran Council said. It is interest itself which "produces nothing." Not unproductive loans.

And:

"V. But you must diligently consider this, that SOME WILL FALSELY AND RASHLY PERSUADE THEMSELVES -and such people can be found anywhere-that together with loan contracts there are other legitimate titles or, excepting loan contracts, they might convince themselves that other just contracts exist, for which it is permissible to receive a moderate amount of interest."

This is a negative statement. Not a permitted activity.

And further:

"Should any one think like this, he will oppose not only the judgment of the Catholic Church on usury, but also common human sense and natural reason"

Thus these statment reiterate the sinfulness of charging any interest.

This teaching can be said to be infallible because it was taught at all times and in all places.

But it changed!

[Aloysius]

IT DIDN'T CHANGE.

It is infallible by the ecumenical councils and by the universal ordinary magisterium, yes.

Yes, that is a negative statement, that's what I'm arguing. It is from the encyclical you quoted (I'm sure you've probably never read it in its entirety). You know, the one that allows for parallel titles. That quote is specifically saying that you cannot use the parallel titles thing to attempt to disguise real usury.

usury as defined traditionally by the Catholic Church is charging for the use of money, an interest at all upon an unproductive loan.

when a loan is productive, that means a lender can share in the profit produced by it since both of them caused that profit. You'd learn that if you studied at all the fifth lateran council.

"For that is the real meaning of usury: when, from its use, a thing which produces nothing is applied to the acquiring of gain and profit without any work, any expense or any risk."

okay, I'm going one more time to attempt to explain this statement to you. It is very clear.

Usury- when A THING THAT PRODUCES NOTHING is used to aquire gain

thus lending usury- when a LOAN THAT PRODUCES NOTHING is used to aquire gain

anyway, I'm not out to convince you but to convince the audience. I know you are so attached to using this as a red herring to infallibility that you'll never give it up.

[LittleLes]

[quote name='Aloysius' date='Jul 25 2005, 04:39 PM']

usury as defined traditionally by the Catholic Church is charging for the use of money, an interest at all upon an unproductive loan.


[/quote]

RESPONSE:

No. You are in error. Usury is defined as receiving any payment in excess of the amount loaned. It has nothing to do with a productive or non productive loan. That is a fundamental flaw in your argument.

From the Catholic Encyclopedia: "Interest is a value exacted or promised over and above the restitution of a borrowed capital. "

From Aquinas' Summa Theologica, 2/2, q 78, a 1:

"I answer that, To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice."

And in summing up, Aquinas says:

"Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury: and just as a man is bound to restore other ill-gotten goods, so is he bound to restore the money which he has taken in usury. "

I have no idea where you got the idea that urury only involved "nonproductive" loans" and try to claim that was part of Church teaching.

But, as has been evidenced, this longstanding Church moral teaching changed. The original prohibition against charging any interest, and the teaching on the moral licitness of chattel slavery are the two best examples of the error of the claim of infallibility by the universal ordinary magisterium.

[Aloysius]

I got that idea from the great English Historian Hilaire Belloc, as well as a thourough reading (including referencing the original latin source) of the entire tenth session of the fifth lateran council.

But let's follow Aquinas's theory (which incidently if you were paying attention I already quoted) logically. specifically "because this is to sell what does not exist"

when a lender lends money to a person to be used for productive means, and that money produces more profit, then both the lender and the borrower caused that profit to exist. as such they both have a moral claim to that profit. It is not an interest rate, though, it is sharing of the profit between the lender and the borrower.

Usury is when a lender charges for the use of his money. What I am talking about is when a lender is able to share in the profit produced by the money he lends, something that in the Catholic Tradition has always been acceptable. You have not proven otherwise.

maybe where I confused you was labeling it as interest when profit is made by a lender on an unproductive loan. it is really sharing of the profit produced. since the lent capital produces profit, the lender has a moral claim to that profit. it is a sharing of what both sides cooperated in creating (like a partnership). it is not asking for any amount of money based on what was lent, but rather based on what was made as a result of the efforts of both the lender and the borrower. Belloc says that up to a 50% sharing of the profit could be morally licit considering both sides were about half the cause for creating that profit.

THIS ISN'T about infallibility or chattel slavery, this is about USURY.

and LittleLes, this is your unlucky day for encountering me, because for the past year I have considered this very topic of usury by little pet study project. I did my Argumentation final on it, I included it in my Senior Project, and I read up on the Church's actual position. I'm sorry, but you are wrong. I have demonstrated that. Now admit it and we can move on. The Fifth Lateran Council clearly defines usury the way I am definining it, and in fact that same session (the tenth session) LAUDS a few other types of lending.

[quote]Since, therefore, this whole question appears to concern the peace and tranquillity of the whole christian state, we declare and define, with the approval of the sacred council, that the above-mentioned credit organisations, established by states and hitherto approved and confirmed by the authority of the apostolic see, do not introduce any kind of evil or provide any incentive to sin if they receive, in addition to the capital, a moderate sum for their expenses and by way of compensation, provided it is intended exclusively to defray the expenses of those employed and of other things pertaining to the upkeep of the organisations, and provided that no profit is made therefrom.  They ought not, indeed, to be condemned in any way.  Rather, sucha  type of lending is meritorious and should be praised and approved.  It certainly should not be considered as usurious; it is lawful to preach the piety and mercy of such organisations to the people, included the indulgences granted for this purpose by the holy apostolic see; and in the future, with the approval of the apostolic see, other similar credit organisations can be established.  It would, however, be much more perfect and more holy if such credit organisations were completely gratuitous: that is, if those establishing them provided definiitive sums with which would be paid, if not the total expenses, then at least half the wages of those employed by the organisations, with the result that the debt of the poor would be lightened thereby.  We therefore decree that Christ's faithful ought to be prompted, by a grant of substantial indulgences, to give aid to the poor by provided the sums of which we have spoken, in order ot meet the costs of the organisations.[/quote]

[track2004]

Okay here's a question... does the Church pay for parishes, land, anything, everything up front or does it borrow money to pay for stuff? And what about my credit card? Have we decided God will smite me (or MasterCard) for having it? Oh and what about stocks and bonds that were sold during the Great Depression that people put in $100 and only got back $95 because it was the safest place for money to be? Was that evil? And what about when the bank charges me for overspending?

Banks and interest are the reason the economy works. They are how you can buy a house. They are how I am in college. They are the reason the world can actually function.

[Aloysius]

did you not read my post at all? especially the Aquinas quote ESPECIALLY the bolded part:

[quote]It is lawful to borrow for usury from a man who is ready to do so and is a usurer by profession; provided the borrower have a good end in view, such as the relief of his own or another's need.[/quote]

the sin of usury falls upon the people who decide to charge arbitrary interest rates. those on the other end of it do not sin so long as they have a good end in view and are smart enough not to drive themselves so deep into debt they can never get out.

more on the foolishness of society for going so deep into usury by Peter Maurin:
[quote]Legalized Usury
Because John Calvin legalized
money lending at interest
the State has legalized
money-lending at interest.
Because the State has legalized
money-lending at interest
home-owners have mortgaged their homes..
Because the State has legalized
money-lending at interest,
farmers have mortgaged their farms.
Because the State has legalized
money-lending at interest,
institutions have mortgaged
their buildings.
Because the State has legalized
money-lending at interst,
Congregations have
mortgaged their churches.
Because the State has legalized
Money-lending at interest,
cities, counties, States,
and the Federal Government
have mortgaged themselves
in all kinds of financial difficulties
because the State has legalized
money-lending at interest.[/quote]

but again, the only person committing the sin of usury is the one deciding to ask for interest in the first place. even the loan officer for the bank is not necessarily sinning, because it is the bank which is a usurer by profession and as Aquinas basically tells us, we can USE usurers, manipulate them even though they are doing a bad act, to do good.

ultimately as Catholics we seek a society that respects private property and ownership A LOT MORE than the present usurious society does. but that doesn't forbid us from using userers against themselves to attempt to achieve the end of real property.