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The Christianization of Usury in Early Modern Europe

MARK VALERI Professor of Church History Union Presbyterian Seminary

In the early seventeenth century, the beginning of Europe's commercial revolution forced reconsiderations of the use of credit in longdistance trade. Unlike their Catholic competitors, Protestant regimes depended on the exchange of paper securities and other credit instruments. Protestant moralists developed rationalizations for usury as a concerted effort to protect the Protestant interest in the context of imperial warfare and colonial settlement By the end of the seventeenth century, these moralists had made modern, market-oriented conceptions of usury commonplace in the Chnstian West

n 1611, the chaplain to the Lord High Chancellor of England, also a member of the committee that produced the King James Bible that same year, completed a lengthy study of usury. Roger Fentors A Treatise of Usune became an authonty for Anglican and Puntan readers alike. Fenton

began with a complaintLondoners practiced usury at every point in business. Wildly mixing meta-

phors from England's woolen industry, nascent manufacturing, and a newly fashionable taste for watches, Fenton asserted that usury was " . . . so woven and twisted into every trade and commerce, one moving another, by this engine, like wheels in a clocke, that it seemeth the very frame and course of traffick must needes be altered before this can be reformed."1 Given its importance to all facets of trade, Fenton argued, usury ought not to be analyzed as merely a technicality of interest rates, loan contracts, and investment fees. It ought to be condemned wholesale and unequivocally as the rot at the core of England's economic corruption. Fenton compiled one text upon another to the same effect any lending for profit, any use of credit as a commodity, any fees or interest attached to any loans whatsoever, amounted to sin. The standard scnptural passagesfrom Exod 22, Lev 25, Deut 23, Ps 15, and Ezek 18said so Ancient moralists and the Patnstic authones confirmed the point Moreover, the great theologians of the Protestant Reformation all condemned usury out of hand: Luther and Melanchthon, Calvin and Bucer, Junius and Zanchi. Fenton dwelled on Calvin, who blasted French merchants for creating complicated measures to profit from loans, yet avoided the technical term "usury." By Fenton's reading, Calvin decned usury as uncivil, inhumane, and obnoxious Case closed.2 Some eighty years after Fenton's pronouncements, an even more popular and more widely published Anglican divine, Archbishop of Canterbury John Tillotson, preached several sermons on Chns-

1 2

Roger Fenton, A Treatise of Usurte (London, 1611), 2 Ibid, 4, 10-11, 60-63,143-45

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tian calling, or economic vocation. Like Fenton, Tillotson warned against avarice and covetousness. Yet, quite unlike his predecessor, the archbishop had nothing unkind to say about usury. Tillotson dismissed OT prohibitions against the practice, explaining that they applied only to primitive agricultural economies. He urged London's merchants to use any profitable tactic as long as they minded their manners and kept their hearts pure. Tillotson was not alone. Other Anglican moralists in London, Dutch reformed ministers in Amsterdam, French Calvinist pastors in exile, and Puritan preachers in Boston all had come to the same conclusion by the last decade of the seventeenth century. Usury no longer deserved to be called a sin.3

Fenton's and Tillotson's writings suggest two opening observations on the history of Christian teaching about usury. First, few topics aroused such extensive debate from the mid-sixteenth through the seventeenth centuries as did usury. Economic counselors to the French and English crowns, propagandists for overseas trading companies in the Netherlands and England, humanist essayists throughout Europe, municipal officials in the North American colonies, writers of devotional tracts, preachers, authors of formal thologieeveryone wrote about usury. Usury sparked such debate because it represented an economic revolution. The exchange of credit for profit held together an ensemble of new economic practices that made the western market system during this period. Widespread commercial networks depended on an expanding number of instruments to transfer wealth: minted money (specie) and paper money to be sure, but also book debts, private notes of credit, printed merchants' notes, bonds, mortgages, and insurance policies. Just as one might associate "capitalism" today with controversial financial instruments, such as hedge funds or derivatives, that divide moral commentators into critics and supporters of a free market, so, too, with usury. Those like Tillotson, who legitimated usurywho discarded ancient prohibitions, replaced moral invective with technical economic recommendations, or merely omitted critique of loan practicesunderstood the emergent economy as a means of national prosperity and social integration. Those like Fenton, who blasted usury with Scripture and tradition, interpreted the market system as a threat to the economic order and tool for selfish individualism. When commentators pulled the thread of usury, they unraveled the fabric of the whole commercial order. In the midst of such transformations, moral commentators through the seventeenth century faced a genuine dilemma. What had been a consensus across major Christian movementsusury was in all respects a sinfractured into qualifications, judgments that varied according to circumstance, and downright contradictions. The very term "usury" stood for an ever-changing array of exchange techniques: taking any interest on loans, making loan contracts that embedded fees or late payments, charg-

3 John Tillotson, The Works of the Most ReverendJohn Tillotson (London, 1712 [published posthumously], 259-88). See for evidence from the other moralists mentioned here, Edward Sullingfleet, A Letterio a Deist (London, 1677), 119-22; Albert Hyma, "Calvinism and Capitalism in the Netherlands, 1555-1700," Journal of Modern History 10 (1938): 321-43; J. F. Bosher, "Huguenot Merchants and the Protestant International in the Seventeenth Century," William and Mary Quarterly, 3rd ser. 52 (1995): 77-102; and [Cotton Mather,] Thirty Important Cases Resolved with Evidence of Scripture and Reason (Boston, 1699), 49.

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ing more than the legal limit on loans (typically from 5% to 8%), raising prices for rent or other necessaries taken on credit, making commercial deals that in any effect guaranteed a profit to the lender, and manipulating exchange rates for payment in foreign currency. Apart from Catholic teaching (and here, too, there were differences among ecclesiastical and theological officials), no tradition developed an authoritative rule for such a plethora of lending practices. Seventeenth-century Christians confronted "usury" with different definitions, justified some forms of it while rejecting others, changed opinions, and expressed as much ambivalence, if not confusion, as they did moral certainty. The difference in perspective from Fenton to Tillotson suggests a second observation: during the seventeenth century, the dominant teaching in Christian Europe about usury changed. Despite continuing redefinitions and moral deliberation, this is clear: at the beginning of the century, most Western Christians read Scripture to include strictures against the exchange of credit for profit, and at the end of the century, they read Scripture to allow for it Divines such as Tillotson and his contemporaries dismissed over 1500 years of Christian prohibitions against usury. They represented the Christianization of an economic practice that has since become known as modern, rational, and unavoidable. This remarkable transition has often been portrayed as the result of the Protestant, and particularly Calvinist, Reformation. So, the story often goes, ancient and medieval moralists inhabited an Aristotelian economic universe where consumable commodities and money occupied quite different spaces.4 Commodities could be sold for a profitfor more than the cost of producing or procuring them. This was the case because they kept their value when transferred between seller and buyera bushel of wheat or gallon of wine were worth no less when sold than before. Indeed, they were worth more because of the added value of the seller's labor. Money, however, functioned in theory as a mere sign of value. It was an empty marker, its only worth lay in its power to effect exchange. As a mere medium for trade, then, by necessity it could not increase in value during business transactions. The use (Latin usura,fromwhich we get "usury") of money as a means of profit in and of itselfto make money merely from lending moneywas a misuse. It imputed to money real value past the point of exchange. It moved the medium of exchange into the realm of commodity. In the process, it changed the meaning of what ought to have been a constant sign. Making money from loans was akin to using a ruler to measure cloth while changing the length of an inch every time a measurement was made. That was why Scripture unequivocally condemned it It was not merely that moneylenders often oppressed poor borrowers. The poor could be oppressed by any number of other means, including high prices or rents. Usury was especially perverse because it was all a ruse. It was sheer theft. According to this commonly received narrative, Catholic moralists maintained that usury was unconditionally and universally wrong. Humanists of the Renaissance, along with a few of the earliest

4 For one example of this common narrative, see Norman Jones, "Usury," EH.NetEncyclopedia: Usury ( Accessed June 21, 2010.


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reformers trained in Catholic moral theology, such as Luther, condemned usury, even as Venetian and Baltic merchants began to discover the vast profits to be made by lending money for overseas trading ventures or for the creation of domestic markets. The Roman Catholic church accordingly maintained anti-usury rules through this period and beyond. A 1745 papal edict reasserted the unlawfulness of the practice. Only in the mid-nineteenth century did the church loosen its prohibitions, chiefly through a series of rulings by the Roman Congregations that never officially rescinded the 1745 decree, but that nonetheless narrowed the definition of "usury ' to overly oppressive interest rates inflicted on impoverished debtors.5 Reformed Protestants, especially John Calvin, supposedly broke the Catholic framework6 They observed that in fact, the value of money changed through time, despite medieval theory. In the expanding commercial milieu of Protestant, urban centers, price inflation rendered a pound worth so much grain one year, and less the next The creditor who loaned one pound in 1555 and received a pound in return in 1557 might in fact lose money. Some interest merely kept pace with price inflation. More importantly, the opportunity for long-distance exchange transformed money into a means of production. Merchants invested in trading ventures rather than in agriculture or manufactures, and deserved a return on it Given such assumptions, Aristotelian conceptions of the "sterility' ' of money appeared to be outdated. There remained little reason to interpret Scripture on usury to mean any profit from a loan. Writers such as Calvin accordingly distinguished between a legitimate increase on credit and egregious or uncharitable returns on loans, especially to poor debtors. Calvinists sometimes called the latter "usury" in the sense of necessarily vicious (they referred to OT prohibitions against nsk, translated as ''biting usury") Their arguments were altogether different than those made by the Catholic schoolmen. Informed by a Protestant emphasis on faith and a personal appropriation of Scripture, they defined commercial ethics by the standard of internal motive rather than by the canons of ecclesiastical authority. Intention, in other words, often marked the line between good and bad loan practices. The Reformers, according to this reading, had deconstructed medieval objections to usury and opened the way for modern commercial uses of credit It took a generation of Protestant moralists to realize the implications of this innovation and to overcome medieval scruples, but overcome they did. Calvinists thus led the way through the seventeenth century. Puritan divines, their parishioners in London, and their devotees in New England built small trading firms and whole colonial economies out of the exchange of credit. Huguenot financiers chafed against Catholic teaching and, exiled by French royal persecution, moved throughout the Atlantic world to create long-distance mercantile networks. Dutch Reformed bankers transformed Amsterdam and Leiden into fiscal powerhouses, the envy of other European cities. By the time Archbishop

See, among many such accounts, Jones, "Usury." The standard argument about usury and Calvinism, from which this the next two paragraphs are based, is Benjamin N. Nelson, The Idea of Usury: From Tribal Brotherhood to Universal Otherhood (Princeton: Princeton University Press, 1949).

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Tillotson came along, Reformed leaders had created a new Protestant economic mentalityfocused on individual conscience rather than external regulation, ready to dispense with traditional teachings on exchange, and eager to profit from newly established commercial networks held together by credit. Tillotson merely gave formal Anglican recognition to a widespread shift in moral perspective. This Protestant-as-opposed-to-Catholic reading of usury is misleading. Many Catholic moralists anticipated the supposedly Calvinist argument long before Calvin. As early as 1467, the papacy had validated Italian "charity banks" that charged interest on loans to Venetian merchants and used the profits for charitable purposes. Late medieval theologians such as Jean Gerson, Gabriel Biel, and John Eck (who was deeply indebted to the Fugger banker family) explicitly criticized the ancient assumption that usury was fraudulent by nature. They reasoned that long-distance trade and banking had changed the meaning of money, from a mere measure of exchange value to a means of investment in commercial ventures. That is, even pre-Reformation schoolmen recognized that the new function of money justified interest on credit within legal limitsan opinion that did not, they argued, contradict scriptural and traditional prohibitions against oppressing debtors.7 Moreover, Protestant teaching was not as lenient as the standard narrative claims. Fenton's critiques reflected a widespread Protestant assumption through the early seventeenth-century that making a profit from credit often violated scriptural norms for justice, despite the fact that most European states, including England, legalized interest rates from 6% to 8% on domestic loans and 10% on overseas credit


Calvin serves as a telling case in point 8 In a city so dependent on trade as Geneva, he could hardly condemn all new credit practices. He promoted the establishment of a public bank and supported a 5% revenue on loans given to traders who used the funds for business ventures. His earliest writing on usury, a 1545 letter to Sachinus, a conscience-stricken German merchant operating out of Baltic ports, explained that making a such a profit was not illicit if the creditor shared the risk of the venture. That is, if the project produced no profits, then the creditor was due no increase. Calvin's advice followed Genevan precedent and Catholic teaching already in placethe allowance for a modest income from loans given as commercial investments. He effectively affirmed an emerging distinction between what we now call commercial credit and consumer credit The former was allowable within strict limits. The latter, which included any loans not immediately used for speculative ventures, was usurious in the sense of illicit and deplorable. Scriptural prohibitions, that is, applied especially to consumer credit or personal loans between individuals.

7 See John T. Noonan, The Scholastic Analysis of Usury (Cambridge, Mass.: Harvard University Press, 1957). There are numerous Catholic web sites that rehearse this history. Many of them argue that changes in Catholic teaching on usury do not imply the denial of traditional teaching or contradiction to papal moral authority. See, e.g., Arthur Vermeersch, "Usury," The Catholic Encyclopedia, vol. 15 (New York: Robert Appleton Company, 1912), available on the Internet as Accessed June 21, 2010. 8 This and the next two paragraphs are based on the documentary evidence provided in Mark Valen, "Religion, Discipline, and the Economy in Calvin's Geneva," Sixteenth Century Journal 2% (1997): 123-42.


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Historians eager to describe Calvin as a promoter of modern credit practices often cite his letter to Sachinus, but Calvin's understanding of usury was relatively conservative. He grew critical of city merchants who, without using the term "usury," deployed various tactics to gain from needy immigrants or indigent Genevans. They lent money to farmers during the winter and demanded repayment when grain prices reached their highest levels, reaping profits of as much as 30%. They levied spurious fees on loans, such as penalties for late payments or charges for currency exchange or drafting contracts. They hid high interest rates by fixing contracts so that the debtor agreed to a 5% annual interest rate, yet was obliged to pay the principal and a year's interest within the first month of the loan, making for a 60% annual rate. During the 1550s and early 1560s, Calvin's criticisms of such practices rose to a condemnation of nearly all forms of usury. Eventually, he turned against even legally sanctioned uses of commercial credit He filled his social commentary with denunciations of financiers and their abuse of credit,finallyconcluding that a well-run commonwealth would outlaw usury completely. Calvin matched his rhetoric with practical discipline. The Genevan Consistory, with the reformer as its leader, conducted a near witch hunt for usurers during periods of economic strain in the city. It hounded suspected usurers, from small-time loan brokers to large-scale grain merchants. Devoting over one-fifth of its disciplinary trials to various forms of usury, the Consistory issued dozens of punishments, ranging from verbal admonishment to excommunication and, ultimately, to civil fines and expulsion from the city. Calvin's admirers in late-sixteenth and early seventeenth-century Europe remembered him as a fierce opponent of the new forms of usury fueling Europe's growing commercial economy. Geneva was not unique in this regard. Taking its cue from Calvin (indeed, quoting him at length), the Reformed Church of France issued national edicts from 1559 to 1567 that condemned usury. They forbade bankers from taking communion, linking those who made money from credit to pirates and hucksters. The Dutch Reformed Church did its French counterpart one better. National synods from 1574 through 1620 listed lombards, or bankers, not only alongside pirates and hucksters, but also acrobats, clowns, and prostitutes. The synods banned lombards from the Lord's Supper and suspended high-flying financiers such as Isaac LeMaire for their usurious practices. Academic divines such as Gisbert Voetius and city preachers such as Jacobus Triglund legitimated this discipline with detailed accounts of the corruptions of Amsterdam's financial exchange, the cupidity of merchants, and the intrinsic evil of commodifying credit at every opportunity.9 Calvinists in England adopted the same teaching. Puritan pastors and divines urged severe restrictions on loan practices through the mid-seventeenth century and wielded church discipline against violators. True enough, they allowed small rates of interest that kept pace with inflation. They also per-

9 See The "Acts, Decisions, and Decrees" of the Reformed Churches of France during this period, reprinted in John Quick, Sjnodicon in Gallia Reformata (London, 1692), 8-9, 48-53, 65, 79-80. For LeMaire, see J. G. Van Dillen, 'Isaac LeMaire et le commerce des actions de la Compagnie des Indes Orientales," Revue d'Histoire Moderne 10 (1935): 5-21, esp. 7-8. For Dutch synodical decisions, see J. Reitsma and S. D. van Veen, eds., Acta derVrovindak en Particulire Synoden... 1572-1620 (8 vols.; Gronigen: J. B. Wolters, 1892-1899), 1:273; 2:148; 3:155,252, 271-72,284; 4:92, 96, 345; 5:236,246. For Voetius, see his Selectae Disputationes Theologicae, in John W Beardslee III, d. and trans., Reformed Dogmatics: J. Wollebius, G. Voetius, E Turretin (New York: Oxford University Press, 1965), 269-75. For Amsterdam's preachers, see Simon Schama, The Embarrassment of Riches: An Interpretation of Dutch Culture in the Golden Age (Berkeley, Calif.: University of California Press, 1988), 51-125.

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mitted commercial investment for profit, as long as the creditor bore the risk of investment This allowance, however, did not preclude prohibitions against contracts that guaranteed profits to creditors and thereby took unfair advantage of debtors who alone bore risks but shared rewards. Puritan authorities such as William Perkins, William Ames, and John Cotton, along with lesser lights, condemned merchants' increasing reliance on guaranteed interest on loans.10 Social commentators and moralists in London, such as the humanist jurist Thomas Wilson, the economic writer Gerard de Malynes, Anglican divines such as Fenton, and Puritan preachers decried the various schemes by which creditors made profits without active production and labor, as though the mere elapse of time enhanced the value of their money. like today's financial wizards, England's early modern usurers appeared one step ahead of moral critics, always innovating ways to sell credit. Landlords raised rents for those taking room on credit Shopkeepers inflated prices for goods sold on credit. Financiers accepted mortgages for collateral and received rents from the mortgaged land on top of repayment for the original loan. Merchants devalued securities with future redemption dates or attached insurance fees to bonds. By the 1620s, usury had become, for its critics, a synecdoche for nearly every form of avaricious dealing.11 Resistance from the Crown prevented these Anglicans and Puritans from enacting formal ecclesiastical censure against usury, but Puritan immigrants to New England seized the opportunity to model a Genevan-style discipline in the New Worid. During the first decades of setdement in Massachusetts Bay, Puritan churches worked in concert with the civil government, or General Court, to punish merchants who charged interest on consumer loans or profited from indigent debtors. The court enacted a 5% ceiling on commercial interest Pastors during the 1630s and 1640s brought suspected offenders before church courts for censure or excommunication. Yet even in Massachusetts, anti-usury sentiment faded by the end of the 1680s. Preachers such as Boston's Samuel Willard, New England's most accomplished theologian before Jonathan Edwards, attacked medieval restrictions as hopelessly irrelevant to modern commerce. In 1699, Boston pastor Cotton Mather informed New Englanders that Puritan ministers no longer regarded usury as sinful. Meeting as the Cambridge Synod, they had determined that usury, or "an Advance on any thing lent by contract" (that is, as a guaranteed fee or interest rate) was legitimated by the T)ivine Law" of the OT, given "countenance" in the NT, 'Justified" by economic "Necessity and Utility," mandated by the ethical principle of equity, and congruent with the moral "Law of Charity." The changing nature of money rendered the old distinction between commercial and consumer credit philosophical nonsense. As Mather put it, money was indeed a commodity: "Money is as really Improvable a thing as any other; and it rather more than, less productive [sic]" so that "there can be no reasonable pretence that should bind me to lend my Money for nothing, rather than any other Commodity whatsoever: nor can a

10 Norman Jones, God and the Moneylenders: Usury and Eaw in Early Modern England (Oxford: Oxford University Press, 1989). 11 This and the following two paragraphs are based on the documentary evidence provided in Valeri, "Religious Discipline and the Market Puritans and the Issue of Usury" William and Mary Quarterly 3rd ser. 54 (1997): 747-68.


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Contract in this case by more blameable, than in any other." Treating credit as a commodity, to be sold on the market for the going pnce, was not only acceptable but a moral mandate. Mather and his colleagues imagined usury to be a means of sociability, prospenty, and the common good.12 Similar accounts can be given for the Reformed churches in the Netherlands and France. Dutch church leaders relied on the advice of progressive theologians such as Johann Knex and Claude de Saumaise, who dismantled the old objections against usury during the 1650s and 1660s. After Saumaise produced a lengthy treatise that defended usury and trading in secunes, the synods of Amsterdam and Leiden removed restrictions on lombards, effectively giving sanction to modern credit practices. The Reformed Church in New York grew wealthy by establishing a real estate and banking business funded with high interest rates. We have no parallel accounts from the Reformed Church in France because the Crown outlawed its synods after 1600. Yet we do have evidence of change from Huguenot churches abroad. The Reformed French Protestant Church in Charleston, South Carolina, for example, served that colony's most potent financiers, who became church elders and loan brokers with no apparent sense of contradiction during the 1680s.13 To be sure, Mather and his contemporanes condemned ruthless treatment of impovenshed debtors. Likewise, no moralist countenanced interest rates, such as 30% or more, that violated common standards of decency.14 Yet from the end of the seventeenth century to the present, Protestant commentators have sanctioned the modern protocol for lending practices: market factors determine interest rates, fees, and other charges for pnvate loans, consumer banking, and commercial investment alike.


How was it that by the end of the seventeenth century moral theologians had abandoned their fulminations against usury and removed ecclesiastical restnctions against bankers^ How did it come about that Tillotson and others not only justified usury in the limited technical sense of making an investment in a commercial venture with a 5% or even 10% return at best, but also in an expansive sense of allowing a guaranteed profit from any kind of loanincluding consumer loanswith interest rates that rose and fell by market demand? What sparked this immense change? The answer has little to do with a supposed Protestant ethic embedded in Calvinism: the notion that Reformed theology sanctified capitalistic impulses by elevating pnvate intention over traditional rules. The history of Calvinist objections to usury through the 1640s belies that assumption. The answer lies instead in the relationship between the commercial revolution of the seventeenth century

The decree was recorded by Cotton Mather and published in his Thirty Important Cases (Boston, 1699), 51 For the synods, see W C Knttel, ed, Acta der Particulire Synoden van Zmd Holland, 1620-1700 (6 vols Granvenhage M Nijhoff, 1908-1916), esp 4 1 3 For the progressive theologians and usury, see Jelle C Riemersma, Religious Factors in Early Dutch Calvinism, 1550-1760 (The Hague Mouton, 1967), 79-80 Saumaise's work was De Usuris Liber (Batavor, 1638) For the South Carolinian Huguenots, see R C Nash, "Huguenot Merchants and the Development of South Carolina's Slave Plantation and Adantic Trading Economy, 1680-1775," in Bertrand Van Ruymbeke and Randy J Sparks, eds, Memory and Identity The Huguenots m France and the Atlantic Diaspora (Carolina Lowcountry and the Atlantic World, Columbia, S C University of South Carolina Press, 2003) 208-40 14 This general standard holds today even in modern free market economies Most American states, for example, have caps on interest rates anywhere from 5% to 40% above the Federal Reserve prime rate, depending on the type of loan (loans between individuals, loans for large purchases such as cars, or credit card loans) The state with no such limits, South Dakota, is a favorite home for credit card companies See "Usury Laws by State," http //wwwusurylawcom/state/ Accessedjuly8,2010


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the growth of overseas trading lines, expansion of domestic markets, and creation of a consumer cultureand what contemporaries perceived as a worldwide struggle between Catholicism and Protestantism. Protestants transformed the morality of credit as a means of protecting their churches in the midst of a transatlantic contest for empire that began during the 1650s. Catholic dynasties such as Spain and France competed with Protestant regimes in England and the Netherlands for commercial riches that funded new state bureaucracies, supported a growing military, and protected colonial ventures. Money, the means of war, came to serve the interests of godliness in the early modern world.15 To begin with the economy itself, we should note that Protestant and Catholic powers relied on different forms of money to facilitate trade. Spain ran its transatlantic commerce on the fuel of Mexican gold and Peruvian silver, minted in vast amounts and transported to Europe. France relied on Spanish specie imported (and re-minted into French coins) through the sale of massive amounts of agricultural produce. The value of this specie was relatively stable, fixed to the actual amount of precious metal in each coin. With little access to gold and silver, England and the Netherlands represented an altogether different monetary system. They and their colonial dependencies depended on the power of paper money and transferable securities (notes and bonds) to facilitate trade. The imperial market systems of western Europe's Protestants rested on complicatedsome economic historians employ the term "abstract"instruments at nearly every transfer in an ever-expanding series of exchanges.16 The most widely used of these instruments were called bills of exchange. Merchants in London, Amsterdam, Boston, and New York wrote and received these signed notes (something like IOUs) that promised payment in goods or cash by a set date and prescribed penalties for late payment They also included interest, or a prescribed increase over time, which was a form of payment for the use of such funds. That is, the merchant who signed a bill of exchange over to another merchant was remunerating the recipient for the use of credit in a commercial transaction. More importantly for the history of usury, perhaps, was the way in which these bills became substitutes for money in all forms of transactions. In the absence of specie, shopkeepers, farmers, fishermen, peddlers, and artisans all began to use bills of exchange for everyday business. When they did so, they engaged in a practice that previously had been called usury, but that passed in their day as a necessary means of business.17 In the complex nexus of the expanding market, effective exchange required rapid, impersonal, and legally accountable measures to transfer credit and assure some penalty for delayed payment Recipients of bills of exchange often transferred them to other creditors, indebting its original signer to someone whom he had never known. In such cases, it was practically impossible to follow the customary religious mandate to refrain from taking interest from a poor debtor, to distinguish between commercial and consumer credit, or to monitor one's motives so that debtors were not used as means of

15 For the Protestant interest in this penod, see Thomas S. Kidd, The Protestant Interest New England After Puritanism (New Haven: Yale University Press, 2004). For the relationship between commerce and impenal warfare in this penod, see Istvan Hont, Jealousy of Trade: International Competition and the Nation-State m Historical Perspective (Cambndge: Harvard University Press, 2005). 16 Craig Muldrew, The Economy of Obligation: The Culture of Credit and Social Relations in Early Modern England (New York: St. Martin's Press, 1998). 17 For this and the next paragraph, see Larry Neal, The Rise of Financial Capitalism: International Capital'Markets m the Age of Reason (New York: Cambndge University Press, 1990).


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profit One may have never met one's debtor. Bills of exchange in effect made usury a commonplace without an explicit reference to high interest rates on personal loans. The widespread circulation of bills of exchange eroded many previously held rationales for antiusury sentiment Even the most conservative critics of usury found themselves at a loss to analyze the specific meaning of usury amidst multilayered and indirect exchanges, the unavoidable treatment of credit as a commodity, new accounting measures, fiscal rationalizations for interest, and complex debt litigation. Formal economic theory, attached to international politics and nationalist agendas, provided the patriotic sanction for this expansive commodification of credit A new genre of social commentary published from the 1660s through the 1690sbeginning in London but soon spreading to other Protestant territorieslegitimated free-floating interest rates and rising loan fees as an economic necessity and national mandate. Advisors to Parliament and advocates for England's overseas trading companies gradually assembled a body of literature that derived economic principles from technical analyses of market exchange and the overall, long-term production of wealth. Sometimes classified under the rubric "mercantilist,'' economic writers such as Sir William Petty addressed the nation's economic problemsshortage of coin, depression in the cloth trade, scarcity of goods, unemployment, and rising povertywith proposals to enhance exports and the overall exchange of goods. They sometimes offered contradictory advice on interest rates, but they all rested their arguments on fiscal analyses, trade statistics and other empirical data, mathematical reasoning, and comparisons especially with European competitors.18 In their advice to the English government, these proto-economists excluded customary moral and religious objections to usury. They rejected earlier commentators who assumed that prices should be stable, specie had an unchanging value, and usury corrupted credit transactions. Money had no fixed value, they argued; its worth changed as it facilitated different market transactions. The practical effect of monetary policy and innovative credit schemes eclipsed abstract arguments about the nature of money. Higher interest rates in fact encouraged investment in overseas ventures and expedited commerce. Analysts such as Petty suggested that the sooner that English policy makers learned that lesson, the sooner they would encourage English merchants to adapt to rather than resist currency fluctuations, compete in the exchange of credit, allow their prices in commodities (including money) to rise to the greatest profit level, andhere was the payoffenhance England's balance of trade. The merchant and financier who understood the market and maximized returns from it served the public good. Here was Western Europe's first thoroughgoing legitimization of usury, appearing in a flood of

18 For this and the next two paragraphs, see Joyce Oldham Appleby, Economic Thought and Ideology in Seventeenth-Century England (Princeton: Princeton University Press, 1978).

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economic pamphlets during the second half of the seventeenth century. Popular Anglican theologians such as Tillotson submitted to such logicif usury was good for England, then it was good for Protestantism. They could hardly condemn it It did not take long before Dutch and Huguenot merchants adopted similar arguments: usury was good also for the Netherlands, and for a French Protestant diaspora completely reliant on longdistance mercantile exchange. American Puritans, along with their counterparts in New York and Philadelphia, followed suit They all joined intense devotion to the Protestant cause to the economic well being of their respective nations. They came to understand what previous commentators had condemned as usury to be divinely appointed instruments to best the Spanish and French in trade. Enhanced national prosperity followed, along with the means to fund national armies that restricted the powers of the Catholic antichrist in Europe and limited its spread across the New World. To be sure, Rome had its economic resources: agricultural output in Italy and France, the gold of Montezuma, and the silver mines of Potosi.19 Late seventeenth-century Protestants knew, however, that the supply of precious metals would eventually dwindle, and that real commercial power could outpace agricultural production. They were right The English and the Dutch owned the future. By their judgments, a brisk trade in credit, making money from money, enhanced the very cause of liberty and godliness in the worid. It was no wonder that men such as Archbishop Tillotson found predecessors such as Roger Fenton to be hopelessly out of date.20 From our perspective, we might well question whether these seventeenth century moralists had the story just right We ought not to doubt their impact They made for a modern interpretation of usuryone that overcame ancient and medieval tradition, and that helped to form economic sensibilities to this day. Yet we can also recognize that the imperial agendas and religious polemics of their day distorted their vision. The early modern apologists for usury conformed the Bible to their peculiar needs and aspirations. Their understanding of history and the potential of a free market in credit to abet the true church might appear anachronistic, perhaps even dangerous, to us. It was a peculiar seventeenth-century preoccupation. The Chnstianization of usury thus provides a case study of the limitations of a highly contextualized reading of Scripture. If we find the conclusions of the apologists for usury troublesome, then we might ponder the problems of interpreting the Bible through the lenses of contemporary social situations. Such interpretations can produce surprising innovations. They might appear morally uplifting. Yet, when our contextual readings obscure the text itself, they can also inhibit the power of the Word to challenge our assumptionsto speak against the political and social agendas that shape our worldview

19 J. H. Elliott, Empires of the Atlantic World: Britain and Spam m America, 1492-1830 (New Haven, Connecticut: Yale University Press, 2006), esp. 88-114, 184-218. 20 See Mark Valen, Heavenly Merchana^: How Religion Shaped the Market m Puntan America (Princeton: Princeton University Press, 2010).

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