Jewish Moneylending

The profitable money business between Jews and Christians often became tense.

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The following article recounts the history of the main commercial occupation of Jews in Christian Europe, moneylending. It is reprinted with permission from Medieval Jewish Civilization: An Encyclopedia (Routledge).

Jewish Law Took an Interest in Interest

General histories of the Middle Ages, and even more specialized ones such as those on medieval commerce, say two things about Jews: they were “usurers” and they engaged in the slave trade. One of the oldest Christian accusations against Jews in the medieval period was, indeed, that of usury. If by “usury” we accept the Canon Law definition of any profit whatever, then Jews were of course usurers; but the modern understanding of the term is rather the taking of excessive interest, and to avoid that argument, and the pejorative connotations of the term, “moneylending” is preferred in this article.Medieval coins. 

Biblical law forbids taking or giving interest to “your brother” (a fellow Jew), whether money or food or “any thing.” The Talmud interpreted this very strictly, so much so that even greeting someone from whom you have borrowed, if such greeting had not previously been the custom, is forbidden. [For Biblical law regarding moneylending, see, for example, Exodus 22:24, Deuteronomy 23:20-21, Leviticus 25:35-37.]

The Bible further permitted lending money on interest to a “stranger”, but prohibited it to a fellow Jew (“your brother”). The Talmud observes that even the borrower transgresses the commandment if he borrows on interest…

Originally, the medieval rabbinical attitude toward lending money on interest to Gentiles was very conservative, restricting it to scholars (not only as a means of income but because it was felt that they would be cautious about such loans and limit the interest charged) or to cases where it was absolutely necessary for livelihood.

Moneylending Yielded High Profits for Little Risk

Ultimately, however, the potential of great profits and the widespread demand for moneylending made it universal among Jews. Mordecai B. Hillel of Germany (b. 1298) wrote that there is no profit in any form of commerce like that to be made in lending money. Ibn Adret in Spain observed that it has become permitted for everyone to charge interest on loans to Gentiles, “and now all have made themselves ‘sages’ in this respect, adding that he heard in the name of Rashi, that this is because taxes have constantly been increased and there is no longer any limit to “because of livelihood” (i.e. in order to meet their tax burden, Jews had no alternative.)

As noted elsewhere, fanciful theories have been advanced as fact with regard to Jews either having been “forced,” or voluntarily choosing to abandon landholding, and with no alternative choosing moneylending as a livelihood. Not one scrap of evidence has ever been produced to support such theories, and in fact there is no evidence. Undoubtedly the above statement by authoritative rabbis are correct: the ever increasing tax burdens, on the one hand, and the relatively large profits to be made with virtually no risk, on the other, encouraged Jews to engage in moneylending on ever larger scales.

Christian Moneylending: Ignored Laws, High Interest

Another factor that has sometimes been suggested, the lack of alternative availability of lenders owing to church prohibitions on usury, ignores reality in favor of theory. While it is true that canon law, beginning in the late twelfth century and throughout the thirteenth, placed absolute prohibitions and harsh penalties on Christian lending on interest, it is also true that these measures were frequently ignored in practice even by churches, monasteries, bishops and the popes themselves.

Italian merchants were present in France and Germany and ever ready to lend money, charging such rates of interest as the market would allow. It has frequently been pointed out that the rates of interest charged by Jews never approached the rates charged by Christian lenders, including Church authorities…

Strange Relationships

Just as Jews lent money to Christians, so they also frequently borrowed money from them, also on interest. Indicative of this strange and often uncertain relationship that existed between Jews and Christians is an interesting responsum concerning a Jew who had borrowed money from a Christian and asked a Jewish friend to give him the money to repay the debt. Then some other Christians came and robbed the houses of the Jews (the question was whether the debtor was not required to return the money that his friend had given him, since it would anyway have been stolen, had he not given it to him: the answer was. that h e was obligated to repay it.).

However piously Church officials protested against “usury;” they were themselves quite willing to borrow money from Jews. Already in the ninth century we hear of priests selling church vessels to Jews, and later such object were frequently given as pledges for loans, in spite of the protests of the cantonists and civil law…Jews also had to be careful about taking surety objects that later could be claimed to have been stolen (although at times laws protected Jews against such charges) or “bloodstained garments” that could be suspicious.

It was certainly prudent and necessary to have some form of security, in the way of pledges, for loans to Christians, since it was often easy enough for the borrower simply not to repay the loans…Eventually it became necessary for civil authorities, and particularly the kings, to enact measures protecting the moneylending privileges of the Jews and to ensure that they were repaid.

Did Jews Actually Charge Exorbitant Interest?

There is not doubt that some Jews, at least, charged what today would be considered exorbitant rates of interest. There is the report, for example, of the abbey of Saint-Benigne in Dijon (France), which in 1196 borrowed 1700 livres (pounds) from a Jew at the rate of 65 percent. For eleven years the abbey could not pay anything on the loan so that the debt had grown to 9825 livres. In Marseilles, the abbey of Saint-Victor in 1185 owed 80,000 sous to the Jews of the city and granted them some property, which would have included churches in payment. To avoid this “scandal” of Jews owning churches, the bishop of Antibes assumed the debt himself.

On the other hand, it must be realized that these rates of interest were annual, and rarely did loans to individuals, at least, remain unpaid for as long as a year…As we have seen, though, in some cases the debtors made few or no payments for years, and then complained bitterly about the high interest.

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Norman Roth is a professor of Jewish History at the University of Wisconsin, Madison.