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

By
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

Bibliography
Preface

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.

	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.” 
	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. 
	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.
Introduction

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.

	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.
	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”.  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.
	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.”  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.  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.”  (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.

	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.  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.”
	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.”  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.”  He cites as his final proof the 1745 encyclical of Benedict XIV, Vix Pervenitwhich Halsall claims forbids all interest.
	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.In 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.”  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.”
	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.”It 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.”
	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.  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”and is a violation of the law of God, prohibited by the prescriptions of both “the Old and Divine law.”St. Ambrose primarily bases his argument on the prohibitions of usury in the Old Law, Exodus 22:25 and Leviticus 25:36.
	St. Jerome similarly defines usury, “One calls anything whatsoever usury and surplus if one has collected more than one has given.”In 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...”This 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,showing 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.When 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.
	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.
	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”.Based upon these canons, Noonan seems to be correct in saying that the sinfulness of usury “is proximate to being a matter of faith.”
	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.
	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.”  Their repetitious arguments often talk about how “the official Church has changed its teachings in other matters – e.g. religious liberty and usury.”  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.”Usury 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.”
	“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.”Arguments 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.”Pope 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.
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.”
	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.”  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.”This 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.”There 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.”
	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.”This claim is verified by Pope John Paul II in 1994:
there is a need to seek out and to discover “the most adequate formulation” for universal and permanent moral norms in the light of different cultural contexts, a formulation most capable of ceaselessly expressing their historical relevance, of making them understood and of authentically interpreting their truth. This truth of the moral law – like that of the “deposit of faith” – unfolds down the centuries: the norms expressing that truth remain valid in their substance, but must be specified and determined eodem sensu eademque sententia in the light of historical circumstances by the Church's Magisterium.
	Development in moral teaching occurs, but we must still have a way to distinguish legitimate developments of truths from corruption, deviation and error.  One sure guide for Cardinal Newman is that no legitimate development will ever contradict or nullify a previous teaching.  This makes one wonder how a “new moral doctrine” on usury that is “substantially different from that taught throughout the Middle Ages”  can be considered a “development” of the older teaching.  To remain faithful to the thought of Newman, one must maintain that “new doctrines were only more elaborate formulations of older truths that brought out features that were implicit but unstated in the earlier expressions of the truth.”  This would agree with the First Vatican Council which says there is a possibility of development of doctrine only if “that meaning of the sacred dogmas is ever to be maintained which has once been declared by Holy Mother Church, and there must never be any abandonment of this sense under the pretext, or in the name of, a more profound understanding.”
	Pope John Paul II says that the development of the Church's moral doctrine is similar to that of the doctrine of the faith.  “The words spoken by John XXIII at the opening of the Second Vatican Council can also be applied to moral doctrine:”
This certain and unchanging teaching (i.e., Christian doctrine in its completeness), to which the faithful owe obedience, needs to be more deeply understood and set forth in a way adapted to the needs of our time. Indeed, this deposit of the faith, the truths contained in our time-honored teaching, is one thing; the manner in which these truths are set forth (with their meaning preserved intact) is something else.
This lays out the tight-rope which we must be careful to walk: there has obviously been development and change in the Church’s teaching on usury, but what aspects of the Church’s teaching on usury have been maintained, and what truths have been and must be preserved?
	Even if an authentic development of the usury teaching is found to exist, this does not mean that all Church teaching is up for grabs, and this includes the Church’s moral teaching.  “Moral doctrine is plainly subject to genuine development.... authentic development can appear to be a reversal (although not really such): for example, development in the Church’s teaching on usury.”  The next three chapters will be a search for this “authentic development” in the Church’s teaching.
	When dealing with such development, very clear distinctions and careful analysis will be required.  Our examination on usury will require in depth and careful reading of the earlier teachings, looking for those “implicit features” of the original teachings which show that there is actually a harmony with the Church’s teaching today.  This is something that we have seen so many fail to do.  In fact, as we will continue to examine in the next chapter, the problem with many of these arguments is their sweeping generalizations that fail to examine exactly what the Church taught during each period of its tradition.
Chapter Two

The scholastic theory of usury by means of the Thomistic argument shows clearly and consistently the natural injustice of usury in money loans.  The theory is formally perfect.

	Many Catholics attempt to defend their faith and respond to the various attacks being made on the Church.  Several different arguments can be made which seem to uphold the teaching authority of the Church.  One way this is often done, especially when faced with such a large body of evidence, is to admit that the Church changed its teaching, but then respond by saying that there was something about the nature of this teaching which allowed it to change.
	To properly examine these arguments, we must understand the different ways in which the Church teaches, and one of the best summaries is Canon 749 of the current Code of Canon Law:
	§1.  The Supreme Pontiff, in virtue of his office, possesses infallible teaching authority when, as supreme pastor and teacher of all the faithful... he proclaims with a definitive act that a doctrine of faith or morals is to be held as such.
	§2.  The college of bishops also possesses infallible teaching authority when the bishops exercise their teaching office gathered together in an ecumenical council when... they declare that for the universal Church a doctrine of faith or morals must be definitively held; they also exercise it scattered throughout the world but united in a bond of communion among themselves and with the successor of Peter when together with that same Roman Pontiff... they agree on an opinion to be held as definitive.
	§3.  No doctrine is understood to be infallibly defined unless it is clearly established as such.
	Thus we see that the official teaching magisterium, composed of the Pope and bishops united with him, can be exercised in two ways: ordinary and extraordinary. The ordinary magisterium is the common teaching of the college of bishops throughout the world in union with the Pope.  The extraordinary magisterium is a formal declaration which defines a teaching, done only by the Pope or an ecumenical council of bishops that is approved by the Pope.
	Opinion among theologians is divided as to when the Pope speaks with infallible authority.  The definition of Vatican Council I defines it as only when the Pope “in the exercise of his office as shepherd and teacher of all Christians... defines a doctrine concerning faith or morals to be held by the whole church.”One of the strongest papal teachings on usury that could be argued to meet these criteria are the decrees of Gregory IX, which had 19 canons on usury.  These legislative teachings were promulgated as binding for the universal Church, and thus they would seem to meet the criteria needed for papal infallibility. 
	Yet some theologians interpret paragraph three of Canon 749 as saying that any infallible declaration must use a solemn formula such as: “We declare, pronounce, and define... to be doctrine revealed by God.”  The decretals of Gregory make no such statement, and neither does the encyclical of Pope Benedict XIV, Vix Pervenit.  In addition, Benedict’s letter is only addressed to the bishops and clergy of Italy, so it could be objected that it was not intended for the whole Church.  As theologians are divided on these issues, perhaps the most we can say is that the Popes taught strongly and with a high decree of authority that the taking of usury was sinful.
	Regardless of the level of papal teaching, we have seen that at least three ecumenical councils prohibited usury, and there is no doubt that their teaching is for the universal Church.  Yet some might claim that the intrinsic sinfulness of usury was never taught infallibly by the ecumenical councils of the Church, thus itcould be changed.  “It might have been said that each council action was only disciplinary.  Lateran II excommunicated usurers, Lateran III denied them sepulture, Vienne prescribed a method of punishment for defenders of usury.”
	Describing the Church’s teaching on usury as a disciplinary teaching puts it on the level of the prohibition of eating meat on Fridays, making a claim such as this:
In analyzing this concept, we must also distinguish between any early canonical bans on interest-taking, and the intrinsic immorality of usury.  The Church assumes the right to make reasonable rules for its faithful, who then sin by disobedience if they break such rules, even though what is forbidden is not per se evil.
Thus, Rupert Ederer argues that the Church has always taught that excessive interest is immoral per se (the modern definition of usury); yet when it also taught that all interest-taking was immoral, it was only as a disciplinary teaching.  This theory that usury was a disciplinary teaching follows the thought of Cardinal de la Luzerne who, in trying to justify the decisions of the Holy Office, said in 1822, “this prohibition is a purely penal, prudential enactment of positive law: the natural law itself dictates no such general prohibition.”
	The difficulty with evaluating such a claim is that the magisterial teachings themselves made no such distinction.  However, we can look to the arguments and analysis made by the scholastics as representative of the reasoning behind the prohibition.From even a brief reading, it is obvious that the usury prohibition was never taught just to correct the problem of excessive interest; rather, the taking of usury was prohibited by the fact that that it was considered unjust to take any interest just because one has made a loan.  Thus, while this argument sounds appealing, it does not seem to match the historical teaching.  Usury was taught as much more than a disciplinary teaching.  As Noonan argues, “the laws would not be made, the penalties would not be given, if it were not believed that the acts condemned were sinful.”
	Finally, what about the teaching of the ordinary magisterium, the teaching of the Bishops dispersed throughout the world?  No matter how one argues about the level of teaching of the popes and councils, it seems irrefutable to say that the usury teaching was taught by the ordinary magisterium of the Church.  Bishops, theologians, councils, and popes were united in teaching that usury is sinful, an extraordinary unity which spans across time and place.  If it is possible for the ordinary magisterium to teach infallibly, usury would seem to be such a case.
	So how could such a widespread, seemingly infallible teaching be changed without destroying the teaching authority of the Church?  When responding to Noonan on this issue, Patrick O’Neil makes an interesting argument that should be read in full:
The Church may err in falsos testes – because of inaccurate testimony (whether that inaccuracy be willful or inadvertent). This includes expert testimony in the literal sense of the sworn statements of laymen and scholars alike, as well as general scholarly opinion, or even the general popular opinion, in an area outside of faith and morals, but related to those judgments made regarding issues of faith and morals.
O’Neil then applies this argument to the case of usury:
The error concerning the charging of interest is an example of correct moral principles (against economic exploitation and so forth) mistakenly applied on account of the inadequacies of early economic theory. When better economic theory became available (along with the lessons of practical experience), the Church could change its position because the fundamental form of her judgment was: “If W is the economic function involved in the charging of interest, then the charging of interest is immoral, because economic activities must adhere to rule X (or rules X, Y, & Z).”Changes under these circumstances do not threaten the claims of the magisterium of the Church in any way. The discovery that the charging of interest does not (necessarily) involve exploitation, but represents instead legitimate payment for the time-value of money and for the risk factors endured by the lender, denies the antecedent of the hypothetical. 
	O’Neil’s argument is very thought provoking, for he presents the possibility of saying: we can admit that the Church’s position (conclusion) on usury changed, but the Church never actually changed its teaching, for it remained consistent throughout because it maintained a conditional teaching.  When the economics changed, so did the conclusion, but not the teaching.  This would also make the usury teaching something like an application of general principles to a particular situation, very similar to the Church’s teaching on just war.
	Can the Church teach a conditional moral teaching as O’Neil described:  as long as X, Y, and Z are true, you can or can not do a particular action?  It would seem the Church has taught in such a conditional manner in its teachings on just war, self-defense, and double effect.  As an example, the Church’s just war teaching would say that there are certain conditions which must be met before a war is just and one can participate.  Some of the conditions for a just war include: the enemy is committing injustices which should be stopped; it is a last resort and no nonviolent alternatives are possible; no cruel, wantonly destructive, or unnecessary means are used; and today Pius XII adds the condition that the war should be defensive and not aggressive.  “If all the conditions are met, war can be just.”
	The obvious implication is that the Church’s teaching of these general principles can be a definitive and unchanging teaching on a matter of morals, but the Church’s declaration that a particular war is or is not just could be in error.  The Church must rely on “expert” testimony and might not have full knowledge regarding the intent, means, etc. behind a particular war.  O’Neil essentially says the Church always taught that one cannot economically exploit others, and for a while, it saw charging interest on loans to be such an exploitation, until the economy later changed.  The Church never changed its principle, the injustice of economic exploitation; it only changed its application of this principle to a particular situation.
	This makes another appealing argument, except for two problems.  It allows some to claim that the Church was mistaken and erroneous in prohibiting usury; and again, the Church never phrased the usury teaching in such a way.  It seems that there are some economists today who claim that it was not economic exploitation to charge interest on loans during this time of the Church’s prohibition. In fact, several think the scholastic economic analysis was fundamentally flawed, thus there is some support for a claim that the experts and scholars gave inaccurate testimony.  Some have even argued that the usury doctrine was “especially backward.”  “The scholastics missed the entire interest rate problem in treating usury.”  However, the scholastic doctrine of usury also has several defenders among modern economists.
	In particular, Lord John Maynard Keynes, one of the great pioneers in economics this century, “reassessed the Scholastics’ theological economics... as valuable contributors to economic philosophy.”  In addition, Bernard Dempsey, trained as both a theologian and economist, used a “Thomistic account of economic life” which took the usury proscription seriously.On a practical level, whether it followed modern economic principles or not, it seems that in the medieval economy the usury rule was good for the society, it did not choke commerce; rather, it regulated the course of credit and may have even encouraged business.  It might even be argued that “the action of the Church tended to encourage rather than to retard commercial progress”
	The second problem with O’Neil’s argument is that the Church never phrased its teaching on usury as a conditional teaching, one where it is only seen as a particular application of the principle of justice.  Usury was prohibited because it was part of the very definition of injustice, taking more than what one is due.  Like the claim that is was merely a disciplinary teaching, the claim that the usury prohibition was a conditional teaching does not seem to match the historical evidence.
	One last argument, very similar to O’Neil’s, also says that the Church’s teaching changed but retained its same meaning.  This argument examines the “spirit of the law” –what was its purpose and goal, why was usury prohibited?  This is the crux of Noonan’s own argument:  the Church constantly teaches the message of justice and charity as Christ taught in his “new commandment” to “love one another; even as I have loved you” (John 13:34).  Yet what actions are actually just and charitable depend on concrete circumstances, thus “they are not beyond reexamination and revision to preserve their purpose and to protect the permanent goods they safeguard.”
	What goods was the Church attempting to protect? Noonan answers that the Church sought “protection of the poor from exploitation, the encouragement of the avaricious to share their wealth, and the proper distribution of capital for the life of the community.”This is in agreement with the teaching of the Fathers of the Church, who in reiterating the scriptural precepts prohibit usury primarily because it is contrary to the charity and mercy which is due to the poor.  Yet Noonan should be the first to realize that the Fathers had not yet developed the analysis of usury, for they only saw that “its origin was avarice and greed in the heart of the usurer [who is] heedless of the gospel precepts of charity, mercy, generosity and humanity towards one’s neighbor.”
	So what was the basis of the scholastic prohibition? Among the scholastic writers “the position was almost universal that usury was forbidden by the natural law, and by this alone.”  “The usury doctrine, dating mainly from 1150 to 1350, appeals not to authority and charity, but to ‘natural law’, therefore to reason and commutative justice.”  Noonan himself recognizes that for the scholastics of the middle ages, the “fundamental notions of law, property, justice and intention furnished the general shape of the scholastic doctrine of usury.”
	The Church prohibited the taking of interest for several other reasons than just trying to avoid economic exploitation of the poor.  The scholastic arguments and canon law behind the Church’s position do not even see it based solely on the Scriptures and divine authority.  The loan was a private exchange (a commutation), and thus was governed by the commutative justice which says one should never take more or receive less than their due.  Thus their arguments are based on this: money is something barren and unfruitful, and something which has a fixed value; thus it is unjust and contrary to the nature of money to try to sell it for a higher value, or to make it grow by itself.  In addition, usury is the selling of time, something common to all men and which no single man possesses, thus it is again unnatural, for no one has a right to sell what he does not own.  “The social case against usury is not absent from scholastic thought....  But, on the whole, this kind of argument is subordinated to the juristic formulae.”  (See chapter three for further development of these scholastic arguments and teachings.)
	If there was any “spirit of the law” in the usury prohibition, it is perhaps the fact that the law always focused on the intention of the usurer.  Any intention of desiring dishonest profit was the primary cause of and vitiating factor in almost all usurious transactions.  As Luke 6:35 was so commonly quoted by the Church, “mutuum date, nihil inde sperantes” – make a loan, hoping for nothing from that loan.  A usurious intention, simply hoping to profit on a loan, was enough to make one a usurer.  As the decrees of Gratian say, it is this love of gain that is found in those “who loan for usury... or who in any contract receive more than they give.”All the authors wrote vehemently against any intention to make profit on a loan, for it is considered dishonest gain and encouraged reprehensible avarice and greed.  Note that one can licitly receive more than was loaned as a gift, if it is given due to the borrower’s gratitude; but one could not make a loan hoping to receive such a gift.
	Several arguments have been made that the Church’s teaching on usury was able to change:  it was disciplinary, it was conditional, only the intention behind the law is important.  While these are all legitimate possibilities, a historical examination shows that usury was never taught in any of these ways.  But this does raise an important question, was there anything about this teaching that was based upon conditions and assumptions that could change?  The next chapters will examine how the changing economic conditions would affect the Church’s teaching, and this becomes the basis for the Church’s “change” in no longer prohibiting usury.  First, a change in the external circumstances surrounding the making of a loan, as will be discussed in chapter three; second, a change in the very nature of money itself, as will be examined in chapter four.
Chapter Three

The canon law, the canonists, and the theologians recognized from the beginning that the usury law permitted exceptions.  From the recognition of individual exceptions, there arose a theory, and from the theory of exceptions there eventually developed a theory of interest....  In the end, as everyone knows, interest on loans came to be considered the norm, and usury the exception; and the scholastic analysis of usury came to center on the distinction between usury and interest.

	In the discussion up to this point, the term “interest” has not been emphasized.  This is actually a technical term, as a standard textbook makes clear:
The prohibition was against usury, “where more is asked than is given.”  The Latin noun usura means the “use” of anything, in this case the use of borrowed capital; hence, usury was the price paid for the use of money.  The Latin verb intereo means “to be lost”; a substantive form interisse [sic] developed into the modern term “interest.”  Interest was not profit but loss.
This distinction is very important, because upon it all other arguments and conclusions will be based.
	This provides the historical question that must be asked: did the Church condemn the taking of all interest on all loans?  A simple reading might lead some to answer the same way the Scriptures and Fathers did, “Absolutely, unequivocally, without exception, all return on a loan was condemned.”  Yet a further reading of the sources gives an unequivocal answer quite the opposite: there existed legitimate titles to payment beyond the principal on a loan.  If the former view was actually the Church’s teaching, then the Church has reversed its teaching; but if the latter, then we have exceptions to the usury prohibition which become the basis of an authentic development of the concept of interest.  Now we can make a deeper examination of the sources.
	In analyzing the question of usury, Saint Thomas Aquinas raises and answers this objection:
Obj. 1. Now sometimes a man suffers a loss through lending money.  Therefore he may lawfully ask for or even exact something else besides the money lent.
Reply, Obj. 1. A lender may without sin enter into an agreement with the borrower for compensation for the loss he incurs of selling something he ought to have; for this is not to sell the use of money but to avoid a loss.
This is the principle of emergent loss (damnum emergens) by which a lender could charge, not simply because of the the loan of money, but for the economic loss incurred due to the circumstances in which the loan was made.  This becomes the basis of a lawful and justified title for the taking ofsomething above the amount lent.  These titles are called “extrinsic” because they are separate from the money lent itself; for they are only involved in the loan transaction when viewed within the circumstances as a whole.
	Both the Scholastic Theologians (who often comment on Lombard’s Sentences) and the Canonists (who usually comment on Gratian’s Decretals) would come to agreement on this title.  It is obviously a matter of justice that one should be compensated for damages resulting from the loan.  “The canonists all admit that loss incurred is sufficient title for demanding usury though they add that it is not usura but interesse, compensation for damages accruing.”
	Although not developed by Thomas himself, many of his contemporaries would begin to discuss other titles to interest.  A second title that was accepted after some debate was another type of loss, lost profit.  “Loss occurring (damnum emergens) and profit ceasing (lucrum cessans) are the two great titles to interest, as interest is understood today, a return owed without fault of the debtor.”  If one could have made a profit with one’s money instead of loaning it (and can prove it!) then this becomes a legitimate title for interest.  If I were going to purchase an orchard, but made the loan instead, the lender might also owe me the profit I lost from not owning the orchard.  This title would become much more important as commercial centers and opportunities for investment became prevalent.  Much later, it might even come to include the cost of one’s labor in making the loan (a just wage for bankers).  “In the eyes of the Church, the most important and legitimate one [excuse], held that usury could be considered a salary, a remuneration for labor (stipendium laboris).”
	We should notice that the Church teaching also allowed two types of contracts that were different than loans.  The first is what would be called a rental or lease (locatio), for this is the loan of something that is returned itself.  The loan (mutuum) involves fungibles (usually involving objects which are consumed such as money or flour) which are repaid with different objects of the same number, weight, and quality.  In a rental, the object loaned is a non-fungible, where the same object loaned is the one returned, such as a horse, field, etc.  So why can a charge be made for a rental (locatio) and not a loan?  In a rental, the person maintains ownership of the property, thus “one may lawfully sell its use while retaining one's ownership of it.”The owner maintains the risk of loss, plus in some cases there may be deterioration of the object lent that justly deserves remuneration.
	The second separate contract is the partnership (societas), a “great and universal form of licit investment in commerce throughout medieval Europe.”Like the rental, in a partnership the ownership of the money is not transferred to the other party, thus the risk still lies with the investor who Thomas says “may lawfully demand as something belonging to him, part of the profits derived from his money.”Of course the partner who provided the labor of working to make the profit must be compensated, but the capital comes from the “lending partner” who also should be compensated.  The licitness of this partnership would have the advantage of encouraging the investment of idle money instead of the loaning it out at usury.
	Something should also be mentioned about the notion of risk.  As just seen, risk is a deciding factor for easily determining who owns something.  In a loan, the ownership is transferred, and so is the risk; while the lender still has a personal claim for the amount loaned, he does not own it.  The borrower must still repay the loan even if the money is lost or stolen, thus the lender shares no risk and no ownership.  Arenter of a house would not have to rebuild the house if it were destroyed by a natural disaster, so the risk lies with the owner of the house.  It would seem that in a secure loan, there is no risk taken by the lender, thus there would be no reason for risk to become an extrinsic title for charging more than the amount of the loan.
	The earliest canonists (and some later authors) thus refuse to make any exception to the laws on usury because of risk to the lender.  Due to its early proscription in the Decretals of Gregory IX, risk was not accepted as a valid extrinsic title until the year 1645, when the Congregation of the Propaganda allowed for it.  Although still debated, “the best authors have long since recognized the lawfulness of interest to compensate a lender for the risk of losing his capital.”  It seems risk was first allowed in cases where there was greater risk of non-solvency of the debtor or chance of failure of his enterprise.  Then a charge would be justified, not because of any actual loss but because “the lender became in reality a partner in the venture, a stockholder rather than a bondholder.”  Thus, although the risk present in a loan is usually considered an extrinsic title, it is in many ways a form of partnership.  (See chapter four on how some now consider money to be capital.)
	There are several more extrinsic titles to payment above the principal of the loan debated throughout the Middle Ages.  In fact, the canonist Cardinal Hostiensis composed a rhyming mnemonic (in Latin) that lists thirteen exceptions to the usury prohibition which were accepted by most of the scholastic authors.  One common title was the penalty or fine (poena), which could be charged if the person was late in paying.  This also developed into a payment for delay, because the continued non-payment hurt the creditor, becoming another form of damnum emergens or lucrum cessans.  However, one still could not make the loan hoping the person would be late, such as setting a date that was impossible to meet.  One last possible payment could be if the debtor makes a free gift to the lender in gratitude for the loan.  Again, there could be no usurious intention by the lender.
	With all of these exceptions, are not the canonists distorting the teaching of the official Church councils?  Some say the 12th century canonists avoided the usury prohibition “by gradually narrowing the meaning of usury until for all practical purposes it meant an exorbitant, i.e., an unjust charge, for lending money, which was a serious sin, as it has continued to be down to this present day.”Such a claim only distorts the development being made by these canonists who saw these exceptions as a matter of justice, not an evasion of the prohibition.
	“These titles are the notorious ‘subterfuges’ by which the medieval canonist sought to ‘evade’ the prohibition of usury.”Sarcasm aside, notice how the extrinsic titles, the partnership, and the rental are not just a scholastic attempt to avoid the usury prohibition or legitimize the growing economic activity.  These are situations where the canonists recognized that legitimate interest may be due simply as a matter of justice.  The multiplication of these exceptions was only the result of the changing economic circumstances that added complications to the transaction of a simple loan.  “Emergent loss to the lender – cost in any form – is the basic title to interest.  All other titles – cessant gain, risk of capital, delay and so on –are but special cases of cost to the lender.” 
	These titles to interest are very different from usury, for the loan is still essentially a gratuitous act of generosity and mercy where the lender can not hope to make a profit.  “The interesse could be claimed only on proof of loss”and originally it could only be charged after the expiration of the loan, although later development also allowed it to be contracted for in advance.  “Those who deposit or lend can fairly charge for various other factors: costs incurred in making and administering the loan, the risk of non-payment, probable inflation, taxes, the foregoing of other legitimate uses to which the money otherwise would be put, and so on.”
	Now that we have examined these exceptions, we are better prepared to ask the question, has the Church changed its teaching on usury?  The answer is seen by continuing our historical examination with the encyclical of 1745 by Pope Benedict XIV, the first pope to write encyclicals:
The nature of the sin called usury has its proper place and origin in a loan contract (mutuum). 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 somegain is owed him beyond that which he loaned, but any gain which exceeds the amount he gave is illicit and usurious.
A very strong teaching, consistent with all previously declarations of the Church, but then he continues.
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.
Those who claims the Church changed it teaching would not be able to find any inconsistency between this teaching and the Scholastic tradition.  Benedict XIV condemns usury, but approves legitimate extrinsic titles and partnerships.
	In fact, some authors conveniently overlook canon 1543 of the 1917 Code of Canon Law that reads:
If a fungible thing is given to someone in such a way that it becomes his own and is to be returned later on in kind only, no profit may be made by reason of the contract itself; but in lending a fungible thing it is not in itself illicit to contract for legal interest, unless this be manifestly excessive, or even for a higher profit if a just and adequate title be present. 
While also including the modern definition of usury as excessive interest, it would seem this official law of the Church (which was in effect until 1983) still remained faithful to the Church’s teaching as properly understood according to the theory of extrinsic titles outlined by the scholastics.  In fact, the 1917 Code also provided “that several penalties be imposed on those convicted of usury, which is listed with such crimes as murder, rape, and robbery.”
	Of course some might argue that that the development of these exceptions, the extrinsic titles, occurred only in the writings of the scholastics, for the great councils of the Middle Ages (as examined earlier) said nothing of these exceptions.  Yet I believe these theologians and canonists were making an authentic interpretation of the Church’s teaching.  Even someone who says the Church has an evolving theology recognizes that “nowhere in the council documents or scholastic teaching is it stated clearly that interest in itself and under all circumstances is a violation of justice.” 
	It is based on a careful examination such as this one that Dr. Germain Grisez, a modern author on morals, can answer the question: “Did the condemnation of the taking of interest ever meet the conditions for the infallible exercise of the ordinary magisterium?”  “The answer is negative.”  He makes this answer because he recognizes the important distinction between interest and usury, a distinction which he sees present in the teaching of the magisterium: “The sin of usury is not simply the charging of interest on a loan, but the charging of interest on a loan in virtue of the very making of the loan, rather than in virtue of some factor related to the loan which provides a basis for a fair demand for compensation.” 
	Some will accept these teachings of the scholastics, Benedict XIV and canon law; but then they still object that if the Church’s teaching is consistent in allowing these exceptions, why did it condemn banking by refusing absolution to bankers until the nineteenth century?  The problem was that one always had to prove that a just and adequate title was present in the loan, or else the loan was assumed usurious.  As loans became more and more frequent, it would have become very tedious and in many cases nearly impossible for a banker to prove that loss had occurred.  This placed confessors in a quandary and is the reason behind the change in the confessional practice that was allowed by the Vatican in the 1830s. One must recognize that the Church always needs to exercise caution in such matters, and thus it approached the question with great care.  The teaching on usury did not change, but the question had to be answered: could extrinsic titles be assumed to exist without proof?
	Obviously the answer today is a resounding “yes.”  But it was only slowly over time that this considerable and widespread change in the economic system occurred.  With the development of a widespread capital market, investment opportunities became more numerous, and the title of lost profit, “lucrum cessans, became a general fact of life in the early modern world.”  As modern economists would say, there is an “opportunity cost” of loaning out one’s money, for which one deserves just remuneration.  “The scholastics teach that the divine and natural prohibition of usury is only of profit taken without just title on a loan contract, and they are able to find a multiplicity of titles and contracts by which profit may be received.”  Thus Father Dempsey concludes that the scholastics would have also agreed that we can assume the existence of extrinsic titles:
The Scholastic position may be summarized by saying that a loan which brought no antecedent loss or sacrifice to the lender could not be the foundation of a title to interest to that lender.  If the loss emergent upon that loan because of forfeited benefit or opportunity was a personal loss to the lender he could charge for it.  If such an emergent loss was prevalent in the economic community in which that person lived, he might also make a charge for that loss, even though he did not personally suffer a specific loss; for in these circumstances that would be the common price of this “privation of money.” 
	This chapter has developed the Church’s teaching on usury with a careful examination, seeing that there were exceptions to the absolute prohibition.  This becomes the basis for saying that the Church’s teaching in the twentieth century is still consistent with that of the middle ages.  Even Noonan must admit this: “Formally it can be argued that the old usury rule, narrowly construed, still stands: namely, that no profit on a loan may be taken without a just title to that profit.” 
	The only change that occurred was the development of additional extrinsic titles over time; and the fact that at one time extrinsic titles had to be proven, and now they can be assumed to exist.  This is a very strong argument for an authentic development of the usury teaching.
	However, others today have raised a much different question.  Could our economic society have changed so much that the very nature of loans and money themselves have changed?  Is our economy so radically different that the usury teaching no longer applies to us?  The next chapter must examine whether the modern economic changes have actually made the scholastic’s economic theory on usury obsolete.
Chapter Four

The basis of the condemnation of loan interest by Aristotle and the Scholastic writers was the principle that in an exchange transaction justice demands an equivalence between the goods exchanged.  And since money, a “barren” metal, was considered not a durable but a “fungible” good whose use was inseparable from its “consumption” in exchange, the equivalence consisted in a return by the borrower to the lender of the exact amount of the sum loaned. Later writers, in attacking the minor premise of this argument, came to distinguish between what we might call the mere face value or exchange value of money and its capital value, in virtue of which the possessor secures a “command” over other goods.

	There is a second school of thought that does not seek to make a general application of the extrinsic titles.  Instead, some seek “a modification of the original Scholastic analysis with respect to the nature of money and capital... to establish a direct and intrinsic justification for modern interest.”  Such an argument for justifying the taking of interest deals with two issues: first, a change in the nature of money itself, which originally was considered barren, but is now seen as productive or a capital resource; second, a change in the nature of a loan which in modern times becomes more like a rental or partnership.
	The Scholastic usury teaching was often based upon the teaching of Aristotle that the proper use of money was as a medium of exchange.  Exchange is natural, and can even be productive, but money lending itself is not naturally productive.  They argue that money is considered infertile and barren.  “Thomas Aquinas observes: ‘Nummus non parit nummos’ (Money does not reproduce itself).... it is against nature for money loaned to give birth to more money.”
	Bernard Dempsey examines the teaching of what he calls “The Schoolmen,” Jesuit theologians, economists, and usury analysts of the sixteenth and seventeenth century.  They continue the scholastic traditions and say that money is not fruitful per se (in itself), but then they readily admit that money is fruitful per accidens (in certain concrete situations).  Further, “the circumstances in which money can be considered by and in itself may be very rare.”  There was an increase in the availability of market opportunities at this time, and this began to give an additional value to money in addition to its strict value as money in itself.  “The special value of money arising from opportunity available may become so widespread in some places and circumstances that in that market a true, common, just price for the privation of money can be established.”
	This marks the beginning of a development in what the exact nature of money is, leading some to argue that money has actually changed in our society.
There is much greater facility nowadays for making profitable investment of savings, and a true value, therefore, is always attached to the possession of money, as also to credit itself.  A lender, during the whole time that the loan continues, deprives himself of a valuable thing, for the price of which he is compensated by the interest. 
	What does this mean for scholastic arguments?  The fact that money was sterile and barren is a central part of their usury theory.  “Centered on the object involved in the contract, the scholastic analysis refuses to consider other objects for which the contractual object might be exchanged.  A contract about money is considered a contract about money, not a contract about real capital.”When the Scholastics spoke of money, they had in mind real, tangible objects, e.g. gold and silver coins.  If the nature of money has changed, then the Scholastic analysis would seem to no longer apply, for now an entirely different transaction is taking place.
	“In view of the general applicability of money to productive enterprise and of the consequent ‘quasi-productivity’ of money capital, every loan of money is virtually a locatio [rental].”  This is a modification of the original Scholastic analysis of money and capital that establishes an intrinsic justification for modern interest by shifting the contract from a loan of money (mutuum) to that of a rental or lease.  This does not mean money is no longer a fungible, but rather that money now has an addition value beyond its face value, a value that makes it almost naturally profitable to own money.  If I loan someone my orchard, I deserve a recompense for the natural fruit that orchard produces.  In some ways, this type of a loan can be seen as a type of partnership. Now a person can make money with the money I loan him, not just with his own labor and resourcefulness, and so I deserve a share of that profit.
	Thus, many today see interest as part of every loan not just per accidens, but even per se.  “Most theologians of the present day maintain that usury is now lawful because money has acquired the characteristics of capital.... Since interest on capital is lawful, interest on loans of money must be also lawful.”Money no longer has as its sole use the fostering of the exchange of goods.  Money is now also an asset which one can profitably invest to make more money.  In loaning money, the title to lost profit plainly exists as part of the loan itself.
	In addition, in today’s society there are numerous investment opportunities, which together have established a “price” for money: the market rate of interest.  “Due to the change in the nature of money, every modern economy includes extensive money markets.... it is reasonable to assume that market rates of interest reflect legitimate grounds for seeking and accepting the payment of interest.” The existence of a common interest rate automatically devalues one’s money over time, so in making a loan, one would justly deserves compensation under the title of loss (damnum emergens).  Not only is this title assumed to exist, it is an intrinsic part of every loan.  “Gradually, instead of being seen as ‘sterile,’ money was seen as productive.  Further, interest charges served to equalize the value of present and future amounts of money.” 
	The process needed for actually determining a legitimate rate of interest is beyond the scope of this paper.  Suffice it to say here that the process would be similar to how the just price is established for other goods, for as Thomas says, “the just price of things is not fixed with mathematical precision, but depends on a kind of estimate.”  The safest “estimate” of the just price is the common estimation (communis aestimatio), which for loans would be the market rate of interest.  “Generally, that interest rate is lawful which is considered legitimate by the common judgment of prudent men, with due consideration for local industrial and commercial conditions.” 
The appearance of a market rate of interest removed the debtor-creditor relationship from that of isolated exchange and precluded the danger of exploitation of the borrower, which was the first concern of the Scholastic doctrine. 
	Does a change in the nature of money contradict the Church’s teaching on usury?  The Church never defined that money was always unproductive, only that profit on loan could not be morally legitimate without some claim to it.  Pope Leo X, in the Fifth Lateran Council, gave the following definition of “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.”  This shows the strong consistency in the Church’s teaching.  If money is really a barren resource, seeking profit on a loan is unjust (unless there are other extrinsic titles present).  But “in modern economies, it is clear, money has investment uses and is widely productive.”  With abundant opportunities for the investment of money, as there are today, it would seem the modern loan of productive money no longer meets the conditions for usury as described by the Scholastics and articulated by Leo X.  “The whole world has become one trading community.... Money consequently is not a mere medium of private exchange.”  The taking of interest on a loan is now a fair practice of justice, just as once justice prohibited the taking of anything above the principal.
At present, the choice for one’s money in our world-economy is never simply between spending or hoarding, for money can always be invested in any number of genuinely profitable (“fruitful”) enterprises.  There is much greater facility nowadays for making profitable investments of savings, and a true value, therefore, is always attached to the possession of money. 
	We have now seen a second way of showing the legitimacy of interest on loans that is in harmony with the Church’s teaching.  Lateran V taught that usury involves the loan of “a thing which produces nothing.”  Pope Benedict XIV taught that “usury has its proper place and origin in a loan contract (mutuum).”  If moneyhas changed so that it is no longer barren, and the loan has changed so that it is no longer a mutuum, then some can legitimately argue that these teachings are truly obsolete, for in fact they no longer apply in modern circumstances.  As the economy changed, the teaching applied less and less, and the Church simply stopped prohibiting usury.  “The Church necessarily permitted what was no longer unjust.”
	It must be noted that there is still a great difference between the claim that this teaching is obsolete, and any claim that the Church’s teaching was wrong or has changed, for the second premise is not a necessary conclusion of the first.  As noted, the change involved something the Church never claimed to teach definitely, the fact that money is unproductive.  The Church did change, not its teaching, but the fact of the applicability of its teaching to the particular economic conditions, which do change.  The only possible criticism of the Church is that it should have recognized sooner that its previous teaching was no longer applicable.
	Does this “change” admit of change in other areas of Church teaching?  Since it seems that this teaching became obsolete, could not other moral teachings also be obsolete today?  Our modern society has drastically changed in the last two centuries, so it would seem possible for many of the Church teachings to be so “historically conditioned” that they no longer apply.  Yet, as addressed in chapter one, fundamental human nature and divine revelation are unchanging and never obsolete in any time or culture.  This is an important distinction which must be made, for while the usury teaching involved changing economic conditions, almost every other moral teaching of the Church involves the ends of man’s human nature (thus the prohibition of abortion, contraception, divorce and remarriage, homosexuality, etc.) or the contents of divine revelation (e.g. reserving the priesthood to males).  One can never claim that teachings such as these could become unapplicable in today’s circumstances.
	We have now seen two different approaches to the “change” in the Church’s usury teaching.  First is the assumed existence of extrinsic titles that justify the taking of interest, based primarily on the title of lost profit.  Second is the change of the nature of money, where a loan now involves capital, something that is naturally fruitful and for which a charge can be made, just as when one rents other types of capital.  Is interest justified today simply from the intrinsic productivity of money, or only by the existence of extrinsic titles?
	While it would seem that the nature of money has changed, no one can deny that it is still used as an object of exchange in transactions.  This basic function of money is not changed, even if it may be considered productive in view of its power of representing real capital.  Thus some argue that the productivity of money does not eliminate the extrinsic titles.  Since money capital is “fertile or productive, or quasi-productive.... interest could be justified on intrinsic as well as extrinsic grounds.”  While either the intrinsic or extrinsic position may be legitimately argued, are the two proposals actually that different?
	Perhaps one can conclude that both of these possibilities are correct, for in a way, the productivity of money becomes itself a legitimate title to interest.  As already indicated, one can see an intrinsic justification for interest, because something intrinsic to money itself (its quasi-productivity) makes the extrinsic title (to compensation for loss) present in every loan.  Thus the extrinsic titles can be assumed to exist today, because in capitalism, the unlimited opportunities for investment have made money fruitful, and loaning money automatically involves loss of profit to the lender.
To-day the title to interest is intrinsic to the money itself.... This kind of intrinsic title partakes of the nature of extrinsic and intrinsic titles.  It is extrinsic, inasmuch as it is not rooted in the nature of money itself, independent of all circumstances.  It is intrinsic, inasmuch as it attaches to money in fixed economic conditions like our own.
Perhaps the answer may be summarized in this way: the loan of money, considered only in itself apart from all circumstance, is still not justification for the taking of interest; however, money can never be considered apart from today’s economic conditions, which justify the taking of interest, due to lucrum cessans.  “Loss of profit has become today an ordinary effect of loaned money, in view of the fact that, under the present economic system, property as well as money is definitely productive.” 
	This does not prevent some from still arguing even today that the only legitimate title to interest comes from extrinsic titles.  “It has always been the work of man, and it alone, which has been productive and fruitful.... Money is not fecund.  In fact, some will argue that the Church does not allow for an intrinsic title to interest.
The Philosophers, Theologians, Canonists and the Church [meanwhile] stood by the dictum of Aristotle that “Money does not breed money.” So that any return by reason of a money loan alone was unjustified.  Interest might be taken... on the ground of extrinsic titles.  The Church has declared nothing expressly about the reasonableness of interest rising out of an intrinsic title. 
	Does the Church teaching actually support one position or the other?  Most official teaching only allows for extrinsic titles, but its silence on an intrinsic justification for interest does necessarily equal disapproval.  “The justification of interest on either extrinsic or intrinsic grounds [as surveyed above] is compatible with recent decisions of the Church and c.1543 of the [1917] Code of Canon Law.”  It seems that either position may be taken, and one thing is consistently clear: the Church’s teaching has not radically changed.
The Church’s attitude may be explained as an acknowledgment that, in the present condition of society, when there are so many opportunities for investment, there will always be a presumption that the lender has a right to compensation. 
	Interest on loans is now morally accepted by the Church because of a change in the circumstances surrounding the loan, particularly in the economic milieu of free market trade.  While it may be debated as to whether this is due to a change in extrinsic or intrinsic circumstances of this market, two conclusions seems clear.  First, the nature of financial transactions has changed over time as commercial, competitive markets developed.  Second, this financial change is not a change in the teaching of the Church on usury.  There may have been many changes in the emphasis, perspective, and even practice of the Church, but I do not think commercial developments and a shift in perspective constitute a new, “substantially different” moral doctrine, as claimed by Noonan.
	As I make the argument that “the Church’s teaching on usury has not changed,” there is another extreme that must also be avoided.  Some might interpret this to mean that Church teaching on usury still applies, and the taking of interest on a loan is sinful.  After all, was not this infallibly taught by the Church for all faithful Catholics to follow?  The next chapter will examine those who argue that even today, the Church’s ancient prohibition is still in force (and being constantly violated!)
Chapter Five

We do not believe in “money lending” at interest.  As Catholics we are acquainted with the early teaching of the Church.  All the early councils forbade it, declaring it reprehensible to make money by lending it out at interest.  Canon law of the middle ages forbade it and in various decrees ordered that profit so obtained was to be restored.  In the Christian emphasis on the duty of charity, we are commanded to lend gratuitously, to give freely.

	The Catholic Worker is a newspaper founded by Dorothy Day in 1933 for promoting concern for the rights of the poor and workers.  Even today it costs only a penny a copy, and its articles still express the ideas of its founder, being particularly critical of modern economic society, including the subject of the sinfulness of usury.  One Catholic Worker article, actually entitled “Usury is a Sin,” says that “the charging of interest on loans is immoral.”  Why?  Because it is contrary to the laws of God, the teachings of Christ, the Magisterium of our Church, the natural order, and justice for the poor.
	As many Catholics believe that the Church is indefectible, immutable, and infallible, some do not see any possibility of the Church’s teaching on usury being changed.  The obvious conclusion is then that the prohibition of usury must still be in effect, and we are entangled in sinful activity in our modern society, for usury is involved every time we accept interest on a savings account or pay interest on a loan.  Noonan notes that some would go so far to say today: “It is a mortal sin to take or to seek profit on a loan.”
	Numerous examples of such a position are available.  Father Jeremiah O’Callaghan was a great 19th century Catholic missionary who evangelized most of Vermont.  During his time there he wrote several works attacking all banking as usury, for he found this to be rampant in America, among the bishops and laity alike.In fact, his case of denying the last sacraments to a dying usurer in 1819 went before the Sacred Congregation in Rome.  The reply he received “supposes that there were sufficient extrinsic titles to justify the merchant in retaining the money.”  (Contrary to the advice of Rome and the local bishop, the penitent did make restitution as Father O’Callaghan had recommended for the safety of his eternal salvation.)  The problem was that “O’Callaghan was completely ignorant of the doctrine of extrinsic titles.”  As seen in chapter 3, these titles are legitimate, and because of cases like this one, the Church decided these titles can be assumed to exist today.
	In our own century, Hilaire Belloc, an English Catholic layman, sees Catholic teaching being ignored by the modern banking industry.  “The modern world is organized on the principle that money of its nature breeds money.”He makes the distinction that interest should not be taken on consumption loans (loans for the purchase of objects).  Belloc says that interest can be morally charged on loans for production or investment purposes, but not on consumer loans, because he views productive loans as a form of partnership.  While basing this on the Church’s teaching of legitimate partnership and the scholastic argument that money is barren, Belloc has made a very different distinction based on something the Scholastic and Church teaching was not concerned with: what the borrower does with the loan.  “Neither Aristotle nor Aquinas drew a distinction between interest on loans made to the needy and interest derived from commercial investment.  All money lending for the sake of profit was reprehensible.”
	In fact, it was Calvin who defined usury as “a financial gain sinful only if it hurt one’s neighbor.... On loans to the poor, profit would be wicked.”Many today have the mistaken idea that the Church always allowed loans to the rich and businessmen, and many authors besides Belloc try to make this distinction between loans of consumption and production.  The confusion arises from the fact that Church teaching allowed partnerships, but not the taking of usury on loans.  “The notion is erroneous because what is critical is not what the borrower uses the loan for but whether or not the loan involves cost (loss or cessant gain) to the lender.”
	Even more recently, Jacques Maritain, an influential Catholic philosopher, wrote “A Society Without Money” which was finished the night before he died in 1973.  He sees that usury has become a normal part of the business world, which makes “profit as an absolute end in itself” and subjects us all “to a system contrary to nature, where no account is taken of the laws and demands of human morality.”  As he says, “one is perfectly correct in hating money lending.”
	Maritain’s argument is primarily an economic one, that the nature of money does not allow it to intrinsically grow.  He follows the argument of Aristotle and Aquinas, as we saw in the previous chapter.  It seems rather difficult to maintain such a position, and even if this position can be upheld, it still must recognize the existence of legitimate extrinsic titles, which the Church has allowed.  Money lending at interest is not sinful in today’s circumstances.
	It must be recognized that these authors do have a legitimate point.  Dorothy Day, Belloc and Maritain are all writing because they have seen extreme abuses in the modern economic society where laissez faire capitalism often exploits the poor and lower class.  Pope Leo XIII makes this same complaint, seeing a voracious usury rampant in our industrial society.
A devouring usury, although often condemned by the Church, but practiced nevertheless under another form by avaricious and grasping men, has increased... the whole process of production as well as trade in every kind of goods has been brought almost entirely under the power of a few, so that a very few rich and exceedingly rich men have laid a yoke almost of slavery on the unnumbered masses of non-owning workers.
Unfortunately, in recognizing this legitimate problem, these writers have decided that it is interest on loans itself that is a problem with society.  I do not think the banking system itself is intrinsically sinful or evil, it is just misused by men who are driven solely by materialism and profit.  This does not prevent some from claiming “that [credit] economy is evil... for the ease with which it permits a very real and literal enslavement of the human person to material well being.”
[Despotic economic] dictatorship is being most forcibly exercised by those who, since they hold the money and completely control it, control credit also and rule the lending of money. Hence they regulate the flow, so to speak, of the life-blood whereby the entire economic system lives, and have so firmly in their grasp the soul, as it were, of economic life that no one can breathe against their will.
	St. Thomas Aquinas recognized that economic activity must always be viewed within a larger scheme.  “Temporal goods are subjected to man that he may use them according to his needs, not that he may place his end in them and be over solicitous about them.”  For Thomas, all material goods, private property, and exchange transactions are governed by a view of man’s final destiny.  “The pursuit of material welfare was not to be regarded as an end in itself, but as a means to achieve the summum bonum [greatest good] of salvation.” 
	This would seem to be the constant teaching of the Church with regard to money, for this is the point emphasized by the Church’s “social” encyclicals of the last century.  “How ought man to use his possessions? the Church replies without hesitation: ‘As to this point, man ought not regard external goods as his own, but as common so that, in fact, a person should readily share them when he sees others in need’.”  The purpose of money and loans, like all material goods, is the advancement and perfection of all men, not just personal gain and profit.
	Let us examine one more argument from an editorial in The Catholic Worker, complaining that the problem of usury is no longer being addressed by the Church.
If the topic does come up, the answer, if you’re lucky enough to get one at all, usually is “But the Church does not forbid all interest, only ‘undue interest’.”  That may be so, as the explanation on the ban has shifted, historically, from no interest no way, to administrative costs only, to no excessive charges.
	The problem with this statement is that it assumes the Church’s teaching at one time forbade all interest.  From the examination presented in chapter three, it should be clear that this is confusing the terminology of what the Church taught.  The Church forbid the taking of all usury (not all interest), which means taking anything above the principal on a loan, simply because one made the loan.  The Church still allowed the taking of interest when one had a just title to it. Obviously, the Church prohibition forbade more than just excessive charges, but it is not wrong to say the Church forbade undue interest, if by undue one means interest that one has no legitimate claim to take.
	This fact will not prevent many from saying that, “Catholic teaching itself, as teaching, is not dead, though it is ignored.”  Some will continue to complain that the Church cooperates with evil, others that she tolerates an evil she cannot prevent.
The personnel of the church do not hesitate to ignore completely what the Church has taught for centuries... these churchmen, by proposing more or less watered-down solutions of a practical order, did their best, at the cost of much embarrassment, many hesitations and an unacknowledged fundamental contradiction, to find some kind of justification for lending at interest.  In so doing, they unfortunately weakened that pure witness which the world expected of the Church.
	There are also numerous other authors who write in The Catholic Worker with similar arguments to those already presented here.  A description given by Noonan is aptly fitting to their stance on usury.
Indeed, more rigorist than the medieval theorists themselves, they persist in regarding all forms of interest and profit on all kinds of credit extension as usury, and they refuse to admit that interest titles and the other contracts of credit were put forward sincerely and in good faith.  They are thus more Catholic than the pope.
	While the validity of most of these arguments is questionable at best, perhaps there are some aspects of the Church’s usury teaching which have been forgotten and do have application in our modern society.  While not within the scope of this paper, a few examples of this can be mentioned.  There is obviously excessive interest being charged to the poor in many third-world countries, especially those under Mafia control.  In our own country, one must question the interest rate charged on credit cards, as many easily slip into very large debts from these.
	One particularly strong criticism is of the modern practice of banks that make loans for which they do not have deposits.  In fact, Dempsey makes several arguments against this “credit creation,” and “finds the modern banking system guilty, by scholastic standards, of ‘institutional usury’.”He argues that when creating credit, the bank does not suffer any loss, yet it makes profit from this credit creation, which he considers usury.  It seems one could say, “when such newly issued money is then loaned out without cost to the lender at interest, such interest is clearly usurious.”
	As an aside: “Islamic religious law prohibits Muslims from paying or receiving interest.”  Instead, all parties in a financial “loan” share in the actual losses or profits.  This makes Islamic bank “depositors” much more like shareholders, for they profit based on the bank’s own profits (and losses), not a fixed rate of interest.  In fact, this unique system of banking has actually been successful.  “The Islamic banking system has outpaced conventional Arab banking in terms of growth.”  Perhaps the modern banking system of money creation is not an absolute necessity.
	Interestingly, some additional issues are raised under the title of usury by our current Pope.  As part of the preparation for the great millennium, he makes reference to the Old Testament jubilee year, which also includes the usury prohibitions.  At an international level he suggests the coming jubilee “as an appropriate time to give thought, among other things, to reducing substantially, if not canceling outright, the international debt which seriously threatens the future of many nations.”
	On a more local level, the Pope recently spoke on continuing to fight “the worrisome and, unfortunately, widespread phenomenon of usury,” a “serious social evil” which is contrary to building “a more just society, one of solidarity, and more attentive to the demands of the needy.”  While these cases do not refer to the technical definition of usury as dealt with in this paper,they do show that the Church is still concerned with economic matters, and rightfully so, for “the Church is concerned with the WHOLE of a man’s life,” and material things can have an effect on a man’s immaterial soul.
	Perhaps there are still a few lessons to be learned from the historical teaching on usury.  First and foremost is the Church’s great concern for the poor.  This teaching is strongly presented in the Scriptures and Fathers of the Church, but so often today receives only a token acknowledgement.  As one Papal encyclical put it so clearly: “The gap between most of the richest countries and the poorest ones is not diminishing or being stabilized, but is increasing more and more to the detriment, obviously, of the poor countries.”
	Second, as a means of helping the poor, perhaps there is a need today for providing “free” loans to the needy.  In fact, this is an often forgotten part of the Church’s usury theory that could still be applied today.  “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.’”There is little opportunity for the poor, even though they are often very hard working and resourceful, to get the money needed to improve their condition.
	  This is particularly applicable in many developing countries where no structures exist for getting loans, purchasing land, or other means that would allow for entrepreneurship.  “The fact is that many people, perhaps the majority today, do not have the means which would enable them to take their place in an effective and humanly dignified way within a productive system in which work is truly central.”  I think particularly of Latin America, where often a small minority controls the country’s land and other productive resources.
	Of historical note, instead of relying solely on charitable handouts, the middle ages developed an institution, called a mons pietatis, which was essentially a public pawnshop “run not for profit but for the service of the poor.”In this way, it provided an opportunity for the poor to get loans without having to pay usurers; instead, there was a small fee attached, which was justified as necessary for continuing the existence of the montes.  Although it initially met with much opposition, it was eventually accepted by the Church, and many theologians saw it as a part of fulfilling the requirements of justice towards the poor.
	Perhaps this concern we should have for the poor is best summarized by Pope John Paul II as “solidarity,” a view of one’s fellow man as a brother, not just a distant stranger.  A concrete commitment to solidarity and charity is required in order to overcome today's widespread individualistic mentality.Such a realization provides for the fact that a justice of strict equality (as is practiced in economic matters) sometimes needs to be supplemented by mercy and charity.  We cannot throw away the principles of justice that allow the taking of interest on loans, as these are needed for order and harmony in society.  Yet these principles should be practiced with charity, recognizing those circumstances when strict justice should be dispensed from in dealing generously with our neighbor.
	Our great concern for the poor does not provide sufficient reason for a condemnation of all of modern economics.  Social critics of our government and economic system may use the Church’s past teaching on usury as an attempt to add weight to their arguments, but in reality they have little support from the writings of the Church under the heading of usury.  A much better approach would be to examine the contributions made by the Church in its social encyclicals.  As reiterated many times, the crucial point of this paper is that a careful reading of the Church’s teaching is necessary to recognize that a true development took place, one in which the usury prohibition can no longer be applied the same as it once was in the past.

Conclusion

In general, leaving aside the prejudice attributable to religious interest or practical motive, it is clear that almost all historical errors about the scholastic usury theory arise from a single failure: a failure to consider the theory broadly enough, to take into account either the multiple character of its foundations, theological, economic, and legal, or the multiple aspects it presented in practice, particularly the aspects under which it encouraged the growth of interest titles and above all the use of alternative methods of credit besides the loan. 

	Has the history of the Church’s teaching on usury been one of error, change or development?  Once the Church prohibited usury as any return (profit) taken on a loan thatexceeded the original amount of the loan.  Today interest is taken on loans as a normal part of daily finances, with no condemnation by the Church.  How did this reversal occur?  Judge Noonan’s conclusion summarizes my own: usury is a multifaceted issue that can only be understood after careful examination.  Let us now review and highlight the many different positions we have seen on the subject.
	In Chapter one, we saw those who think that when the Church prohibited usury, it was prohibiting any interest on loans, and since it apparently taught this infallibly, it must have contradicted itself in allowing interest on loans today.  As we have seen, it is a grave mistake to say that when the Church prohibited usury, the Church infallibly taught that all interest on all loans is prohibited.  Nevertheless, the issue becomes a chance for all critics of the Church to attack her.  Both non-Christians and other Christian denominations suggest that the Church can not be a source of true teaching because of her error in the prohibiting of usury.
	Another group, while not always claiming the Church erred in its teaching, sees usury as an example of Church changing its teaching.  Thus they hope to show that all doctrine is changeable and evolving.  This claim is often made by dissenting theologians who wish to attack the existence of universal moral prohibitions.  Pope John Paul II has clearly and consistently addressed these issues, defending the teaching authority of the Church against these positions.  Legitimate development in the Church’s teaching is possible – even its moral teaching; but new teaching would never contradict prior Church teaching.
	Chapter two introduces several positions that try to explain this apparent contradiction in the Church’s teaching.  First is the claim that the teaching was never infallibly taught.  In examining the different ways in which the Church teaches, there is strong evidence that it was taught infallibly by different Popes, Ecumenical Councils, and the ordinary Magisterium.  Thus, this argument is found inconclusive at best, and so we must continue to examine the issue as if the usury prohibition was taught infallibly by the Church.
	Some then argue that the usury prohibition was only a disciplinary teaching, something the Church could change at any time.  Yet why then was it taught so strongly and by so many?  And why would bankers be treated as outcasts from society over a discipline?  This position runs contrary to the primary reasons behind the prohibition, which is clearly based on a natural law argument, not an ecclesiastical discipline.  Usury was prohibited because it was considered to already be a sin, not because the Church made it into a sin.
	An interesting proposal then asks if the usury prohibition could have been phrased as a hypothetical teaching, one in which certain conditions must be true in order for it to apply.  However, this also does not coincide with the Church’s teaching on usury, for though it may have some exceptions to the rule, the rule still applied in all loans that were made throughout the changing circumstances of 1400 years.  While the Church does present some moral teachings in an abstract or conditional manner that then must be applied to particular situations, this was not the case with usury.
	John Noonan then argues that only the “spirit of the law” must be followed, and thus the law could change as long as it protected the same goods.  Yet is the good being protected just the Church’s love and concern for the poor, or is usury prohibited to encourage the following of the virtue of justice?  The scholastic arguments based the usury prohibition on commutative justice, which binds all to never take more than their just due.  Many claim today that only the intention of the Church’s moral law has to be followed, not the letter of the law; but is not the intention of a lawgiver normally revealed by reading the law itself?
	Chapter three introduced a fundamental distinction that must be recognized in examining these claims that Church teaching changed.  Usury is not simply “gain from a loan,” but rather “gain from a loan sought directly by lenders without a just title.”This is especially the interpretation we can plainly see in the writings of the Scholastic Theologians and Canonists, which is approved by the later teachings of the Popes and Canon Law.  The recognition of just titles is an authentic development of the prohibition, as it is interpreted by the Church, particularly as the economic circumstances began to change.
	Based on the principles of justice, it is usury to make a charge for a loan, unless one has a just reason for such a charge.  At one time, the only cost to the lender was the loan itself, and so the Church taught in the situation of that particular time: nothing above the principal could be taken on such loans.  Yet this did not outlaw the possibility of legitimate interest in the future, nor did it prohibit rentals or partnerships.  Any extrinsic title (loss) had to be proven, and such a title was called interest, not usury.  As seen, the primary title that developed was the cost incurred by the lender, which came to include any lost profit, and the later development of several other legitimate extrinsic titles.  It is here that we see the possibility of a “change” in the teaching of the Church.
	As the economic system changed, the circumstances under which an injustice was committed also changed.  An increase in the number of legitimate claims becomes a development of justice, not a reversal of the prohibition.  This is not contrary to the Church’s original teaching, for the church never condemned interest on loans, but rather the taking of interest on loans without a just title to compensation.  One cannot hope for profit on a loan, but one can expect and demand the interest that is due according to the principle of justice.
	Particularly in examining the encyclical of Pope Benedict XIV, we see that the Church’s basic teaching on the subject still remains: anything charged beyond a valid claim made for just and legitimate reasons is sinful usury, while the charge beyond the principal made for a just reason is legitimate interest.  (Notice that this is actually not all that different from the modern definition of usury as excessive or undue interest.)  When these extrinsic reasons began to become more common, the Church could only be consistent if it maintained the principles of commutative justice that allowed for these extrinsic titles.
	Today, due to nearly unlimited investment opportunities and inflation, these legitimate claims to interest can be assumed to exist.  This was the major change in the Church’s 19th-century confessional practice; but still was never a reversal of Church teaching.  The only change was allowing interest to be taken without explicit proof of extrinsic titles, and this change was made because money and loans have so drastically changed in modern circumstances.
	In fact, in chapter four some argue that modern finance has changed so much, that there exists a very different justification for allowing interest.  Many hold today that the nature of money itself has actually changed.  Money is seen as no longer barren, but is now productive.  This would make money the same as productive capital, something very different from what the Scholastic prohibition was concerned with.  On a loan of productive capital, interest was always allowed by the Church.
	Once money is viewed as productive, making a loan will automatically involve lost profit; and once a rate of inflation is established, one’s money depreciates in value over time, resulting in a loss.  It can be strongly argued that these two extrinsic titles to interest can now be considered an intrinsic part of every loan that is made.  In fact, today there is an established market rate of interest, a common estimate of how much this loss is.
	In this we see that there are two different grounds for justifiable interest: the extrinsic titles (chapter three), and the fruitfulness of money (chapter four).  Yet in reality, these two arguments are actually not that different.  In our economic conditions today (with many circumstances extrinsic to the money considered in itself), interest is allowed on all loans for intrinsic reasons, because in practicality the money cannot be considered apart from these conditions.  While some prefer one reason or the other, it is clearly seen that both positions allow legitimate interest, and neither contradicts the Church’s previous teaching on usury.
	How is this possible?  Because the Church never condemned the taking of all interest on all loans.  This is the common mistake made by so many who criticize the Church.  In chapter five, we also see this same mistake is made by several who view this teaching as a means to condemn the modern social order.  Several “faithful” Catholics see interest on loans as still condemned by the Church as sinful, and thus use the usury teaching to convict the modern banking system of being the source of all economic problems today.
	The problems with these positions are that they ignore the fact there has been a very real change in the economic conditions over the last few centuries.  Now, not only are there legitimate extrinsic titles, but these have become so numerous and frequent we can safely assume they are present in almost all loans today.  In addition, it is very difficult to argue that money is still barren in today’s first world countries.
	Yet these people make this argument because they do see real problems with our economic society, which often consist solely of materialism and profit hoarding with a little or no concern for the poor.  There is a growing gap between the rich and poor, but does this separation mean we should promote usury if making a loan to the rich, while prohibiting any interest on a loan to the poor?  While it might an interesting solution to closing the gap in social problems, it is still contrary to justice and I believe does not look at social ills that are causing today’s economic problems.
	These people do us a great service in raising our awareness of social ills and concern for the poor, but this awareness could be made even more profitable by then examining how to solve these problems based on the teachings of the Church in the papal encyclicals since 1891.  From the popes we can learn and promote the proper understanding of man’s relationship to material goods, which sees the value of the worker himself as much greater than the product which he produces.  Learning the principle of solidarity, we can work to help our brother or sister who is in need, rather than just complaining about the injustices that exist.  While one part of the Church’s usury prohibition was always her concern for the poor, the attempts to revive this prohibition are not helpful in combating today’s social ills.
	This does not mean we should not retain the parts of the usury teaching that can still apply today.  Many commendable practices fall under this umbrella: debt reduction for developing counties on an international level; the elimination of loans which are made at exorbitant rates of interest among private individuals and in third world countries; low-interest or interest-free loans for poor yet resourceful entrepreneurs.  And this does not mean that there can not be legitimate criticisms made of the banking industry under the name of usury, particularly in its practice of money creation and today’s excessive credit card rates.
	From the Old Testament scriptures to present-day papal teaching, the word usury evokes a great variety of definitions and reactions.  While for a few a great concern even today, for most it is only a curiosity of history with little relevance for modern times.  Yet it must be recognized that Judaism, Christianity, and Islam all condemned usury in some form or another (and Aristotle too).  But for all Catholics, one important question must be answered: how can we account for the obvious difference between the Church’s teaching which condemned usury, and its modern acceptance of interest in practice?
	The answer to this question comes down to recognizing what the Church has actually taught.  The Church never prohibited all interest on all loans, for this is not what usury was defined as.  A similar definition claims that usury prohibited any return taken on a loan that exceeds the original principal of the loan.  This is partially true, for the Church taught that one could not take a payment simply because one has made a loan.  But one must recognize that because of different situations and circumstances, payments for different reasons might be legitimately taken.  Thus it is true to say that usury is condemnation of profit on a loan - as long as one recognizes there may be payments which are not profit on the loan, payments made because of some just title of loss or cost to the lender.
	To properly understand the Church’s teaching, one must define usury as the prohibition of gain from a loan sought directly by a lender without a just title.  This is the definition of the usury prohibition as it was taught, understood and interpreted by the Church for thousands of years, just as it is today.  Anything charged beyond the legitimate claim is still called usury, and taking such usury is - as it always was - a sin against justice.  There has been obvious change in our economic conditions, which resulted in a necessary development of how this teaching is applied.  Yet the Church’s basic teaching on the subject still remains in effect and unchanged, and thus usury fails to be a valid example of a reversal of Church teaching.
Epilogue

As far as dogma in the technical Catholic sense is concerned, there is only one dogma at stake.... that usury, the act of taking profit on a loan without a just title, is sinful.... it is taught by the tradition of the Church, as witnessed by papal bulls and briefs, conciliar acts, and theological opinion.  This dogmatic teaching remains unchanged.  What is a just title, what is technically to be treated as a loan, are matter of debate, positive law, and changing evolution.  The development on these points is great.  But the pure and narrow dogma is the same today asin 1200. 

	The wild roller-coaster ride is over, and in the end few are left standing.  After a thorough examination which covered areas from Scripture and Patristics to economic theory and banking, there is one clear conclusion: Any change in the Church’s teaching has been a real and legitimate development, not a reversal, error or contradiction.  The moral principle of justice in the making of loans still exists as the Church has always taught, even if it no longer applies the same as it did in the past.  “We prefer to speak of the change as a development of doctrine, and presume to maintain that in the process there has been no contradictory step of vital importance.”
	This particular development in the Church’s doctrine is not the type of change that would allow for change in the other areas of the Church’s teaching on faith or morals.  The example of usury simply shows how the Church must always adapt its teaching to the conditions and needs of the time, just as its application of usury to the particular economic conditions of our time has changed.  In no way does this diminish the Church’s ability to teach without error and without change in matters of faith and morals.  In particular, not when it definitively proclaims a teaching based on divine revelation or human nature, for the basis of such teachings cannot change.
	Now I have confidence to answer those critics I meet, and my faith in the Church remains solid, even when confronted with the thorny issue of usury.  The Church indefectibly and infallibly preserves everything taught by Christ and the apostles.  Throughout time, it will always continue to do so, for this authority and promise were given by Jesus Christ to the first pope:
I tell you, you are Peter, and on this rock I will build my church, and the powers of death shall not prevail against it.  I will give youthe keys of the kingdom of heaven, and whatever you bind on earth shall be bound in heaven, and whatever you loose on earth shall be loosed in heaven. 

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