On Usury

by Hilaire Belloc

As long as Usury was forbidden by the moral law and its immorality admitted, even though it took place widely, it took place under protest. It was always checked by the public disrepute in which it was held and by the fact that unless it were disguised, the interest could not be recovered by law. Disguises were indeed often used, as for instance, the promise to repay on a certain date a certain sum of money as having been lent, when as a fact a small sum had been lent. But though such subterfuges were continual, the evil could not spread until the taking of interest upon money alone became an admitted practice of which no man was ashamed, which no one thought evil, which was taken for granted.

By the third generation great central banks had arisen, notably in Amsterdam and London. Shortly afterwards, during the 18th century, men had everywhere begun to think (later in Catholic nations than in Protestant, but everywhere at last) as though interest on money were part of the nature of things: as though money had indeed, merely as money, a right to breed. The false doctrine was bound to lead to a deadlock at last, and in our own time that deadlock has been reached. The recovery of the vast usurious loans is impossible. Recourse has had to be made to repudiation on all sides, and the whole system is breaking down.

But remember that the worst of its effects is not its own self-destruction, but the way in which it has gathered into a few centers the power of controlling lives of the community and particularly of the proletariat, whose employment, and therefore existence, depends upon the great advance of credit by the holders of financial power. For all our great enterprises today are possible only through the favor of the lenders of money or credit.

We may sum up then and say that the unrestricted admittance of Usury as a normal economic function about a lifetime after the Reformation advanced the destruction of economic freedom, the swallowing up of the small man by the greater man, and the ultimate production of a large destitute Proletariat in the following fashions:

1. By the eating up of small property by Usury, falling as it did habitually upon men already embarrassed, and achieving their ruin;

2. By transferring real wealth in goods and land to those who directly used their mere money power, often enormous and impersonal, through mortgage and foreclosure.