- OldEngl. law stated that any compensation for lending money, i.e. interest or making a profit from lending, was usury; later the word was applied to excessive interest rates. The Greek word for 'interest' was tokos = offspring. From this, usury was thought of as the breeding of money from money and therefore against nature and forbidden to Christians. Some members of the Jewish community became immensely wealthy by lending money. They also enjoyed special protection of the crown, as on their death the crown took possession of unpaid notes and therefore of monies yet to be paid. Christian lenders from Lombardy got round the proscriptions against interest by making 'charges' for services rendered. Frequently, interest charges of whichever kind of up to 60 per cent and more were imposed. One way of by-passing the problem of usury was by this means: a knight borrows money, which will be repaid on three successive Easter days. The note specifies £30 but the knight promises to pay 10 marks three times. Thus, if he fails to repay the actual loan of 30 marks, he is bound to pay £30, which gives the lenders interest of 33.3 per cent. A more concrete example is that of Henry IV. Over the course of his reign, Henry borrowed as much as £150,000, or rather, he signed notes to that value. What he actually received was only £130,000: thus 'charges'. A 14c quotation sums up a deep anxiety about borrowing money and payment of interest: 'He who taketh usury goeth to hell; he who taketh none liveth on the verge of beggary.' It is no surprise that the papacy and English monarchs were always in debt. -
Dictionary of Medieval Terms and Phrases. Christopher Coredon with Ann Williams.