January 23, 2019

A Short History Of Usury
From The 1894
Maine Farmer's Almanac

One of the recurring themes in the old farm almanacs of 19th Century America was a caution against taking on debt. Debt was understood to be a form of enslavement, and the independent-minded rural people of that day loved their freedom too much.

In the above Farmer's Calendar excerpt from the Maine Farmer's Almanac of 1894 the editor provides a little history of Christianity and usury. Usury was once very severely condemned by Catholic and Protestant church leaders. It is a history that few know about.

Usury was once understood to be the loaning of money at interest. These days, the meaning has been changed to mean the loaning of money at too high of an interest rate.

I have loaned money to people in my life, but I have never loaned it at interest. Well, in one instance I had no choice but to charge interest, but not really. Here's the story... 

Several years back, when my wife and I sold my parent's house to one of our sons, we set it up so he would pay us every month for a number of years until the total sale price was paid off. To our surprise, the attorney handling the sale informed us that we had to charge interest to our son for what amounted to a mortgage loan. He told us that the law requires it. And the law also dictated what the minimum interest rate we had to charge would be!

Not wanting to charge interest, we simply lowered the price of the property so that the total amount (including interest) when the loan was all paid off would equal the selling price we originally wanted.

But, of course, the government wants me to pay income tax on the interest portion of every payment my son makes. So, from a financial perspective, I'm losing money. 

Four and a half years later, my son (and his wife) have not missed a payment and they have made great improvements to the old house. It's gratifying to see. That gratifying feeling more than offsets our financial loss to income taxes.

If you click on the picture above, it should come up large enough on your screen that you can read the 125-year-old essay, thus saving me the time I would otherwise have to spend transcribing. 

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