The practice of usury in mid-sixteenth century England

Abstract

A ban on the practice of usury, taking interest on loans, was evolved in medieval law both canonical and secular. Over the centuries the law was challenged, questioned, refined and modified, but in essence stood firm. Ahile a grievance to the poor, however, usury was a necessity to the businessman who developed a whole range of subterfuges to disguise it. The Reformation did not sweep away canon law, so that Elizabethan divines condemned usury in arguments that echo their medieval predecessors. The man of business did not live up to the ideals of his church or his state, and so universal was the practice of usury that a normative market rate of Interest existed, but because of the official disapproval, it can only be reconstructed imperfectly from fragmentary evidence. To enforce the law, Tudor statutes encouraged informing, and a wave of enthusiasm for bringing usury coses to court in the 156c*s supplies a wealth of material both for the structure and practices of the money market, and for the reconstruction of the interest rate. At the same time the course of trade, traditionally based on Antwerp, suffered a series of disruptions through political events or plague, with consequent fluctuations In the rote of interest, which tended to rise during the 1560's except in tne more secure field of domestic mortgages. For similar reasons the Crown found it increasingly difficult to borrow abroad and turned to its merchant subjects for loans. Case-studies of "usurers" and debtors set against their social background highlight the practices and events of the period, and a providential supply of data for the Isle of Sheppey in Kent allows the comparison of a rural loan market with that of the capital. by 1571 it was no longer feasible to pretend that the pernicious practice of usury could ever be stamped out: Crown and subject used it daily. Informers were abusing their role and blackmailing their victims instead of bringing them to justice and a forfeit to the Crown. Both the Crown and frustrated merchants found lending mutually advantageous and the usury laws a hindrance. Rationalization and control were required, not an ineffectual ban. The parliament of 1571 reviewed the situation, and while conservative opinion could not permit usury, it was conceded that usury up to 10% would not necessarily be prosecuted. In effect this was taken as toleration, and although the clergy still preached disapproval, a necessary business practice had been freed from an anachronistic law.