The Church quickly came under considerable popular pressure to do something about the problem, and at first, it did try to tighten the clamps. Existing loopholes in the usury laws were systematically closed, particularly the use of mortgages. These latter began as an expedient: as in medieval Islam, those determined to dodge the law could simply present the money, claim to be buying the debtor’s house or field, and then “rent” the same house or field back to the debtor until the principal was repaid. In the case of a mortgage, the house was in theory not even purchased but pledged as security,
The Church quickly came under considerable popular pressure to do something about the problem, and at first, it did try to tighten the clamps. Existing loopholes in the usury laws were systematically closed, particularly the use of mortgages. These latter began as an expedient: as in medieval Islam, those determined to dodge the law could simply present the money, claim to be buying the debtor’s house or field, and then “rent” the same house or field back to the debtor until the principal was repaid. In the case of a mortgage, the house was in theory not even purchased but pledged as security, but any income from it accrued to the lender. In the eleventh century, this became a favorite trick of monasteries. In 1148, it was made illegal: henceforth, all income was to be subtracted from the principal. Similarly, in 1187, merchants were forbidden to charge higher prices when selling on credit—the Church thereby going much further than any school of Islamic law ever had. In 1179, usury was made a mortal sin, and usurers were excommunicated and denied Christian burial.122 Before long, new orders of itinerant friars like the Franciscans and Dominicans organized preaching campaigns, traveling town to town, village to village, threatening moneylenders with the loss of their eternal souls if they did not make restitution to their victims. All this was echoed by a heady intellectual debate in the newly founded universities, not so much as to whether usury was sinful and illegal, but...
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in transporting goods to wherever they were needed), whereas interest accrued even if the lender did nothing at all. Soon the rediscovery of Aristotle, who returned in Arabic translation, and the influence of Muslim sources like Ghazali and Ibn Sina, added new arguments: that treating money as an end in itself defied its true purpose, that charging interest was unnatural, in that it treated mere metal as if it were a living thing that could breed or bear fruit.
