Thursday, September 20, 2012
Interest rates, lending, debt slavery in MEDIEVAL ENGLAND of interest to BELIZE
A bit of medieval history of England, about money matters, interest rates ( usury ), and such.
In Praise of Medieval England
The Middle Ages are frequently associated with backwardness, tyranny and poverty: a period in which life was hard and short. Notwithstanding the absence of technological benefits in the fields of medicine and science, this was in reality an age in which prosperity and happiness were abundant and widely diffused.
The litmus test of any successful civilisation is the financial arrangements which prevail in its economic life. Are the means of exchange - that is money and credit - issued by the state for the sole benefit of its inhabitants, or are they controlled and manipulated by private bankers for their own enrichment and the enslavement of the people?
In mediaeval England state finances were firmly in the hands of the king, but prior to 1290 they were in the grip of a group of marauding moneylenders.
The laws against usury before the arrival of William the Conqueror in 1066 were very strict. In 899 King Alfred (871-99) directed that the property of usurers be forfeited, while in 1050 Edward the Confessor (1042-66) decreed not only forfeiture, but that a usurer be declared an outlaw and banished for life.
These wise laws were abandoned when the Normans defeated the English at Hastings on October 14th 1066. William I (1066-87) was accompanied by a party of Jewish settlers, who had been resident in Rouen, Normandy, since Roman times. Circumstantial evidence indicates that these Jews had provided financial support for William's military campaign in return for the right to practise usury in England under royal protection.
It was, however, William's son Rufus (1087-1100) who actively permitted these Jews to engage in lending money at interest - a venture in which he initially took a 50 per cent share of the profits. In order to pay the interest on loans advanced to the Crown, Rufus was obliged to tax the populace, which engendered much resentment towards him. The Encyclopaedia Britannica provides a vivid description of this odious man:-
‘In appearance William II was unattractive; bullnecked, with sloping shoulders, extremely corpulent and awkward in his gait; His long locks and clean-shaven face marked his predilection for the newfangled fashions which contemporary ecclesiastics were never weary of denouncing. His features were strongly marked and coarse, his eyes grey and deeply set; he owed his nickname (Rufus) to the fiery hue of his complexion. He stuttered violently and in moments of passion was almost inarticulate. His familiar conversation was witty and blasphemous. He was surrounded by a circle of vicious parasites, and no semblance of decorum was maintained in his household.
‘His character was assailed by the darkest rumours, which he never attempted to refute. He died unmarried and without issue.’
Those Jews not involved in the money-lending racket traded in corn and wool or dealt in trinkets, cheap jewellery and useless junk. Although it was forbidden by statute, many of them engaged in coin-clipping, that is filing and clipping the edges of coins and putting them back into circulation as clipped coins. The filings and clippings were then melted into bullion. A similar fraud they perpetrated was the plating of tin with silver and then selling it as silver-plate.
Another practice which incensed the English merchants was the custom of Jewish traders of selling a whole range of merchandise under one roof. Items such as candles, cloth, iron, leather, silver- ware which were normally sold in separate shops, were all disposed of in a bazaar type operation. The greed of these traders caused both anger and impoverishment amongst the merchant class and undermined the guilds.
The moneylenders charged princes and other noblemen interest rates of at least 33 per cent per annum on lands which they had mortgaged. The working class, who pledged their tools of trade or chattels, were expected to pay rates of up to 300 per cent per annum. Not unexpectedly, within two generations one quarter of all English lands were in the ownership of Jewish usurers.
The allegations of ritual murder of pre-adolescent Christian boys around the time of the Jewish Passover, or Pesach, added greatly to the general clamour that all Jews should be removed from England.
In 1233 the Statutum de Judeismo restricted the lending activities of the Jewish money-lenders, and in 1275 a statute abolished all forms of usury. An extract from the latter statute reads as follows:-
‘Forasmuch as the King hath seen that divers evils and the disinheriting of good men of his land have happened by the usuries which the Jews have made in time past, and that divers sins have followed thereupon that he and his ancestors have received much benefit from the Jewish people in all times past, nevertheless, for the honour of God and the common benefit of the people, the King hath ordained and established that from henceforth no Jew shall lend anything at usury either upon land or upon other thing (writer's emphasis).
‘And that no usuries shall run in time coming from the feast of St. Edward last past. Notwithstanding the covenants before made shall be observed, saving that the usuries shall cease. But all those who owe debts to Jews upon pledge of moveables shall acquit them between this and Easter; if not they shall be forfeited. And if any Jew shall lend at usury contrary to this Ordinance, the King will not lend his aid, neither by himself or his officers for the recovering of his loan; but will punish him at his discretion for the offence and will do justice to the Christian that he may obtain his pledges again.
‘And that the distress for debts due unto the Jews from henceforth shall not be so grievous, but that the moiety of lands and chattels of the Christians shall remain for their maintenance; and that no distress shall be made for a Jewry debt upon the heir of the debtor named in the Jew's deed, nor upon any other person holding the land that was the debtor's before that the debt be put in suit and allowed in court.’
Finally, in 1290 on July 18th a statute was passed by King Edward I (1272-1307) and the House of Commons compelling all Jews* to leave England for ever by November 1st of that year. Any Jews who remained in the kingdom after that date were liable to be executed.
The announcement of the expulsion was greeted with great joy and jubilation throughout the land. Unlike with the modern practice of ethnic cleansing, the Jews after paying a tax of 1/15th of the value of their moveables and 1/10th of their specie were permitted to leave with all their goods and chattels.
With the banishment of the money-lenders and the abolition of usury, we may observe how the finances of the English nation were practised at the different levels of society.
For the individual who wished to buy a house costing, say, £100 he would be required to make a down-payment of £10 and negotiate a loan of £90 from a bank. He would own 10 per cent of the house and the bank would own the remaining 90 per cent. Rent would be payable on the house of which 10 per cent would accrue to himself and the balance of 90 per cent to the bank. The following year he would pay the bank a further instalment of 10 per cent, reducing the bank's ownership to 80 per cent and the amount of rent payable to it. These instalments would be continued until he owned 100 per cent of the property.
In the event of the buyer defaulting on his rent payments he would be evicted. However, he could never lose that portion of the house he had paid for and would continue to receive rent on it. House price inflation was not a factor during this era, as the rate of inflation was zero - as it should be. In any normal society which does not practise usury.
A business loan would be agreed on the following terms:-
A fishing captain of sufficient years' experience who wished to purchase his own boat would approach a bank for a loan. He would buy a boat, which would belong to the bank. The bank would pay him a salary. After one year he would have the option to buy 10 per cent of the boat and receive 10 per cent of the profits. This procedure would continue until he owned 100 per cent of the boat. If, for example, after two years the bank decided to cancel the agreement because the captain was doing a poor job, he would still retain his 20 per cent share. In the event of the boat sinking, the insurance would cover it. The essence of this contract was that it was fair to both sides and that risk was equally shared by both borrower and lender.
The finances of the English Crown from 1290 onwards were centred around what was known as the `tally stick`. This ancient instrument of finance, known to the Saracens and possibly also to the Chinese, is derived from the Latin word tallia, meaning a stick. A tally stick was made out of hazel, willow or boxwood because these woods split easily. They were usually eight inches in length (from forefinger to thumb) and half an inch wide, although they could be up to eight feet long.
The denominations were indicated by differently sized cuts in the wood. A thousand pounds was marked by cutting out the thickness of the palm of a hand, one hundred pounds by the breadth of the little finger, one pound that of a swelling barleycorn, shillings somewhat less; and pence were marked by incisions. The payee was recorded on the flat sides.
When all the details had been recorded on the tally it was split nearly to the bottom, so that one part retained a stump, or handle, on which a hole would be bored. This was known as the counter-tally, or counterfoil, and was held on a rod at the Exchequer. The flat strip (without the stump) was given to the payee. As no two pieces of wood are identical, it was impossible to forge a tally stick.
Tally sticks were first introduced during the reign of King Henry I (1100-35) and would remain in circulation until 1783. It was, however, during the period 1290-1485 that tallies would reach their apogee and constitute the principal means of state finance. Tallies were used not only to pay state salaries, but to finance major items of infrastructure, such as construction of the wall of the City of London, public buildings and ports.
The exact amount of tallies in circulation during this period is not known, but as late as 1694 £17 million worth were still in existence. This was a prodigious sum, as the King's annual budget rarely exceeded £2.5 million, and a labourer earned only a penny a day.
With very few taxes, no state debt and no interest to pay, a contented and prosperous life was enjoyed by all the inhabitants of England. A labourer could provide for all the necessities his family required. People were well clothed in good woollen cloth and had plenty of meat and bread.
Houston Stewart Chamberlain, the German-domiciled British philosopher, confirms these living conditions in The Foundations of the 19th Century:-
‘In the thirteenth century, when the Teutonic races began to build up their new world, the agriculturist over nearly the whole of Europe was a freer man, with a more assured existence, than he is to-day (writer's emphasis): copyhold was the rule, so that England, for example - today a seat of landlordism - was even in the fifteenth century almost entirely in the hands of hundreds of thousands of farmers, who were not only legal owners of their land but possessed, in addition, far-reaching free rights to common pastures and woodlands.’
The average labourer in those days worked only 14 weeks a year and, not surprisingly, there were 160 to 180 holidays a year. According to Lord Leverhulme, a writer on that period, "The men of the 15th century were very well paid." In fact they were so well paid that it would only be by the late 19th century that a worker's wages equalled the buying power of those of the mediaeval period.
An Italian traveller visiting England in the reign of King Henry VII (1485-1509) gives a glimpse of the prosperity he found in London:-
‘...In one single street, named Strada (Cheapside), leading to St. Paul's, there are fifty-two goldsmiths' shops, so rich and full of silver vessels, great and small, that in all the shops in Milan, Rome, Venice and Florence put together I do not think there would be found so many of the magnificence that are to be seen in London.’
The large amount of free time available enabled the English country folk to indulge in fishing, hunting, hawking and snaring, while studying and reading were popular in the winter months. This explains why this period has always been known as ‘Merrie England’, Shakespeare described England as being...
‘This royal throne of kings, this scepter'd isle, This earth of majesty, this seat of Mars, This other Eden, demi-Paradise.’
A feature of mediaeval life in England was the prominent role which religion played. With a population of only five million, some 100,000 pilgrims would be visiting Canterbury Cathedral and other shrines at any one time. Piety and meditation formed an integral part of their devotions.
The nation's wealth could be seen in the beautiful Gothic cathedrals, which were erected throughout the land. Many of them were built with the help of voluntary labour. G.M. Trevelyan, the social historian, writes that...
‘The continuous but ever-moving tradition of ecclesiastical architecture still proceeded on its majestic way, filling England with towering forests of masonry of which the beauty and grandeur have never been rivalled either by the Ancients or the Moderns. In the newer churches the light no longer crept but flooded in, through the stained glass, of which the secret is today even more completely lost than the magic of the architecture.’
Critics might raise the objection that during this epoch England was involved in the Hundred Years' War (1337-1453). However, many of these battles were little more than large-scale archery contests, and none was fought on English soil. The English crossbowman was the most skilled exponent of this type of warfare. At Agincourt, October 25th 1415, the principal battle of that war, contemporary estimates of English casualties range from 14 to 1,600.
With the advent in the sixteenth and seventeenth centuries of the goldsmiths, who practised fraudulent banking based on fractional reserves, this glorious period in European history slowly came to a close. On June 1 1694 it terminated with the establishment of the Bank of England and the institution of a National Debt. This private bank took over the finances of the Crown and is directly responsible for having reduced the English and other British to their current status of debt slavery.
* The Jewish population at the time was approximately 16,000
Posted by A Professional BEACH BUM retires in Belize! at 3:05 PM