Usury Act of 1571

There are two aspects to the English Parliament's deliberations on the Usury Act of 1571. Firstly they took the Francis Bacon line (see his Essay on Usury, a masterpiece of concise erudition) by an ABC analysis of the problem of usury identifying outrageous behaviour (Class A), sensible socially acceptable behaviour (Class C) and then a grey area in between (Class B).

As a first approximation civil society was given the OK to adopt 10% as the discerning factor (Bacon put it at 5%) and the Doctrine of Discernment is a key concept in Catholic christian ethics. So we get Class A Usury as anything over 10%, Class B Usury as 0 - 10%, and Class C Usury at 0% and under, at which point the lender pays the borrower a Stewardship Fee for looking after his money.

Secondly Parliament adopted distinctly different approaches to the three classes of usury in the administrative procedures of the Doctrine of Usury.

Class C cases are dismissed out of hand. ‘No case to answer! Don't waste the Court’s time! Credit makes the world go round! Of course the merchants are right and the theologians are splitting hairs! Go dance on pins!’ However the poor should pay lower and not higher rates of interest for their credit. Why? Because they are poor so they don’t have any money. Christian charity, common courtesy and run of the mill justice.

Class A cases are also dismissed, but by the courts, so that the dismissal is backed up by the full force of the law, its prisons, its law enforcers and its property confiscators. The penalty imposed on the usurer is three times the amount stolen, although previously, as Henry Swabey demonstrates, it was much worse than this for the usurers who could expect eternal damnation, no Christian burial and then some.

Class B cases reveal one of the real subtleties of the Act of 1571, because in these cases, civil society is commanded to deal with the problem by the Parliament of 1571 taking what constitutes in effect a Citizen's Arrest approach. Tawney's understanding of this is spot on in his Compromise of 1571 essay where he quotes from the author of The Death of Usurie (1595) - see Page 82 in the full text version of Tawney’s Introduction to A Discourse on Usurye by Thomas Wilson.

Source: Endnote 21 to Public Cash for the Real Economy by Peter Etherden (2008)