Debt and Usury Case Usury - 8048 Words

History and Background To begin my research, I wanted to get a clear understanding of just exactly what usury was and how it came about. The word usury is derived from both the Medieval Latin word usuria, meaning interest or excessive interest, and from the Latin word usura, which simply means interest. At that point in time, the definition of usury meant the charging of interest on loans, but over time after the legislation of countries to limit the rate of interest on loans, the definition of usury came to mean the interest above the lawful rate. As it stands today, usury would be found to mean the charging of unreasonable or relatively high rates of interest. The practice of usury can be traced back over four†¦show more content†¦Adam Smith, who was considered the â€Å"Father of the Free-market Capitalism† and known for his general advocacy of laissez-fair economics, however, was strongly in support of controlling usury (Jadlow, 1977; Levy, 1987). While he didnâ €™t want to completely exclude interest, he was in favor of the imposition of an interest rate ceiling (Smith, 1937). Another reformist was Silvio Gesell, a successful nineteenth century merchant in Germany and Argentina, who condemned interest on the basis that his sales were more often related to the pride of money than people s needs or the quality of his products (Gesell, 1904). His proposal of making money a public service subject to a use fee led to widespread experimentation in Austria, France, Germany, Spain Switzerland, and the United States under the banner of the so-called â€Å"stamp script movement†, but these initiatives were all squashed when their success began to threaten the national banking monopolies (Kennedy, 1995). Usury Law Generally, usury law is used for the most part in the handling of consumer credit cases that involve the statutes and regulations which limit the charges that creditors may assess when extending credit to consumers. There are many statutes and regulations which restrict credit charges. The oldest of these are referred to as general usury statutes which are established to set the maximum rate of interest that can be charged in any loan transaction in aShow MoreRelatedWilliam Shakespeare s The Merchant Of Venice1532 Words   |  7 PagesYet, from an Islamic perspective, the answer is no. While the American public seems enamored with more and more debt, Islam has distinct regulations regarding the acquisition of personal debt. The reason is clear: In Islam, economics and religion are inextricably linked—a concept completely foreign to all but the most fundamentalist Americans. The ills of money-lending from the Eastern perspective have been fodder for Western literature for centuries, replete with illustrations that mirror the differencesRead MoreAnalysis Of Riba ( Interest ) As A Cause Of Imbalance Society And Its Islamic Perspective Essay1363 Words   |  6 Pagesits followers. 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