RABBI ARTHUR SEGAL:BEHAR:JEWISH RENEWAL:JEWISH SPIRITUAL RENEWAL:LOAN INTEREST

RABBI ARTHUR SEGAL:LEVITICUS 25:01 - 26:02:PARASHA BEHAR:"Ribbit, Ribbit"

RABBI ARTHUR SEGAL:LEVITICUS 25:01 - 26:02:PARASHA BEHAR:"Ribbit, Ribbit" 

 

 

PARASHA BEHAR
LEVITICUS 25:01 - 26:02
RABBI ARTHUR SEGAL

HILTON HEAD ISLAND, SC

BLUFFTON, SC

JEWISH RENEWAL:

JEWISH SPIRITUAL RENEWAL

 

"Ribbit, Ribbit"

Two Budweiser frogs were visiting Eretz Israel. It was a beautiful
evening on Lake Kinneret in Ha Galilee. Yakov was feeling amorous. He
said to Rivka, "Ribbit?" There was no reply. Yakov waited a few moments
are tried again. "Ribbit?" But again there was silence. Yakov,
frustrated, puffed out his big bull frog's chest and bellowed
"RIBBIT!!??"
Rivka coolly replied "I'm not INTERESTed."

Ribbit is the Hebrew word for "interest." (Sorry to PUNish you with the
above.) "If your brother becomes impoverished...you shall strengthen
him--stranger or resident--so that he can live with you. Do not take from
him interest and increase....Do not give him your money for interest, and
do not give your food for increase" (Lev 25:35-37).

 

 These same commandments are echoed in Deuteronomy 23:20-21 with a twist. "You shall
not cause your brother to take interest, interest of money or interest of
food, interest of anything that he may take as interest. You may cause a
gentile to take interest, but you may not cause your brother to take
interest."

Ribbit is the lending of money for interest. A Jew is not allowed to
charge interest. This prohibition not only extends to monetary loans, but
also to transactions involving barter or delayed payments. No one is to
derive a financial benefit by waiting to receive payment or property. A Jew is
not allowed to pay interest either. The Talmudic rabbis actually forbade
certain transactions because they had the appearance of interest, even
though the law was not actually violated. These are called "ha'aramat
ribbit."

The society promulgated by the Torah did not want to wait until someone
became poor to help him. We are commanded to help one as soon as he
begins to lose money. We are not to wait until he becomes poor. The
Chazal (the rabbis of the Talmudic period of 500 C.E.) said, "Uphold him
before he falls and becomes dependent of charity." Maimonides ruled that
one of the highest forms of charity is to help another before he becomes
destitute and has to ask for help. The Rambam said we could do this with
free loans, investing in his business, offers of employment, or any other
assistance. This mitzvah comes from the phrase "you shall strengthen
him." Rashi offers the analogy of when we see a donkey beginning to lose
its load, we are to rush in and help. If we wait until the load totally
falls off the donkey's back, it will take five times the effort to
correct the situation.

The Torah uses two words for interest and increase. The word "neshek"
comes from the word "neshehkah," which means "biting." The transaction
bites into the borrower's wealth. The second word, "ribbit," means to
increase, as this is what happens to the lender's wealth. Both are
disallowed by Torah. But why in Leviticus do we see that the law applies
to both Jew and non-Jew, but in Deuteronomy we see that Jews can charge
non-Jews interest and conversely pay non-Jews interest? Did God change
his mind? Or could it be that Deuteronomy was written at a later
time, perhaps during the period of Ezra (ca. 500 B.C.E.) after the return
from Babylon, when many rules were enacted delineating Jew from non-Jew.
An example of this would be Ezra's ruling that all returning Jews to
Israel must divorce their non-Jewish wives. Could this be another law
keeping us from social intercourse with gentiles?

If we could borrow interest-free from a fellow Jew, why would we
consider borrowing from a non-Jew? But on the other hand, if we could get
interest from a non-Jew, why would we consider helping a Jew from who we
could not make ribbit? Perhaps the answer is found in the next verse
where we are taught that God "will bless us" in our "undertakings." Is
this saying that our willingness to forgo financial gain by borrowing and
lending only from Jews is what God considers just?

Maimonides insists that taking interest from a non-Jew is a "positive"
commandment. The Rambam wrote that this indeed would limit our
interacting with them and hence limit intermarriage. He believed that if
Jews gave gentiles interest-free loans, they would become grateful to us,
socialize with us, and we would adopt their ways and marry their
children.

The Talmud Bavli is replete with verses concerning ribbit. Chapter 5 of
Tractate Bava Metziah is dedicated to the subject. Tractates Succah
29A and Temurah 6B list the punishments for lending or paying interest
and actually compare lending with interest to murder. Interestingly,
Tractate Makkot 24A says that while it is "kosher" to lend to a non-Jew with
interest, there is value and goodness in lending to him without
financial gain.

But there is another Torah verse often overlooked regarding this subject.
In Exodus 22:24 we read, "When you lend money to My people, to the poor
person who is with you, do not act toward him as a creditor and do not
lay interest upon him." This law immediately follows the mitzvoth to
take care of the stranger, widow, and orphan, Jew or non-Jew. Does "My
people" (ah-me) mean Jews only or all of God's people are deserving of
care when in need? It is obvious from the content of this paragraph
that the authors of the Torah laws in Exodus and Leviticus prohibited
all people in need from being charged interest.

Note that loans with prohibited interest had to do with helping the
poor in an agrarian society. The idea of commercial loans was a "city"
innovation. One took out a loan only in desperation during the time of
the formation of our people. We were commanded not to take advantage of
the poor. That is what interest to a poor person would be. It would be
cruel to require a destitute person to pay interest when the loan itself
would be difficult enough to pay back. This law also teaches us that we
should trust that God is in absolute control over us and our possessions.
Our money. which we lend, is not our money at all, but really God's money
which He has lent us. To loan without interest is to have the same faith
in God when we listen to Him when we do not work on Shabbat and when we
do not plow in the Sabbatical (shemittah) year.(These rules are also in
this week's parasha in Lev 25:4,11.)

However, when some of 'us'  returned from the exile in Babylon, commerce had to
resume quickly. There had to be a free flow of money. The laws were
"slightly" changed to adapt to those times. When some of our people returned to
Judea under the orders of the Persian king, Cyrus, we were lead by Prince
Sheshbazzar, the son of Jehoichin, the next-to-last king of Judah. When
Jehoichin was released from prison by Nebuchadnezzar's successor he and
his family became quite wealthy. Some of these wealthy Jews became
aristocrats in the Persian court. They had little financial incentive to
return to Judea. In fact most Jews decided to stay in Bablyon and live as Talmudic Rabbinic Jews, and not again as Temple Priest oriented Hebrews.

A parallel development was occurring in Egypt. A group of Jewish
businessmen established themselves ca. 650 BCE on the Elephantine Island
in the Nile River near the present day Aswan dam. The had commercial
contact with the Jews of Persia for 200 years. They had their own temple
where they offered animal sacrifices just as in Jerusalem! They did
this long after the first Temple was destroyed by the Babylonians. Jews
were no longer tied to the land as farmers and shepherds. They were
merchants and bankers and needed to use capital and have it work for
them. They needed to charge interest to the non-Jews who wanted
investment monies, and they needed to pay interest to non-Jews when Jews
needed investment money.

(As a historical note that you may find fascinating, Rabbi Raymond
Scheindlin writes of the Judean authorities after Ezra. They built the
Second Temple and then tried to shut down the Elephantine Temple as it
was contrary to Deuteronomy 12:4-9 of having a "private altar." It
functioned until 410 BCE when some Egyptians rebelled against the
Persians, and the Jews remained loyal to the Persians. The neighboring
priests of the ram-god Khnum took the opportunity to destroy the temple
as they were offended because the Jews sacrificed sheep and rams! When
the Persians suppressed the Egyptian rebellion, they rewarded the Jews of
Elephantine Island by allowing them to rebuild their temple. However to
bow to both the Cohanem in Jerusalem's second Temple and the Egyptian
priests who worshipped rams, the Jewish Elephantine Temple could only
sacrifice vegetables, fruits, and grains. The colony disappeared 100
years later. This is yet another example of Jews adapting and reforming to meet
their needs and situations, while still remaining Jewish.)

The Bible records how only a few Jews obeyed the Jubilee year rules.
These rules listed in this week's parasha (Lev. 25:10-11) state that
every 50 years, all deeds to land revert back to the original owner. This
rule was altered as well with a loophole saying that it only applied
when 100 percent of all the tribes lived in Israel. Since some had
vanished, the law was voided until "their return" (Talmud Bavli Tractate Arachin 32B).

Interest, Proverbs 23:32, says is like the "bite of a snake" that bursts
and increases. Regardless of these economic matters our goal as modern
Jews is to always remember the Torah's principles of concession,
good-heartedness, and performing ahavath chesed (deeds of loving
kindness). Proverbs also says that the Torah's "ways are pleasant, and
all her paths peaceful" (3:17). When we study Torah, Talmud, and Mishna
we must never lose sight of this primary demand.

Chapter 5 of Talmud Bavli Tractate Bava Metzia begins by asking what the difference is between
"interest and increase." Daf 60B concludes that the words are
synonymous with subtle differences between Torah interest and Talmudic
interest. The major difference is that Torah interest is recoverable by
going to court. The study of rabbinic interest, called the "dust" of
ribbit, is fascinating. It is Talmudically not allowed for the borrower
to do a favor for or to honor the lender. He cannot invite him over for
dinner, get him an aliyah at the synagogue, or let him stay overnight,
rent free in his home. These could all be construed to be ribbit. A
seller cannot charge more for an object if one defers payment. Conversely
one cannot charge less if one pays cash for an item on the
"barrelhead."

Insincere transactions are prohibited as well by the Talmud. For example,
Moses lent money on the security of Aaron's field worth more than the
loan. The contract said that if Aaron did not pay back the loan, Moses
would own the field. At the time of the contract both Aaron and Moses
knew that Aaron would not pay back the loan, and Moses would end up with
the field which was worth more than the loan. This increase would be
illegal ribbit. The contract is based on the reliance that the condition
of repayment will not be met. This fraud is called an "asmachta" from the
Hebrew word for "reliance."

Here is where the Talmud begins to answer the question of the double
standard of Jew and non-Jew vis-à-vis interest. Bava Metzia 70B quotes a
sage from the Second Temple days who prohibited lending money to
gentiles with interest even though the Torah in Deuteronomy 23:21 says
it is all right! The reason is so that we would have no dealings with
them and learn from their ways. Remember, non-Jews then were pagans and
"gentile" did not mean Christian as we commonly use the term today. An
exception was given to Torah scholars, who would not, it was assumed,
succumb to pagan ideas.

A rabbi from the Mishna period 200 CE ruled that the Torah law of
loaning to a resident alien (ger) without interest was to be interpreted
so that the ger would be treated the same as a gentile and charged
interest. Why? Unlike Torah times when we lived with a mixed multitude of
people in our midst in relative peace, in 200 C.E. Jews lived with pagan
Roman conquerors who were both resident aliens and gentiles. But by the
time the chapter ends we read in daf 75B, that the more liberal rabbis of
the Talmud period in 500 C.E. posit that the law of  "before a blind man you
shall not place a stumbling block" (Lev 19:14) means clearly for "all"
men. They go on to say that one should not cause another to sin.

Desperate people are like the "blind." Since it is a sin to charge
interest as well as to pay it, it would be a sin to lead a gentile into
taking out a loan and paying interest. Therefore they reason, it is best
to neither charge nor pay interest to anyone, Jew or non-Jew.

We have seen how it is easy to interpret the Torah's rules to mean that
one should help the poor of any people with interest-free loans, and
frankly, in any way possible. We can see how the Torah was not speaking
of commercial loans. However, since this was not stated specifically, an
elaborate legal fiction had to be set up to allow Jews to engage in
commerce as the world became modernized.

Before the modernity of the world abutted with Halakah (Jewish law), Jews
struggled through the Middle Ages. Many anti-Jewish laws were
devised to keep us from owning homes or property and from engaging in
trades that required joining guilds. The Church had Canon law based on
our Torah, which forbade Christians to charge interest. They called it
"usury" from the Latin word for "use." Today the legal term "usury" means
charging above the fixed interest rate. However at that time it simply
meant charging interest. Christians could not charge interest to each
other based on Canon law. The Church needed Jews to be their bankers
because the Church interpreted Deuteronomy's verses to mean that Jews
could lend to Christians. In 1179, Pope Alexander III issued a ban
prohibiting all Christians from lending money with interest to anyone. He
cited Luke 6:35: "Love your enemies, and do good, and lend, expecting
nothing in return."

The Church ruled that this ban did not apply to Jews as we were not "true
believers." This is biblical interpretation of acting as if "the shoe
is on the other foot." As noted above in our short discussion of the Jews
of the Babylonian and Roman diasperas, Jews traveled from country to
country buying and selling merchandise. Credit was unheard of and cash
was the only means of payment. If a Jew needed money he could not get it
from a Christian as a Christian could not lend to him with interest. So
Jews were forced to borrow from and lend to each other. But the Torah
mitzvah of not collecting interest put the Jewish bankers at a
disadvantage. The rabbis devised a legal fiction that gave Jews
permission to break Torah laws as doing so would protect their financial
livelihoods. Since financial livelihood affects one's life, they were
allowed to break the laws of ribbit on the grounds that they were
fulfilling the mitzvah of saving a life.

The Jews would lend their money from benches near the cities' cathedrals
and churches in the town's squares. They could charge and collect
interest as the rabbis ruled that this was a permissible venture (hetter
iska). The Italian word for bench is "banco" and this is of course from
where our English word "bank" is derived. The Church developed a legal
fiction as well, because they taxed the Jewish money lenders heavily, so
while the Church was not collecting interest from their fellow Christians
directly, they were doing so indirectly. Of course, as history shows, the
Jews were blamed for extracting a "pound of flesh," as Shakespeare wrote
about Shylock, the Jewish money lender in his play, The Merchant of
Venice.

The concept of a Jewish "permissible venture" was devised. This is called
in Hebrew a hetter iska, as cited above. This is, according to Professor
Steven Resnicoff, Esq., "a unique contractual arrangement devised under Jewish
law to circumvent the religious prohibition on the collection or payment
of interest. It accomplishes this by substituting an investment scheme in
lieu of a loan without meaningfully altering the parties' respective
rights. Within the realm of Jewish law, this device for centuries has
facilitated effectively consumer as well as commercial financing."

To explain the legal workings of this "permissible venture" would take
pages and would read like a law text. It is recognized Halachically as a
"shutfus," which is loosely translated as a partnership. Under Jewish law
a person can invest in and share the profits of a shutfus without being
liable personally for any loss. Moreover, one member of a shutfus is not
necessarily authorized to bind another personally. Nor may one member of
a shutfus be liable for acts of another. Therefore one can set up this
dummy partnership, with A giving B money, B using the money with A having
no say in its use and no liability for B's losses or mistakes. And yet A
can sit back, not be involved, and be paid back his investment and a
share of the profits. According to Jewish law, this money is not
principal and is not interest.

What happens when Jewish law, which defends this legal fiction, collides
against U.S. law which despises, as did our Talmudic rabbis,
contrived contracts (asmachta, as described above)? In the 1985 case of
Bollag v. Dresdner, the court considered a case where the financier
(lender) gave the recipient (borrower) $15,000 to be used for business
purposes. Soon thereafter, the parties signed a Jewish "permissible
venture" agreement that stipulated the amount, the terms, and the
conditions of the arrangement. The agreement stated that the recipient
received $15,000 for a business investment from which the recipient would
share his profit with the financier. The court concluded that substance,
not form, controlled characterization of the venture, noting that "a
transaction must be considered in its totality and judged by its real
character, rather than by the name, color, or form which the parties
assign to it." It therefore ruled that the transaction was a loan with
interest and not an investment.

In reaching its conclusion, the court took into consideration the
financier's statement that he was not to share in any business losses of
the recipient but that he was "guaranteed" his investment
"unconditionally." In addition, the court heard a rabbi as an expert
witness who said that Jewish "permissible contracts" were not loan
agreements. The court concluded that these "contracts" are indeed loan
agreements and that the rabbi and the financier were being
disingenuous.

By calling obvious loans "partnerships," those who are trying to get
around the mitzvoth of not charging and accepting interest are putting
themselves in legal jeopardy. They potentially are breaking the laws of
tax deductions, interest declaration, tax reporting, partnership frauds,
bank fraud, revised uniform limited partnership act, as well as the
Torah law of not stealing, lying, and swearing false oaths. This has
caused some states, like New Jersey, to demand that all consumer
contracts be drafted in language that may be understood plainly by
the general public.

 

 The biggest sin the users of these "permissible
ventures" are doing is breaking the mitzvah of chillul ha Shem
(desecration of God's name, which we learned about in last week's d'var
Torah) by making our people look fraudulent by looking for loopholes to
disobey our own civil and religious laws and cheat others.

The spirit of the Torah law is to help people in their time of need
without abusing them. As spiritual  Jews we have the benefit to be able to
study and discern this. We can say without fear of rebuke or
excommunication that we wish to set up free loan societies to help the
poor of our community, while at the same time not having to engage in
legal fictions to loan or be leant money for commercial uses. This is the
mitzvah of "gemilut chesed." The law to extend chesed (kindness) as
ordained by the Torah makes no distinction between friend and foe.

Exodus 23:04 tells us to return even our enemy's ox that we find. We are
supposed to help our enemy if his mule is overburdened. Talmud Bavli Tractate Bava Metzia 31A
states that we are obliged to help him 100 times over!! Not giving a free
loan to a non-Jew in need would be like bearing a grudge, which is also a
sin. By performing legalistic routines to avoid mitzvoth we are missing
out on the joy of Torah's spiritual teachings. When we are taught in
Leviticus 25:35 to help the poor so he can live with us ("umatatah yado
imach"), we are being taught that we are all connected as people. "Imach"
means "together with you." When there are poor in our community it is not
only bad for them, but bad for the society in general and us as
individuals. When the Torah says "vehechezakta bo," the actual
translation means you shall "strengthen in him," not "strengthen him."

Rabbi Yehoshua says in the Mishna Rabba Vayikra "more than the rich
does for the poor, the poor does for the rich." When all members of
society are no longer poor, we all become richer.

When we are taught not to take interest so we can "let your brother live
with you," we are being told that God wants harmony to exist. The lender
who extracts interest hopes that the loan is extended as he earns money
on each passing day. The lender wants to gain wealth so he can repay the
loan quickly and save on interest. But when one is lent money with no
interest, both have the same goals of a quick repayment due to financial
recovery of the borrower. The Shulchan Aruk in its Halachic rules on
ribbit (160:2) goes so far as to say that one who charges interest denies
the Exodus from Egypt. These are some of the spiritual gems the Torah and Talmud and other texts are trying to teach us.

Talmud Bavli Tractate Shabbat 133B says, "Imitate God. As He is gracious and merciful,
so you be gracious and merciful." If a poor person, Jew or non-Jew needs
help, do we break the commandment of not "standing idly by the blood of
your neighbor" and not help the non-Jew as we would the Jew? Do we forget
the spirit of the Torah and spend more time on legal fictions to lend to
each other with interest on commercial loans, and ignore the plight of
our fellow humans who need interest-free loans just to get back on their
feet? Do we ignore Deuteronomy 15:7-8 that says, "If there be a destitute
person among you...you shall not harden your heart or close your hand.
Rather, you shall open your hand to him, you shall lend him what he
needs?" I think not.

Shabbat Shalom,
RABBI ARTHUR SEGAL

HILTON HEAD ISLAND, SC

BLUFFTON, SC

JEWISH RENEWAL:

JEWISH SPIRITUAL RENEWAL

 

ORIGINAL VERSION WRITTEN WHEN SCHOLAR-IN-RESIDENCE AT CONGREGATION TEMPLE MICKVE ISRAEL, SAVANNAH, GEORGIA

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