Medieval Usury and the Commercialization of Feudal Bonds [1 ed.] 9783428477852, 9783428077854

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SHAEL HERMAN

Medieval Usury and the Commercialization of Feudal Bonds

Schriften zur Europäischen Rechts- und Verfassungsgeschichte Herausgegeben von Prof. Dr. Reiner Schulze, Trier, Prof. Dr. Elmar Wadle, Saarbrücken, Prof. Dr. Reinhard Zimmermann, Regensburg

Band 11

Medieval Usury and the Commercialization of Feudal Bonds By

Shael Herman

DUßcker & Humblot . Berliß

Die Deutsche Bibliothek - CIP-Einheitsaufnahme Herman, Shael: Medieval usury and the commercialization of feudal bonds / von Shael Herman. - Berlin : Duncker und Humblot, 1993 (Schriften zur europäischen Rechts- und Verfassungsgeschichte ; Bd. 11) ISBN 3-428-07785-7 NE:GT

Alle Rechte vorbehalten

© 1993 Duncker & Humblot GmbH, Berlin

Fotoprint: Berliner Buchdruckerei Union GmbH, Berlin Printed in Germany ISSN 0937-3365 ISBN 3-428-07785-7

For Helen, Jordana, and Dara

Geleitwort In dem programmatisch angelegten Band 3 dieser Schriftenreihe hat Peter Landau mit eindringlichen Worten den Einfluß des kanonischen Rechts auf die europäische Rechtskultur hervorgehoben. Der vorliegende Band nimmt dieses Thema insofern auf, als seinen Ausgangspunkt dasjenige der kanonistischen Dogmen bildet, das mehr als jedes andere das Verkehrsrecht des Mittelalters geprägt hat: das kanonische Wucherverbot. Konsequent durchgeführt, hätte es das Wirtschaftsleben wohl weithin zum Erliegen gebracht. Daß es dazu nicht kam, sondern daß internationaler Handel, daß Wirtschafts- und Finanzwesen einen bis dahin unerhörten Aufschwung nahmen, liegt nicht zuletzt daran, daß die mittelalterlichen Juristen eine ganze Vielzahl von Wegen ersannen, auf denen das Wucherverbot mehr oder weniger subtil umgangen werden konnte. Einer der praktisch wichtigsten von ihnen war die in der Regel als Kauf deklarierte Begründung einer Rentenschuld. Die Entwicklung dieses Finanzierungsweges und ihre rechtliche Beurteilung im mittelalterlichen Frankreich und England bilden einen Schwerpunkt des vorliegenden Bandes. Eingebettet sind diese Erörterungen in den weiteren Fragenkreis der zunehmenden Kommerzialisierung mittelalterlicher Lehnsbeziehungen; ergänzt werden sie durch einen Blick auf den von der Kirche tolerierten Judenwucher, auf dessen staatliche Reglementierung sowie auf mögliche Verbindungslinien und Wechselwirkungen zwischen jüdischer Doktrin und mittelalterlicher Geschäfts- und Finanzierungspraxis. Kanonisches Recht, Judenrecht, Feudalrecht und mittelalterliches Wirtschaftsleben: dies alles sind europäische Themen par excellence. Dieser europäische Charakter der Studie wird noch dadurch unterstrichen, daß die durch das anglonormannische Recht hergestellte Verbindung zwischen England und Frankreich deutlich hervortritt und damit einmal mehr die Vorstellung einer gänzlich isolierten Entwicklung des englischen Rechts als ein Mythos erwiesen wird. Zum ersten Mal erscheint hiermit ein Band dieser Schriftenreihe in englischer Sprache; damit wird die schon im Vorwort zu Band 7 angedeutete vorsichtige sprachliche Öffnung fortgeführt, die nach dem Verständnis der Herausgeber dem europäischen Charakter der Schriftenreihe entspricht. Der Autor dieses Bandes, Shael Herman, verkörpert europäische Tradition außerhalb Europas. Er ist Professor an der Tulane Law School, Louisiana, und

Geleitwort

8

unterrichtet damit in einem Staat, wo wie in nur wenigen anderen civil law und common law aufeinanderprallen bzw. ineinander übergehen. Ich freue mich sehr, daß es gelungen ist, diese überaus anregende Studie im Rahmen der Schriften zur Europäischen Rechts- und Verfassungsgeschichte zu publizieren und sie damit für das europäische Lesepublikum sehr viel leichter zugänglich zu machen, als sie es in einem amerikanischen Law Journal wäre. Februar 1993

Reinhard Zimmermann

Preface This book builds upon my earlier study, "Legacy and Legend: The Continuity of Roman and English Regulation of the Jews," 66 Tulane Law Review 1781 (1992). Like "Legacy and Legend," this book blends aspects of Roman law, canon law, and Jewish law, as weil as medieval English and French law. In tenns of outlook and argument, however, the studies are fundamentally different. "Legacy and Legend" laid equal stress upon Roman law and English law and viewed canon law as a bridge between them. To highlight links among these bodies oflaw, the article showed that the Jewish rejection ofChrist's message decisively affected their self-definition and the course of their relations with Christians. During the earliest centuries of Christianity, for example, this rejection inspired in Christianized Roman emperors a scom for Jews. Reinforced by church leaders, this imperial hostility dramatically affected the tenns of Jewish survival among Christians. Centuries later, medieval English monarchs, similarly scomful of Jews, nevertheless imported Jewish lenders from Normandy to act as financiers 10 the newly conquered Norman realm. These monarchs found in Roman doctrine and canon law a convenient, ready-made user's manual for their Jews. To these thematic threads the present book adds an analysis of medieval financial practices and doctrines. Dur story-line here may be summarized as folIows: medieval churchmen, professing aversion to commercial activity, rejected Roman doctrines that authorized 1ending at interest. The rejection eventually assumed the fonn of a canonical usury ban. Exempt from the ban, Jewish lenders attracted a social opprobrium of alm ost biblical proportions. Jews' usury was a badge of their rejection of Christ's message; in the collective medieval imagination, Jewish lenders summoned images of biblical money changers in the temple. Despite its efforts, the Church could not eradicate usury, for it was a manifestation of human profitseeking. A quickening thirteenth century commerce demanded interest-bearing transactions; and clerics, monarchs, and nobles engaged routinely in such transactions. Seeking 10 reconcile material aspirations with spiritual ones, theological imaginations were bent to the task of accommodating commercial practices to the usury ban. An account of that accommodation, this book speculates about the effects of medieval usury upon the feudal structure of the Anglo-Norman realm.

10

Preface

In a book about debts, I would be remiss if I failed to record my own. I am grateful to Professors Peter Stein (Queens' College, Cambridge), Richard Helmholz (University of Chicago), and Reinhard Zimmermann (University of Regensburg) for having generously read and commented on drafts of this work. Each colleague offered a number of thoughtful suggestions for improving the story. I am also grateful to Professor Zimmermann for the foreword and for having recommended this book for German publication in the series, Schriften zur Europäischen Rechts- und Verfassungsgeschichte . The series editor, Professor Reiner Schulze (University of Trier), has kindly coordinated publication of the book with Duncker & Humblot. Lynn Becnel and Stephanie Mitchell painstakingly typed and corrected the manuscript more often than any of us can remember. Catherine Bellordre carefully checked substantive information in the book againstendnote references. Mark Cunningham checked formal consistency ofthe endnotes. Kimberly Koko Glorioso and Kevin Hourihan, both ofthe Tulane Law Library, contributed their expertise to preparation of the bibliography. These librarians, along with Margareta Horiba and James Donovan, also of Tulane Law Library, generously gave their time in the search for bibliographic sources. At Duncker & Humblot, Professor Norbert Simon and Frau Heike Frank expertly supervised the book's production. I thank all of these individuals for their patience and cooperation. Preparing a camera-ready manuscript is achallenge, especially for an American author unschooled in German printers' terminology and modern computer technology. Colleagues fortuna tel y recognized my shortcomings and came 10 my rescue. I wish to thank Professor Joachim Zekoll, Tulane Law School, for explaining Duncker & Humblot's specialized vocabulary and for helping me on several occasions 10 communicate with the German editors. Thanks are also due to Marcia Zierlein, Tulane Law School, for laying out this book in camera-ready form. Finally, this work was completed during my tenure as a scholar-in-residence at the Louisiana Bar Foundation. For their material supportand confidence in me, I thank the Foundation, and particularly its executive counsel, James Gulotta; its president, Marcel Garsaud; and its secretary-treasurer, Eldon Fallon. New Orleans, Louisiana March, 1993

Shael Herman

Table of Contents I. Introduction .....................................................................

13

11. The Church, Contrary to Its Roman Law Heritage, Condemns Lending at Interest ........................................................................

19

a) Roman Law as Damnosa Hereditas .......................................

19

b) The Church Rejects the Roman Practice of Lending at Interest .......

19

111. Theological Foundations of the Usury Ban and Its Evasions ...........

23

IV. Commercialization of Feudal Bonds ................... .....................

25

a) Overview .....................................................................

25

b) Norman Financing Practices During the Tenth through Thirteenth Centuries ..........................................................................

26

c) Landed Revenues as Natural Camouflage for Interest ..................

28

d) Rents: A Natural Outgrowth of the Personal Bond of Lord and Vassal

29

e) Two Forms ofTenement Transfers: Subinfeudation and Substitution ....

30

aa) Substitution .............................................................

30

bb) Subinfeudation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30

f) Commutation of Services: A Sign of Commercialization of Feudal

Bonds .........................................................................

32

g) More Evidence of Commercialization of Feudal Bonds: Subinfeudation ut de vadio ...................................................................

33

h) The Nontenurial Rent: Both Euphemism and Convenient Disguise for Usury .........................................................................

34

i) Blurring Lease and Loan ...................................................

34

j) Distraint: Compulsory Rendition of Rent Payments and Services .....

36

k) The "Thinglikeness" of Rents .............................................

38

V. French Experience with Gages, Subinfeudations, and Rents ...........

40

a) Commercialization of Feudal Bonds in Medieval France ...............

40

b) French Financing Practices .................................................

42

c) Waning Obstacles to Liquidating a Fee on Default ............... ......

43

d) Jewish Lenders in France ..................................................

45

12

Table of Contents

VI. Recapitulation ...................................................................

47

VII. English Experience with Usurious Lending and Its Evasions ...........

48

a) Jewish Lenders in England .................................................

48

b) Subinfeudations and the Locus of Creditor Leverage ...................

50

c) Subinfeudations ut de feodo ................................................

50

d) Subinfeudations ut de feodo and ut de vadio Contrasted ...............

51

e) Subinfeudations ut de vadio as Investment...............................

53

f) Jewish Holdings by Subinfeudation .......................................

53

g) Christian Holdings by Subinfeudation ....................................

54

h)· Royal Statutes Aimed at Investors in Encumbered Estates .............

54

i) Statutes of 1269 and 1271 Divest Jews of Encumbered Estates .......

55

j) Quia Emptores (1290) ......................................................

56

k) Milsom's Observations on Quia Emptores ............ .......... .........

57

I) Mortmain Statute [De Viris Religiosis] (1279) ..........................

59

m) Specific Instances of Subinfeudations ut de vadio .......................

63

n) Westminster II: Elegit ......................................................

65

VIII. Assize of the Jews (Assisam Judaismi) ........ ...............................

68

IX. Conclusion .......................................................................

76

Appendix A: Charters of William de VaIence made in Favour of Nicholas Fitzmartin Touching 50 Marks of Yearly Fee-Rent ........ .............

78

Appendix B: Analysis of Charters ...................................................

82

Endnotes .................................................................................

86

Bibliography ............................................................................

123

Index.....................................................................................

131

I. Introduction Tbe canonical ban on usury orprofitseeking l is usually traced to Luke' s biblical injunction, mutuum date nihil inde sperantes ("Lend: expect nothing in return").2 Tbis maxim of moral conduct began to assume its own life among patristic writers in the fourth century. By the 11 OOs, the beginning ofthe "golden age of canonical studies,''3 the ban had taken shape as a canonical prohibition on interest. Seemingly a variation of the golden rule, Luke's aphorism of financial ethics evoked the essential impulse of Christian caritas. As an axiom of economic relations, however, the usury ban might have seemed irrational: one needed no doctorate in macroeconomic theory to realize that the usury ban, by stigmatizing as sinful an expectation of compensation for one' s trouble and risk,4 could have retarded the progress of emerging credit economies during the eleventh and twelfth centuries.s A conflation ofbusiness and charity might seem incongruous in a devoutly Christian vision of reality centered on salvation in the afterlife. Although the profit motive merited no reward in the heavenly hereafter, its classification as sin in the earthly here-and-now was unduly harsh and punitive. We do not know why the early Christian Church adopted a rule so apparently counterintuitiveas the usury ban. The ban was probably attractive toearly church leaders who depicted themselves as an impoverished brotherhood of man. In agrarian economies more dependent on barter than currency, perhaps the difficulties of the ban' s enforcement easily escaped notice. As trade accelerated and more complex credit economies overtook simpler agrarian ones, however, the usury ban's clog on commerce became increasingly troublesome. 6 Whatever the rationale for the usury ban, authoritative classical texts in both the Hebrew and Roman traditions permitted reasonable profit in business transactions. Even if church leaders understandably resisted Jewish leaming7 on the subject of lending at interest, they could have found in Roman texts a justification for profitseeking. Roman law, in its recognition of the irrepressible human urge to truck and barter, foreshadowed modem law. Medieval clerics, the main students ofthe classical Roman texts rediscovered in Bologna in about 1100 A.D., had full access to Roman law regulation ofbusiness practices and virtually any other subjects that had ever intrigued Roman jurists. Roman law sharply distinguished and categorized loan transactions based upon whether a lender's purpose was essentially altruistic or selfish8 ; each loan

14

I. Introduction

category contained distinct liability rules that have survived in many eivil-Iaw systems.9 Roman tolerance of profitseeking was evident in Roman imperial rulings that authorized lenders to charge their borrowers a reasonable rate of interest. 1o Yet, on the issue ofprofitseeking, the Church fathers, despite guidance offered by Christian and pagan emperors,11 preferred an outright ban. As if to make this financial policy odder still, the medieval Church engaged in a program of "do as I say, not as I do." At any historical moment, the Church selectively condemned some usurers, defended certain usurious transactions by means of elaborate casuistry, and itself engaged in lending at interest. 12 The Church's inconsistent attitude toward usury and the delicate lines drawn by churchmen and canonists between lieit and iJIicit interest should have provoked consternation even in the hearts of devout believers. To those convinced of the inevitability of profitseeking, the usury ban must have seemed a financial policy inimical to financial progress itself. Scholastic thinkers' imaginative justification of usury could not conceal the ban's commercial dysfunction. 13 In an expanding credit economy, the Church's usury regulation affected the actors, the form, and the function of transactions that the ac tors chose to accomplish their commercial ends. By openly forbidding profit, the Church interposed a major roadblock to business through interest-bearing loans. Good Catholics, preoccupied with conducting business so as to avoid jeopardizing their spiritual welfare, resorted to legal contortions to assure that their profit-seeking dealings would pass clerical muster. 14 These dealings were bound to occur amid a barrage of conflicting signals about sin and salvation. Taking as a given the tortuous path to contradictory goals of spiritual and material prosperity, this book examines how the usury ban affected the development and enforcementof certain financing devices in medieval England and France. The book further suggests ways in which the usury ban and the financing devices inspired by it may have contributed to a deterioration of centuries-old seigneurial ties that medieval minds took for gran ted. To begin our inquiry, Section 11 develops a point already suggested: as an heir ofRoman law, the church was weIl situated to have adopted a Romanist approach to interest and profit. Nevertheless, medieval church leaders, although they continued to use convenient Roman terminology conceming credit transactions, appear to have consciously rejected a Romanist approach in favor of a view of money espoused by Aristotle and Aquinas. IS Section III explores theological foundations of the usury ban and the way in wh ich the ban resulted in innovative financing devices whose main function was to conceal the collection of interest. Section IV examines one such financial device, the nontenurial rent, commonly known in medieval English law as the rent charge. This device, acommon evasion

1. Introduction

15

of the USUTY ban during the twelfth and thirteenth centuries, retained its vitality weIl into the eighteenth century .16 Our investigation ofthe "rent" occurs in stages: Section IV discusses a prototype of this medieval financing device and its enforcement; Section V examines French experience with rents; and Section VI focuses on English variations of the rent that the Normans, once established in England, had imported from France. To illuminate the role of rents in a primitive English economy, Section VII examines the commercial role of medieval Jewish lenders, for the Nonnan conquerors, conscious that the Church tolerated Jewish usury, invited them to England to act as lenders to virtually anyone with borrowing power. We shall explore the function of the Exchequer of the Jews, a special department of the royal exchequer administered according to Jewish law for the throne' s benefitand concerned exclusively with Jewish loans and lending practices. Because many Jewish lenders' transactions with high nobility and clerics invoked the Assize of Jewry, Section VIII explores certain commercial doctrines of the Assize with a view to assessing their similarity with and possible contribution to English law. We shall suggest how English borrowers' understandable ambivalence toward the usury ban and English kings' equally strong ambivalence toward their Jewish lenders may have directly affected important English statutes ofEdward I, whose prowess in drafting and enacting legislation eamed hirn the title "the English Justinian."17 In passing, we also note seemingly parallel patterns of royal enactments on both the English and French sides of the Channel, as weIl as parallel patterns of deterioration of feudal estates that these enactments sought to check. Although we cannot conveniently connect into a rigorous linear argument the images, personalities, and phenomena that we have summoned, we can stitch them into a composite like features of a medieval tapestry. This medieval art fonn thematically connects images and symbols that might often be physically and chronologically remote from one another. Such thematic unity resulted from the shared theological conviction of both audience and artists that reality was an organic and divinely ordered chain of being. Because we no Ion ger subscribe to such a theological outlook, appreciation of such unity today requires an educated eye: although a casual glance hardly anticipates subtle dependencies among recurring symbols and motifs, a closer inspection vindicates the artist's confidence in the unity of his subject; he has imaginatively implied a link between a pair of clerics in the foreground with a white hart in the background; though distant from each other, images of knight-crusaders and serfs are also thematically linked. Instead of a rigorous argument for OUT conclusions, we offer several

16

1. Introduction

major premises as stable points by which to take our bearings in the profusion of phenomena that folIows. First, for their early practices and laws, the English, as transplanted Normans, were as indebted to the French as Chaucer' s language was indebted to the French language of his day. Not accidentally, illustrious Englishmen, beginning with Williarn the Conqueror, were equally celebrated in French and English history and lore. William erected or financed important abbeys in Caen and Jumieges, and French historians have boasted that both Williarn and Mathilde, his queen, were buried in Caen. Richard I, the Lion Hearted, was buried in the Cathedral at Rouen. A multifaceted cultural bond between France and England l8 is also suggested by the fact that much early French poetry was composed in England and that important Norman monuments and churches in Bayeux, Caen, Rouen, and Jumieges celebrate· Williarn and his invading army as proudly as monuments across the Channel. 19 Second, because for centuries after the Norman Conquest the Catholic Church dominated France and England, both countries ' laws were heavily indebted to the canon law. Inspired by Roman law, canon law was a medieval ius commune diffused by churchmen and lawyers without concern for political borders and subdivisions. On the question of lending at interest, the canonists could have followed Roman law and perm iued the charging of interest. Forreasons described hereafter, Church policy dictated a deviation from classical Roman law principles. Third, English and French tenurial systems had both military and fiscal aspects. A lord's tenement simultaneously betokened his military prowess, his political importance in the realm, and his financial wherewithal. When a lord's financial needs took precedence over his military position, he entered into credit arrangements that violated and transformed classical feudal bonds. 20 To check this transformation, or at least to control its direction, important English statutes of the thirteenth century (e.g., Quia Emptores, Mortmain) addressed both feudal and fiscal aspects of the tenurial system. 21 Some contemporary French statutes appear to have had the same goals. 22 Fourth, during the eleventh, twelfth, and thirteenth centuries, both Jews and Christians, including clerics and nobility, engaged in lending at interest. 23 Because of the usury ban, Christian investors, unlike their Jewish counterparts, could not be candid about their commercial practices, but borrowers sought capitaI from anyone willing to lend it.

1. Introduction

17

Fifth, in Bracton's memorable image, the Jews were royal chattels; the Jews' assets belonged to the king and whatever they acquired was for the king. 24 Like royal franchisees, the Jews had latitude in their dealings with borrowers, but the king was assured that profits from the Jews' transactions were within his easy grasp and could be seized at any time. 2S If Jews were prominent on the retail side of the financial apparatus, the king and his advisers served as auditors and administrators of the apparatus. In commercial activities, these figures complemented each other. The Jews alone did not invent commerciallending practices,26 as some writers have argued, but medieval monarchs and the Church assured that the Jews received most of the credit for the innovations. Suth, on the subject of lending at interest, accommodation and even unwitting cooperation among Jewish and Christian lenders found expression in vigorous trading in encumbered estates and rent charges. Addressing usurious lending, scholarly arguments of rabbis and canonists sometimes mirrored this financial cooperation among Jews and Christians. 27 Seventh, a lender always realized that he ran a risk of a loan's nonrepayment. Then as now, collateral for every loan was essential. The collateral was only as good as the lender's power to realize upon it. Because medieval society was tied to landholding, rents were a popular form of security that had the extra virtue of concealing usury. To secure his loan, a borrower transferred his tenement to his lender in what to all appearances was a sale; the lender then released the tenement to the borrower who would continue to cultivate it and would pay interestconcealing rentals for the occupancy. Alternatively, the lender might remain in possession of the tenement and take the revenues for himself. In medieval parlance, a transfer to a lender might be by substitution with the lender's regrant by subinfeudation to the borrower. In this way, the borrower could swap feudal dues for non feudal dues. A difficulty in this two-step arrangement was whether the ren tal stream included interest and was thus usurious, and this troublesome topic vexed canonists and Jewish commentators alike. A borrower might also subinfeudate his tenement ut de vadio (as of gage) to a lender, but this arrangement did not dispel concems over usury. A subinfeudation ut de vadio was hardly distinguishable from antichresis, a device of ancient vintage already in use among Egyptians, Syrians, Jews, and Greeks. 28 Both rabbis and canonists wrote extensively about the device. By the time of Glanville and Beaumanoir, it had other names such as possessory mortgage, mort gage, and impignoratio. 29 Whatever its name, the device permitted concealment of interest as rent. To reinforce the artifice and to sidestep the usury issue, medievallawyers characterized a lender's cash payment to his borrower as the "purchase price" of a rent and called the lender and borrower respectively rent "purchaser" and rent "seller."30 2 Hennan

18

I. Introduction

Eighth, in both France and England, the tenurial system,originally established to support a military apparatus, was commercialized by lending at interest with security in land. This observation is consistent with Marc Bloch' s remark that the history of both fiefs and rural tenures was characterized by transfonnation of a social structure founded on feudal service to a system of ground rents. 31 Feudal incidents of the traditionallord-vassal relationship and the technical language used to describe them often concealed credit relationships.

11. The Church, Contrary to Its Roman Law Heritage, Condemns Lending at Interest a) Roman Law as Damnosa Hereditas Seventy-five years ago, the distinguished English Romanist, Francis de Zulueta, cleverly characterized as darnnosa hereditas the legacy of Roman law for western civilization. 32 As heredes necessarii, his audience could hardly have refused Rome's legacy. AIthough a little frayed by time and wear, some of the most venerable and durable threads in the western legal fabric were undeniably visible and Roman. As de Zulueta recognized, the Church, once a powerful transnationallawmaking authority blessed with vast holdings, figured among Rome's chief heirs. 33 DeZulueta might have indicatcd, however, that the Church, when it was called to take over the Roman hereditas, behaved as a heres voluntarius rather than a heres necessarius. The Church fathers, concerned over the prosperity of their Christian flock, received the corpus of the Roman hereditas curn beneficio inventarii. 34 The doctrinc ofbenefitof inventory permitted an heres voluntarius, concerned over whethcr an estate was truly darnnosa, rapidly to inventory a decedent's assets and liabilities to see if his appointment entailed more trouble than it was worth. 3S This ecclcsiastical selcctivity was hardly accidental. For in deliberating over whether to retain, to reject, or to transform particular Roman institutions, the early church Icadcrship took into account how its actions would hinderorcontribute to the stability and expansion of a young and fragile Christian community.

b) The Church Rejects the Roman Practice 0/ Lending at Interest On a number of subjects such as slavery and the regulation of Jews,36 early church leaders practically duplicatcd Roman regulation. In such cases, the Church may be said to have actcd as a dutiful heir. Thc Church's reaction to Roman financial regulation was a wholly different issue. Proffered Roman rules on the profit motive in commcrce, thc Church inspected them carefuIly, and declared itself against becoming any heres at all. TravcIling Roman roads, the Church fathers, as they appraiscd the Roman regulation of interest and commercial profit, thrcw their lawmaking machine into reverse gear. The Church fathers, 2"

20

11. Church An Heir of Roman Law

who held themselves out as a penniless uni versal brotherhood bound together by Christian caritas, recoiled at Roman business regulations. Rooted in the premise that profitseeking was inherent in business psychology, Roman regulations allowed transactions for gain. To be accurate in our assessment of the Romans' commercial regulations, we should acknowledge that they did not endorse extortion of debtors. As early as the Twelve Tables (Ca. 450 B.C.), Roman legislation recognized the potential for powerful creditors' oppression of their debtors in an unregulated marketplace. Starting with the Twelve Tables, Roman laws routinely stipulated limitations upon interest borne by loans. After the advent ofChristianity, even Christianized emperors like Justinian approved modest rates of interest. 37 The Church rejected as damnosa hereditas the Roman jurists' assumptions of the inevitability of the profit moti ve. Inspired by AristotIe' s view that money was sterile38 and by St. Luke' s celebrated aphorism, mutuum date nihil inde sperantes, Church fathers condemned as sinful all profittaking, by interest or otherwise.39 In the Church 's view, commercial gain, although it enhanced a Christian 's material welI-being, imperilled his prospects for salvation. The canonical ban on usury, broadly defined as profit in any form, was strict. Payments to a usurer in excess of the principalloan were deemed stolen goods. For receiving such excess, the usurer's penalty was excommunication. 40 With clear-eyed hindsight, we know now that myopia infected the ecclesiastical condemnation of profiting in business. Informed by theological assumptions, notempirical research, a denial of a human traitas fundamental as the profit motive could not long endure amidst a quickening medieval commerce. Like Ptolemy' s geocentric vision of the universe, an ecclesiastical view of commerce, devoid of a profit motive, contradicted the Romans' vision of reality. The Church rejected the Roman view that the profit motive could not be extirpated, although excesses associated with a profit motive could be hedged about by careful regulation. lustification of an economic dogma as dysfunctional as the Church 's usury ban was complex and contradictory. Although churchmen professed revulsion toward profitseeking, they sometimes engaged in loans at interest and condoned such loans in a variety of disguises. 41 Byzantine complexity was not necessarily tantamount to absence of method or strategy. To the contrary, the Church's strategy here lay in a Byzantine and complex analysis of usury. 42 To understand the Church' s view of usury, we m ust notice whom the Church approved and whom it blacklisted from moneylending activities. Ordinary Christians risked excom-

b) Church Rejects Roman Practice of Lcnding at Interest

21

munication if their usurious practices were open and notorious; to be known as public usurers, they would normally have occupied the roles of pawnbrokers. 43 By contrast, Jews who acted as pawnbrokers ran no risk of excommunication. To the Jews, having rejected Christ and thus having forfeited their salvation, papal excommunication meant nothing. 44 According to church leaders, the immediate solution to the Jews' plight was conversion to Christianity. Without such conversion, the Jews remained spirituallepers whose survival vindicated Christ' s message and underscored the folly of the Jews' rejection of hirn. As early as the fourth century A.D., the era ofthe emperor Theodosius I, the Church had already adopted an ambivalent policy of Jewish persecution and tolerance according to wh ich Jews had to end ure in this life as testes veritatis (truthful witnesses) so that their misery wouldconfirm Christianity as theone true faith. 4s In the view ofthe Church, no career assignmenteould have suited the Jews more aptly than an irredeemably sinful one like usury.46 This attitude persisted weIl past the Middle Ages and into modemity. Brissaud, the French historian, has accurately charaeterized the rationale of medieval church poliey toward Jewish lending: In lending. the Jews were not engaging in an act of charity nor rendering good service; they were speculating; and because they had no regular pi ace in the social hierarchy of the middle ages. commerce in money became for thcm the mitier of a pariah. 47

On the issue of usury, the Chureh's strategy toward Jews assured it both spiritual and material gains that itcould not haveearned exclusively by approving the profit motive as inevitable and theologically sound. By ostensibly banning usury for Christians, the Church stigmatized the Jews for their denial of Christ. 48 Yet, the Chureh, realizing the folly of the view that money could not multiply, still played a vigorous role in the burgeoning credit eeonomy of the middle ages. For there were ways to cireumvent the usury ban, so long as interest payments were weIl disguised. As the distinguished Freneh historian, Femand Braudei, noted: U sury was practiced by the whole of socicty: princes. the rich. merchants. the humble. even the Church-bya society thattried to conceal the forbidden practice. frowncd on it but resorted to it. disapproved of those who handled it. buttolerated them. One went as furtively to visit the money lender as one wentto visit a whore. but one went all the same. 49

Although the Church marginalized Jewish usurers as lost sinners, it still assured itself a eash flow needed to finance its own expansion and to legitimate borrowings by the secular powers with whom the Chureh had to cooperate.

22

H. Church An Heir of Roman Law

Because our vision of reality today is grounded securely in secular assumptions,so the anachronistic superstition explicit in the foregoing quotations may distract us from their legal implications. The distraction is easily predictable: modem legal scholars' tastes do not usually run to canon law; their intellectual equipment is often unsuited for its study; their knowledge ofLatin, when it exists at all , isatbestrudimentary. Butcanon law then stood muchnearertodaily affairs than it does today. In its origins, much law that concerned medieval monarchs and their clerical advisers was ecclesiastical; for these medieval actors, even secular law might bear the distinctive earmarks of canon law. Modem students of canon law today have identified its pervasive influence upon many legal ideas, ancient and modernY De Zulueta 's phrase damnosa hereditas implies an inquiry into the intellectual estate bequeathed us by the Romans. An assessment of the Church's attitude toward the hereditas implies examination of the eccentricities and ironies of intellectual inheritance. In business regulation, the Church could not have ignored the Roman inheritance. After all , Roman jurists, in formulating commercial regulations, had a firm grip on the human psychology at work in business ventures. S2 Viewing that inhcritance as damnosa, the Church struggled to invert, to counteract, and to circumvent the rules, hoping vainly in the process to alter human nature in conformity with its new rule. The Church then bequeathed its view of profit to an increasingly profit-oriented society in which men wanted to do business without jcopardizing their salvation. Tracing the Roman hereditas of interest and profit as it descended from the Romans to the Church, thence to secular ruIers and lawmakers, and eventually to commercial investors makes a fascinating chapter in economic and legal history. Without usury, that is, profiting from the risk associated with a loan' s tardy repayment or nonrepayment, we would today lack a common vocabulary for commerciallaw, finance, and economics. In view of the indispensability of interest, profit, and calculations of the time-value of money,53 the Church required a strikingly long time to reconcile itself to the idea of usury. Equally striking were the facesaving gestures that permitted men, fearing excommunication, to claim that they complied with a ban that the Church itself violated with impunity.S4

Our inquiry is made challenging and rewarding by the fact that it is not strict1y linear or chronological. Like any astute detective who happens upon a pile of data that seems to speak incoherently, we must identify and classify clues; and crisscrossing both French and English ground a number of times, we return to the clues to test working hypotheses about the fitful and episodic evolution of ideas essen tial to a credit econom y. In this accoun t we shall see that Eng land and France had much in common; in both realms, churchmen, kings, Christian nobility, and Jewish lenders behaved like so many insect fossils trapped in amber.

III. Theological Foundations of the Usury Ban and Its Evasions We consciously intended our earlier comparison ofthe Church' s usury ban with Ptolemy's geocentrism. Both dogmas sprang from theology rather than an empirical assessment of reality. As Thomas Kuhn has shown, proponents of Ptolemy's geocentric vision of reality clung with an almost religious fervor to their dogma; they engaged in intellectual gymnastics to explain away or to rationalize "counterinstances" that defied explanation under Ptolemy's theory.55 Like the spirited defenses ofPto1emy' s view, justifications of the Church' s usury ban required the ban 's scholastic dcfenders to engage in intellectual gymnastics. These intellectual justifications sprang from a commercial psychology irreconcilably at odds with business reality. In the Old Testament mcdieval scholastics would have found the distinction between brothers and strangers56 a basis 10 ban lending at interest only for one' s kin. Instead the scholastics expanded and fortified their usury dogma by invoking AristotIe's view that money was barren: "Usury [was] detested above all and for the bestofreasons; it [made] a profitoutofmoneyitself, notfrom money's natural object. "57 In 325 C.E., the Council of Nicaea generally forbade clerics to charge interest. Any cleric who violated this ban was to be deposed. Local councils adopted similar prohibitions, and the Canons of the ApostIes forbade bishops and priests to charge interest on their loans. 58 In the fourth century, St. Jerome formulated a usury ban for both clerics and laymen in their dealings with other Christians, and it was eventually enshrined in canon law. St. Ambrose of Milan (340-397 CE) excepted from St. Jerome's absolute ban loans at interest to one's enemies during a just war. 59 St. Ambrose's innovation may have been pragmatic in the extreme, for it established a justification of usury as a financial weapon against Jews, Saracens, and heretics. 60 Assuming money had immutable and absolute value, the Church apparently considered the idea of the time value of money as heretical as the teachings of Galileo and Copemicus. The autonomous system of canon law established by Gratian about 1142 had as one of its foundation stones an absolute ban on usury. In 1139, the Second Lateran Council deprived the unrepentant usurer of church sacraments and barred his burial in hallowed ground. 6 \ From about 1150, when Pope Alexander III dec1ared usury a sin against

24

1lI. Theological Foundation of Usury Ban

justiee, the Church condemned usury outright. 62 BYthe end ofthe twelfth century, popular preachers such as Fulk of Neuilly and Robert of Courson campaigned against interest on loans and encouraged local councils to renew the historie sanctions against usury.63 According to Braudei, a quickening economic life made it impossible to ban the multiplication of money. If the usury ban in its absolute form was divorced from human reality, devices for concealment of usury had to be imaginatively constructed. Eventually, the exigencies of business yielded a variety of sophisticated commercial devices to permit the multiplication of money in ways tolerable to the Church. Because the usury ban was a creature of clerieal ingenuity,64 the cleries knew where to modify it to defend profitseeking, especially when the profits flowed into their coffers. 6S In the hands of scholastic thinkers, doctrines of risktaking became flexible tools for such modification. 66 In accordance with the principleres perit domino, forexample, a lendercould collect interest (poena conventionalis) if he continued to own the object and to bear the loss. Medieval scholastics seem sometimes to have viewed risktaking as an allor-nothing issue associated with an owner's loss ofhis investment by destruction (periculum sortis), and at other tim es with a lender's risk of a borrower's nonpayment (periculum mutui).67 Besides risktaking, there were other scholastic justifications for collecting interest. If a borrower invested a loan in luxuries, not necessities, he might owe a fee; if a lender, by making the loan, suffered loss (damnum emergens), he could charge a premium; or if a borrower did not repay his loan on a stipulated maturity date, he would owe a premium over the original advance. 68 In addition to these justifications for usury, lenders often profited from capitalizing interest in advance. In these transactions, widely used even today by private lenders unconcemed with the niceties oftruth-in-lending, a borrower, upan receiving the funds, promised to repay a principal amount much greater than the sum actually advanced. 69 Unlike other disguises forinterest, this mask for usury was relatively uncomplicated. Among the most complex vehicles forprofiting from loans were limited partnerships in which an investor might contribute a disproportionately smaller sum to finance a commercial partnership's venture in exchange for a larger percentage of eventual profits. 70

IV. Commercialization of Feudal Bonds a) Overview Ouring the period 1100-1290, when lews imported from Normandy became prominent lenders for English borrowers,11 one of the most adroit evasions of the usury ban was a nontenurial rent. Unlike tenurial dues owed a lord for occupancy of a tenement,72 this rent usually veiled a borrower's monetary repayment of a loan to an investor outside the feudal bond. 13 English sources often characterized the nontenurial rent as a rent charge. The term appears to have been borrowed direct1y from aFrench institution, rente constitueeorsimply rente,14derived from the Latin redditus (to render), the term used by canonists and the charters that created the rents. 7S In a variety of disguises whose fabrication medieval drafters and chirographers had elevated to an art-form, these payments looked suspiciously like interest payments for the use of money.76 Because nontenurial rents were transnational evasions of the usury ban that were fully familiar to Catholic churchmen on both sides of the English Channel,77 our initial accountofthem does not sharply distinguish French versions from their English counterparts. Instead we explore the form and function of these rents generically: on both sides of the Channel, similar economic conditions and theological assumptions tended to force the conception and regulation of rents into similar molds. Ouring the twelfth and thirteenth centuries, both the English and the French were devoutly Catholic; the Reformation stilllay centuries in the future; Norman Catholics on both sides of the English Channel were concerned not to ron afoul of ecclesiastical strictures on the issue of usury. According to Hyams,78 the Norman conquerors, far from shedding their French habits, imported many such habits to England and adapted them to local conditions. English adaptation of Norman financing practices was natural; inventing new financing techniques when old ones worked and the Church had already approved them could have seemed to medieval Englishmen a waste of precious energy more profitably invested in administering the newly acquired realm. Ouring the early thirteenth century, English sensitivity to Catholic dogma probably resembled that of the French; for England was a papal fiefdom administered intermittently by high Catholic churchmen and papal legates. 79 Particularly during King Henry UI's minority (1216-1226), papal influence

26

IV. Commercialization of Feudal Bonds

intruded into many aspects of English administration. Henry III and his closest advisers were French. Upon the death of King John, Henry UI's father, John's widow married a high French nobleman, Ugo de Lusignan. IO Thus Henry's halfbrothers bom of his mother's second marriage were French, too. During the 1200s, allegations of usury, although understandable for Jews, struck fear in the hearts of self-respecting Catholics no matter where they considered themselves at horne. Even skeptical Christians would not have aggressively challenged the Church's ban, nor would they have been inclined to test the Church's power to excommunicate the ban's violators. 81

b) Norman Financing Practices During the Tenth through Thirteenth Centuries If religious orders themselves were among the principal targets of the Church' s earliest usury bans,82 then lending practices among Norman religious orders about the time of the Conquest should provide valuable background for our inquiry. Such financial practices were readily exportable to England. Until 1204, Normandy and England constituted a single administrative realm regulated by Anglo-Norman custom, and Norman security devices were presumptively valid for England.

A convenient starting point for an investigation of Norman financing practices is Genestal' s work on Norman monasteries as medieval mortgage bankers. 13 B y reference to a large number of surviving cartularies, Genestal documented a vigorous trade in gages and rents among Norman priories, abbeys, and monasteries. In Genestal's account we find a ready vindication ofBraudel's remark 84 that the whole of medieval society engaged in borrowing and lending. The Church may have banned lending at interest, but it did not "kill credit" in the middle ages. 15 Monasteries and abbeys engaged in lending with each other and with English borrowers. Security for such loans might be situated in Normandy and across the Channel in England. 16 Jewish lenders transacted their affairs with everyone in the marketplace.s 7 The monasteries' investments put them securely at the top of the medieval credit economy; their principal assets were gages and rents. The main legal difference between the two security devices was thought to lie in the exigibility of a loan: a gage lender could demand repayment of the principalloan, while the purchaser of a rent could not. This distinction between a gage and a rent was probably more apparent than real: although the owner of a perpetual rent could not demand repayment from his borrower, i.e., the ostensible rent seIler, he could achieve the same result by selling his rights in the rent to a third party for a lump

b) Nonnan Financing Practiccs

27

sumo Even without judicial action, the third-party purchase reached the same result as a mortgagee's seizure and auction of a tenement to the high bidder, the standard way of liquidating a mortgage indebtedness. Eschewing loans at interest as manifest usury, Norman monks in the eleventh century preferred to put their funds into gages. Such investments had distinct advantages: in possession of a tenement, a gage creditor easily proved his rights; ifthe debtor defaulted, the creditor acquired inexpensive real estate. According to Genestal, the monasteries seldom made gratuitous loans. A great majority of gages appear to have included usury or profit. To distinguish gratuitous gages from onerous ones, the terms vivum vadium (vifgage) and mortuum vadium (mort gage) were employed. The profit or usury lay in the creditor's disposition of revenues yielded by the tenement during the gage's term. If the lender credited the revenues against the loan balance, then the gage was vivum vadium or vifgage; if not, then the device was mortuum vadium or mort gage. 88 In either case, a borrower could redeem the tenement from his creditor. Deprived of the chance to reduce the loan by application of the revenue stream, however, the borrower would find redemption from mortuum vadium more difficult than from vivum vadium. His loss was the monastery's gain. In the twelfth century, Pope Alexander III (1159-1181) banned mortuum vadium by ordering gage creditors to deduct from loans the revenues from tenements in their hands. Because the Pope exempted from the usury ban gages de feodo monasterii, the clerics in theory could have continued to lend at interest on gages. 89 Nonetheless, during the twelfth century, perpetual rents began to overtake gages as the preferred form of secured financing. 90 According to Genestal, the monasteries preferred rents over gages because the lauer were of short duration and required the monasteries constantly to monitor the gaged properties' income and to seek new borrowers for the cash as it flowed into the monks' coffers. Unlike agage, a perpetual rent had the virtue for the borrower (dibirentier) ofleaving hirn in possession ofhis land. For a lender (credirentier) , a perpetual rent had twin virtues: it required little fiscal monitoring;and was weIl suited to the monastery's financial administration. 91 Furthermore, if, as was the usual case, the monks were subject to a poverty vow, then they could avoid the issue of whether their ownership of the principalloan violated the vow. Instead, the monks could legitimately claim in perpetuity the annual revenues to be applied to the use of (ad usus) the monastic order for a varietyof special needs. 92 Canonical rationalizations for monastic investment in rents were commonplace. According to the title on fiefs in the Decretals, abishop could take the fruits of a fief without crediting them against the outstanding loan. So long as the cleric

28

IV. Commercialization of Feudal Bonds

was in pos session of the fief, the vassal was freed of services otherwise owed the Church. 93 Laurentius Hispanus, Bartholomew ofBrescia, Raymund ofPenafort, and Abbas Antiqus approved this rule on the basis that ecclesiastical fiefs merited an exemption inapplicable to lay fiefs. Innocent IV suggested that the text of this Decretal should appl y onl y to a sm all rural fief w hose reven ue was so insigni ficant that it would scarcely exceed the value ofthe service required ofthe vassal. Now excused from the service, the vassal was said to have received a fair exchange and the clericallender was held to have received no usury.94 Let us conclude this section by supposing again a case of antichresis9S in which a tenant sought to borrow out the value of his tenement. For a capital sum, in reality a loan, the tenant transferred his tenement to a third party, the ostensible tenement purchaser, who left the tenant in possession. In repayment of the advance, this third party received arental stream from the tenant. Comparing snapshots of the tenant taken before and after the transaction, we note that the chief distinction is the interposed purchaser, who now assumed his borrower's obligation of feudal dues owed to his borrower's lord. In lieu of feudal services to his lord, the tenant now owed a money rent to his new lord, the interposed purchaser. When the original lord demanded feudal du es from the former tenant, the lauer could point to his lender, i.e., his new landlord, as the proper addressee of the original lord 's grievance. As we see in Section VII, if the new landlord was an abbey, the tenant' s transfer was into mortmain, and the original lord 's services might be seriously impaired. Viewing the transaction through the eyes of a modem real estate lawyer, we might say that the tenant and his new lord had accomplished a primitive saleleaseback;96 alternatively, the transaction might consist of a tenant's assignment to the third party-assignee followed by the assignee's sublease in the tenant's. favor. A medieval setting would oblige us to speak of substitution of the third party and subinfeudation of the tenant. The parties' language matters less than their understanding. Succeeding sections indicate how social forces, economics, and theology combined to assist medieval borrowers and lenders in embracing the rent as a spiritual haven from claims of manifest usury.

c) Landed Revenues as Natural Camouflage for Interest In feudal France and England, revenue yielded by land was a natural disguise for interest because the economies ofboth nations were tied to land. 97 In the newly acquired Norman domain across the channel from France, real estate was the essential form of wealth. One's ability to borrow and to repay a loan was tied to revenue-yielding land. Whether the revenues and profits yielded by land were

d) Rcnts

29

called interest or rent depended partlyon scholastic semantics and partlyon theology. Even today the distinction between interest and rent may depend on technicalities more than substance. For example, both a sale with right of redemption and a sale-Ieaseback form of financing today depend upon characterizing certain payments as interest or rent. 98 For medieval borrowers and lenders, characterization of interest as rent in a primitive sale-Ieaseback vehicle was similarly important for religious reasons. 99 According to some canon law authorities, a gage creditor, as temporary owner ofthe land, was entitIed to profit so long as the profit was called rent, not interest. 1oo

d) Rents: A NaturalOutgrowth 0/ the Personal Bond 0/ Lord and Vassal Because the c1assical feudal relationship was a diad consisting of landlord and tenant,or lord and vassal, medievallawyers seem instinctively to have solved problems in terms of a landlord-tenant relationship. The idea of rent as an archetypal payment permeated feudal arrangements, and the rent eventually became aconvenient mask ofusury. Toappreciate thecentrality ofrents in feudal practice, we must remember that feudal rents originated in the collective imagination of societies sustained by seignorial bondsof a highly personal nature. In its pure form, the feudal relationship, manifested from the highest rungs of society to the lowest, presupposed as a crucial human concern personal defense and physical safety: a monarch, whether in Franceor England, required loyal men who would cheerfully come to the physical defense of the kingdom; villagers and serfs werepreoccupied with daily physical security that permiued them toeke out a livelihood from their modest plots and trades. 1ol From kings to serfs, anyone who ignored the importance of daily physical security did so at his peril. 102 Both French and English kings, in exchange for their vassals' 10yaIty and military services, assured them protection and the privilege of occupying their fiefs. In imitation of the king's practice, these vassals, as tenants-in-chief, parcelled out their own dominions, retaining key portions (demesne) for themselves and distributing the rest in exchange for services of their own tenants. 103 At the top of the feudal hierarchy, tenures were typically military; a chief tenant bought his tenure with military service. If a tenant, by virtue of his personal characteristics, could not provide his lord military service, then perhaps his lord would instead accept spiritual or civil service. On this alternative, abbeys and monasteries figured in the feudal hierarchy as both land lords and tenants. 104 While c1erics could not do baule, they could pray, and prayer was indispensable for devout kings and knights who counted crusading against infidels among their essential duties.

30

IV. Commercialization of Feudal Bonds

e) Two Forms ofTenement Transfers: Subinfeudation and Substitution A vassal's parcelling out of his tenement to his own dependent vassals might have taken one oftwo distinctive forms: substitution or subinfeudation. Each of these forms had its own effects and implications, and would today be regarded respecti vel y as akin to assignmen t and sublease. As a general proposition, a feudal lord, facing a choice between the two forms of alienation by his tenant, preferred his tenant to substitute a successor rather than to retain an interest in his tenement and then to subinfeudate to a third person. This preference arose because substitution operated a novation that permiued the lord control over the choice of the transferee-vassal who fully replaced the transferor-vassal. By contrast, subinfeudation was in the nature of a sublease. In a subinfeudation, the lord was decidedly out of control because the original vassal remained in place; like a sublessor, the original vassal negotiated an independent arrangement with his subvassal. Denial of the lord's power to obtain homage directly from the new vassal made subinfeudation an ideal vehicle for breaking down feudal structures: the vacuum left upon ousterofthe lord'sjudgment came to be filled promptly by commercial people, including Jews, for whom the chivalric idealism betokened by traditional feudal bonds was alien.

aa) Substitution According to Professor Milsom,los substitution, like novation or assignment with release of the original tenant, was a "horizontal" transaction; to owe services directly to a lord, the new vassal would have to be substituted to his own grantor's tenore; the former vassal surrendered the tenement and the new vassal made a personal bond with the lord. The new grantee of the tenement owed services directly to the lord. In a transfer of an estate by substitution, rather than by subinfeudation, the personal character of the classical feudal bond required the lord toconsent to the new tenementholder, in much the way thata landlord today might approve or reject his tenant' s proposed assignee. In the medieval pattern, the landlord's consent to a new "man" depended on the landlord's sovereign discretion and judgment, for not every tenant could be expected to come to his lord's defense and to fight bravely beside hirn.

bb) Subinfeudation When a tenant (D negotiated in exchange for his subtenant's (S) services the latter's seisin of a fraction of Ts own tenement, Ts tenure was subinfeudated; in

e) Subinfeudation and Substitution

31

the medieval imagination, this process of subinfeudation produced a growing chain oftenures from the king down ward. According to Milsom, subinfeudation was a "vertical transaction" whereby the original tenant remained in place as the lord' s tenant and then created a new tenure with perhaps wholly different services so that the gran tee held immediately of hirn but was a stranger of the 10rd. 106 There is today no exact duplicate of this subinfeudation process because the personal character of the feudal bond has disappeared: a tenant does not bargain away personal services for his lord's physical protection. Still, we can imagine a chain of subleases and sub-subleases in which each new gran tor has gran ted an estate less than his own in return for arental stream. In such a chain, each lease or sublease stipulates its own particular terms, conditions, and covenants. One after another, each tenant, and then each subtenant, although he retains a reversionary right in the estate, disappears physically when he surrenders possession to a new subtenant, and the new occupant has the greatest stake in maintaining his possession. Without privity between the landlord and his tenant' s tenant, there is no necessary relationship between rents or services rendered by a tenant to his landlord in one link of the chain and by a subtenant to that same tenant in an adjacent and separate link. The longer the chain, the more difficult the landlord's task of policing the occupant of the premises, for the occupant answered directly to the tenant who installed hirn, and that immediate predecessor warranted the occupant's possession. The kind and quality of a grantee's services given in exchange for his enjoyment of a subinfeudated tenure had no necessary connection with the services due from his own grantor to the landlord. Because ofthe lord' s remoteness from the grantee of the subinfeudated tenement, the lord could be hurt by any subinfeudation that reserved less service than the tenement was actually worth. I07 From the lord' s perspective, any estateescheating to hirn on his tenant' s death would have no content beyond the services stipulated in the subinfeudated link. Although a subinfeudated tenure could yield valuable services for the lord, it might as easily yield purely nominal services useless to the 10rd. 108 The tenant' schief concern was his own stability even if earned at the lord' sexpense. As a feudal creature, subinfeudation was corrosive of feudal stability; this device helped to free feudal ten ures of the obligation of personal feudal services; and thus freed, the tenements were soon encumbered as collateral for lenders. This process whereby estates were liberated from feudal incidents only to be pledged to lenders had to occur without the Church 's express approval, 109 even though she also became an investor in such subinfeudated estates. IIO Later, we shall return to subinfeudation, first when we discuss subinfeudations as collateral security (ut de vadio), then when we discuss the Jews' role in financing landed

32

IV. Commercialization of Feudal Bonds

estates, next when we explore similar patterns of subinfeudation in French practice, and finally when we come to statutes in which rulers, by banning or limiting subinfeudations, tried in vain to check the degradation of feudal bonds.

0/ Services: A Sign 0/ Commercialization 0/ Feudal Bonds

f) Commutation

Like his Nonnan cousins on the French side of the channel, William the Conqueror made his soldiers tenants-in-chief and granted them estates in exchange for their homage and military service. William's followers retained their estates and social positions by rendering their liege lord services of homage annually or at shorter intervals. In England, knight service, for example, las ted forty days a year. In imitation of the king's bond of homage with his tenant, a gran tee of the king's tenant-in-chief might render other personal dues, Le., a certain period of annual military service. A vassal served at his lord's pleasure; and tenure depended upon the lord's satisfaction with the vassal's perfonnance of his services. If the personal nature of the feudal bond were taken with utter seriousness, no one in the realm, except the king, enjoyed security of tenure. The chivalric and personal character of the feudal bond and the im personal character ofbusiness practices tended to be antagonistic to each other. Over time, probably as personal feudal bonds hardened into more durable rights in tenements, a vassal's regular satisfaction of his personal duties to his lord gave way to money payments. For landlords and tenants, as perforce for lenders outside the feudal hierarchy, cash tended to solve a variety of problems. In an agricultural and feudal economy, to take an obvious ex am pie, rent payments were naturally associated with land exploitation. With time's passage, the personal bonds inherent in homage gradually were commercialized by ac tors in the feudal hierarchy. At the top of the feudal hierarchy, the king routinely commuted knight service to scutage,111 a cash payment equal to the value of a knight's service, although the bond of homage in principle always pennitted a lord, at his option, to demand his tenant's personal service instead of cash. Instead of requiring a vassal's personal service, a lord might grant tenancy by substitution or subinfeudation in exchange for a fraction of the land's yield in fruits or a seignorial rent. Mirroring the process of commercialization of services at the top of the feudal chain, personal services due from more modest and inferior tenementholders were gradually commuted to money rents so that a tenant might pay a cash rent in lieu of personal services for his tenancy.112 For satisfaction of his obligations to a seigneur, a tenant' s cash rent payments soon after the Nonnan Conquest113 proved more convenient than personal

g) Subinfeudation ut dc vadio

33

services. A monarch, concerned over the ability and loyalty of an unfamiliar soldier, was satisfied with payments that perm itted hirn toraise an army ofhis own choosing. Analogously, creditors today normally prefer cash over services and harter,and an aggrieved creditor seeks payment of damages more enthusiastically than specific performance of a recalcitrant debtor' s obligation. At every level in the feudal hierarchy, by the middle of the thirteenth century, the processes of depersonalization and commercialization of the feudal bond had intensified and had expanded. The prevalence of money payments permitted transactions with commercial lenders for whom a sound investment mattered more than the integrity of feudal bonds. Unlike the military elite who initially held their tenures in return for personal services, the roturiers 114 or commercial types who loaned against collateral in tenements in the form of subinfeudations sought essentially a dependable return on investment, not a military career under a feudallord's banner. As Marc Bloch said, "like the history of the fief, the history of rural ten ure was ... that of passage from a social structure founded upon service to a system of ground rents."IU Bloch's view resonated in Plucknett's assessment of the achievements ofEdward I's legislative policy: The spirit of [Edward's I policy is doubtless remote from the original spirit of the fief. but for over a century before Edward's accession, feudalism had become commercialized; by treating feudal relationships as marketable interests with cash value-' chattels real' as the lawyers were soon to call them-his statutes merely made public the hollowness of the whole system. Complicated and moribund, even the remedies Edward administered probably hastened its final dissolution. 116

The next section details a particular phenomenon with which King Edward's policy unsuccessfully contended. g) More Evidence o/Commercialization 0/ Feudal

Bonds: Subin/eudation ut de vadio

Vehicles for commercializing feudal bonds, subinfeudations in favor of commercial investors and lenders stood outside the diad composed of lord and vassal,landlord and tenant. 1I7 In fa vor ofthese commercial strangers to the feudal bond, dismemberments and alienations were often made ut de vadio, as of gage. In contrast with subinfeudation ut defeodo, a typical alienation between figures in the feudal hierarchy, that of ut de vadio was collateral security granted by a tenement holder to a commercial investor outside the landlord-tenant diad. 118 Like a banker, an investor outside the feudal hierarchy sought cash; his need to take over the real security, in contrast with the need of a gran tee in the feudal chain, arose only on a borrower's default. With the rising incidence of subinfeudations as collateral security, a secured creditor could challenge the feudal superiority of a borrower's lord as a mortgagee today might challenge in 3 Hennan

34

IV. Commercialization of Feudal Bonds

a lien priority contest the superiority of the landlord ' s lien over chattels found on the tenant' s premises. Laterwe shall see that both English and French enactments sought to bar subinfeudations in a futile effort to turn the tide of dismemberments that shredded ever more finely the feudal bonds in which vassals responded exclusively to their lords. 119

h) The Nontenurial Rent: Both Euphemism and Convenient Disguise for Usury Our inquiry focuses upon the transformation of the feudal bond into a creditordebtor relationship masked behind a leaselike arrangement (or arent) in which neither party could admit the true relationship. More impersonal than services, cash payments could be put to innumerable purposes. Behind rent payments substituted for personal services, Ienders and borrowers disguised interest payments. Confusion surrounding the origin of rent charges arises partly because alease as a legal form was uncannily ambiguous; seven hundred fifty years ago, the line between true leases and leases as financing devices was more blurred than it is today. Then as now, payments made by an occupant of land eluded facile characterization, a fact that was not lost on either the Church or her faithful, if we are to judge by the nearly obsessive treatment of rent charges by canonists and popes from about 1100 until 1425 when the Church gave its imprimatur to rent charges. l20 Even today one cannot be sure that parties to alease have intended a pignorative arrangement121 (i.e., a secured loan) , or an occupancy compensated in instalIments, (i.e., a classicallease). As we have indicated, if a tenant held an estate in exchange for his personal services, then he enjoyed a true lease. l22 But ifhe might have freed himselfby commuting these services into cash payments, then his lease could become a financing device. By means of commutation, various seignorial services might be transformed into revenues, ground rents, or a fraction of fruits. Such transformation was facilitated when the "lord" was a lender in quest of profits, not an actar in the feudal hierarchy.

i) Blurring Lease and Loan Needing to raise cash, a tenant, by means of a primitive sale-leaseback transaction, could transfer his interest in land to a lender who would then lease it back to the tenant in exchange for a "rent."123 If the borrower-tenant then defaulted, the lender-landlord would have to declare the true nature of the transaction and would claim the income and chattels from the leased land and perhaps even the fee itself. An English lawyer's imagination would not be strained by the flexible character of alease, far in England a term of years began

i) Blurring Lease and Loan

35

as a temporary financial interest; security for a loan was its principal use. In this circumstance, as in modem sale-Ieasebacks, it was often difficult to distinguish rent from interest and purchase price from 10an. l24 The ban on usury predisposed the parties to characterize as rent any cash payments flowing between them. l25 In a modem credit economy it is difficult to conceive ofbusiness transactions without interest payments. Money is a commodity; indeed, it is the exchange commodity parexcellence; its value turns upon how long one uses it, and interest largely represents the rental value of money over time. Butcanonical restrictions tended to transform loans at interest secured by realtY into a highly elastic and adaptable conception of rent. This conception seems to have invaded the commercial consciousness and dominated financial transactions. For example, a lender could transfer to a borrower a sum of money on an understanding that the borrower, instead of repaying the principal at maturity, would pay a certain smaller sum, usually annually for his lifetime or in perpetuity. In the case of a perpetual duty ofpayment, the borrower's obligation was heritable; his descendants, on the borrower's death, had to pay the annuity. Between this perpetual duty and the conception of the loan at interest as we know it, there was a difference: unlike the creditor of an ordinary loan, the creditor of the perpetual obligation could not demand back the principal, transferred in exchange for a perpetual rent; in principle, the loan, if made for the borrower's life, matured no earlier than the borrower's death; if perpetual, it never matured at all. l26 This arrangement fitcomfortably into the medieval conception ofbusiness: because tenancies were commonly measured out in lifetimes, the parties to this simulated arrangement would have found nothing aw kward in a borrower' s duty to pay over his lifetime, especially if the debt were collateralized with land. For repayment, the creditor of this constituted rent, that is, the "tenant" of the rent (credirentier) as contrasted with the tenant of the land (debirentier), had to depend on the borrower's good will. The creditor could not force the borrower to pay the debt off; even if land consliluled collateral for the borrower's annual service, the creditor could not foreclose the tenement because foreclosure presupposed acceleration of the original debt. Until feudal bonds had become attenuated in the thirteenth century, a creditor could not ordinarily seize and seil the debtor' sinterest in the land to liquidate a debt. The creditor, unable to collect the principal from a recalcitrant borrower but needing to raise cash, could seil the debt to a third party willing to purchase it. Although this transaction surely appeared to yield interest, precisely as a lifetime annuity today returns interest along with principal, the canonists characterized it as a rent charge or rente constituee and no violation of the usury ban. 127 This result the canonists justified on the fiction that the lender was no 3·

36

IV. Commercialization of Feudal Bonds

lender at all; in canon law doctrine, the lender purchased the annuity and the borrower sold it in the same way that a feudal lord could be regarded as having purchased a vassal's services. For the canonists, a crucial distinction between a sale of rent, on one hand, and a loan, on the other, was that a loan always required repayment of principal. The grant of a rent charge did not; the gran tor of a rent charge, when, at his option, he reimbursed the original principal, was said, in a phrase curious to modem ears, to have "repurchased" the rent. 12l1 The grant of rent, however, contemplated that the gran tee or purchaser of the rent could always obtain payment of arrearages. The undemandable principal ofthe rent appeared as a moral being distinct from arrearages, and this distinction was reinforeed by procedural habits to which we turn in the next section. j) Distraint: Compulsory Rendition 0/ Rent Payments and Services Lawyers are among the most astute recyclers of their working materials. A paper shredder violatesour senseof decorum, for we (andourclients) always have faith that we can cannibalize old transactions for new ones. Legal evolution can often be understood in terms of recycling and cannibalizing existing resourees. As the doctrine of stare decisis shows, our discovery in old institutions offeatures that permit their adaptation to new uses lends stability and legitimacy to our daily activities. We have already seen that the landlord-tenant relationship evolved imperceptibly into a loan device; likewise, a classical feudal enforcement technique, distraint, became a weapon for debtenforcement, although its original purpose was a lord's exaction of feudal and personal services from his tenant. Distraint was the classical remedy par excellence against a recalcitrant vassal unwilling to render feudal services; by means of distraint, a lord, even without court supervision, could paralyze a vassal' s or tenant's daily operations. According to Milsom, distraint, the nonjudicial seizure of the tenant's ehauels, was the heart of the "disciplinary jurisdiction."129 As the tenant's continued tenure depended upon his lord's caprice, so too did the lord's use of distraint. Employed in feudal France even before the Norman Conquest,130 the remedy of distress (Latin: districciones) carne into play when a tenant's services were delinquent, and he had made it clear that he did not intend to perform .131 Whatever the abstract and theoretical side of seisin, its most important practical effect, distress, could be exercised by every lord over his men within the frontiers of his fee. The remedy of distress was usually swift, cheap, and effective. By the time

j) Distraint

37

of Edward I, distress was "a form of coercion exercised by a lord on his own authority, without intervention of any court, in order to compel fulfillment of any incident of tenure to which he conceived himself entitled."132 Under the heavy press ure of a lord's distress, many a tenant succumbed 10 his lord's bullying and unfounded demands. \33 The lord, of course, had unusually good reason to employ the device; each time a tenant succumbed to his lord' s demand for rent or service, even when the latter was not entitled to it, the lord' s seisin of the rent or service further ripened, lengthened, and hardened into something approaching a right. 134 Even without ajudgment, a lord could distrain on the tenant's chattels; with a judgment, he could distrain on the fief as weil (distraint per feodum). When the lord, withoutjudgment, distrained on the tenant's chattels, the tenant, however irate he was about the impropriety ofthe claim, could either perform the services demanded orcontest them. The tenant, ifhe chose to contest the lord's demand, sought a writ of replevin; and once the tenant had posted good security pending the proceedings, he could recover his beasts and chattels and resume his more or less regular routine until an uItimate resolution of the dispute. m Despite the highhandedness of distress, the lord would not routinely liquidate the seized chattels; instead he held them to pressure his recalcitrant tenant to render the services demanded. For current analogy to distress, one thinks 10day of a creditor's pre-petition, self-help attachment, or sequestration of a debtor's possessions, but such conduct on a creditor's part 10day might easily violate the due process requirements of the United States Constitution. 136 In those days, a tenant, aIthough incensed about the lord's distraint, had no other court in which to express his indignant ire, and unconstitutional deprivation of property would have made no sense. Ignoring for the moment constitutional objections meaningless in thirteenth century English procedure, the tenant,like adefendant whose chatteis are attached today, could have the seizure dissolved by posting a bond or an appropriate indemnity. Either form of security was surely a faster route to restoring his daily routine than protracted litigation. Distraint was an elastic vehicle useful in contexts where it might not have been originally designed 10 go. To secure performance of a covenant, a thirteenth century debtor could contractually subject his land to a creditor' s distress. "Rent charges were often secured in this manner, aIthough there was no sort of tenure between the recipient and the tenement charged."131 One of the most famous of these debtor covenants enforceable by distraint appeared in section 60 Magna Carta; formulated as a specialty, that clause authorized twenty-five barons to distrain the king by his castles, lands, and chattels until he had made amends; and when amends were made, the distress was to be dissolved. Plucknett saw in this provision the supple adaptability of distraint:

38

IV. Commercialization of Feudal Bonds

It is natural and properthat those who seek to impose a rule oflaw upon public affairs should look foranalogies and technical devices among the institutions ofprivate law. The twenty-five barons, faced with the problem of bringing effective pressure to bear upon the monarch with as little risk as possible of precipitating a civil war, naturally looked to the current practices of the lawyers. There they found that a voluntary agreement to submit to distress was a common and serviceable device.\3B

k) The "Thinglikeness" 0/ Rents Anned with powers of seizure and distraint, creditors, as rent tenants and holders of subinfeudations for collateral (ut de vadio), began to resemble modern creditors engaged in a familiar collection and enforcement process. As areal right, a rent charge followed the land into the hands of third acquirers. Hence, distraint, provided the charter stipulated for it,139 permitted a creditor as a rent owner to enter the land out of which the rent issued and to take the chatteIs and revenues there. A credi1Or's entry and distraint could occur even if his obligor had transferred possession of the land to a third person. According to Pollock and Maitland. this characteristic of distraint made it easy to visualize the rent as issuing out of the land itself and passing to the rent owner through the hands of the tenant or the third party. An analogy drawn from modem real estate practice may help us envision this autonomous corporealization of a rent. This seeming extrusion of rent out of the land resembles a modern assignment of rent under the following circumstances. Suppose that today a creditor (C) has loaned a borrower (B) a sum on a nonrecourse basis. As collateral for repayment of the loan, B. instead of mortgaging a parcel of real estate, has pledged his interest in areal estate lease in which he is landlord;l40 the landlord 's lien affects all movables located on the property and revenues yielded by it. Assurne the pledged lease has no accelerator clause in case of a tenant's default, so the tenant's default is adefault in a periodic or successive obligation and the landlord cannot demand the entire rent for the unexpired term. If a tenant (n defaults in his rent payment, B' s recourse, besides eviction of T, is to demand the rent from T as each month passes. As long as B pays Chis periodic installments, there is no problem. C, although he has security in the rent stream, has no reason to notify Tto pay therent overto hirn. IfTdefaults under the lease, C cannot sue B because B was bound on a nonrecourse basis. A personaljudgment againstB is impossible. C's only useful remedy is 10 foreclose B's interest in the lease. If C, having foreclosed the pledged lease, now occupies the status of landlord, he can either evict Tor demand from T the monthly rent only as it falls due. B may even have sold the land affected by the lease, so the rent stream in the hands of a third party remains !iable for the debt on a

k) The "Thinglikeness" of Rents

39

nonrecourse basis. Although the land remains burdened in C's favor, he has limited remedies. 141 To medieval minds, these abstract rents yielded by in rem charges on a tenement became corporealized; in Pollock and MaitIand' s phrase, they acquired, a "thinglikeness"; they became reified. Some rents were extremely abstract and elusive. In particular, the "thinglikeness" of a "rentseck" (redditus sicus) was even more striking than that of a classical rent charge; holding this "thinglike" rent, alandlord had no power at all to distrain on his tenant's chattels, hence the term "dry rent." The landlord might enter the land to demand payment, but his coercive threats were hollow; hc could not even seize chattels found there to enforce the rent obligation. Evcn more elusive and fragile than a rent seck was a rent ex camera, a portable annuity unsecured by real estate and payable exclusively from the debtor's purse in whatever chamber (camera) or residence he might be found. 142 With rent charges and rent services, landlord and tenant crossed from the permissible domain of lease into the forbidden land of interest-bearing loans at interest. The fuel for the voyage was theological. Pollock and Maitland confirmed Braudel's claim about ecclesiastical trading in rents: "The purchase of a rent was a favorite mode of investing money at a time when any receipt of interest for a loan was sinful, and a religious house would have many rents constituted for its favor by those whose piety or whose wealth fell short of a gift ofland."143 Rents granted forpious causes often disguised interest-bearing loans secured by encumbered estates. Then as now, the Church profited from transactions where it could accommodate a borrower's pious impulse as well as his des ire for financial relicf. l44

v.

French Experience with Gages, Subinfeudations, and Rents a) Commercialization 0/ Feudal Bonds in Medieval France

According to Marc Bloch's pioneering study, Feudal Society, feudalism was a transnational phenomenon. During the medieval period under consideration, French and English experiences with tenures often mirrored each other in both broad outline and detail. French terminology descriptive of feudal institutions might have varied slightly from that of the English, but in both societies the legal evolution oftenures seemed constructed from a single great oak. 14S In both France and England, medieval society witnessed a gradual commercialization of feudal bonds; this process was characterized by a movement from a feudallord's strict andpersonalcontrolofhistenant'salienationandabridgement(i.e.,subinfeudation) of an estate to dilution to the vanishing point of feudal incidents and seigneurial control over a tenant's transfers to strangers. As in England, the classical feudal bond in medieval France was highly personal for both lord and vassal; a lord, unsure of the vaunted military prowess of a vassal and his immediate family, had no reason to accept hirn. In a classical feudal relationship, outsiders unapproved by the lord would not be substituted in the feudal group. Gradual collateralization of feudal tenures entailed their transfer in pledge to investors outside the feudal hierarchy; and these transfers often facilitated dispositions inter vivos without the lord's consent. In France, the medieval nobility never enjoyed the Norman conquerors' luxury of imposing rapidly a feudal system across a whole territory. In the words of lE.M. Portalis, the French Civil Code drafter, there were everywhere and always in Francefranc alleux not incorporated into the feudal hierarchy.l46 Wherever feudal practices prevailed in France, French lords, like their Norman counterparts across the Channel, saw in their vassals' subinfeudations a means of assuring soldiers and material resources for their collective success. Also signs of waning seigneurial control, these dismembered estates sparked seignorial reaction. As in England, the dismemberments were prohibited by French enactments analogous to Quia Emptores,147 an English statute that barred subinfeudations; French regulation, even when it allowed such dismemberments, strictly regulated the sizes ofthe dismemberments in fractions of one-third or one-fourth. Eventually

a) Commercialization of Feudal Bonds in Medieval France

41

an inter vivos transfer of a tenement was permitted in favor of a vassal's descendants, at least to the extent of their hereditary shares. When seigneurial consent as a condition for a vassal' s subinfeudation declined in importance, there arose a new condition, the consent of family members; for once a tenement came to beregarded as a vassal's property, maintained and administered by aclan, the clan claimed in it avested right or expectancy. By the thirteenth century, French seignorial practice tolerated even the dreaded

impignoratio,14I a tenurial dismemberment long banned to keep a vassal from

pledging his fief to sec ure his debts. 149 Authorized by Pope Clement III to accommodate crusaders' need for funds, this transaction was a secured loan disguised as a sale of a tenement with a right of redemption, similar to a saleleaseback arrangement. 150 When impignoratio of a tenement was permitted atall, strict limits on its duration seriously hampered its utility as a financing vehicle. For example, while the Custom of the He de France in the fourteenth century allowed a vassal 10 pledge his fief without his lord's consent, the transaction 's effect on the feudal bond was moderated by a rule that Iimited the term of the pledge to three years. ISI Then as now, in France and England, alandlord ' s intuition about impignoratio, the pledging of a fief, was justified; alandlord knew that his personal bond with and control over his tenant would erode once the tenant had acquired an unrestricted right to mortgage his feudal tenement without the lord's direct understanding with the mortgagee. Today, alandlord and a mortgagee, to avoid an eventual collision of their respective rights, routinely crystallize their understanding in elaborate side agreements, nondisturbance covenants, attornments, and the like. Six hundred years ago, however, the relations among landlord, tenant, and their lenders were not so carefully negotiated and documented. Like his English counterpart, a typical French lord seems to have preferred a vassal's substitution or direct alienation over a subinfeudation. The lord's preference was rational: when a vassal transferred a fief to a successor by substitution, there was at least a meeting of minds among the lord, the first vassal, and the vassal' s successor. The first vassal surrendered his possession to the lord; the lord invested the new vassal with seisin and obtained from hirn at the same time homage and a personal commitment of loyalty. In principle, a vassal' s alienation of a fief by substituting a new vassal did not diminish (abreger) the feudal services yielded by the fief. IS2 Alienation changed the vassal's identity, but if the lord accepted the new vassal, then the latter's substitution in principle did not dilute the fief's intrinsic value. By contrast, when

42

V. French Expericnce With Usurious Financing Dcviccs

the tief passed to a stranger by abridgement or subinfeudation, feudal services might pass beyond the feudallord's grasp; the lord, unable to negotiate directly for the new vassal's homage and services, might then lose control over the tief and associated feudal services and incidents. The loss of seigneurial control, and the resulting impairment of the feudal bond and the incidents associated with it, might occur in several ways: a vassal might divide the tief among his own vassals without retaining valuable rights on the alienated parts; or he might transfer his tief into a church entity that would enjoy the transferred interest in mortmain. Altematively, by renouncing homage and services associated with the feudal bond for an annual rent, the vassal could commercialize the feudal bond. 1s3 In this last case, the transferee would assurne the transferor's feudal duties and, as in English practice, might retransfer the tenement to the tenant in return for a money rent. 1S4 Dilution of a fief's valuable incidents resulted from its transfer to a person legally or physically incapable of serving the lord. As feudal practices evolved, the number of such incapables grew. Although early in the evolution of feudalism, men became a military elite by acquiring tiefs, near the end of the twelfth century, as tiefs became commercialized, roturiers who invested in them sought sound investments for their money; a military career and a personal bond with the feudal lord were not in their plans. Sound investment entailed subordination of the feudal lord as a potential competitor for the tenant' s assets upon his default.

b) French Financing Practices If, as suggested, English medieval practices borrowed heavily from those dominant in France, a brief review of French financing techniques and enforcement methods should retine our understanding of English medieval tinancing with rents. Employed to evade the ban on usury imposed by the Church, the devices used by the French were distinctively transnational and were adjusted to similar economic conditions on both sides of the channel. Between English and French practices, to be sure, there were differences, but their similarities were overwhelming. Tbe English rent charge appears to be a device imported from Normandy where religious orders used it routinely by the twelfth century.1SS Professor P.-C. Timbai has systematized and analyzed numerous cases on the medieval French law of obligations and, in particular, on the tinancing and enforcement of obligations secured by land. In a number of illuminating documents in Timbal's collections, French borrowers collateralized their debts

c) Waning Obstac\cs lO Liquidating a Fee on Dcfaull

43

with rents and gages. We briefly review here Timbal's account of these lending devices as a helpful backdrop for similar English financing and enforcement practices. As already shown, French borrowing practices depended upon the device of "constitution of rent." Instead of borrowing capital at interest, a Frenchman in need of capital, much like his English counterpart, 'sold' his lender a rent annuity, normally for life (rente viagere) or in perpetuity (rente perpetuelle).ls6 As we see below, a rente perpetuelle, unlimited in duration, corresponded to a rent in fee in English practice. A debtor's promissory instrument or chirograph might authorize his incarceration and even his excommunication for repeated defaults. Like English law, French law was concerned with the borrower's liability for arrearages, a prototypical feature of rents. Also, as in English law, this liability for arrearages was distinguished from liability for the principal sum, and a French creditor could readily execute on a French borrower's chattels for arrearages.\S7 By the fourteenth century, seizure and sale of the fee in satisfaction of a debt had become commonplace, and the phrasing of debt instruments changed in recognition of a creditor's wider remedies upon his debtor's default.

c) Waning Obstacles to Liquidating a Fee on Dejault As in English experience, in France, until about the fourteenth century, both the familial nature of landholding and the personal qualities of the feudal bond itself made impractical forced execution on immovable property for liquidating personal debts. Liquidation by judicial seizure and sale presupposed alienation to a third-party investor whom the feudal lord might reject arbitrarily, although the third-party investor had put significant funds at his borrower's disposal. Seignorial rights dependent on the personal bond of lord and vassal collided with a third-party creditor's rights to enforce his money debts. In such a collision of rights, the King's unassailable priority made a gaged tenure fragile collateral for a commercial creditor. In the twelfth century, the French monarchs' paramount seigneurial rights permitted them to annul gages.\S8 A French lord's seignorial rights would ordinarily have defeated a lender's competing interest in repayment of a debt on liquidation of the tenant's interest in his tenement. This result was consistent with twelfth-century French judgments, according to which a lord's consent was an indispensable precondition to a gage of a feudally burdened tenement. A lender who missed this point and who forced execution of the tenement would be scolded by the tribunal for presuming to accept a gage without the lord's or king's approval. Bans on forced execution were commonly explained on the ground that they resulted in alienation to third parties whom the lord might reject. In fourteenth century France, as seignorial control over fiefs

44

v.

French Experience With Usurious Financing Dcviccs

waned and subinfeudations and "abridgements" increased, the incidence ofgages and hypothecs of land grew along with judicial execution in case of defaults. In Declareuil' s words, the process of fragmentation of lands, noble or not, seemed "almost unbelievable." As ifto echo English complaints that led to the enactment of Quia Emplores, 159 French lords lamented their loss of valuable feudal incidents, saying that tief tenants had "put so much [land] beyond theirreach thauhey could not guarantee the services [i.e., to their lords] from what remained to them."I60 From the seigneurs' perspective, the result was feudal chaos: "all sorts of feudal dues, incidents, royalties, and revenues were transferred in innumerable ways . .. [and were] fragmented in unequal fractions in the widest variety ofhands."161 According to Timbai, family solidarity in France reinforced the ban against gaging an immovable. When an individual acquired a tenement for his services, his entire family exploited it, and a tenure was seen as belonging 10 a family as a collective unity. Forced execution would dispossess an entire family, not only the vassal-debtor hirnself; the retrail lignager, whereby a surviving relative of a landholder could redeem a tenement in a third-party acquirer's hands, tended to keep property in the family.162 Beginning in the thirteenth century, new economic and legal factors led to the conclusion that tenementscould be judicially liquidated to satisfy debts. Timbal's description is consistent with Bloch's view that the evolution of feudal tenures was characterized by deterioration of feudal bonds consisting of personal services, protection, and loyalty, and the replacement of these feudal tenures by a system of ground rents. In thirteenth-century France, the deterioration was manifested in parlements' judgments that barred a feudal lord from seizing a tief for absence of a vassal (jaule d' homme) and from taking for hirnself the revenues ofthe land to the prejudice of the decedent' s creditors. 163 By this time French lords had found it increasingly difficult 10 oppose alienation of a tief and 10 block execution of a tenement by a vassal's creditor. As the patrimonial character of tenures was magnitied and its feudal character diminished, the volume of tenement transfers swelled and rights of lineage weakened. l64

In the thirteenth century, French debtors' charters, unlike those of earlier centuries, often consented to seizure of the land 10 satisfy debts. A debtor's charter typically provided a clause obligatio bonorum l65 that authorized, in case of a debtor's default, execution on all the debtor's assets, not only the particular asset pledged as collateral. The debtor, according to Beaumanoir, might often pledge his after-acquired assets as well. l66 As in English practice, a French creditor enjoyed rights against both his debtor and the land that were good against the world, provided he had perfected his encumbrance before a third party had acquired an interest in the tenemenl.

d) Jcwish Lcndcrs in France

45

A debtor's obligations, as set out in his charter, were enforced by judicial distraint. As rnedieval receivers (custodes saisinae), the creditor's agents ternporarily dispossessed the debtor, seized his chattels, and collected and applied the tenernent' s revenues against his debts. 167 Once the debts were paid, the debtor recovered the tenernent. If the fruits and revenues frorn the tenernent were too rneager to discharge the debt, the debtor's interest in the land itself was sold to satisfy the debt. In foreclosure, a vassal's lord rnight challenge a seizing creditor on the proverbial court house steps. The challenge resulted in accornrnodation of cornrnercial aspects of financing to the feudal bond, again confirming Bloch's observation of the tendency toward cornrnercialization of tenures. A judicial order that rnight in 1100 have typically provided that a tenernent be "held and exploited" to satisfy a debt rnight be subtly yet significantly expanded by 1250 to permit a tenernent to be "held, exploited, and sold."I68 By the fourteenth century, French feudal lords seern to have tumed increasingly passive in the face of third-party creditors' claims; instead of seizing a fief and asserting priority as against the cornpeting creditor's right, a lord stood by, awaiting adjudication of the tenernent to the highest bidder who then forrnalistically pledged his faith and rendered hornage to the feudal lord. 169 Consistently with our earlier account, 170 Timbai reported that rents constituted for a debt were often difficuIt to distinguish frorn ground rents paid under a true lease, especially when the rents were gran ted in perpetuity. But a creditor of arrearages arising even frorn a life rent enjoyed a privilege. The credirentier (the rent tenant) was recognized as having both a personal right against the owner of the encurnbered estate and areal right in the realty itself. This dual aspect of the rent irnplied that a French creditor, like his English counterpart, had a right to pursue the property in a third party' s hands. l7l

d) Jewish Lenders in France Like the usury ban and the rent devices that rnasked it, the royal regulation of Jewish lenders' practices was transnational. 172 Virtually a duplicate of an English statute of 1275, a French Ordonnance of 1299 controlled Jewish lending to Christians at interest; other ordonnances authorized seizure of Jews' assets and confiscated their prornissory instruments for the benefit of the French treasury. \73 Ternplates for these French rulings originated in church decrees and particularly the Lateran Councils, whence they issued arnong Catholics, including Normans wherever they rnight be. 174 In fourteenth-century France, a Jewish lender had first to obtain the king' s approval for his suit against a debtor. The English Exchequer

46

v.

French Experience With Usurious Financing Deviccs

of the lews had already established a similar prerequisite in the thirteenth century.17S As Timbai remarked, "the policy of the royal power toward the lews, sometimes repressive and other times conciliatory, but always inspired by economic and financial needs, would continue till the end of the Middle Ages. "\16 Continuity of royal policy toward lewish lenders was inevitable; for it was coextensive with the usury ban that Frenchmen formally abandoned in 1804 upon enactment of their Civil Code. 177

VI. Recapitulation Our inquiry has so far concerned an irreconcilable conflict in the human psyche between spiritand flesh, or as theologians put it, the body-spiritduality. As the professed partisan ofthe spirit, the Church regularly warned Christians away from usury. Commerciallife, by constantly reminding men that greed and the profit motive were inescapable features ofthe human psyche, challenged church dogma on business as surely as Copernicus had challenged Ptolemy's geocentric world view. While the eventual result of the conflict between spirituality and materialism was never in doubt, no one could confidently predict the intellectual acrobatics the Church would engage in subtly and delicately to accommodate these irreconcilable impulses. Everyone, including the Church, conducted business for profit, but the profit was routinely disguised, rationalized, or denied. Even standing alone, the process of disguise and denial was fascinating; for it was closely associated with the commercialization and transformation of feudal tenures. What made the process even more interesting was the effect of the usury ban upon Jews. Without animus toward the Jews, the Church' s policy could have resulted in Christians' and Jews' land transactions camouflaged behind rents. Jews needed no camouflage and had none. The so-called sin of lending at interest would not have made them any less redeemable because their rejection of Christ had irrevocably condemned them. As the distinguished sixteenth century French jurist, Du Moulin, put it, "The Church, by asophism, seems to have authorized the Jews to lend (at interest) .• Aren't you damned in advance as Jews ... amortal sin matters not to you! You may lend at usury.'''178

VII. English Experience with Usurious Lending and Its Evasions a) lewish Lenders in England Like their Nonnan protectors, EngIish Jews were of French, usually Nonnan provenance. Upon its conquest in 1066, England became a Nonnan stronghold; and Normandy and England constituted a single administrative unit until 1204. Norman Jews invited to England must have gone there eagerly since they had known intermittent oppression in France. 179 A single royal charter guaranteed the privileges of the Jews in both England and Normandy.180 According to this charter, the king's goal was to make the Jews lenders to the English realm. A Jewish lender required a royallicense to trade in anything except church reIics and blood-stained garments, a limitation that even then dated back centuries to the earliest Church regulation of Jews and that had been confinned in Church canons. Royal charters contemplated Jews as lenders in declaring that a Jew might seil any pledged article unredeemed for a year and a day. In Bracton's memorable phrase, reminiscent of Roman mies on masters and slaves, the Jew can have nothing that is his own, for whatever he acquired he acquires not for himselfbut for the king; for the Jews live not for themselves but for others, and so they acquire not for themselves but for others. l81

Throughout the newly acquired Norman realm, royal instruction obliged the king's lieges to protect the Jews. 182 This royal order reflected not so much royal benevolence toward Jews as adesire to exercise control over them. Put another way, the Jews' servility was relative; in relation to all save the King, the Jew was free. English Jews were to become a source of ready cash for many royal purposes and programs. The king himself established the Jewish community of London in the center of the city near a market place called King Cheap. To maintain control over the Jews, he dictated the sites of the Jews' other pennanent communities. Inspired by Church teachings, the goal ofEnglish monarehs until Edward I in 1290 was not to assure Jewish prosperity but the Jews' miserable survival; the Jew was testis veritatis ofChrist's message and his degradation the penalty for its rejection. "To the Church the unconverted Jew was a standing reproach, and there were never wanting zealots for conversion of the Jews. "1113

a) Jewish Lenders in England

49

When English leaders did not borrow from the Jews, they took by tallages and taxes whatever they wanted on the premise that this financial oppression was divinely ordained. l84 According to Richardson, the earliest reliable evidence on Jewish lenders in England dates from 1130. By then, a transplanted Jewish community was prosperous and was comfortably settled in England. Although Jewish persecution and oppression were intermittent, the Jews played a necessary part in the economy of so much of the twelfth and thirteenth centuries that they enjoyed the protection of the king and the tolerance, if not the affection, of the Church. 18S When the Jews' borrowers were delinquent in their payments, the Jews paid the Crown steep fees to enforce them in a special section of the Exchequer, the Exchequer of the Jews. 186 In the Jews and their transactions, the king had a direct interest. Wh ether paid voluntarily or by judicial process, Jewish bonds and charters offered a major source of funds l8 ? and an easy way to police the financial stability of the King's subjects. Once settled and actively trading in England, individual Jews made substantial loans. As Pollack and Maitland noted, "[the Jews] at times financed the Kingdom; there were few great nobles who had not at one time or another borrowed money from the Israelite and paid the two pence per pound per week that was charged by way ofusury."188 Among the Jews' borrowers were the crown itself, nobles, and religious orders. For large loans, several lenders might combine into partnerships (consortia) and might enter relationships akin to loan participations or syndications. 189 If no individual Jew could satisfy the borrower' s request, then several Jews divided a loan and spread both the risk and the collateral. Even when three or four Jews were designated as members of a lending syndicate, several unknown Jews scattered throughout the English realm, and even in Normandy, could have participated in the loan and formed a banking network. For the privilege of forming these a1liances, the Jews paid the Crown handsomely.l90 Richardson's research into English financial records also disclosed a number of Christian financiers 191 whose transactions were facilitated by popes and archbishops. Aemish lenders, far example, acted as international financiers to the Pope, and the Pope once complained to the Archbishop of Reims that "whatever [was] given by charity [was] swallowed up by the maw of usury."I92 About the middle of the thirteenth century, the device appears to have become common among Jews of accommodating landowners with capital sums in return for the creation of an annual rent charge akin to the now familiar impignoratio and antichresis. Such rent charges, if granted in perpetuity, formed a ready market among Christians and led eventually to transfer of the lands burdened by the charges. Thus, Jewish Ienders, consistently with their positions as public 4 Herman

50

Vll. English Experience With Usurious Lending

usurers, appear to have dominated the retail market in which loans were originated. Christians seem to have functioned in a secondary market l93 in which theoriginated loans were bought up, often at discount, and were traded vigorously to the prejudice of traditional seigneurial bonds. Of interest here are the ways in which Jewish and Christian lenders functioned in the market in encumbered estates and the steps taken by the English monarchs to check or control the trade. Again, the key is subinfeudation.

b) Subin[eudations and the Locus o[ Creditor Leverage Between subinfeudation ut de feodo (as of fee) and subinfeudation ut de vadio (as of gage) lay a difference crucial to the role of both usury and Jewish lenders who practiced it during the century before their expulsion from England. These medieval Jewish lenders considerably affected English financing methods and tenurial patterns that the monarch selected as targets of statutory reforms. Today we would describe the difference between the two forms of subinfeudation generally in terms of "leverage." We now rehearse some implications of this leverage in light of a few hypothetical situations.

c) Subin[eudations ut de [eodo Assume that Ralph, as tenant, holds of William as lord and that Ralph, by subinfeudation, has gran ted Harold a tenement. In a classical subinfeudation ul de feodo, most nearly comparable to a sub lease, Ralph, in creating the new dismemberment, has gran ted Harold occupancy for his services. That is, Ralph has acquired Harold's services for Harold's lifetime in return for his occupancy. If, after the grant to Harold, the latter failed to render the stipulated services, Ralph could distrain upon Harold's chattels; so long as Ralph, as William's tenant, rendered the services owed William, then William had no complaint, and Harold's fulfillment of his duties to Ralph did not directly concern William. Ralph had to assure that Harold rendercd thc stipulated services required by their specific agreement. l94 As for William 's concern over Harold' s fulfillment of his duties, William would become agitated when Ralph died without heirs or with a minor heir, for William might thcn scc the feudal incident of greatest value, the wardship of an inheritance, reduced in size and worth because of Ralph's alienation to Harold. 19S Ralph' s default in his services to William raised other delicate issues. Entitled to distrain anywhere in the fee, William could distrain even on Harold's chattels. But as William was a stranger to Harold, thc latter could surely become resenüul

d) Pt dc kodo and ut de vadio

51

if he had fully performed his own services to Ralph only to learn that Ralph had notkept up his own end ofthe bargain with WiIIiam. By the old action ofmesne, Harold could in theory compel Ralph to perform his duty to WiIIiam; but the action of mesne was "slow and cumbersome and in any case ineffective."l96 The need for the writ of mesne was aggravated by a rule that forinsec service was charged upon each and every part of the land, so that a subtenan t, in theory at least, might find his one acre distrained upon for services reserved on a grant of five hundred. Eventually, by the Statute of Westminster 11, William might have Ralph' s tenancy extinguished so that Harold now held ofWiIIiam directIy and for the same services and Ralph lost both his tenancy and all right to Harold's services. For Harold the extinguishment ofRalph' s tenure presented its own difficulties: ifRalph owed WiIIiam heavier services than Harold owed Ralph, Harold would have to make up the difference in services and then seek the difference from Ralph. Harold's potential for recovery on his claim against Ralph would often be doubtful: if Ralph could indemnify Harold for dues Harold had rendered William on Ralph's account, then, without fanfare ordistraint, Ralph could have easily rendered the services and payments he originally had promised William. Because William enjoyed leverage by virtue ofhis lordship and distraint powers, Ralph's incentive to perform in William 's favor ordinarily had to exceed any impulse on Ralph's part to reimburse or to indemnify Harold. Here was the proverbial right without a remedy, or at least a useful remedy. Although armed with a right, Harold, having volunteered to WiIIiam services he did not owe, had no readily realizable remedy for indemnity against Ralph. l91

d) Subinjeudations ut de jeodo and ut de vadio Contrasted Let us contrast a c1assical subinfeudation ut de feodo with a subinfeudation ut de vadio, a typical vehicle whereby Jewish lenders, denied a station in the feudal

chain, acquired rights such as rent charges yielded by subinfeudated tenements. In a subinfeudation ut de vadio, Harold now actually occupies the role ofRalph 's creditor, although for all we can detect from their charter, Harold is Ralph's subtenant. l98 That is, via Harold's loan of a capital sum to Ralph, Ralph is now Harold' sdebtor. The new loan arrangementmay look Iike aclassical subinfeudation because Ralph willlikely remain in possession with the opportunity to exploit the land so that he can satisfy both William and Harold. Nevertheless, loan is the essen ce of the relationship between Ralph and Harold; Ralph is in hock to Harold, and Harold's claims are outside of fee. As long as Ralph prospers, he will repay Harold's loan, which appears to be rent, but consists of areturn of capital plus

52

VII. English Experience With Usurious Lcnding

interest. Unlike the rents flowing from tenant to lord in a subinfeudation as of fee, Harold 's rights in the subinfeudated tenement itself are collateral or conditional. As long as Ralph makes good on his payments to Harold, Harold has no more interest in claiming a rent stream than would today' s collateral assignee of the rent stream under a lease. In the subinfeudation ur de vadio, unlike that ur de feodo, the rents flow downstream from Ralph to Harold, although Harold's charter may obligate hirn for a nominal service that can be demanded at Ralph's option. In exchange for a capital advance or loan, Harold has acquired a right to collect an annual rent out of a particular tenement, if Ralph hirnself does not pay the obligation. In exchange for Harold's payment, Ralph, as borrower, now has to tolerate, perhaps for his Iifetime, the threat of Harold's collection of an income stream yielded by the subinfeudated tenement. If the rent charge has been gran ted in perpetuity, then Ralph' s heirs, and even their heirs, shoulder the burden as weIl. In a subinfeudation as of gage (ur de vadio), there is no serious risk that Harold will default: for his capital advance, he owes Ralph no real duties. To the contrary, Ralph, Harold's borrower, might default; and the default might affect both Harold and William. Ralph' s financial failure will pit William and Harold against each other, and both will look to Ralph' s tenement for satisfaction. Both can distrain on Ralph's chattels, William to collect the services stipulated in his link with Ralph and Harold the loan-concealing rents. l99 In subinfeudation ur de feodo, the leverage lies with Ralph, for he is Harold's lord. By contrast, in subinfeudation ur de vadio, as between Harold and Ralph, Harold, as creditor, enjoys significant leverage over Ralph as debtor. About subinfeudation ur de feodo, much has been written; it is a classical feature in studiesoffeudal tenures. Information on the second form, ut de vadio, is scarcer. Standard treatises do not routinely make the distinction between the two kinds of subinfeudation, but we should make it here. From a feudallord's standpoint, according to standard treatises, the problem with subinfeudation was that "manor grew from manor."200 This metaphor picturesquely described the phenomenon whereby, as feudal chains extended downward, feudal lords found themselves further from their dismem bered tenements, and out of pri vity with the tenement occupants. Thus, feudal lords were deprived of control over estates they would have readily enjoyed if new occupants had acquired their tenures by substitution, not subinfeudation. Without subinfeudations, any new Harold who sought a tenement in the feudal hierarchy would by substitution replace a Ralph. By substitution, Harold would hold directly of William, not Ralph. Without Ralph as the middleman, William could then negotiate direct1y an arrangement with Harold and could exercise surveillance, if not control, over Harold' s activities. From a historian's cosmic perspective, the feudal chain would not

f) Jewish Holdings by Subinfeudalion

53

become unnecessarily elongated. Deprived of such cosmic perspective, WiIIiam, Iike a modern landlord, might note only that it paid to know one' s subtenant, even if the latter's rentals flowed to an intermediate party.

e) Subinfeudation ut de vadio as Investment A coincidental inversion of the canonists' depiction of cash incapable of begetting cash,201 the image of manors begetting manors offers a helpful perspective on the role of subinfeudation in feudal evolution, but the perspective is only partial. Alongside classical subinfeudations ut de feodo, subinfeudations ut de vadio, according to the author of GlanviIIe, constituted a standard form of land investment. 202 lewish fenders and their transferees were among the chief beneficiaries ofthis structure in which security produced security. Charters that created these charges caIIed them infeudations and rent fees. When the grantee of a subinfeudation was a lew, there were exceptional effects. f) Jewish Holdings by Subinfeudation

Although a lew could hold in fee his own dweIIing,203 he was barred from holding a feudal estate because he could neither swear fealty to a Christian lord nor demand feaIty from a Christian vassaI. 204 The seisin granted a lewish fender in a charter was ut de vadio; when the lew held a tenement, he held it as coIIateral, not in fee. As a consequence of his exceptional status, the lew, unable to occupy the land, would either leave the owner in occupancy or sublet the land to a Christian who could swear feaIty to the lord. In the WiIIiam-Ralph-Harold triad, Ralph 's fealty to WiIIiam mightcontinue as be fore the subinfeudation ut de vadio, subject to Harold's charge on the tenement. What happened when Ralph defaulted? When a lew obtained seisin of a gaged tenure, eitherthe sheriff or one ofhis officers accompanied hirn to the place, gave hirn the keys and required the viIIeins to do fealty to hirn. If, as often was the case, the lew was already indebted to the Crown, any chattels found there-the corn in the barns, the oxen, and horses-might be sold by the sheriff, who would account for them at the Exchequer of the lews. These steps, however, were preliminaries. What became of the land? When land was pledged to a lewand he received seisin ofthe gage, he hirnself could notoccupy it. Buthe experienced no difficulty in finding Christian sublessees. A sublessee' s title depended upon that of the lew. Ifthe sublessee's right to the land was chaIIenged, he called the moneylender in warranty. A lewish creditor, because he had not obtained seisin 'as of fee',

54

VII. English Experience With Usuriolls Lcnding

arranged instead for a conveyance of the property to a purchaser willing to pay his price. Often a religious house, like today' s trader in negotiable mortgage notes, would acquire the borrower' s debts at a discounted figure that recognized the risks of financial embarrassment.20~ The Jewish creditor would also transfer to the purchaser his security interest in the land, normally in the form of a gage or subinfeudated rent charge to serve as collateral for the borrower' s obligation. In due course, there developed a regular market in encumbered estates in wh ich the highest English nobility, Jewish lenders, and religious orders appear to have actively participated. 206

g) Christian Holdings by Subinjeudation Encumbered estates in land, i.e., subinfeudations ut de vadio, often came to be vested in Christian investors, although Jewish lenders may haveoriginally floated loans secured by the encumbered estates. According to Richardson, this commerce between Christian and Jewish lenders "provided accidentally but surely the solvent which broke down the apparent rigidity of the structure of feudal land tenure and facilitated the transfer of estates to a new capitalist class, thereligious communities or to new men who were making their futures in service to the crown."207 To invoke again the image of manors begetting manors, we now see that the term "manor" was ambiguous; it meant both a tenement itself and security in rents from a tenement. Desperate for funds, a grantor of a manor subinfeudated his tenure; he granted a lenderrevenues from the manor; converted to cash, the income was interest. If the grantee was a Jewish lender, the manor had to be held in gage, not fee.

h) Royal Statutes Aimed at Investors in Encumbered Estates As time passed, powerful Christians, monarchs, and religious houses trafficked in rent charges and encumbered estates. The resuhing instability in the realm' agitated the king and his advisers. Although Jewish lenders were neither the only traders nor even the most powerful traders in these encumbered estates, they appear to have been indispensable in the marketplace. As royal chattels, the Jews were particularly vulnerable to royal scheming and manipulation. Royal statutes soon targeted Jews and deprived them of their financial interests either by cancelling them or having them assigned to Christians.

i) Royal Statutes

55

i) Statutes 0/1269 and 1271 Divest lews 0/ Encumbered Estates In 1269 A.D., astatute of King Henry III declared as its purpose "the better ordering of the land and relief of Christians from the burdens laid upon them by the lewry ofEngland." The statute provided that "all debts owed to lews that were fees (Le., infeodo), and then in the hands of the lews and not assigned or sold to Christians ... must be quit to the Christians by whom they [were] owing ... with their arrears.''201 Henry' s statute of 1269 A.D. further barred lews from thereafter acquiring any secured debts. 209 In 1271, another statute confirmed a royal policy against lewish holders of encumbered estates. 21O It declared: Know that for the honour of God and the Catholic Church, the better ordering and increased prosperity of our land, and the relief of the Christians from the losses and burdens, which they have sustained by reasons of the freeholds which the Jews of our realm c1aimed to have in lands, tenements, fees, rents and other tenures; and lest mischief should grow therefrom in future to Us, or the people of our realm, or the realm itself: We have provided, by the advice ofthe prelates, magnates and nobles, who are of our council, and We also have ordained and decreed for Ourself and our heirs, that no Jew do have a freehold in manors, lands, tenements, fees, rents or tenures of any kind whatsoever by charter, grant, feoffment, confirmation, or any other kind of obligation, or in any other manner: so nevertheless that they may continue to dweil in the houses in which they dweil in cities, boroughs or other towns, and have them as they have been wont in time past; and also that if they have other houses to let, they may lawfully let them to Jews alone, and not to Christians.

Through the Exchequer of the lews, the King, like a supreme assignee of a11 lewish assets, had already amassed quantities of lewish bonds and charters. The accumulation ofrent charges in the Queen's hands was notorious. 211 The statute of 1271 substituted the king for the original lewish lenders and vested in hirn the lews' rents and fees. The statute further provided that when a Christian borrower repaid the loan, the king, like any other mortgagee or lienholder, would release the collateral. If the loan itself could not be repaid, then the king would take the true annual value of the tenements, presumably by collecting the rents and revenues yielded by the tenements. A goal ofthe statutes of 1269 and 1271 appears to have been to co11apse existing intermediate subinfeudations as of gage made to lews. The goal was to be achieved by accumulating for the royal exchequer the rents and the collateral for the obligations contracted by Christian borrowers. After the lews' expulsion in 1290, the receipts in the rolls of the Exchequer ofthe lews hardly changed. Now the king, in full control of the lews' bonds, security, and rent charges, could demand their satisfaction or could negotiate their discounts to his most devoted

56

VII. English Expericnce With Usurious Lending

vassals. For the king, this was a classic case of "do as I say, not as I do." Despite theking's professedaversion to usury, he took advantage of Jewish loan portfolios concededly based on usury that he condemned. 212 j) Quia Emptores (1290)

King Edward apparently realized that depriving the Jews alone of their rent charges and collateral in land would not uproot once for all the ubiquitous weeds of subinfeudation that threatened to fragment every parcel ofhis feudal domain. 213 Many of these weeds were now nurtured by religious orders and nobles elose to the throne. In 1290, the celebrated statute Quia Emptores was enacted to reach prospectively everyone, including Christian investors, who had gran ted subinfeudations. The statute' s avowed goal was 10 simplify the tenurial hierarchy by barring any further subinfeudation, unless the king had first approved it. New occupants were thenceforth to hold their tenures by substitution and for the services that their own predecessors owed. Quia Emptores aimed to avoid dilution of services to the lords and to reduce the length of hierarchical bonds between the lords and the actual occupants of their land. 214 Seen against the background of the earlier statutes of 1269 and 1271, Quia Emptores very possibly represented a royal policy to control (but not to eradicate) subinfeudations both de feodo and de vadio and to reintegrate these encumbered estates into the king's hands. As a result of the statute, every freeman could seIl at his pleasure his tenement "so that the feoffee should hold the land or tenement ofthe chieflord by the same services and cus10ms by which the feoffer before held it. ''lU A freeholder, instead of enjoying the qualified permission granted hirn under Magna Charta, could alienate all his land provided he reserved the services for the chief lord, not hirnself. Quia Emptores pretty much ended the practice of creating new seignories in fee without the king's consent. In principle every tenancy was to continue as part of the same fee or manor to which it then belonged; for if no new reservation of services could be made, no new manor could be created. 216 Every escheat brought the actualland nearer the king. To borrow a musical image, the feudal hierarchy, like a great invisible accordion, had been squeezed resolutely to eliminate in future a vast number of intermediate tenement holders, and ostensibly 10 enhance for the lords who remained in the seignorial hierarchy their chances of enjoying their escheats, wardships, and associated feudal incidents. 217 Quia Emptores also marked another step in the legislative process to reintegrate into royal hands a growing volume of encumbered estates that secured the loans of Jewish lenders. With both fists full of the usurious bonds and rent charges already in existence in 1269 and 1271, the king embraced prospectively the investments of every investor in encumbered and subinfeudated estates.

k) Milsom's Observations on Quia Emptores

57

k) Mi/som's Observations on Quia Emptores According to Milsom, there was great 'artificiality' in the background of Quia Emptores because military service, the glue of feudal tenures, was increasingly

seen as unreal. A tenure, reports Milsom, came to be seen as a tenant's property, not as a way of securing service that the lord desired. As property, a tenure would be sold for money; although some vendors might choose to take a permanent income in the form of an annual rent, many would prefer a once-for-all capital payment. For a once-for-all capital payment, noted Milsom, the natural transaction would be a substitution; and a legal artificiality arose because for some reason the substitution was not being used. Suppose, says Milsom, a tenant who really wished to seil his land for a capital sum subinfeudated for a nominal service but still lOok his capital payment. The new tenure so created [was) itselfartificial, and the vendor [was) often ... a lord in no other sense, and in particular [would) have no court; and he [was) probably responsible for the changing nature of distress by challeis and of replevin. He [was lthus a cause as weil as a symptom of the disintegrating structure; and the artificialtenure he ... created [was I c1early the mischief aimed at by Quia Emplores. 218

According to Milsom, it was unclear why sales were so often effected by subinfeudation and why substitutions seem to have become unnaturally rare from the late twelfth century. Milsom hypothesized that the artificial subinfeudation was made because the lord dared not consentto a substitution. That it was often made because he would not consent, or asked too high a price, is unlikely because of the foreseeable danger to his incidents. But it is not impossible that deliberate evasion came to play some part. If the subinfeudation was for a tenure which did not itself carry wardship and marriage, the grantor would gain that measure of freedom from incidents at the direct expense ofthe grantor's lord; and this might be reflected in the grantor' s price of which, since his consent was not needed, the lord could exact no share. 219

Milsom's comment on the artificiality of subinfeudations for a once-for-all payment prompts a question whether perhaps he has focussed only on subinfeudations ut de feodo, not those of gage, i.e., as collateral for debts. In other words, the king, concededly concemed over the havoc wreaked on feudal estates by subinfeudations as of fee, also recognized that there was in his kingdom a swelling volume ofloans secured by rent charges and encumbered estates whose holders, in case their borrowers defauIted, would compete with feudal lords. King Edward could hardly have missed the point: the queen and many religious houses headed by high clerics had invested in these secured debts. 220 Already having reamassed the Jewish debts, the King now had 10 check or control221 debts acquired by Christians, including his immediate family and close advisers.

58

Vll. English Experience With Usurious Lending

Our argument is a natural extension ofMilsom 's premise. As Milsom implies, many tenants realized that the longer the feudal chains, the weaker the lords' control. But to say this, we would have to suppose that tenants had plotted to defeat their feudal lords' eventual rights to feudal incidents. Given communications at that time, no tenant might do more than predict the likely effects of a subinfeudation: a lord's loss of valuable feudal incidents, if it occurred at all, could occur long after a transfer. Even without such communication, however, a tenant and his feudal lord were concerned with immediate effects of the transaction, and the leverage acquired by a creditor over a tenant at the lord's expense may weil have been irresistible. If, as we have said, some subinfeudations were de vadio, this will perhaps explain why the grantor (Le., the borrower), to use Milsom's phrase, did not behave as a lord with a court, and why the new tenure had an artificial character. The fact is that the gran tor had no leverage against the grantee because the latter was the grantor 's creditor. Facing his gran tee, the grantor was at a disadvantage. He had bargained for only nominal service in addition to a capital payment that he must repay. He could not make demands upon the grantee any more than a borrower today can make demands of his mortgagee. If the grantor failed financially, he faced demands from the front and the rear, i.e., from both his lord and his own "tenant," who had none of the traits of areal tenant. Thus we can say with Milsom that the new gran tee was both a cause and a symptom of a disintegrating structure. 222 The new gran tee 's power to disintegrate the structure mightderive from his poweras an investor outside the feudal structure to take over the pledged tenement and to press ure his gran tor in case of the grantor's default.

This explanation may tell us why there were surprisingly fewer substitutions than subinfeudations, even though the gran tees appear to have been "paying" capital sums. Harold' s gran tee of the subinfeudation, while seeming to be a buyer, was in reality a lender. Ostensibly a vendor, Ralph was actually a borrower. Grantors like Ralph, though they remained in the feudal chain, served both William, a feudal lord, and Harold, a lender. For if Ralph did not repay the advance, then his tenement stood as collateral. With serious reservation about the original grant to Harold, William lacked any real interest to see that Ralph repaid Harold. But Harold could turn the tables on William, first by distraining on Ralph's chatteIs and eventually by installing a disloyal occupant, while William powerlessly stood by. William, it must be remembered, was a stranger to the Ralph-Harold link. As long as Harold, or the next occupant whom Harold installed, was willing to perform the nominal services due to Ralph and to assure William of no interruption in the duties owed William by Ralph, then William should have had

1) Mortmain Statute

59

no complaint against Harold's distress upon Ralph's chattels. We can even imagine that William subordinated his claim on Ralph's tenement in favor of Harold's; in this case William could scarcely complain. 223 Such could be the hazards of Harold's leverage over Ralph and Harold's eventual collision with William in Ralph's tenement. I) Mortmain Statute [De Viris Religiosis] (1279)

A recurring theme of this book has been that medieval business practices conflated material and spiritual features ofhuman experience in a way that would today seem odd to uso A routine commercial activity like lending, without wh ich there could be no credit at all, raised delicate theological issues. Businessmen were keenly aware that many transactions would not withstand ecclesiastical scrutiny. A merchant, like a pilgrim in Chaucer's Canterbury Tales, must have imagined his daily activities in terms of a physical joumey to the city of man and aspiritual journey to the city of God. At least the Church exhorted hirn to such imaginative reflection unless he were resigned to the consequences of failing to do so. For adherence to the usury ban in the here and now, Church dogma promised eternal rewards; for its violation, excommunication and eternal damnation. Hence, the task of overt taking ofinterest was assigned to lews, who were beyond redemption for having rejected Christ's message. For a medieval Englishman, service to God was full-time work, and it was expensive as weil. Good Christians were obliged to bring Christ's message to the heathens in the Holy Land, and great fortunes poured into the king's crusading machinery so that he could travel regally in the company of his trusted soldiers. At horne, physical defense of the real m and expansion of Church installations required considerable financial outlays. Jewish lenders financed many such costly ventures, both domestic and foreign. Operating singly and in syndicates, Jewish lenders financed construction and maintenance of many of the earliest and most celebrated abbeys. In retrospect, the irony is striking, for the Jews, having rejected Christ's message, became indispensable and involuntary underwritersof expeditions and buildings needed for transmission of that message. There were other ironies as weil. The Church embodied the material-spiritual duality that characterized Chaucer's pilgrims. High churchmen engaged in commerce on a large scale, and the Church found itself in the uncomfortable position of condemning, condoning, and engaging in usury all at the same time. Vis-a-vis other bargainers, the Church, because of the usury ban, occupied a unique position; for as churchmen bargained, they also dictated for the transactions themselves a technical vocabulary, a design, and a standard of acceptability among the financial community.

60

VII. English Expericnce With Usurious Lcnding

From the time of the Norman conquest, monasteries and abbeys occupied crucial positions in the feudal hierarchy. Unlike a knight, an abbot could not supply warriors, but he could assure regular prayers for the king's success. For these spiritual services, an abbey received aspiritual tenure, calledjrankalmoign or free alms. As church holdings expanded, the Church met vigorous royal efforts to check or to curb the expansion. Issued in 1217 at the beginning of Henry III' s reign, the Great Charter addressed specific instances ofthe Church's increasing dominance; for once a religious house had acquired a spiritual tenure, there was no dislodging it by customary means. This tenacity derived from the fact that the monastery, as a religious order, was etemal; by contrast, when a knight died, his heir needed the approval of the king or a mesne 10rd. 224 Such approval was discretionary, not automatie; even when it was granted, the knight' s successor had to swear an oath offealty and to pay for the privilege of doing so. Not so an abbey, whose mortmain holdings could swell without temporal limit. Considering that the Church pointed the way to life everlasting, the term "mortmain" itself was ironically funereal, for it signified "dead hand." Alienation of lands into the Church was called amortization. Kings and their vassals could have scarcely missed the irony of bargains in wh ich spiritual welfare and everlasting life were bought at the price of interment of valuable feudal incidents in the grip of a dead hand. This loss to the dead hand was not to occur without a struggle between the king and Church. Chapter 43 ofthe Charter of 1217 banned the now familiar two-step transaction under which a tenant granted his tenement to a religious house, normally by substitution. By means of a subinfeudation, the religious house immediately regranted the tenement to the tenant. This transaction distanced the tenant from his lord by inserting between them the religious order as an intermediary. Whenever this transaction occurred, the Charter of 1217 authorized forfeiture of the land to the lord of the fee. If the monastery as substituted tenant continued the outgoing tenant's services to the lord, then why such seignorial acrobatics? Historians have suggested two reasons, both inimical 10 the lord' s interests. First, the lord lost valuable incidents in wardship, reliefs for a marriage, escheat for felony, or failure of an heir. 22S Second, the tenant put himselfbeyond his lord's reach and left the monks to fend for hirn. The tenant, further to insulate himself from responsibility for feudal dues, received the re grant by subinfeudation at a money rent that he now owed the monastery in lieu of feudal services. As we shall see momentarily, a transfer to a monastery was not necessarily a sale. The capital advance to the tenant was likely a loan, not a purehase price, so that the money rent constituted repayment of interest and principal. The monastery was investing in an encumbered estate.

I) Mortmain Statute

61

Chapter 39 of the Charter targeted another feature of typical transactions whereby estates were gobbled up in mortmain. As mentioned in our discussion of QuiaEmptores, a tenant, on creation of a subtenancy, would often reserve from the subtenant only nominal services in instances where the new subtenant had paid a once-for-all capital sumo We have al ready suggested that the capital sum was Iikely in many cases a loan, and that the nominal service required of the subtenant disguised the true nature of the arrangement. To limit this use of nominal services, the Great Charter of 1217 forbade the tenant from alienating so much of his fee that the residue would be insufficient to sustain the lord's services. 226 Historians will point out that the entire fief was technically liable for the feudal services no matter how often the tenancy had been subinfeudated. Yet, because the tenant had a greater stake in land he retained in demesne than in subinfeudated land, the most effective security for the tenant's services was the demesne. Ifhis holding in demesne shrank to the vanishingpoint, the tenant might be tempted to abandon it and to dcfault in the services owed his lord. Despite the Great Charter of 1217, the Church 's domination over tenements to the prejudice of lay lords persisted. In 1258, a Petition of the Barons addressed the question of mortmain in terms that the barons cared deeply about: the loss of wardships, marriages, reliefs, and escheats. In 1259, Chapter 14 of the Provisions of Westminster declared it unlawful for religious men to enter anybody'sfeewithoutthelord'sauthority.127 UsingtheseprovisionsofWestminster as aspringboard, Edward I's Statute ofMortmain in 1279 widened the scope of earlier royal pronouncements on mortmain; it addressed the loss of services and escheats and established that "no religious ... could presume to buy or to seil, or to receive from another by colour of gift, term or any other title whatsoever, or to appropriate to hirnself lands or tenements in any wise come into mortmain, under pain of forfeiture thereof." By way of sanction, the statute gave the lord of the fee an immediate right of entry exercisable within a year and a day; on the lord's failure to exercise the right, then the lord next immediately above hirn in the feudal hierarchy could enter within the next six months, and so on. 228 As we read the Statute ofMortmain, we can imaginc King Edward remonstrating with his abbots and bishops. The statute broadly hints that the realm' s spiritual leaders have engaged in widespread chicanery; for example, the phrase "colour of gift" suggests a sham or simulation; another transaction has been concealed behind a gift. "Appropriating to oneselfby art or device" is nota neutral depiction of a monastery's acquisition. According to Plucknett, the abrupt ban on all acquisitions of land by the Church was a deli berate affront to the Church and to public feeling. Xl9 The statutory language itself supports this argument.

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VII. English Experience With Usurious Lcnding

The Mortmain Statute contained perhaps another sign of the king's desire to control the traffic in encumbered estates that flowed to religious houses from Jewish lenders. According 10 Plucknett, until the mortmain regulation, a commonly inserted clause in charters contained a double barrelIed attack on 'men of religion and Jews,' two categories of investors who appear 10 have collaborated on the disposition of rentcharges and encumbered estates. 230 Perpetual rents also fell within the Statute of Mortmain. 231 The statute implied that a monastery had no more right to acquire security in a tenement in the form of a rent charge than to become a member of the feudal hierarchy by substitution. Viewing the Mortmain Statute in a light favorable to the monarch,232 one might conclude that the king's primary intention was to protect royal interests from injury, not affirmatively to harm the clergy. His goal seems to have been to coordinate, to control, and 10 police transfers into mortmain, not absolutely to ban them. This royal policy the king soon revealed by issuing 10 grantors, when he saw fit, licenses to alienate tenements into mortmain. 233 As a royal ultimatum, the Mortmain Statute might have seemed so much window dressing for effect. Edward I then took as his sole prerogative the amortization of lands. Ordinarily a license into mortmain reserved the rights of the lords of the fee, presumably to demand feudal incidents and to distrain for feudal services. 234 At aminimum, these royallicenses suggest that the king sought to ingratiate himself with his magnates by assuring them that alienation to a religious house would not impair their rights. The king's recitation was perhaps a hollow gesture; for as we shall see, if a monastery acquired from a tenant an encumbered estate or a perpetual rent, then the monastery got enforceable collateral rights over a tenement that would constitute a powerful weapon against the feudal lord of the tenement. Returning to our triad composed of William, Ralph, and Harold, if Harold held an encumberedestate as collateral for a sum advanced 10 Ralph, then when Harold transferred this security to the monastery, William's right to distrain could be inferior to that of the monastery. Between William and the monks, there was apt to be competition for control over Ralph's tenement. By banning lending at interest, the Church ironically had forced commercial activities into forms that would pass ecclesiastical scrutiny, only then for the Church, at the closing of a transaction, to be found profiting from the very restrietions it had articulated. In King Edward I the Church had a clever opponent, and the competition among King, magnates, and churchmen prompts us 10 ask who among them benefited most from dealings in encumbered estates.

m) Instances of Subinfeudations

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A charter that memorialized a tenant's alienation of his estate to a religious house often characterized the transfer as a gift to pious uses. Of course, many such gifts were bona tide. For many donors, however, piety was not the only motive, and perhaps not even the dominant one. Such "gifts" were as likely camouflage for a secured loan. According to Richardson, a large number of apparent benefactions to monasteries were actually cash transactions with embarrassed debtors. To avoid offending the king' s dignity by reference to simony,'135 a drafter of a gift charter expressed a pious motive, omitted reference to the true consideration, and stated only that the abbot and convent had granted the vendor a share in any future (i.e., spiritual) benetits of the Church. Such concern over the king's dignity was unjustified: hc had already compromised it by trading in the debtor' s obligations and by condoning such trading among high officials close to hirn. m) Specijic Instances 01 Subinleudations ut de vadio

For this last conclusion, some slcuthing is required: as Richardson notes, the true character of apparent benefactions may be suggested by no more than an entry in a cartulary of a landowner's bond obliging hirn to repay a loan with interest, or of an acquittance by a money lender to a religious house. 236 Earlier we suggested that many subinfeudations were ut de vadio and that transfers characterized as sales were in reality pledges for loans. In confirmation of this sug~estion, the King promoted a steadily increasing stream of debtor transactions durihg the thirteenth century, even when he was not actively a party to them. Let us consider a prototypical transaction that might have been a target of the king's mortmain policy. A Christian has borrowed substantially from a Jewish lender, who takes as collateral a rent charge, i.e., a subinfeudation ut de vadio. The debt weighs heavily upon the borrower, who recognizes that the king, by virtue ofhis control over the Excheq uer of the Jews, might accommodate his need. Seeking relief from the Jew's dcbt, the borrower approaches a religious house headed by a prelate, who is coincidentally a confidant of the king. The prelate expresses willingness to help the borrower, but for the protection of the interests of those concerned, the arrangement requires a proper structure. Like a modern commerciallender, the Church order has several options: first, it can advance the borrower additional funds, which will be applied to the loan. A drawback of such an advance is that the security for the advance may be fragile inasmuch as the Jewish lender has retained primary rights in the encumbered estate. Second, the monastery can negotiate directly a discount with the Jewish lender, who, in return for prompt payment, may discount the principal debt. Once the debt is cancelled and the debtor's realty no longer encumbered, the monastery can become the

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VII. English Expericnce With Usurious Lcnding

borrower's creditor and can acquire security by subinfeudation. Third, the religious house can guarantee the indebtedness to the Jewish lender, taking an interest in the tenement as security. Here again the security of the religious order may be subordinate to that of the Jew. Fourth, the religious house, with ready cash, can fully buy out the Jew's loan along with the accompanying security and can occupy the Jew's role as creditor. An interesting example, which depended upon a negotiated discount with a Jewish lender, teils us why the king should have been pleased thatan estoppel plea based on unclean hands was unavailing against the crown. To understand the particular transaction, we must go to 1170, shortly after Archbishop Thomas Becket was murdered by King Henry' s men. In that year, Henry 11, to do penance for Thomas Becket's death, agreed to reconstitute Waltharn Abbey. A heavily burdened debtor, Roger de Wanchy, had mortgaged his manor to a Jewish lender. When Roger died, his son Michael sought relief from the loans. Hoping to find favor with the King, Michael reached Walter of Ghent, a canon of Waltham and a prominent minister of Henry 11; Walter was the abbot-designate of Waltharn Abbey, now an object of the King's bounty. Walter proposed that the King discharge the debt ifMichael would grant half ofhis manor to the abbey. The King also asked Michael to grant the abbey the other half of the manor for an annual rent and a little ready cash. 231 Having performed as req uested, Michael no Ion ger had to face a Jewish lender. But the transaction had a twist that highlighted the virtue for the King of being the universal assignee of all Jewish property. that Unbeknownst to Michael, the King, instead of paying off the Jew' s debt, it was heavily discounted and released along with other Jewish debts. Lest we take seriously royallaments on the growth of Church holdings, the King' s own involvement in this transaction should have estopped hirn from complaining.

saw

The monarch had other reasons to avoid complaining: as the time of the Jews' expulsion drew near, the King, through the intermediary of the Exchequer of the Jews, more regularly took over the Jews' bonds and security. Ifthe Jews' usury made them unreconstructed sinners, then the king hirnself was subject to a similar indictment. On occasion, the abbeys' acquisition of encumbered estates, while the debts thereby secured remained vested in creditors, exposed them to royal claims. During the twelfth and thirteenth centuries, several Cistercean abbeys acquired encumbered estates from Jewish lenders. When the king, as holder of the debts secured by these estates, realized the estates were now vested in solvent parties, he demanded payment. This royal maneuver was more injurious to the abbeys than the mortmain policy ever could have been. On the whole, however, the market in encumbered estates and rent charges benefited religious houses. Richardson has observed:

n) Wesuninster II: Elegit

65

If weahhy lews were capitalists in the twelfth century. so also were wealthy religious commu nities .... Religious houses were ... in the market for encumbered estates. They must have been c1ients equally welcome to debtor and creditor. If the debtor rid hirnself of an ever increasing debt and at the same time acquired a little ready money and pemaps some odour of piety into the bargain. the creditor realized his capital and some part. at least. ofhis interest which had hitherto been guaranteed to hirn on rather poor security. 238

Viewed atcloserange, a vigorous market in encumbered estates may explain why the King, feigning displeasure at the growth of estates in mortmain, had nevertheless to license239 so many transfers to religious orders. Commerce demanded it; although a religious community's holding of a tenement might threaten a baron 's expectation of feudal incidents, such a holding had redeeming virtues ifthe monastery could thereby underwrite a Christian borrower's loan to permit hirn to go on a crusade with the king. Lucre and piety were thus conflated in medieval experience.

n) Westminster Il: Elegit The statutes we have already investigated either implicitly orexplicitly treated Jews as targets; that is, the statute drafter, having identified the Jews as a source of mischief, announced a policy to halt an activity in which they were then engaged. The legal machinery operated upon the Jews as passive objects. It deprived them first of their investments and their means of Iivelihood, and eventually even of their right to reside in England. This section shifts the focus of the previous sections by considering the Jews as agents of royal policy, not its targets. Here we ask whether the Jews' practices might have actively operated on and inspired the English legal machinery. This inquiry is reasonable: the king had avested interest in the Jews, and he stood to profit by all that was nominally theirs. Deriving from principles of Jewish law, techniques and practices routinely recognized in the Exchequer of the Jews could have migrated into the royal courts. We shall next present evidence in support of this claim and then we shall suggest reasons why we must be careful not to exaggerate the claim. In a consciously ironic tone, Pollock and Maitland issued a tantalizing invitation to discover whether the Jews' commercial practices might have actively contributed to English statutes and enforcement procedures. Whether the sojoum of the lews in England left any permanent marks upon the body of our law is a question that we dare not debate. though we may raise it. We can hardly suppose that from the Judaica. the Hebrew law which the lews administered among themselves. anything

ux

5 Herman

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VII. English Experiencc With Usurious Lcnding

passed inlO the code of the contemptuous Christi3l1. But that the international Lex Judaismi perished in 1290 without leaving any memorial of itself is by no means so certain. 240

Even before the fonnal establishmentofthe Jewish Exchequerin the late 11 OOs, English law obliged Jewish Ienders to deposit into an official ark in the custody ofthe Jews' wardens a part of every bond they received. The practice made it easy for the King to police the Jews' activities and to determine his barons' financial health at a glance. "We should not be surprised," Pollock and MaitIand observed, "to \earn that the practice of preserving in the treasury one part (pes or foot) of every indenture which recorded a fine levied in the royal court was suggested by Jewish practice."241 According to Pollock and Maitland, both Jewish and English practices were traceable to 1194. Elsewhere I have suggested that the Jewish practice of depositing instruments in archae Iikely had antecedents already nine centuries old by 1194. 242 Because the king' s welfare was a step removed from that ofhis Jews, we should not be surprised to leam that Edward I, early in his reign, announced a policy that followed enforcement techniques of the assize ofhis Jewry. The Statutes of Jewry pennitted a Jewish lender to enforce his debtor' s obligation to the extent of"one moiety" of the debtor's rents, lands, and chattels. 243 The "one moiety" provision confinned a longstanding Jewish rule on enforcement of gages. At the time of the statute' s passage, even a Christian bearer of a Jewish debtor instrument could presumably have utilized this Jewish enforcement technique, providcd that the instrument stipulated the Assize of Jewry as the law applicable to its enforcement. To dispeI any doubtabout the Jewish remedy's general availability, however, the Statute of Westminster 11244 in 1285 authorized the writ of Elegit. This writ seems virtually to have duplicated for Christian creditors the Jewish enforcement remedy stipulated in the Statute of Jewry. According to Pollock and Maitland, elegitmay have been "a lasting monument ofthe Hebrew money lender. "245 Until then, a judgment creditor' s prospects of execution of a judgment debtor' s assets were rather limited; the creditor's main relief was by distress, i.e. seizure of the debtor's chattels without a powerto seil them. With the writ of elegit, ajudgment creditor enjoyed an option: instead of seeking satisfaction by the nonnal means of distraint, he could collect his debt from the debtor's reaIty by holding possession of one-half of it until the debt was paid. Thus did elegit speed up a dilatory process for enforcement of debts. Despite Pollock and MaitIand's suggestion that elegit had Jewish origins, scholarship on the question remains divided. Rabinowitz, though usually a confident proponent of the view that Jewish law deeply affected English law, suggested that the creditor' s remedy of elegit under the Statute of Westminster 11 was perhaps no innovation at all.

n) Westminster II: Elegit

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English bonds dating from 1260 authorized seizure of a debtor's land and collection ofprofits from it until the debt was discharged. Contemporary French bonds authorized similar creditor's remedies. 2A6

VIII. Assize of the Jews (Assisam Judaismi) A number of scholars have argued that Jewish law in the hands of England's Jewish lenders exercised a notable influence upon English commerciallaw.2