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THE HISTORY OF BANKS cee to buy his 20% share also. What is fair or THE HOUSE BUYER not fair is much easier determined when If a man wanted to buy a house, the same one does not have wild market swings sort of business arrangement could be brought about by interest-caused inflation made. He might have 10 pounds of his or deflation, i.e., the house being worth 100 own for a down payment. He would go to pounds this year, 200 the next year, and the bank and ask for a loan for the balance. dropping to 50 the year after. In that day The bank would send out an appraiser to they had nothing comparable to the booms find out if the house was really worth the and busts that are the rule today. It is said discussed purchase price of perhaps 100 that the price of bread remained the same pounds. If it was, a deal could be struck. for four centuries in the Hanseatic League. The gop py nn’ aad deme ele In a no-interest contract there is always tir be 0, aes © risk for both partners. If the risk factor is st gama dad corse , all on one side, the Church determined The buyer also paid rent. He received nether it was a usury or non-usury con- 10% of his own rent because he owned jact The usury contract makes one side 10% of the house and the bank received risk-free and eventually ruins the borrower 90%, The next year he bought another 4. it was designed to do. ‘The no-interest 10%, and owned 20%. He then received contract shares the risk. Both parties rise potency Fpl ater — a = or fall together. This is one of the oldest bank allowed him to buy more of the Tules 7 cae law in determining ass house. In time he owned it all. If he failed 2 NO) & pnnuact Was A usury contract to pay the rent, he was evicted and another _“™~ r +B Iomnectia, Emujnnd, p.165 renter/buyer installed. He still received }. lewish Encyclopaedia, England, p.165. 20% of the rent because he owned 20% of 2. Medieval Studies, Vol. I, 1939, Vol. I, the house. Being kicked out did not 1940, Pontifical Institute of Medieval Studies, deprive him of what was already his. Toronto, Canada. © Of course, the contract might specify that Continued next issue ... NEXUS®75 Jee eocowwintanenanaannan Es OCTOBER - NOVEMBER 1993