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Taking Interest: Difference between revisions
From Halachipedia
→Expired Currency
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==Foreign Currency== | ==Foreign Currency== | ||
# Rashba respona 4:287 forbids lending money of one currency for another currency since the coins change fixed with respect one to another. | # Rashba respona 4:287 forbids lending money of one currency for another currency since the coins change fixed with respect one to another. | ||
===Expired Currency=== | ===Expired or Altered Currency=== | ||
<p class="indent">The system of coins used in the days of the Gemara and Shulchan Aruch were intrinsically valuable commodities, such as silver or gold. In that system the size and weight of the money and the value of that metal determined the value of the coins.<ref>Gemara Bava Metsia 44a-b</ref> This is known as [https://en.wikipedia.org/wiki/Commodity_money commodity money] and is associated with the theory of economics [https://en.wikipedia.org/wiki/Metallism metallism]. Another system used is [https://en.wikipedia.org/wiki/Representative_money representative money] which could be used to redeem a commodity; this is also known as the [https://en.wikipedia.org/wiki/Gold_standard gold standard]. In 1971, America replaced this system with [https://en.wikipedia.org/wiki/Fiat_money fiat money], theoretically understood by [https://en.wikipedia.org/wiki/Chartalism chartalism], which has no intrinsic value and no representative value but has a value based on the government.</p> | |||
====Fiat Money (Chartalism)==== | |||
# Today most money is paper or digital money, which has no intrinsic value and not representative of a commodity value. It is evaluated according to the assigned value according to the government and world markets. | |||
# It is forbidden to lend money and charge for inflation.<ref>Igrot Moshe YD 2:114 explains that since halacha views coins as stable and not changing charging for the inflation of the purchasing power of the coins is interest. The only time coins are reevaluated in Shulchan Aruch Y.D. 165:1 is if the coins changed sizes, however, the Rama there writes that if the purchasing power changed but not the size of the coin then one must return the new coins irrelevant of the inflation. Chazon Ish YD 74:5, Minchat Yitzchak 6:61, and Laws of Ribbis p. 52 agree. Note that Rav Moshe is discussing fiat money in 1971 and the Chazon Ish representative money as is evident in their words.</ref> | |||
# If a coin is invalidated and replaced with a new coin in a fiat money system the new coins need to be repaid since the size and weight of the old or new coins are irrelevant to the value of the coin. If the new coins has a different purchasing power compared to the old coins, if someone lent money in an old coin one must return the new coins according to the value the new coins have in relation to the old coins.<ref>Chazon Ish YD 74:5</ref> | |||
====Commodity Money (Metallism)==== | |||
# If the new currency is the same size and weight as the old currency but its purchasing power is different one can simply repay the loan with the new currency.<ref>Rama 165:1</ref> | # If the new currency is the same size and weight as the old currency but its purchasing power is different one can simply repay the loan with the new currency.<ref>Rama 165:1</ref> | ||
# If a person lent someone money in a currency and then that currency become invalidated and was replaced with a new coin, if the new coin is thicker or weightier than the old one, whether or not one can simply repay the loan with the new currency depends on the following factors: | # If a person lent someone money in a currency and then that currency become invalidated and was replaced with a new coin, if the new coin is thicker or weightier than the old one, whether or not one can simply repay the loan with the new currency depends on the following factors: | ||
