The Evil of Usury

"The rich ruleth over the poor, and the borrower is servant to the lender"—Proverbs 22:7

Alas, the above is only too true today as it was when formulated. The rich rules over the poor—an ages long fact. The borrower is servant to the lender—and what is the method used by the lender: the insidious system of usury. The whole case against usury is too large to cover in the space of an article so the following is a concise and brief explanation of the workings of this fraudulent system.

For the many readers who are aware of these little-known facts, the following will serve as a timely reminder and hopefully, an incitement, to inform the many innocents who are daily losing their farms, houses and businesses as a result of this unjust system. Even more urgent is the need to educate the young before they embark on a future relationship with their bank or financial institution. There is no turning back once those loan papers have been signed: you are trapped right up till the day you pay it off.

For the readers who have never been fortunate to know the following, they may well be shocked and even angry. They will be angry at the banks, the Establishment that permits such a swindle, and in fact, thrives off such a swindle.


"For the love of money is the root of all evil"—II Timothy 6:10

"The most sinister and anti-social feature about bank-deposit money is that it has no existence. The banks owe the public for a total amount of money which does not exist. In buying and selling, implemented by cheque transactions, there is a mere change in the party to the whom the money is owed by the banks. As the one depositor's account is debited, the other is credited and the banks can go on owing for it all the time.

"The whole profit of the issuance of money has provided the capital of the great banking business as it exists today. Starting with nothing whatever of their own, they have got the whole world into their debt irredeemably, by a trick.

"This money comes into existence every time the banks 'lend' and disappears every time the debt is repaid to them. So that if industry tries to repay, the money of the nation disappears. This is what makes prosperity so 'dangerous' as it destroys money just when it is most needed and precipitates a slump.

"There is nothing left now for us but to get ever deeper and deeper into debt to the banking system in order to provide the increasing amounts of money the nation requires for its expansion and growth. An honest money system is the only alternative."—Frederick Soddy, M.A., F.R.S., Nobel Prize Winner, 1921.

As the above makes clear, banks are able to manipulate "money" using various methods like the debiting of one account and the crediting of another, and so on, thus "balancing" the accounts. Banks also "create" money in more ways than one, through a trick that will be looked at later on.

Economists use the term "create" when observing the process by which money comes into being. Thus, creation means making something that did not exist before.

A sawmill makes boards, workers build houses from timber, a glass-blower makes fancy glass ornaments. In these examples, they did not "create", but converted already existing materials into a more usable, and thus more valuable form.

However, money "creation" is somewhat different. Here, and here alone, man "creates" something out of nothing. Pieces of worthless paper are printed, given various denominational values, which can be used to purchase, for example, a glass ornament. Its value (of the money, or piece of paper) has been "created" literally out of thin air.

As we can see from the above, manufacturing money is dirt cheap, and whoever does the "creating" and issuing stands to make impressive profits.

The Supply of Money

"Let me issue and control a nation's money and I care not who writes its laws"—Attributed to Mayer Amschel (who later changed his surname to Rothschild and founded the largest financial dynasty ever to exist in its influence and power).

The proper use, distribution and supply of money is of vital importance to the efficient running of society. Modern societies are completely reliant on an adequate supply of money.

Without money, industry would grind to a halt, farms would become mere self-sustaining units, surplus food would disappear, jobs requiring one or more workers would remain unfinished, transport of all goods would cease, hungry populations would kill and steal to stay alive, and government would collapse leading to complete anarchy. It is not hard to imagine the catastrophic conditions created if money was to completely vanish.

Money remains the life-blood of society; money flows throughout society just as vital nutrients flow throughout the body, giving sustained growth, development and vitality.

Money is the method by which goods and services are exchanged; remove money or hamper supply and the results will be disastrous. We need only recall Australia's Great Depression of the 1930's.

Bankers Depression of the 1930's

Australians all know about the Great Depression and the extremely hard times it brought about; but what of its causes?

In 1930, Australia did not lack industrial capacity, fertile farmland, or skilled, industrious and willing workers, residing in both the city and country. Already, extensive systems of reasonably efficient transport and communications were in place. War had not ravaged the cities or countryside, nor had famine devastated the land and its population. The one thing that industry and commerce lacked was a sufficient supply of money.

In the early 1930s, Bankers, who were the only source of new money or credit, deliberately refused loans to industry, commerce and agriculture. However, payment on outstanding loans was demanded, which led to a rapid decrease in the circulation of real money.

This caused a complete standstill; jobs could not be done, goods and services could not be purchased. This ploy by the greedy Bankers placed Australia in the Great Depression of the 1930s, and moreover, placed extensive amounts of businesses, private dwellings and farms in the hands of these same Bankers.

The people, not understanding the system, were in a helpless position, and were cruelly robbed of their hard-earned savings and property; they were told things like "times are hard", "money is short", "everyone is suffering." These same statements come to mind when recalling them being made during Australia's recent so-called "recession".

This was "a 'recession' we had to have," the politicians proclaimed; and one I'm sure the banks loved to have. If you should have the opportunity, a check on how the banks faired during the so-called "recession" will reveal sustained and increased profits, with an abnormal increase in acquired property assets!

Money for Peace? No! Money for War? Yes!

"The Rothschilds can start or prevent wars. Their word could make or break empires"—Chicago Evening American, December 3, 1923.

World War II ended the Great Depression. Overnight, the same Bankers who had no money for housing, food and clothing, suddenly had millions to lend for Army barracks, uniforms, rations and weaponry.

This was a remarkable reversal in policy by the Bankers. They simply began pumping millions upon millions of dollars back into the economy when war was imminent. The Great Depression ended because of the war!

There will be some who believe that a war will lead to a "boom economy" because it leads to a massive increase in activity and production. This fallacy is easily exposed: If we were able to manufacture millions of tonnes of war equipment, dump it in the desert and blow it up, would we therefore have a "boom economy"?

On the contrary, wars create huge debts to the Bankers who are able to expand the money supply and lend more money out. In the case of a war, the victor nation would have to seize the assets of the defeated nation, occupy its place in the international trade system, and thus, sometime in the future, be able to pay back all its debts (including interest) to the Bankers who made the war possible in the first place. Big banks, that have traditionally been owned exclusively by a few collaborating families, can change the course of history and have done so for much of this century.


"Who goeth a borrowing goeth a sorrowing"—Benjamin Franklin.

The main method through which new money (not true, real money, but "credit" representing a debt) can go into circulation in Australia is when it is borrowed from Bankers. When large amounts of money are borrowed and utilised within society, an illusion of prosperity appears. Thus, when "credit" is loaned out to borrowers, more wealth circulates within society giving the outward appearance of abundance. Of course when it comes to paying that money back, there is the question of usury or interest. As "credit" is borrowed out, interest accumulates at ever-increasing rates as we will soon see.

The transaction of borrowing money proceeds as thus:

The applicant applies to borrow X amount of dollars from a Banker. The Banker, by the stroke of his pen, issues the applicant the principal (the amount borrowed), i.e. "creates" the borrowed amount. This amount does not come from individual bank accounts. The Banker lends the applicant nothing tangible (i.e. gold, silver, paper or ink) on credit, they lend the applicant intangible CREDIT on credit!

Thus, the problem of limited supply is circumvented; the Bankers are lending noTHING which means they can go on lending forever. A highly profitable venture indeed.

To conceal the fraud of lending nothing, Bankers charge interest, whereby borrowers (of nothing) agree to return more imaginary "credit" than they borrowed.

The borrower whose original loan consisted of principal only, must also pay an extra amount that the Banker specifies (interest). Therefore, the new money never equals the new debt added. The amounts needed to pay the interest on the original loan is not "created", and therefore does not exist!

Under this insidious system, the new debt will always be larger than the new money; as more money is needed to pay back interest, less money becomes available. This whole system is particularly unjust when one realises that he/she is repaying intangible principle ("created" by the bank) as well as interest (which is conceived from the "created" principal!)

The above can be illustrated by the following:

The applicant borrows $60,000 to purchase a home, farm or business, and the Bank has the borrower agree to pay back the loan PLUS interest. At just 14%, the borrower must repay $710.92 per month for 30 years. The Bank obtains its "mortgage" over the property and the borrower receives a $60,000 cheque from the Bank which is credited to his/her bank account. The borrower then writes cheques to the builder, contractors, other institutions etc. These persons in turn write cheques. Some $60,000 of new cheque-book money has been added to the money supply.

However, the flaw with this usury system is this: the only new money created and injected into circulation is the principal of $60,000. The money required to pay the interest was NOT created and was not put into circulation.

In the above case, the borrower must earn and take out of circulation $255,931, almost $200,000 more than he put into circulation when he borrowed the original $60,000. Every new loan, big or small, puts this same process into operation. The borrower adds a small amount of money to the total supply of money and deducts more than quadruple the original sum (as in above example) to meet his "obligations".

Another example given below illustrates the year by year progression of a loan for $100,000 at 20% interest for 15 years. Take note that the borrower has repaid the principle after five years of payments! The borrower continues to pay the bank a total of $216,134 over the next ten years. (Table)

The inevitable outcome of this system is the diminishment of money in circulation to the point where a depression will be imminent. Money increasingly disappears into the Bankers coffers leaving less and less in circulation. Debtors struggle against each other, vying for new loans which will mean more "created" money and more interest. The banker accrues vast sums of real money and credit that he will gamble on the stockmarket, etc. The Banker will also accumulate all types of property assets, snatched from bankrupt farmers, businessmen etc.

The Banker who produces nothing of value, slowly, then more rapidly, gains a death grip over the land, buildings and labour of future generations. The borrowers have become the servants of the lenders and have placed themselves on the economic treadmill of debt.

Banks Always Prosper—Through the Bad and Good Times

Though millions of financial transactions are carried out every year, very little money actually changes hands. 95% of all "cash" transactions are done by cheque. The Banker is perfectly safe in "creating" the so-called "loan" by writing the cheque or deposit slip, not against real money, but against your promise to pay it back! The cost to the banker is stationary and wages.

The Greatest Swindle Ever!

"Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it all back again. However, take it away from them, and all the great fortunes like mine disappear, and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits"—Sir Josiah Stamp (President of the Bank of England in the 1920s, the second richest man in Britain).

Hidden under a veneer of respectability, integrity and competitiveness, the Banker awaits his next unsuspecting victim. The Banker is partaking in the biggest swindle of all time, and he knows it. The Banker's wealth, power and influence extends the world.

We are ruled by a capitalist Bank-owned Mammon that has usurped the mantle of government, and set about to pauperise and control the people. It is now a centralised power-hungry apparatus which promotes war, steals the people's wealth and uses every type of propaganda to keep its position.

The Banker realises that an under-educated, ignorant and confused population is easier to subvert than a healthy and intelligent people. The ruling Establishment therefore promotes all manner of degeneracy, decadence and corruption including drug use, sexual perversion and trivialities.

Through the use of high technologies, the Banker and his other plutocratic cohorts will have a most efficient and complete control over a nations finance and thus increased powers to amass even more wealth through their evil use of usury.

The future will give way to an even larger increase in financial transfers done not only by cheque but by computer transfers that the consumer/borrower will execute from ATMs (Automatic Teller Machines) and home computers. When 100% of all transactions are processed in this manner, the cashless society will have been reached—a Banker's paradise. The cashless society will be the ultimate instrument in social control; no more tax evasion, no more "extra money on the side", no existence outside the system.

So what can we do about this incredible rip-off? We can warn as many people as possible about this deceitful system and we can tell them not to participate AT ALL. The evil that lurks behind usury must not under any circumstance be supported or encouraged. When enough people realise this iniquity they will develop alternative methods of raising funds. They will come together in new community structures; independent from the old, decrepit worn-out Establishment.

For the love of money is the root of all evil; and the evil that exists at the base of materialistic societies will one day be rooted out and forever destroyed.

"Those who swallow down usury cannot arise except as one whom Satan has prostrated by his touch does rise. That is because they say, trading is only like usury; and Allah has allowed trading and forbidden usury. To whomsoever then the admonition has come from his Lord, then he desists, he shall have what is already passed, and his affairs is in the hands of Allah; and whoever returns to it—these are the inmates of the fire; they shall abide in it. . ."—From the Qur'an, Surah Al-Baqarah.

The following are extracts from Rev. Charles E. Coughlin's famous book Money! Questions and Answers. The title is self-explanatory as to the easy-to-read format of this wonderful book. The book is available from N.D.I.N.S, GPO Box 3126FF, Melbourne, 3001 for A$16 plus A$2 postage and handling.

When an individual borrows money from a bank, does the banker lend him money that other private individuals have brought to the bank?

No. That is what the bankers would like to have you believe, but it is not true.

How do banks create money out of nothing by mere book-keeping entries?

By the following manufacturing process:

  • John Jones, a business man, needs $10,000. He goes to the bank and explains the nature of the business he proposes to conduct. He takes to the bank certified figures indicating the value of his business, factory, farm, home, etc. If the banker is satisfied with the amount of real wealth to be pledged, he gives John Jones a note to sign. This note is a mortgage upon the wealth John Jones owns, and gives the banker legal power to confiscate the wealth, if John Jones does not pay at a specified time the number of dollars he is borrowing. The banker then manufactures the money on his ledgers.

How does he do this?

  • When the banker accepts John Jones' note, on the asset side of the ledger he writes: Assets Liabilities Loans and Discounts...............$10,000 On the liability side he writes: Deposits.......................................10,000 At that instant, there is $10,000 more money in existence and available for use than before the banker made these entries.

What does John Jones do with this bookkeeping money?

  • He goes back to his factory with a bank book, not with actual currency, showing a deposit to his account of $10,000.

What is the exact nature of the item on bank balance sheets called "Deposits"?

  • The "Deposits" are actually and legally nothing but liabilities of the bank. They are the money the bank owes, not what it has. A bank deposit is actually a bank's promise, nothing more.

What can John Jones do with this newly created deposit?

  • He can and does write cheques against this deposit to pay labourers, buy raw materials, and pay general overhead, incident to carrying on the manufacture and distribution of wealth.

How is this possible?

  • Other banks are doing the same thing at the same time. A bank against which cheques are drawn receives the proceeds of similarly manufactured deposits in other banks. Each bank receives cheques drawn on other banks which offset those drawn against it. They all have to work together. If there were only one bank the fraud would be soon discovered.

Is this process honest where John Jones pledges real wealth to secure the banker's fictitious bookkeeping money?

  • No, because it enables the banker to lend purchasing power (money) which costs him nothing but the general overhead of running a bank, and forces John pay interest for the existence of bankers' bookkeeping money, with which 95% is transacted.

When the banker manufactured $10,000 and loaned it to John Jones, who began to write cheques, exchanging that bookkeeping money for wealth and services, what happened to the price levels?

  • They were increased, because there was $10,000 more money in existence than there was prior to John Jones' loan. This new money came into existence, however, without a corresponding increase in the volume of goods and services, thus decreasing the unit value of money already outstanding. The value of outstanding money went down, which meant that the price level went up, i.e., the same amount of goods would then command more money. This principle is well recognised by all economists.
  • For example, if there are only $10,000 in existence in the egg market and only 10,000 eggs to be had we will say that each egg is worth $1.00. Now supposing that there are $20,000 in existence in the egg market and still only 10,000 eggs to be had. Each egg becomes worth $2.00. It is the old law of supply and demand. The double amount of money represents the demand. But the same quantity of eggs represents the supply. The egg merchants desirous of getting as much as they possibly can per egg will exhaust the supply of egg money.

When John Jones, the business man, is forced to pay his loan at the bank, what happens to the volume of money in the nation?

  • It is reduced by the number of dollars that John Jones pays.

What happens when a large number of business men are forced to pay their loans?

  • A large volume of the necessary medium of exchange is extinguished, i.e., cancelled out of existence.

What is a genuine loan?

  • In making a genuine loan the lender advances real money which represents a transfer of real purchasing power. Thus, if "A" earns $1000 working at the production and distribution of wealth, he may exchange that $1000 for wealth, or he may abstain from using or possessing wealth and lend his $1000 to another. If he lends his $1000 so acquired, he is a party to the making of a genuine loan.

Why are bankers as a rule opposed to the existence of genuine money and prefer the existence of so-called credit money?

  • If bankers are compelled to lend genuine money they are merely acting as agents for some real depositors and thereby are profiting only insofar as they are handling genuine money to the extent of the total amount of genuine money deposited with them. If bankers are privileged to lend credit money it means that they are not lending, as a rule, depositor's genuine money but are lending ten or fifteen or twenty times the amount of genuine deposits. They create credit money or fictitious money by a flourish of the fountain pen. Thus instead of lending only actually, for example, a million dollars of total deposits at 3% with the return of $30,000 profit the bankers are lending under the credit money racket, for example $20 million, $19 million of which is fiction. In this latter case their profit would be approximately $600,000.
  • Therefore, bankers are opposed to honest money and to honest lending because of the difference of profits which in the case above would amount to approximately $570,000.

But why should citizens be opposed to bankers making this extra profit?

  • Because this extra $570,000 must be taken out of the sweat of the labourer. It is a social injustice which permits privileged classes to reap where they did not sow.

>Do fundamental, Christian, moral, ethical and philosophical principles harmonise with private ownership of property employed in or available for use in producing wealth?

  • Yes. Private ownership of honestly acquired property, employed in production is in full harmony with Christian principles.

Is capitalism, as we find it in operation today, in perfect harmony with Christian, moral, ethical and philosophical principles?

  • Emphatically, no. Masquerading under the title of capitalism, modern capitalism is notorious for the following errors which are contrary to human nature and to good government.
  • 1. Modern capitalism borrows money at interest for non-productive and destructive purposes.
  • 2. Modern capitalism, while professing in the belief in private ownership, concentrates the wealth in the hands of a few and deprives the mass of private individuals from owning the tools of production.
  • 3. Modern capitalism professes to believe in the private coinage and regulation of money...

Does social justice imply that its followers adhere to the doctrine of modern capitalism?

No. In the four above mentioned errors of modern capitalism, social justice is opposed to this economic system.

Did Karl Marx ever attack private money creation privileges and international bankers?

No, his whole system proposed not the abolition of illicit private money creation and destruction powers, but its consolidation under a system of complete economic, political and religious domination of the entire world by a few internationalists.

Do all people have equal opportunity under our present money system? No, they do not.

"They say to us that we all have an equal opportunity, and that it is our fault that we do not become rich. They seek, however, in every way possible, to prevent us from taking the only opportunity we have to all become successful for they know that if we did, it would end their exploits." (From "Why is Your Country at War" by Charles A. Lindbergh, Sr. in a speech urging the passage of a bill to provide a honest money system.)

Why is it that the modern newspaper (free press) upholds modern capitalists?

Because the modern newspaper, in many instances, is owned or controlled by the banker or the banker dominated advertiser who insists that the editorial matter in a modern newspaper does not militate against the interests of the modern capitalist.

Is usury opposed to morality?

Yes, and it is also opposed to Christian teaching.

(Article from New Dawn magazine—a magazine exposing consensus reality, and publishing suppressed information. Sample copy for A$5 can be obtained from: GPO Box 3126FF, Melbourne, 3001, AUSTRALIA).
.../Next Page
  'The Lie,' Usury, and Spiritual Discernment
  .../Back to Contents