Ribis: A Halachic Anthology
Rabbi Joseph Stern
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PART II
Exemptions from the Ribis Laws
The following sections consider some of the categories that
may be exempt from the Ribis prohibition.
A. Deal consummated through a broker
The medieval commentator Mordechai, quoting Rashi,
permits Ribis if the loan was conducted through an intermediary.
Although Ramo cites this opinion, most authorities disagree
with Rashi's assertion, and at the most, consider the use of a
broker when other mitigating factors exist (i.e. Ribis is being
charged on behalf of a charitable institution). They opine that
under no circumstances should a usurious deal be sanctioned
merely by virtue of a broker's presence.
B. A Partnership
Virtually all authorities agree that the Ribis provisions apply
to a partnership as well as a single proprietor.
The
stipulates that any funds obtained on behalf of a
partnership from a non-Jew (subject to interest payments) must be
borrowed by all partners equally. (For example, if an IOU note is
utilized, it must be signed by all.) He reasons that if only one
partner were to negotiate directly with one Gentile, he would not
be permitted to invest the borrowed funds in the business. In
effect, the Gentile intended to lend money to only one Jew. For this
Jew to now share the money with his partners, would be
tantamount to a Jew's lending another Jew money while charging
Ribis.
Corporations - Banks
With the emergence of a Jewish State and financial
intermediaries operated by Jews, questions arose as to the
permissibility of these institutions' imposing interest on loans and
paying any interest to depositors: The larger implications of the
question were if commercial banks in Eretz Israel (or Jewish-owned
banks in the Diaspora) may operate in a manner similar to their
counterparts worldwide, or if a Heter Iska were necessary for every
transaction.
Almost a century before the establishment of the State of
Israel, Rav Shlomo Ganzfrieds (author of the Popular Kitzur
Shulchan Aruch) and the author of
Rav Nathanson,
debated the merits of this issue, the former prohibiting not only
Ribis levied by a Jewish bank but even depositing funds in any
financial institution with Jewish stockholders, while the latter
strongly disagreed (invoking such Talmudic principles as "Rov"
and "Breira"), urging Rav Ganzfried to retract and in future
editions of the Kitzur to delete his decision. However, both
authorities seemingly agreed that a bank wholly owned by Jews
would be subject to the Ribis laws.
However, Some contemporaries of these scholars most notably
the Maharam Schick and Rav Shlomo Greenfeld
considered a bank's unique status as a corporation; its owners are
not personally liable for any debts incurred on their part. Thus any
Ribis would not pass from creditor to debtor, but rather from a
lifeless entity to real people. This unique state they perceived as a
mitigating, but not totally exonerating, factor They allow a
corporation to collect
(Ribis that is of rabbinic origin) or
permits Ribis if the organization is also a charity or acting on
behalf of an estate.
Proponents of the unique halachic status of a corporation cite
an interesting argument of the Talmud. The Gemara allows a
farmer to advance a Kohen or Levi money and then collect the loan
by withholding the tithe
that they would ordinarily have been entitled to. According to Rav Greenfield's
interpretation of the Gemara, the case involves granting an advance
in exchange for a guaranteed price on commodities, a rabbinic
prohibition of Ribis. Yet, it is permitted on the basis
.
Since if the farmer experienced such
a calamitous harvest that no produce was harvested he needn't give
that tithe; even if he can tithe, he is not subject to the Ribis laws.
He argues that a corporation is analogous to the above situation;
the Ribis prohibition only applies in case of a personal obligation to
pay, ,
not where the corporation's liability is limited to
its business assets. Modern authorities, notably the Minchas
Yitzchak, dispute the
analysis of the law and stress that even according to him only an
of Ribis may be
suspended for a corporation.
Modern responsa dealing with the corporate status in the eyes
of halacha (a topic with ramifications for other areas of Jewish life
as well, especially Sabbath observance and
),
frequently cite the insight of the renowned Talmudic exegetist Rav
Yosef Rosen (Rogatchover Rav). He notes that a Tzibbur
(corporate entity) has historically been treated differently than a
syndicate of individuals, no matter how numerous. For example,
S'micha (laying of hands on a sacrifice prior to slaughter) and
T'murah (transference of the sacrificial status of one entity to
another) apply only to individuals and not to corporations.
However, the Minchas Yitzchak disputes this assertion and
maintains that a bank may not collect or pay out interest without
benefit of a Heter Iska. He reasons that if individuals retain their
statutory rights in a corporate entity (e.g. one is permitted to sell or
to bequeath a reserved place in a Shul), surely a Tzibbur never
loses its own very personal identity. He notes that a Synagogue
congregation conducts the search for Chometz and that it may
not pay interest. Evidently corporations are considered as
individuals in the eyes of halacha. Rav Pesach Tzvi Frank suggests
that although state-owned bank may be exempt from Ribis
problems, a privately owned bank is certainly not.
Other authorities (notably the Darchei Teshuva and Rav
Yosef Henkin) justify borrowing money from a Jewish bank
despite any interest charges. They argue that Ribis can be
construed as a fee to help defray the bank's administrative
expenses incurring from the loan. Despite the lively theoretical
controversy concerning the status of banks and corporations in
practice, few if any authorities permit these institutions to charge
Ribis, without obtaining a Heter Iska.
D. Charitable Institutions; Estates
In the interests of benefiting philanthrophic institutions and
of protecting the rights of heirs not legally competent (generally
children), our Rabbis permitted estates and Zedaka
organizations to lend money and charge interest if the infraction is
mid'rabbanan (of rabbinic origin). Under no circumstances may
these institutions engage in deals involving Ribis d'oraitha
(prohibited by the Torah) even if the deal is arranged with a
broker's assistance.
E. State of Israel Bonds
One of the most popular and efficacious means of financing
the State of Israel's burgeoning needs is the sale of bonds. Is a
Heter Iska required for every transaction? Rav Pinchas Teitz,
writing in Hapardes some 30 years ago, rationalizes the practice
of selling Israeli bonds without a Heter Iska on the basis that Ribis
implies a known creditor and debtor. Here, however, one cannot
identify the individuals backing the bonds. Nor at the time of the
transaction does the lender know the debtor's identity.
Furthermore, it could be argued that all bonds are sold through a
broker, invoking Rashi's opinion that
is not
prohibited. He also raises the corporate status of the Jewish State,
the fact that the Ribis involved in each bond is less than a Perutah
(the halachic equivalent of a penny) per citizen of Israel, and
interestingly enough, the argument that Arabs are also issuers of
Israeli bonds, thus involving a non-Jewish partner in the
transaction. However, a respondent in the periodical Hamaor
(Jubilee Volume) strongly disputes Rav Teitz's assertion and
requires a Heter Iska for bonds.
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