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Shabbat Parashat Shoftim| 5764

Ask the Rabbi

Question: What is the rationale for buying Israel Bonds, when it seems to be in clear violation of the prohibition to take interest (ribit)from a fellow Jew?
Answer: The answer begins with an understanding of the mechanism of the loan process and its effect on the laws of ribit. The Torah talks about one who lends with interest extracting the now increased sum of money from the borrower. There are several recent poskim who view the nature of the obligation of the borrower to pay as critical for the existence of the prohibition of ribit and find this element missing in some modern financial applications.
 The main application is in regard to the modern concept of a corporation. One of the main characteristics of the corporation is that its owners have no personal liability. In other words, as large as the corporation’s debt is, no one can approach even the principle shareholder and demand payment from his personal money. Rather, only the money of the amorphous entity, known as the corporation, can be taken. In other words, only those resources that its shareholders have already “put in the pot” can be touched. Several poskim, most well known among them being Rav Moshe Feinstein (Igrot Moshe YD II, 62-63), ruled that it is, therefore, permitted to take even fixed interest (ribbit ketzutza) from corporations, even those owned primarily by Jews. (See a list of opinions on both sides of the issue in Brit Yehuda 7:(66). Note that the leniency does not apply to paying interest to a Jewish owned corporation.) The same basic logic applies to a government, which obligates itself as an amorphous institution and does not create personal liability for its citizens.
 Not all poskim accept the corporation leniency (or accept it only on the Torah level, not on the rabbinic level (ibid.)) and, therefore, it is preferable to broaden the grounds for leniency in regard to the Israeli government. One distinction is that the shareholders of a corporation are clearly defined. In contrast, the citizens and/or active inhabitants of a country are a fluid group. What is the status of a person who moves to or from the country between the time of the selling of the bond and its payment? Can a citizen cash in on his share of the country’s wealth before leaving it? While one could argue the legal distinctions, the situation resembles that which the Rashba calls “money without known owners” (see Chelkat Ya’akov YD 66). Har Tzvi (YD 126) is lenient for this basic reason on loans from a government bank.
 There are additional grounds for leniency (see Torat Ribbit 17:(59),(89)), especially in regard to citizens of Israel who buy its bonds in shekels, as the government has regulatory powers in regard to its currency.
 Despite the fact that we have already presented enough grounds for at least entertaining permitting unrestricted purchase of Israel Bonds, the Israeli government wisely drew up a heter iska for its various financial dealings. Without getting into all of the details of its mechanism [we have on file a series of articles on the matter from our P’ninat Mishpat section], the heter iska is a widely used document, which turns what would have been a loan into a joint investment of the two parties. While some applications of the heter iska are logically questionable, the minhag ha’olam (including of most who are otherwise “machmirim”) is very lenient on the matter.
 In summary, there is very ample reason to allow taking interest from Israel Bonds. Considering the great mitzva of helping build and sustain Eretz Yisrael in Jewish hands (see Gittin 8b) and helping in the many security and humanitarian needs of its population, especially these days, it would be inappropriate to take a fringe stringent opinion to disallow such a practice.
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This edition of  Hemdat Yamim
 is dedicated to the memory of
R’ Meir ben Yechezkel Shraga Brachfeld o.b.m.

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