Bava Metzia 68a — the Talmud in English

Even so,

the Merciful One said, ![](pamud.bmp "

Exact page position")

ka parik lah

he redeems it from consecration,

for four zuz.

That is, a sela, because the redeemer enters into uncertainty: perhaps there will be produce in it, perhaps there will not be produce in it.

Here too,

with a mortgage with a deduction,

it is no different.

And when the lender enters into uncertainty—that even if the field is stricken and there is no produce in it, he deducts from the debt for him—this is permitted, because this does not appear to be interest. For from the redemption of an ancestral field we see that this is the way of a purchase: they reduce much from the value because of the uncertainty. Therefore, even when he deducts for him much less than the market value of the produce, the matter appears to be reduced because of the uncertainty, and not because of the loan.

And one who forbids will say to you:

The reason that I do not learn from an ancestral field to permit it is that

an ancestral field is consecrated property, and the Merciful One established it,

the Torah established this low amount

, for redemption.

And since this is redemption, any redemption suffices, and one cannot learn from this that this is the way of a purchase.

But

here, it is a loan, and it appears as interest,

since he eats produce exceeding the amount of the loan.

Rav Ashi said: The elders

of the city

Mata Meḥasya told me: An ordinary mortgage

that is, in a place where the borrower may redeem it, but they did not specify from when he may redeem it, the lender has the right to hold it and eat its produce

for a year,

one year.

What is the practical difference? —

If he eats it

the lender

for a year, the borrower is able

to

redeem it from him.

But if he does not

eat for a year,

he is not able to redeem it from him.

Even if it was customary to redeem it also during the first year. But if they specified that he could redeem it during the first year, he may redeem it.

And Rav Ashi said: The elders of Mata Meḥasya told me: What

word is the meaning of

“mortgage”? —

For it is neighbored with him.

That is, since he dwells in the courtyard mortgaged to him, the matter is considered a complete “neighborhood,” for you have no neighbor like him.

What is the practical difference? —

For the law of the adjoining neighbor.

The “law of the adjoining neighbor” is as follows:

If Reuven wishes to sell his field, and Shimon has a field adjacent to the boundary of Reuven’s field, Shimon precedes everyone else, and he has the right of precedence to purchase the field from Reuven. But if the borrower wishes to sell the mortgaged courtyard, and adjacent to his courtyard there is another person’s courtyard, the lender is considered the closest neighbor, and he precedes the adjoining neighbor because the entire “neighborhood” is in his possession, and he is considered an adjoining neighbor from all four directions.

Rava said: The halakha is neither like the promissory notes of the Papponians, nor like the promissory notes of the Meḥozans, nor like the leases of the Narashans.

And the Gemara explains Rava’s words.

Like the promissory notes of the Papponians,

that is,

like the promissory notes of Rav Pappa,

who said above, on page 65a: “My deferred-sale arrangement is permitted.”

The promissory notes of the Meḥozans

of the people of the city of Meḥoza—were written in the following manner:

They added the profit to the principal and wrote it for him in the document.

That is, when they gave merchandise to a merchant in order that he sell it for half the profit—meaning that half the profit would be his and half would belong to the owner of the merchandise, and this is called by the Sages an iska, and they gave him the wage of an idle laborer, as explained in the following Mishna—they would not write in the iska document the value of the principal that the merchant received and the agreement of the iska. Rather, they assessed how much profit there should be, and wrote in the iska document the total of the principal and half the profit as one amount. For example, if the principal was one hundred and half the profit was ten, they wrote in the document: “So-and-so owes so-and-so one hundred and ten on account of the iska. And the halakha is not like them, and it is forbidden to do so.

And the reason that it is forbidden to do so is that

who can say that there was profit,

and if there is no profit, it follows that he takes from him the additional ten above the principal because he lent him money, and this is interest.

Mar bar Ameimar said to Rav Ashi: My father,

Ameimar,

would do this:

he would write in the iska document the value of the principal and half the profit,

and when they came before him

the merchants, and said to him, “There was no profit,”

he believed them.

He said to him: That is satisfactory where he is present

at the time of repayment, for he will believe the merchants and there is no concern of a prohibition.

But what will happen

if he dies,

if he dies,

and the document falls before the orphans—what then!?

For his orphans, who inherit the iska document, will collect from the merchants everything written in the document; and it is forbidden for your father to do so, because perhaps he will die and his sons will come to a prohibition.

It was like “an inadvertent saying that issues from before the ruler,” and his soul departed,

his soul departed,

of Ameimar.

And concerning what Rava said, “and not like the

leases of the Narashans”

a lease is when one receives a field from his fellow for ten kor of grain per year, whether the field produces much or produces little; “Narashans” means poor people, who would lease out fields to the poor.

That is,

who wrote thus

in the lease document:

“So-and-so mortgaged his field to so-and-so, and afterward leased it from him.”

That is, they would lend money to poor people, take the poor people’s fields as a pledge, and then lease them back to them for such-and-such kor of grain per year.

And the reason that this is forbidden is that

when did the acquisition take place?

When did the lender truly acquire it from them as a pledge, so that he could say

“for I acquired it for him”

for the owners by way of a lease? Since there is no lease here, it follows that the produce that the borrower would give the lender each year is interest.

And nowadays, when they write thus: “We acquired it from him”

the field by way of a pledge,

“and we remained there for several periods of time”

years—in the lender’s possession, and he worked the field and ate its produce with a deduction,

“and afterward he leased it”

the borrower, who is the owner,

“it is acceptable,”

and even in this it would have been proper to forbid it rabbinically, but they were lenient

so that you should not lock the door before borrowers.

But it is not a matter!

For even if the field remained in the lender’s possession for three years by way of a pledge, it is forbidden for him afterward to lease it to the borrower.

Introduction to the Law "

iska":

The Sages instituted that a person who receives money from his fellow for the purpose of an iska—that is, he receives the money in order to conduct a business with it, and he and the giver of the money will divide the profits—may do this without there being a concern of interest, if the iska is conducted in the manner established by the Sages: that the entire iska is built on the foundation of “half a loan and half a deposit,” as will be explained.

The institution was that the recipient of the iska receives the money from the giver of the iska in such a manner that the recipient is responsible for half of the money as though it were a loan in his possession. In every matter, the recipient is obligated to return half of the money to the lender, and he has no claim of exemption on account of an unavoidable accident, a decrease in the price of the merchandise, or the like.

Whereas the second half of the money is in his possession as a deposit, so that if the business is lost on account of an unavoidable accident, or the merchandise decreases in value, he bears no responsibility for this half; rather, the entire loss is charged to the account of the giver of the money.

According to this institution, since half of the principal is given to the person conducting the business as a loan, for he is liable for accidents affecting half of the money that he received, the profits that come from this half indeed belong to him, like all the profits of his money, and there is no interest in this.

Whereas the other half of the principal, since it is given into his possession as a deposit, the profits of the half that is a deposit belong to the giver, for they are profits from his money.

The recipient of the iska must receive payment for his effort on account of his involvement with the half that is a deposit, because if he engages in the deposit portion without payment, it turns out that he is exerting himself in it on account of the loan that he received, and there is interest here.

Therefore, the giver of the iska must pay the person conducting it wages for his effort with the deposit portion [which, as stated, belongs to the giver of the iska].

These wages may be paid in two ways:

The first: to pay him wages for his work each day, like a hired laborer.

The second: to pay him general wages for all the days of the partnership, by giving the person conducting the business more than half of the profits.

Or the giver may accept upon himself more than half of the responsibility, and the person conducting the business will bear responsibility for less than half, because reducing the extent of the responsibility is also considered payment.

Likewise, there are circumstances in which it is sufficient to give a small payment, such as only one dinar, for all the effort in the iska.

According to Rambam, this may be done if he fixed this amount as his wages in advance, before the beginning of the business.

But according to Rif, wages of one dinar are sufficient specifically when the person conducting the business has other animals, which he would in any event be attending to, and he has no additional effort in tending additional animals.

Engaging in the deposit portion without receiving payment is, in its plain sense, not a prohibition from the Torah, as Tosafot explicitly wrote below, 70b, s.v. “ein”: that the prohibition against giving produce to a shopkeeper so that he will deal with it for half the profits without receiving payment for his effort is only on account of rabbinic interest.

And even though the money is in the possession of the person conducting the business as a loan, and when the person conducting the business adds effort for him gratis, it should be examined why this is not interest from the Torah, there are several reasons for this.

A. According to the words of Rava below [104b], that the person conducting the business has no permission to spend the money on his personal expenses, but only for the iska, if so, this is not a complete loan in his possession. For every loan is given for expenditure, for all the needs of the borrower; and this person, who did not receive the money for all his needs, does not have the status of a complete loan.

B. If we consider all the money of the iska as one giving, the person conducting the business accepted responsibility upon himself only for half, whereas a complete loan exists only when one accepted all the responsibility upon himself.

C. Even if we consider the half of the money in his possession as a complete loan, nevertheless, the addition that he gives him upon the loan through his effort is not complete interest from the Torah, since the person conducting the business exerts himself also for himself in the half that is a loan, and the additional effort that he exerts in the deposit portion is not considered a complete giving that would be considered interest.

The heter iska customary today derives from the law of the above iska. For when a person deposits his money in a bank [that has a heter iska] and receives interest, or borrows from the bank and pays interest, the money deposited by him becomes, in part, a deposit under the responsibility of the depositor, and the profits of this portion belong to the depositor; and half of it becomes a loan under the responsibility of the bank, and the profits from this half belong to the bank.

The payment of the interest is the profits of the deposit. However, the bank or the borrower is not trusted regarding the deposit portion to claim that it was lost through an unavoidable accident, except in certain circumstances; therefore, in practice, the borrower remains responsible.

Mishna:

One may not establish a shopkeeper,

a person who has money to invest in a business may not say to a shopkeeper [who is a person who sells small quantities of produce in a shop to every person, at a price that is higher than the market price, at which large quantities are sold at a low price]: Take for yourself a large quantity of produce sold cheaply in the market, and sell it in the shop at a high price,

for half the profits,

so that we will divide the profits of the iska: half for me, since I give you the money to engage in it, and half for you, for your engaging in the money as a shopkeeper; and I will not give you wages for your work.

Since an ordinary person who gives money to his fellow in order that he engage in it with the intention of dividing the profits gives it on the understanding that the recipient of the iska will be responsible for half the principal, both with regard to unavoidable accidents and with regard to a decrease in its price,

therefore, the half of the principal from which the shopkeeper earns his share of the profits of the iska, since he is liable for it, is thus a loan. Whereas the other portion of the principal, from which the giver of the iska earns, is in his possession as a deposit. Therefore, it is forbidden for the person conducting the business to exert himself gratis in the deposit portion, so that his effort in the deposit portion will not be payment for the portion of the loan that he received.

And he may not give money with which to purchase produce.

The same law applies: it is forbidden to give a person money so that he himself will take the trouble to buy produce cheaply in the market and sell it expensively in the shop,

for half the profits,

in order to divide the profits.

Unless

the householder

gives him,

the person conducting the business, payment of

his wages,

for his involvement with the portion belonging to the giver,

like a hired laborer.

It will be explained in the Gemara what kind of hired laborer is being referred to.

And since he pays him wages for his work with the deposit portion, this iska is now permitted, for he is not working with the deposit portion as payment for the loan that he received.

And likewise,

one may not establish chickens for half the profits.

It is forbidden for a person to conduct an iska in such a manner that he gives another person eggs, so that the latter will have a hen sit on them and raise chicks from the eggs, and they will divide the profits.

And the iska is conducted in such a manner that they appraise the value of the eggs, and the recipient of the iska undertakes responsibility for half the value of the eggs, both in the event of an unavoidable accident and in the event of a decrease in value; and the profit represented by the difference between the price of eggs and the price of chicks will be divided between them.

And one may not appraise calves and foals for half the profits.

One may not appraise how much calves are worth now, with the person conducting the business accepting half the responsibility upon himself, and, when they profit, divide it between them .

Unless he gives him wages for his effort,

for what he expends in taking them out and bringing them in,

and its food

that he feeds them .

But one may receive calves and foals for half the profits,

as an iska, without appraising them at the time he receives them, how much they are worth, and without their responsibility being upon the recipient , but they divide only the profits between them as payment for his engaging in them. For in this manner there is no loan here at all, since the person conducting the business did not accept any responsibility upon himself, and there is no place here for the prohibition of interest.

And they raise them until they are triple-grown,

so that the calves and foals reach one-third of the growth of an ox, or one-third of the growth of a horse, and then they divide them between themselves .

And a donkey—

until it bears a load.

The person conducting the business must raise the donkey until it can bear a burden, and then they divide it.

Gemara:

A tanna taught: Like an idle laborer.

That is, what we learned in the Mishna, that he must be paid like a hired laborer, its measure is according to what a person would wish to receive as a small wage for sitting idle from labor, instead of working and earning much from labor.

And we raise an objection:

What is “like an idle laborer”?

Is the person conducting the business not idle, but rather exerting himself to sell the produce? He should be paid according to his work.