This quote taken from the Mishpatim portion of the Book of Exodus (chapter 22, verse 24), has been the mantra of Jewish Free Loans dating from biblical days through the arrival of the Jews to America in 1654. Free loans meet Maimonides standard for the highest form of tzedakah, because they promote rehabilitation of the poor; allowing them to maintain both their self-respect and their independence, which helps to preserve their dignity.

Jewish communities in Europe established benevolent societies dedicated to loaning money to the poor without interest. When many of those family members immigrated to the United States they continued this noble goal of assisting poor, industrious workers to achieve self-sufficiency, the basis for success.

In 1654, Peter Stuyvesant, Governor General of then New Amsterdam – now New York – allowed 30 some Jews from Brazil to enter only on the condition that they not be a drain on the community. The Jews established what for that time was the equivalent to today’s Hebrew Free Loan; the first evidence in North America of the kinds of chevra that exist today. Today, many are called Jewish Free Loans, but others around the country are still referred to as Hebrew Free Loans.

With the coming of east European Jewish immigrants late in the 19th century, the problem of how to provide needed economic assistance without the stigma of charity became critical. Within three years, more than 800 people were served. Three features of this New York model of the Hebrew Free Loan show how values based on teachings of the torah shaped the institution.

The first of these features was that loans were made to any Jews regardless of their personal background. All Jews who could provide worthy guarantors were welcome to apply. Secondly, the society worked quickly getting the check written as soon as the guarantors were judged credit worthy. There were no intensive family background and character checks. Thirdly, remembering Maimonides laws of tzedakah, a premium was placed on making sure each transaction was confidential.

Thanks to these high standards, the Hebrew Free Loan Society of New York and its many imitators around the country achieved extraordinary success. In a 10-year old study it was maintained that one out of every 25 Jewish families in New York was at sometime or other a direct beneficiary of the Jewish Free Loan Society’s services. In its first 46 years of operation it made 617,000 loans. That translated into a total of $29.5 million lent out interest free – all with a default rate that was less than one half percent.

In the early part of the century, most loans were to pay bills, to get people employed, assist in business start-ups, get immigrants here and help them get established. Many of our grandparents and great grandparents were among those who were helped. In addition, free loans became increasingly important institutions for Jewish women. Often, these loans were the only forms of credit available to women who sought to go into business for themselves. In Toledo, Ohio in 1908, a woman became president of the Jewish Free Loan there – she was Pauline Steinem, the grandmother of the noted Jewish feminist, Gloria Steinem.

As we learn in Maimonides ladder of tzedakah, a loan is emphasized as preferable to giving money as it states, “greater is the one who lends that he who gives and greater still is he who lends and with the loan helps the individual in need to help himself.” Our tradition recognized that an outright gift, no matter how well intended, still might evoke a feeling of inferiority by the receiver. A loan, however, is a transaction of equals.