Purgatory was caught in the middle. Luther himself had at first still accepted it, but came to reject it, and Calvin and others rejected it too, arguing that it had no basis in Scripture and was tangled up with abuses.
And there were abuses. The Church knew it. In some places indulgences had become mixed up with money, and some preachers made reckless promises about shortening the time of the dead. Trent's job was twofold: to defend the doctrine and to clean up the corruption that had grown around it.
The debt that may remain
In the Decree on Justification (1547), the council taught that even after a sinner's guilt has been forgiven, a debt of temporal punishment may remain, to be paid either in this world or in Purgatory before the gates of Heaven are opened. It condemned the opposite view, that every repentant sinner's whole debt is erased the moment of forgiveness. You can see the same reasoning in the Catechism's section on the double consequence of sin, which we looked at above.
The decree on Purgatory
In December 1563, near the end of its work, the council issued a short Decree on Purgatory. In summary, it declared that there is a Purgatory, that the souls detained there are helped by the prayers of the faithful and above all by the sacrifice of the altar, and that bishops must see to it that sound teaching on the matter, handed down from the Fathers and earlier councils, is believed, held, taught and preached everywhere.
The part people forget
The second half of that decree is rarely quoted, and it may be the wisest part. Trent told the bishops to keep out of popular preaching the "difficult and subtle questions" that don't build up faith, along with anything uncertain, and anything that tends toward curiosity, superstition or what the council calls filthy lucre, the pursuit of base gain. Such things, it said, were to be forbidden as scandals and stumbling blocks.
A separate decree on indulgences the next day affirmed that the Church has the power to grant them, that they're useful for the faithful, and that they should be used with moderation. It also called for the abolition of base gain connected with them. In a single stroke, the Church defended the teaching and warned against both speculating about it and profiting from it.
That's a good lesson in how the Church treats this doctrine. Firm on the substance. Suspicious of embroidery.
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