Case LX: Commerce Forbidden to the Clergy

(1) Are the clergy allowed to speculate on the rise and fall of shares?

(2) Are they altogether forbidden to have anything to do with business on the stock exchange?

(3) If they have in their possession shares that stand at a high price, may they not sell them and buy others at a lower price, and so make a profit?

According to Canon Law a cleric is forbidden to have anything to do with any negotiatio quaes tuosa (as opposed to negotia oeconomica).

By a negotiatio quaestuosa is understood any business in which things are bought and sold again for profit, either in the same condition or altered by the hired labor of others. A priest may therefore sell for profit things that he possesses or has bought for his own use, even if they are not superfluous. He also may buy things, and sell them for profit, after they have been altered or improved, provided the whole transaction is not unbefitting to one in his position. But he must not employ others to alter and improve the things before selling them for a higher price than that at which he bought them, because then he would be carrying on a business by means of others.

This prohibition applies to all who have received major orders, to all holding benefices, even if they have not received major orders, and to all regulars. It is a binding rule, but admits of trivial exceptions, so that certainly only a venial sin is committed if only little business transactions take place, with objects of small value. It is not a grievous sin if some more important business is transacted once, or even now and then. Whether the clergy are allowed to take part in joint-stock companies or in stockexchange business, has been frequently discussed.

(1) It is certainly permissible to buy bonds issued by state or town, and to take interest upon them, for this is simply investing money at interest.

(2) It is certainly permissible to take bonds of joint-stock companies, because, in this case also, it is equivalent to lending money at interest. If the company exists for some bad object the question will arise as to whether it is right to cooperate with it.

(3) It is a very debated point whether the clergy may take shares in a joint-stock company. Many regard it as altogether inadmissible for the clergy to take shares, because thus they take part in a money-making business. Others distinguish between industrial undertakings and trading companies; they think it wrong for the clergy to take shares in the latter, but they consider it permissible for them to take shares in industrial companies, such as mining, railways, and tramways. A double difficulty is very apt to occur in the case of many industrial undertakings, (a) that in them a man carries on a business through some one else, and (b) that these undertakings may generally be regarded as trading companies. Wernz, for instance (III. n. 219), considers a watch factory to be a trading company. On this there are several decisions of the S. C. Off. to be taken into account. According to a decree dated November 17, 1875, it is permitted for the clergy to buy shares in railway and other similar companies (this probably includes trolley lines, steamship and canal companies). A decision dated April 1, 1857, had authorized Bishops to give such permission " de propria persona tantum "; but of course it was not intended that endowments could be applied to such purposes, or that the clergy should borrow money in order to take shares. As to bank shares, a decision of April 15, 1885, states:... "ecclesiastical persons are not to be disturbed if they buy shares or securities of a bank, provided they are prepared to obey the commands of the Holy See and abstain from every management of those shares or securities, and especially from every act called stock-exchange gambling." A priest may therefore hold shares in a bank, but he may not take any part in the management, or attend general meetings. A difficulty is likely to arise herefrom the fact that many banks are connected with stock-exchange speculations and other forbidden proceedings.

It is permissible to take shares in an insurance company, provided that they do not serve any bad purpose. The clergy may also take shares in a company formed to build a Catholic clubhouse or to start a Catholic paper, as in such cases the object of the company is not to make money, but to promote some good end.

(4) Gambling on the stock exchange is forbidden to the clergy, as appears from what has already been said. Therefore to buy bonds and sell them, speculating on their rising or falling in value, especially in time bargains and such matters, in order to make a profit, is negotiatio quaestuosa, and therefore forbidden.

In answer to the questions submitted to us, we may reply: (1) The clergy are not allowed to carry on any speculations in shares, in the sense just stated, because they are stock-exchange speculations.

(2) It is not stock-exchange business, but stock-exchange speculation, that is forbidden. (3) The clergy may certainly sell shares that stand at a high price and buy others of lower value with a view to making a profit; or they may buy shares that stand low, in hopes of their rising in value. This does not amount to speculation. The clergy, however, are advised to make only safe investments, in order not to lose their own savings, and not to risk money derived from church property, which ought to be applied to good purposes.— Dr. Goepfert.