Chapter VII — On the just price of things, and on its increase on account of deferred payment

I. The just price is twofold. One legitimate, fixed by the prince's law; and this is individual, excluding any increase or decrease. The other natural, which according to right reason, all things regarded, is reckoned just, and is called the common price. This admits three degrees: lowest, middle, highest. From the judgment of prudent men and from common usage the justice of the price is to be sought. When the middle price of some cheap ware is 5, the lowest will be 4, the highest 6. If the middle price of a precious thing be 100, the lowest will be 95 and the highest 105, and thus the latitude will be 10. When a legitimate price is not predetermined, wares ought to be sold at the natural and common price.

II. QUESTION I. Are those who increase or diminish the price of things liable to restitution? ANSWER. He who by fraud increases the price deceives his neighbour. Even if, fraud being excluded, he increase the price beyond what is just, or buy a thing more cheaply than it is worth, he sins against justice. While the seller suffers no loss on account of the sale of the thing, although the buyer perceive a great advantage from the purchase, it is not therefore lawful to increase the price, as St. Thomas teaches, II-II, q. 77, art. 1. He who testifies that he sells a ware at the lowest or the middle price cannot deceive the buyer by accepting the highest. Otherwise he sins, and is held to restitution. Besides, a merchant swears that the ware stands him at so much: and this is false. A buyer swears that he could have bought for so much: which likewise is false. The Salmanticenses, tract 14, chapter 2, point 9, § 1, teach that these indeed sin the sin of lying or perjury, but not against justice: because, they say, these are the common lies of sellers and buyers, and men commonly know that these are the stratagems of traders, to whom they give no credence; and if they incautiously give them credence, let them impute it to themselves, since they are easy of belief. Are these things common between sellers and buyers? Are men therefore to impute it to themselves if they are easy of belief? Is this Gospel theology? Injustice is defended by the multitude and usage of sinners. The doctrine recounted is false, and these liars and perjurers are liable to restitution.

III. QUESTION II. Are there any causes for which it is lawful either to sell for more or to buy for less than the ware absolutely is worth? ANSWER. When the sale brings loss to the seller, then the price can be increased, that the loss may be repaired. For the just price is not fixed by comparison to the ware absolutely regarded, but as clothed with circumstances. Further, the inconvenience which the seller suffers, and the utility of which he is deprived, are appraisable at a price, and fall under the seller's dominion. Therefore they are just causes of increasing the price — when nevertheless the buyer solicits and urges the seller to part with the ware; but not if the seller himself offer the ware unasked: for in this case the seller himself spontaneously undergoes the loss, if he suffer any. The mere affection of the seller toward the ware is not absolutely a just cause of increasing the price. Since this affection brings no advantage to the buyer. If the affection be reasonable, as if the ware be adorned with some prerogatives, and the seller suffer loss, then for the repairing of this loss the price can moderately be increased. Often sellers consult their own advantage with the advantage and utility of the buyer. But the buyer's convenience is not commonly a just cause of increasing the price, as the true opinion teaches. Can precious gems, statues, and paintings be sold and bought at any price whatsoever? Many theologians affirm it. But the more probable opinion teaches that these wares also have a price, and that it ought to be determined by the judgment of prudent and expert men.

IV. QUESTION III. Can those things which are exposed for sale at auction be bought or sold at any price whatsoever, whether the highest or a cheap one? ANSWER. Wares of this kind can be sold at whatever price a convention be made between the parties. Since the public power, which instituted this market, at the same time decrees that price to be just upon which the consent of sellers and buyers has settled. Wherefore if buyers either buy more cheaply or pay more dearly, the excess of price in this contest is reckoned to be remitted and condoned on either side. Care must only be taken against frauds in bids of this kind, especially when wares pledged to the sacred monti are sold. Since indeed sometimes the buyers enter upon a monopoly of offering only so much a price, that the sellers may be compelled to sell more cheaply. Sometimes the sellers and the broker propose wares for sale at that time at which they know that few buyers gather to buy, that they may favour friends from whom they receive little gifts; and they betray the cause of the poor, and make themselves friends of the mammon of iniquity. On the contrary, the bidders themselves are wont sometimes to send in trusty buyers of their own, who feignedly offer prices and provoke the true buyers to increase the price. All those frauds are contrary to justice and equity, and oblige to restitution.

V. QUESTION IV. Whence is the common or natural price to be taken, and what are the causes of increasing it? ANSWER. It has already been said above that the price is constituted by the common estimation of men, and admits a latitude of middle, lowest, and highest. Which latitude is not constant but variable, on account of the diverse circumstances of time, place, and persons. And as regards time, if a present ware be sold, it ought to be sold at the price obtaining. If a future ware be sold, as fruits about to be born, account is to be had of the price which shall prevail at the time of delivery. Wherefore those who buy wheat in the month of February at the price then obtaining, to be delivered in the month of July or August, at which time it is believed it will be sold for more, sin against justice, and are held to restitution of the increased price. The price therefore is to be determined according to the value which the ware has at the time at which it is to be delivered.

VI. As regards place, if a seller give wares at Rome and have them at Bologna, they ought to be sold at the price at which they are worth at Bologna, not at Rome. If nevertheless he were about to carry the same to Rome, he could, expenses being deducted, exact the price at which they are worth here. If a seller be willing at his own risk and expense to carry his wares to the place where they are sold for more, he can by right sell them at the price of that place.

VII. The circumstance of persons regards merchants, who by reason of their profession useful to the commonwealth, and necessary to their own proper sustenance, can sell wares for more than other private men. The price fixed by law, nevertheless, neither can they lawfully exceed, nor can they increase the common price once fixed.

VIII. QUESTION V. What are the circumstances in which the prices of things decrease? ANSWER. First, on account of the fewness of buyers and the abundance of wares, the prices of things are wont to be diminished. Second, when a ware is bought in favour of a seller offering it unasked, which otherwise would not be bought, because the ware is then not useful and convenient to the buyer — just as the price is increased when it is sold for the buyer's advantage, when otherwise it would not then be sold. A measure nevertheless is to be used, and care is to be taken cautiously in these circumstances, lest anyone should wish to grow rich out of a brother's want and scarcity. That evangelical rule is always to be held before the eyes: What you would not have done to yourself, do not to another. The price can be increased and diminished according to the variety of circumstances; but always equity and justice are to be preserved. The personal necessity, whether of the buyer or of the seller, can never be a just cause of varying prices: otherwise wares could be sold more dearly to the poor.

IX. QUESTION VI. Can merchants sell wares at the current price, when they know that an abundance of wares will shortly come, and consequently that the price of things will be diminished? ANSWER. Tullius denies it, narrating the case in Book III of the Offices concerning the Alexandrian corn-merchant, as I have indicated above. St. Thomas, II-II, q. 77, art. 3, reply 4, says: Whence a seller who sells a thing according to the price which he finds does not seem to act against justice, if he does not set forth what is future. If nevertheless he should set it forth, or should subtract from the price, it would be of more abundant virtue; although he does not seem bound to this by the debt of justice. The doctrine of Cicero, says the Angelic, pertains to the perfection of virtue, but not to the debt of justice. A merchant does a thing worthy of a Christian if he give warning of the coming abundance of wares. But to manifesting it he does not seem bound by the bond of justice. If a merchant foresee that the price will be increased, he cannot sell more dearly. Therefore neither, if he foreknow that the price will be diminished, is he bound to sell more cheaply. This is diligently to be guarded against, that merchants do not through their brokers allure buyers to buy when a coming abundance of wares is imminent; for then they would sin against justice. If an occasion offer itself of selling at the current price, let them sell, all artifice being removed. But for the rest, if they were to seize occasions of selling, I would not free them from restitution.

X. QUESTION VII. Can he who foreknows that money will be interdicted by the prince's law, or its value diminished, put away his money before the promulgation of the law? ANSWER. The Marquis Bellonus, master of a banking table, when some few years ago this case occurred to him, chose to lose many thousands of crowns rather than to put away his gold pieces to the detriment of other merchants. This honest and ingenuous Christian I have therefore commemorated, that I might propose an example of imitation to the rest. From the preceding question it is plain that the banker is not urged to this by the bond of justice. I confess that he can carry out the payments and exactions which naturally occur. But if he craftily sought a putting away of his money, and to lodge it in the hands of others, that they might undergo the loss near at hand, I would not free him from the debt of restitution: since what you would not have done to yourself, do not to another. Now no one in these cases would wish to be deceived.

XI. QUESTION VIII. What is to be noted concerning a price prescribed by public authority? ANSWER. Navarrus denies that it is expedient for a prince to fix the prices of things, because many frauds follow such a law: which reason, if it held good, would require all laws to be abrogated. Wherefore the common opinion teaches that it is exceedingly expedient that the prince predetermine the prices of things, as St. Thomas teaches, I-II, q. 96, art. 1, reply 2, saying: It is better that all things be ordered by law than left to the judgment of the judge, and so forth. When nevertheless a ware is of inferior value, the seller cannot sell it at the fixed price, but ought so to diminish the price as to equal the defect of the ware: since the fixing was made on the supposition that the wares have the common value. Besides, those who preside over the determining of prices ought to fix the price with regard to scarcity or abundance. A seller cannot compel a buyer to pay the price in gold or silver money, because this would be a burden above the fixed price. When wares are so precious that they exceed the common value, then, proportion being preserved, the price can be increased, provided the excess of value be evident, and the increase of price correspond to this excess of value: for not every excess is enough for increasing the price. Otherwise the fixing of the price would be in vain, since wares are commonly in some way better one than another.

XII. QUESTION IX. Can cheaper wares be mingled with choicer ones, and be sold at the fixed price? ANSWER. When wares by such mixture are reduced to the common goodness of those wares which are sold at the fixed price, according to the opinion of many of the younger authors, a mixture of this kind is lawful. But mixtures of this kind seem to me to be rejected, as full of frauds and contrary to sincerity. Besides, it rarely happens that generous wine mixed with water (say the same of other things) does not become of a worse condition than common wine.

XIII. QUESTION X. Can a merchant sell wares more dearly on account of deferred payment of the price? ANSWER. All absolutely confess that they commit disguised usury who sell wares more dearly on account of the deferred payment of the price alone. Whatsoever (says St. Thomas, II-II, q. 78, art. 2, reply 7) is exacted beyond the just price for expectation of this kind is as it were the price of a loan. There are wont to be alleged the titles of ceasing gain and of emerging loss, of which below. They obtrude also the expenses which the merchant is probably about to make in obtaining the price, which expenses they repute as emerging loss. And if in truth this danger be present, and the buyer be warned of the increased price and consent to it, a moderate increase corresponding to the loss which the seller suffers does not seem to be disapproved. Moralists also dispute whether it be lawful to buy more cheaply by anticipated payment if the wares will be worth less at the time of delivery; and on the contrary to sell more dearly on account of awaited payment, if it be believed that at the time of delivering the price the wares will be worth more. In each case authors commonly affirm it, provided the merchants would have kept the wares until the time at which they would be worth more; but they deny it if this condition be lacking. Hence they infer that it is lawful to buy corn in the month of January by anticipated payment, to be delivered in the month of August, at the price current not in the month of January but that which shall recur in the month of August. Wherefore it would be manifest injustice to buy at a cheaper price on account of anticipated payment wares which would be worth more at the time of delivery.

XIV. QUESTION XI. Is the contract lawful by which in Spain and elsewhere certain wares are commonly sold on credit at a greater price than they are wont to be sold for ready money? ANSWER. Ships laden with wares come from the Indies into Spain. These wares cannot all be sold for ready money. And those which are sold for ready money are sold at a lesser price. The Spanish theologians discuss that case at large, especially Navarrus, Gutiérrez, Medina, Córdoba, Molina, de Lugo, the Salmanticenses. All deny that the price can be increased on account of deferred payment, as Sylvester notes under the word Usury, against a certain Raphael Pornasius, says de Lugo. Nor ought it to be a wonder that this Pornasius taught usurious laxities, if he wrote most laxly concerning monastic poverty.

XV. And so, extrinsic titles being removed, Navarrus, Gutiérrez, Valentia, Garcías, Medina, and Bartholomew of St. Faustus deny that it can be sold more dearly for money not counted down: since, they say, the increase of price is exacted solely on account of deferred payment, which according to all is usury. They urge further. If a sale for money not counted down at a greater price be just, a purchase at a lesser price for money counted down will be unjust: since whether the money be counted in the present or in the future, it does not bring it about that the wares increase or decrease. But a purchase for money counted down is just, as all confess: therefore a sale on credit, as it is commonly called, at a lesser price is unjust.

XVI. The opposite opinion is maintained by Báñez, Serra, Rebello, Villalobos, de Lugo, Sánchez, Lessius, Diana, Castropalao, the Salmanticenses. These assign various reasons. That which can settle this contract is the one which Soto sets forth, Book 6, question 4, article 1, reply 4. These wares are carried from the Indies with very many and very great dangers, and moreover cannot be transported save in great quantity, as much as suffices to load huge ships. Whence it comes about that the factors themselves, who load the ships, are compelled to buy many wares on credit, at a dearer price. Therefore the necessity of unloading the ships at once compels that at least a great quantity of the wares be sold on credit at a greater price. The peculiar circumstances therefore of a far-distant region where the wares are bought, and the maritime dangers of the voyage, seem able to constitute a special title, by force of which they are sold more dearly — not on account of deferred payment, but because such merchandise is of such a nature that it compels wares to be put away quickly. But from this peculiar contract it can in no way be inferred that this is lawful in other common contracts.

XVII. The Spanish theologians similarly dispute whether it be lawful there to buy wool at a cheaper price by anticipated payment. Bannez, La Cruz, Prado, Navarrus, Martínez, Valentia, Rebello, Mercado, and others deny it, resting upon that principle, that it is manifest usury to buy more cheaply on account of anticipated payment. But wools are in fact bought in the month of December or January at the price of 20, to be delivered in the month of May, when they are worth 30. Therefore the price is diminished on account of anticipated payment alone, which all condemn as usury. For why are wools sold beforehand more cheaply? That grass may be bought for pasturing the flocks. No title therefore occurs for diminishing the price, save the want of the seller.

XVIII. The opposite opinion is defended by Soto, Serra, Covarruvias, Medina, de Lugo, Sánchez, Bonacina, Trullench, Lessius, Diana, and the Salmanticenses, tract 14, chapter 2, point 2, no. 133. Since, say these, a practice so continual in Spain is not altogether to be condemned, and it is exceedingly hard to condemn the multitude of such traders, who buy in the month of October or November for 50 gold pieces, say, wool which in the month of May, when it is to be delivered, is worth 40, on account of the anticipated payment, of which the owner is in need for the paying of pasturage.

XIX. Behold, Christian reader, one of the principles whence the relaxation of evangelical morals proceeds. It is exceedingly hard to condemn the multitude of such traders! This same principle the pagans used for the maintaining of the religion of their deities. All nations for so many ages have worshipped the deities. It is exceedingly hard to condemn so many nations upheld by so long a prescription. So the heathen prated against the Christian religion, which they called a new superstition. Most futile therefore is the argument drawn from the multitude of sinners, so often disapproved by holy Scripture and by Augustine. What of this, that this usury is more than Jewish? Not five, not eight, not ten, but more than twenty in the hundred are exacted. This second opinion therefore is false, and the first true, and consequently safe and to be embraced. Read Vol. VII, Book 3, dissertation 3, chapter 7, no. 5.

XX. QUESTION XII. Is it lawful to buy credits or bonds at a lesser price than they are worth, on account of anticipated payment? ANSWER. That contract is most frequent. A man has a bond of exacting from a prince, or from another debtor, 100 after a year. You buy it for 95, or 93, in ready money. If the credit be doubtful, or of difficult payment, or liable to dangers, all confess that it is worth less, and that according to the quality and gravity of the difficulties the price can be diminished. It is disputed only whether, when the debt or credit is of easy payment, liquid and certain, it be lawful to buy at a cheaper price on account of anticipated payment. Sánchez, Diana, Rosella, and others affirm it: since, they say, it is less to have an action to a thing than the thing itself. But those who buy bonds or credits of this kind do not buy the thing itself, but the action of having it. Therefore it can be bought at a lesser price. Besides, these are vendible wares like others which have their price. But in the common estimation of men the price of such debts paid in the present is less than the sum to be paid in the future. Therefore they can by right be bought at a lesser price.

XXI. The contrary opinion is common. Since the price is unjust when for a hundred 95 are paid: for a virtual loan intervenes. And the distinction between a right to 100 gold pieces and the 100 gold pieces themselves is sophistical and fraudulent in this contract, devised for the covering of usury. I prove it. Let us suppose a credit of 100 gold pieces, liquid, certain, of easy payment, and to be exacted today, while you buy it, without difficulty: in this case would the price of 95 be equal and just? You assuredly deny it. Therefore it is evident that the diminution of price is on account of the expectation of time. Therefore you value present money more than future. But this is proscribed by the Church. You insist: Men commonly esteem this ware of credits, payable after a year, at less than present money. But this is true of men boiling with avarice and forestalled by the opinions of the vulgar; not so of Christian men imbued with the divine law. Since indeed, if 100 to be rendered after a year are not worth so much as 100 counted down today, why could not a borrower be compelled to render 106 after a year for a hundred received today? Hear the author of opusculum 67, attributed to St. Thomas, who writes thus: He who owes for a fixed time, if he pay before the term, that something of the debt may be remitted him, seems to commit usury, because he manifestly sells the time of payment. Whence he is bound to restitution. Nor is he excused, because he is burdened by selling before the term, or because he is induced to this by another: because by the same reason all usurers could be excused. This doctrine both the ancients and the younger authors commonly defend: St. Antoninus, Sylvester, Salas, Báñez, Tapia, Malderus, Soto, Lessius, La Croix, Billuart, Viva, and many others. Cardinal de Lugo contends that this question is speculative, not practical, on the ground that in practice credits or debts of this kind are scarcely free from all danger, trouble of exaction, or ceasing gain and emerging loss. But men often feign to themselves a ceasing gain and an emerging loss. When the debts of a prince are bought, what true title occurs here? Scarcely one out of so many buyers of this kind in a century has suffered an emerging loss — namely, that he has not exacted the debt at the prescribed time. Therefore the title is only possible, which cannot be a just cause of diminishing the price.

XXII. QUESTION XIII. What is to be said of the seller's obligation of laying open the defects of wares? ANSWER. There is a mutual obligation, both of the seller and of the buyer, of manifesting the vices or the goodness of wares. If a seller does not manifest a hidden vice of a ware to the buyer, he is bound to restore not only the quantity of the price, if he sell for more than the ware affected with such a vice was worth, but also the losses which the buyer incurs on account of the ware's vice. A threefold defect can be in a ware. The first concerning the substance, as if you sell silver for gold, glass for a gem. To this defect is referred the mixture of wares of a diverse species, as if you mingle barley with wheat, or pour water into wine. Other defects regard either an accidental quality or the quantity; as when wares are sold by a lesser measure and bought by a greater. What is said of the seller is to be said also of the buyer. If he should buy a thing at an unjust price — say, below the lowest — whether in good or in bad faith, the vice being detected, he ought to compensate the seller by equalling the quantity of the price. If he should buy a ware as corrupt which in truth was sound; an estate as mortgaged which was free; if he bought gold for silver, a gem for glass: all these things the buyer ought to manifest to a seller who is either ignorant or careless, and to increase the price according to the value of the wares. If a seller keep silence about a vice of the ware in no way harmful to the buyer, and diminish the price according to the quality and quantity of the vice, he commits no fraud, provided the buyer do not ask: for if he ask, the seller is bound sincerely to manifest the defect; nay, if the seller foresee that the buyer will not buy the ware if the vice be detected, even with the quantity of the price diminished, he would be bound to warn him. For merchandise is to be exercised sincerely, and what you would not have done to yourself, do not to another.

XXIII. Fraudulent and guileful accordingly are those merchants who pour a drop of mercury into the ears of horses and asses, that they may appear swift, spirited, and generous, when by their own nature they are slow, sluggish, and as it were stupid; who upon the topmost surface of a sack or vessel place the best wheat and the best wares, that the deceived buyer may believe the rest of the wares to be of the same goodness.

XXIV. A certain and general rule concerning the various defects of wares, in respect both of buyer and of seller, can scarcely be assigned. For if the vice does not render the ware notably less useful to the buyer, the price being diminished in proportion to the vice, the seller when not questioned is not absolutely bound to manifest the vice. Circumstances can nevertheless occur on account of which the defect is to be manifested. Account is also to be had of commerce and trade. For wares of the same kind are not all of the same quality and goodness. And if traders had to declare even the least defects, and to sell only perfect wares, it would be all over with trade. Since indeed buyers also are often tardy and morose, who on account of the slightest defect would wish to diminish the price beyond what is just. Good and sincere faith therefore is to be preserved, and every circumvention to be guarded against.

XXV. Sellers ought chiefly to beware of mingling wares. The vices of coins are altogether to be declared. He who knowingly puts about false money for true is a thief and a robber. If he do it unknowingly, he does not sin, but when he learns of it he is held to restitution. If it fall slightly short of the just weight, it is commonly reputed as nothing. On the contrary, when it falls short not slightly, then it is to be manifested.

XXVI. What of those who sell by a lesser measure? It is certain among all that a seller is held to restitution if he subtract anything from the quantity of the ware, as when he sells by an inferior balance or measure. The younger authors dispute whether it be lawful for sellers to use a lesser measure when the price has been unjustly fixed by the prince. Cardinal de Lugo with others affirms it, and the Salmanticenses adhere to him. If the fixing of the price were manifestly unjust, neither would I resist. But for the rest, private men, and in their own cause, are not lawful judges of the fixed price. The fixing of a price made by the prince regards the common good and the solace of the poor. Wherefore although in fact wares stand the merchants at more, and while they sell them at the fixed price they suffer loss, the price is not therefore unjust, because it pertains to the prince or the magistrate to determine what prices are expedient for the common good of the city, and not to the merchants. Wherefore they are not to be excused who diminish the measure of a jar of wine, who diminish weights, who subtract one ounce or another under pretext of an unjust price. These sin, and are held to compensation. For if they suffer loss, that is to be ascribed to the adverse lot of trade, not to the injustice of the price. For such is the condition of merchandise, that it brings forth now gain, now loss.