Chapter — Gury-Ballerini, Compendium of Moral Theology (8th ed., 1884)
Chapter IV. On Exchange
- Exchange is the permutation of money with some profit of the money-changer. Yet exchange in general sounds the same as permutation, whether in money or in other things.
Exchange is variously distinguished, namely:
- Manual or small exchange, and local exchange or exchange by letters. The former is made when money of one form or material is permuted with money of another form or material. The latter has place when present money is commuted with absent money to be paid in another place.
- Real or true exchange, and fictitious or dry exchange. The former is that by which money is in fact commuted with another. But the latter is that by which a permutation is feigned, but it is nothing other than a cloaked mutuum, as, for example, when money is given as if to be received in another place, which nevertheless is received in this very place.
- Fictitious exchange is customarily made thus: for example, Titius, needing money in this present place, asks 100 coins from a money-changer. But the money-changer does not give otherwise than as to be paid in a distant place, and he seeks from him the price which is exacted for similar places. But Titius receives the money and nevertheless does not think of money to be repaid in such a place, and this is manifest to the money-changer. Whence that contract is a mere cloaked mutuum 1.
1 There is now no custom of this contract, nor necessity or occasion.
- Principles. - I. Real exchange is lawful, whether small or local, provided equality is observed, or the profit does not exceed the just price determined by law or by the custom of places. The reason is that there are various titles from which the money-changer can receive profit, namely 1. insurance of the money up to the place of insurance; 2. hiring of work and office for counting and transmitting the money; 3. emergent damage from misfortunes of debtors; 4. expenses and cares in keeping the exchange-office. - St. Lig. n. 851-852, and others.
II. Fictitious exchange is illicit per se. The reason is clear; for there is in it no title of accepting profit, since no exchange properly so called is made, since there is no real transfer of money, but only a fictitious one, whence it is nothing but a cloaked mutuum. - Thus all. - St. Lig. n. 853. - I said per se, because by reason of a mutuum it is lawful to follow the laws of this contract, according to what was said above, n. 863.
St. Pius V in the Bull on exchanges placed various restrictions concerning exchange: Haunold, however, testifies that it is in force in few places, at least as to all things contained in it. St. Lig. n. 852 speaks of it.
- Questions. - Q. 1. Whether exchange is lawful for those who do not have the public office of exchanging?
Resp. Affirmatively. The reason is that the same reasons are operative; for everyone has a right to profit for his labor and skill. But these money-changers ought to beware lest they exact profit greater than equitable. - Thus St. Lig. n. 851. - Salmant. c. 4, n. 8. - Carriere, n. 1038.
Q. 2. Whether the exchange commonly called Frankfort exchange is lawful, in which the money-changer gives money to be repaid at the next fairs, so that greater profit is exacted for greater delay?
Resp. 1. Affirmatively, if there is a title of ceasing profit, emergent damage, etc. - St. Lig. n. 854.
Resp. 2. Otherwise it is disputed; but probably it is lawful in this to follow the civil laws for a mutuum, according to what was said above where treating of Usury, n. 863.
- Q. 3. What can money-changers receive by reason of a mutuum?
Resp. They can receive 6 for 100, according to the legal rate for merchants, because they exercise a certain commerce of money. For ordinarily money-changers need much money, so that they may be able to discharge such an office, and many servants, and they are exposed to various dangers. Indeed in various places they are permitted to accept 7 for 100 on account of the dangers and labors which they must undergo in transferring money elsewhere and insuring it. - See Cases, n. 988 and following.