Section 5: The So-Called Onerous Contracts

An onerous contract is one that confers advantages on both contracting parties.

The chief kinds of onerous contracts are: Exchange, lease, purchase and sale, pension (census), bill of exchange, and loaning money on interest.

1. The contract called exchange (permutatio) is the giving of one thing or right as an equivalent for another, or of interchanging two objects of equal value. Until the objects are surrendered, the contracting parties remain each the possessor of his own property and responsible for any loss that may affect it. In making this contract one party is not allowed to take undue advantage of the other, or maliciously exploit the other's ignorance, necessity or weakness of character, or conceal the defects of the object to be exchanged.

2. A lease (locatio et conductio) is a contract by which a right to the possession or enjoyment of real property is transferred for a definite period to another, in consideration of a periodical compensation called rent (locarium).¹ By real property in this connection is meant property that is not consumed in the first use, but continues to render repeated services. Such commodities have a value over and above that of first use. The value of a house, for instance, is greater than the value of the lease of it for a year, because the house will continue to render services and be valuable after the lease expires.² A lease may have for its object: houses, land, animals, labor or services. If it is for more than a year, it must be in writing.³ a) The lessor or landlord (locator) may not lease his property for immoral or unlawful purposes. A lease for such a purpose is void. He must see to it that the property is in good condition when it is handed over to the lessee, or reveal its defects, and he must not demand it back before the time agreed upon; he must not raise the rent arbitrarily ("rent profiteering"); he must not abuse the ignorance or need of the lessee, and in case of necessity (for instance, crop failure or hail storms) should remit the rent either entirely or in part. b) The lessee is bound to take proper care of the property in conformity with his contract, to keep it in good repair, to pay the rent promptly when it is due, return the property intact to the owner after the lease has expired, and make restitution if damage has been done to it through his fault.⁴ c) A lease is terminated by the destruction of its object, by the expiration of the contract, by mutual consent, or by the death of one of the contracting parties.

¹ J. P. Gury, S. J., Comp. Theol. Mor., Vol. I, n. 863: "A lease is a contract by which the use or fruit of a thing or the labor of a person is received by one and granted by another for a certain price for a time. He who hands over a thing for the use or benefit of another is called the lessor; the other is called the lessee or hirer."

² Slater, A Manual of Moral Theol., Vol. I, p. 513.

³ A. S. Bolles, Putnam's Handy Law Book, p. 152.—Gury, l. c.: "Hence various species of lease are enumerated: 1. lease of buildings; 2. of fields; 3. of animals; 4. of labor and service. To the contract of lease there are in some measure akin emphyteusis [Rom. law: A perpetual lease of lands and tenement in consideration of annual rent and improvement thereon] or a fief [feud; land held of a superior on condition of rendering him service]. ... Yet emphyteusis and a fief differ from lease, because they can be established only in immovable property and for no less than ten years."

⁴ Note that, in America, if the lease is for a house or other building, and no specific agreement was made relieving the lessee, he is liable under the common law (which has, however, been changed in several States), for the rent of the building if it burns down, just the same as if he were still the occupier. (Cfr. A. S. Bolles, Putnam's Handy Law Book for the Layman, pp. 151 sq.).—Gury, Comp. Theol. Mor., I, n. 864–869.

A yearly tenant must give and is entitled to a reasonable notice to quit, which according to the common law should be given by one to the other party six calendar months before the expiration of the current period.

If a lease runs beyond the statutory period, it is not absolutely void, but continues during the joint wills of both parties, and may therefore cease at the will of either. If the landlord wishes to terminate it, he must give the tenant notice to quit. If he disregards the law and takes immediate possession, he is a trespasser.

When the terms of a lease are in doubt, they are to be construed in favor of the tenant.

A lease must clearly describe the premises, and a defective description cannot be cured by outside evidence. Any language will suffice that shows the intention of the parties.

To make a valid lease, the parties must, of course, be competent. A lease by a minor is not per se void, but he may cancel it by some positive act.

If a blank form is used in making a lease, and the printed portions do not agree with the written insertions, the written matter is held to express the intention of the parties.

A lessee can assign or sublet his lease, unless this is forbidden, as it often is by the lessor, without his consent. If the lessee dies, his executor or administrator can assign the remainder of the term.

As the lessee may assign or sublet, so may the lessor part with his interest in the leased property.⁵

⁵ Bolles, op. cit., pp. 152 sqq.

Fixtures or things attached to the freehold by the tenant at common law become the property of the landlord, according to the maxim, "quidquid plantatur solo, solo cedit." The common law rule, however, has been greatly mitigated and now, in general, fixtures erected for purposes of trade, ornament, or domestic use, and also agricultural fixtures, may be removed by the tenant. In certain cases, due notice must be given to the landlord before doing this. A tenant can make no permanent alteration without his landlord's consent; should he do so, and thereby injure the premises, the landlord may recover damages, or, if such an alteration is feared or threatened, he may prevent it by obtaining an injunction.

If the landlord has agreed to make repairs, he must keep the property in good condition. But if he fails to keep his agreement to repair, the tenant is not excused from paying his rent or justified in leaving the premises. His remedy is to sue the landlord for the damages or injury done to himself.⁶

⁶ Ibid., pp. 158, 159.

d) A sort of sub-species of lease is the contract by which a man hires the services of another for an appropriate consideration, commonly called wage or salary (locatio sive conductio operae seu locatio personalis).

The relation created by such a contract differs according to the nature of the work involved, which may be either predominantly corporal or chiefly intellectual.

Public officials, too, are bound to the commonwealth by a sort of contract.

Justice and charity demand that a due proportion should exist between labor and its wage. The employer must not abuse the necessity or temporary embarrassment of his workers by imposing oppressive conditions. He must not conceal onerous duties connected with an employment, and must pay his laborers promptly at the appointed time. He must not discharge them arbitrarily nor compel them by harsh treatment to give up their jobs. He should conform willingly to the laws regarding due provision for the life and health of his workers and treat them as helpers, not as slaves, ever mindful of the account he will have to give to the Lord, who judges rich and poor according to the same norms of justice.⁷

⁷ Col. IV, 1; Eph. VI, 9; 1 Tim. VI, 2; Philm. 16.

A servant or employee must not undertake work for which he is not fit or in which his faith or morals are placed in jeopardy. He must faithfully comply with the duties he has assumed by the contract into which he has, explicitly or implicitly, entered with his master or employer,—"not serving to the eye, as it were pleasing men, but, as the servants of Christ doing the will of God from the heart, ... knowing that whatever good thing any man shall do, the same shall he receive from the Lord, whether he be bound or free."⁸ Finally, he has a claim to a fair wage⁹ and the right to employ all licit means in order to improve his economic and social status. Among these means are trade and labor unions and strikes.¹⁰

⁸ Eph. VI, 5–8.—Cfr. Col. III, 22–25; 1 Tim. VI, 1 sq.; 1 Pet. II, 18 sq.

⁹ Matth. X, 10; Luke X, 7; 1 Tim. V, 18.—Cfr. St. Thomas, Summa Theol., 1a 2ae, qu. 114, art. 1.—A. Vermeersch, S. J., Quaestiones de Iustitia, 2nd ed., pp. 527 sqq.—F. X. Godts, C.SS.R., Scopuli Vitandi, 3rd ed., Bruges 1896, pp. 230 sqq.—J. Biederlack, S. J., Die soziale Frage, 7th ed., pp. 150 sqq., 233 sqq.—C. Gennari, Consultazioni Morali-Canoniche-Liturgiche, Vol. I, 2nd ed., Rome 1902, pp. 378 sqq.

¹⁰ A. Vermeersch, S. J., Quaest. de Iustitia, 2nd ed., pp. 624 sqq.; Göpfert, Moraltheol., Vol. II, 6th ed., pp. 199 sqq.; Lehmkuhl, Arbeitsvertrag und Streik, 4th ed., Freiburg i. B. 1904, pp. 39 sqq.; IDEM, Casus Conscientiae, Vol. I, 3rd ed., pp. 895 sqq.; J. Treitz, Der moderne Gewerkschaftsgedanke, Treves 1909, pp. 73 sqq.; Broda, La Fixation des Salaires, Paris 1912; J. A. Ryan, Distributive Justice, pp. 400 sqq.; H. Parkinson, A Primer of Social Science, pp. 112 sqq.

For deciding what a fair wage is the following general rule has been laid down by Pope Leo XIII: "To labor is to exert oneself for the sake of procuring what is necessary for the purposes of life, and chief of all, for self-preservation. 'In the sweat of thy brow thou shalt eat thy bread.' ¹¹ Hence a man's labor bears two notes or characters. First of all, it is personal, inasmuch as the exertion of individual strength belongs to the individual who puts it forth, employing such strength to procure that personal advantage on account of which it was bestowed. Secondly, man's labor is necessary; for without the result of labor a man cannot live; and self-preservation is a law of nature, which it is wrong to disobey. Now, were we to consider labor so far as it is personal merely, doubtless it would be within the workman's right to accept any rate of wages whatsoever; for in the same way as he is free to work or not, so is he free to accept a small remuneration or even none at all. But this is a mere abstract supposition; the labor of the workingman is not only his personal attribute, but it is necessary; and this makes all the difference. The preservation of life is the bounden duty of one and all, and to be wanting therein is a crime. It follows that each one has a right to procure what is required in order to live; and the poor can procure it in no other way than through work and wages. Let it then be taken for granted that workman and employer should, as a rule, make free agreements, and in particular, should agree freely as to the wages; nevertheless there underlies a dictate of natural justice more imperious and ancient than any bargain between man and man, namely, that remuneration ought to be sufficient to support a frugal and honorable wage-earner. If through necessity or fear of a worse evil the workman accepts harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice. In these and similar questions, however, such as, for example, the hours of labor in different trades, the sanitary precautions to be observed in factories and workshops, etc.—in order to supersede undue interference on the part of the State, especially as circumstances, times, and localities differ so widely, it is advisable that recourse be had to societies or boards, ... or to some other mode of safeguarding the interests of the wage-earners; the State being appealed to, should circumstances require, for its sanction and protection."¹²

¹¹ Gen. III, 19.

¹² Leo XIII, Encyclical "Rerum Novarum," tr. in The Pope and the People, pp. 206 sqq.

The workman, then, says Fr. Slater, "has a right to a living wage, and the employer who grows rich by sweating his work-people commits a sin against justice and is bound to make restitution of his ill-gotten wealth."¹³

¹³ Slater, A Manual of Moral Theol., Vol. I, p. 293.

A living wage must be a living family wage (merces familialis), that is, one which will enable the laborer to establish a family and to support that family decently according to his station in life.

A family wage is due to a man because he is by nature ordinarily destined to found a family and provide for it. The wage should be proportioned to the normal size of the family. Many leading Catholic writers hold that the normal family wage is due to every workman on the ground of strict justice. This opinion, though not confirmed by the Church, is highly probable.

The principle of the living family wage, as Fr. Ross points out, has this important implication that it makes child labor unnecessary. If the head of a family receives a sufficient wage, his children will not be forced to work. They should not be robbed of their childhood for the sake of a few pennies a day. The State has a right and a duty to protect its future citizens by forbidding child labor.¹⁴

¹⁴ Reuter-Lehmkuhl, Neo-Confessarius, pp. 215 sq.; cfr. Göpfert, Moraltheol., Vol. II, 6th ed., pp. 196 sqq.; Parkinson, A Primer of Social Science, pp. 170 sq.; J. A. Ryan, Distributive Justice, pp. 373 sqq.; J. E. Ross, Christian Ethics, pp. 342 sq.; M. Cronin, The Science of Ethics, Vol. II, pp. 347 sqq.

e) To stop work without regard to the stipulations of a written or oral contract constitutes a breach of contract and entails the duty of restitution. Whether such a breach of contract should be subject to criminal proceedings, is a question which in our time is political rather than judicial.

A man does not as a rule break a contract without justifying his action, at least before his own conscience. That a workingman has the right to withdraw from a wage contract one-sidedly for good reasons, such as the non-compliance of the employer with the stipulations agreed upon, or an essential change in the relation between labor and wage, cannot be denied. Though strikes are mostly based on false and short-sighted calculations, not every such act of combined self-help is per se immoral, but each case must be decided on its own merits, with due regard to the interests of the weaker party when there is room for doubt.

A strike, as our readers know, is the quitting of work by a body of laborers for the purpose of forcing their employer or employers to comply with some demand or condition, as for increase or against reduction of wages. As carried on at the present time, strikes are usually accompanied by active interference with the business of the employers, by the use of the boycott, intimidation of new employees (scabs), etc.¹⁵

¹⁵ W. McDonald, "The Ethical Aspect of Boycotting," Irish Theol. Quarterly, Vol. I (1906), No. 3; P. Marshall, Ibid., Vol. I, No. 4; T. Slater, S.J., Ibid., Vol. II (1907), No. 6.

Theoretically, a strike need not necessarily be condemned as illicit, though on account of the numerous evils by which it is usually accompanied it can scarcely ever be advisable in praxi. It is for this reason that Leo XIII so strongly insisted on the duty of the State to strive for the abolition of strikes.

"When work-people have recourse to a strike," he says, "it is frequently because the hours of labor are too long, or the work is too hard, or because they consider their wages insufficient. The grave inconvenience of this not uncommon occurrence should be obviated by public remedial measures; for such paralyzing of labor not only affects the masters and their work-people alike, but is extremely injurious to trade and to the general interests of the public; moreover, on such occasions violence and disorder are generally not far distant, and thus it frequently happens that the public peace is imperilled. The laws should forestall and prevent such troubles from arising; they should lend their influence and authority to the removal in good time of the causes which lead to conflicts between employers and employed."¹⁶

¹⁶ Rerum novarum (The Pope and the People, p. 203).

Strikes, therefore, especially in their more threatening forms, should be prevented as much as possible for the sake of the common weal.

This is not tantamount to saying that they are never justified under any conditions. If the public authorities will not or cannot assure just treatment to the workingmen, and the latter abstain from violence, they must not be condemned for laying down work. The evils that often accompany strikes are not essential to the latter, and a strike quite often is a true act of legitimate self-defense. In such a case, the strike is justifiable, unless higher considerations demand a renunciation of just rights.

When the conditions of labor are not in accord with justice, workingmen may, without awaiting the expiration of their contract, threaten to quit work, and if the employer refuses to comply with their demands, lay down their tools. But if the employer is not guilty of injustice, the workers are obliged to live up to the terms of their contract until it expires. They may ask for more favorable conditions, but are not allowed to use force to obtain them.

With due regard to the contractual term, or after its expiration, says Fr. Lehmkuhl, the workingmen may, individually or by common action, go much farther. They have the right to value their labor more highly, and even if they went to imprudent and unfair limits in so doing, one would not be allowed to accuse them of injustice in the strict sense. The value of labor need not be measured by the current exchange value of its product, but the laborer is within his rights if he holds that the exchange value of the product might just as well be measured by the increased value of labor. We do not hesitate to allow the working people a larger scope in this respect for the increase of wages, than we would allow the employers for lowering the same. This lies in the nature of a free contract. The contracting parties may go to the limit of a just wage, the laboringmen in their demands, the employers in their offers. The upper limit, in the very nature of things, is naturally more indefinite than the lower, though in individual instances the determination of the lower limit, too, is not easy. What may be generally regarded as an unjustly low wage may be shorn of its injustice by circumstances. For this reason it will, as a rule, be difficult to permit laboringmen to quit work at once without regard to their contract because of unfair conditions.

In discussing just and unjust conditions of labor we have employed the amount of the wage as an example; not as if it were the only thing that can be enforced through strikes, but because it is the first and most important. The others are either subordinate to, or intimately connected with, wages; in fact, for the most part they are merely another form of wage regulation. Working hours, night work, limitation of child and female labor, all these questions are closely related to the wage problem; so too, the protection of good morals and compliance with religious duties on the part of the workingmen.¹⁷

¹⁷ Lehmkuhl, Arbeitsvertrag und Streik, 4th ed., pp. 59 sq.

3. Buying and selling (emptio et venditio) is a bilateral onerous contract by which one party (the seller—venditor) agrees to interchange with the other (the buyer—emptor) the ownership of an article or commodity for a consideration called price.

There is an important distinction between a contract to sell in the future and a present sale. The first is called an executory, the second an executed sale. If the goods are transferred, there is an executed sale, even though the price is not paid at the same time. But if the price is paid, and the goods do not pass, the transaction is an executory sale. Both kinds of sale may be by deed or sealed contract as well as by parol or orally.¹⁸

¹⁸ Gury, Comp. Theol. Mor., Vol. I, n. 832: “A contract of sale and purchase is defined as: the exchange of a price for merchandise or vice versa, or an onerous contract of giving a determined and just price for merchandise or vice versa.”—A. S. Bolles, Putnam’s Handy Law Book, N. Y. 1921, p. 227.

The commodity sold may be either real property or "goods," which latter term includes all personal chattels other than things in action and money.

A sales contract may be absolute or conditional.

Under the moral law of nature buyer and seller may agree between themselves that the subject-matter of the contract with all its fruits and risks should be transferred at once from the one to the other. Under the existing civil laws the right of ownership is usually not transferred until the commodity in question has actually changed hands and the contract price has been paid or at least guaranteed.

The capacity to buy and sell is regulated by civil law. Under American civil law a minor may disaffirm his contracts by any act clearly showing this intent.

The price may be fixed by the contract itself or in such other manner as the parties may agree. When it is not determined in the sales act, the buyer must pay a reasonable price (v. infra, p. 279).

After a contract of this kind has been duly made, neither party can withdraw from the obligations assumed therein without the consent of the other.

To be morally licit and valid a contract of sale or purchase must comply with the following conditions: a) The commodity which forms the subject-matter of the contract must be the property of the seller, because no one can dispose of what does not belong to him. Secondly, there must be no essential error in regard to the commodity sold and purchased, and hence the seller is bound in justice to inform the buyer, even if the latter makes no inquiry, of any hidden substantial defects and, upon inquiry, also of such non-essential defects as the buyer could himself discover.¹⁹

¹⁹ Cfr. St. Thomas, Summa Theologica, 2a 2ae, qu. 77, art. 3.—Under the American civil law, “when there is . . . a sale of goods by description, there is an implied warranty that they shall correspond with the description; and if the contract of sale is by sample, as well as by description, it is not sufficient that the bulk of the goods correspond with the sample, if these do not also correspond with the description. The Sales Act contains elaborate provisions relating to implied warranties of the quality of things sold. There is no implied warranty of the quality or fitness of goods for any particular purpose unless the buyer makes known to the seller the purpose for which they are required, and he also relies on the seller’s judgment of their fitness for the use he intends to make of them. Again, if the buyer has examined the goods, there is no implied warranty of the defects which such an examination ought to have revealed. An implied warranty as to the quality or fitness for a particular purpose may also be annexed by the usage of trade. There is an implied warranty that the bulk shall correspond with the sample in quality, and that the buyer shall have a reasonable opportunity of comparing the bulk with the sample.” (A. S. Bolles, Putnam’s Handy Law Book for the Layman, N. Y. 1921, 232 sq.)

Essential defects are such as affect the substance of a thing in itself or in relation to the known object for which the buyer desires to purchase it, or, in other words, such as alter the nature of an object or render it noxious or useless. Accidental defects, if plainly apparent, need not be mentioned, provided they were taken into consideration when fixing the price. If, however, the buyer is exceptionally ignorant (valde rudis), manifest deficiencies, too, should be called to his attention.²⁰ Deception entails the duty of restitution on the part of the seller,²¹ and also on the part of the buyer if he takes advantage of the seller’s ignorance to acquire a commodity at a lower price than that which the seller could have obtained if he had not been in error. b) The price must be reasonable (pretium iustum), i. e., equivalent to the value of the thing sold. Therefore, the seller is bound not to go beyond what the law calls a reasonable price.

²⁰ Gury, Comp. Theol. Mor., Vol. I, n. 833: “It is asked whether the seller is bound to reveal defects in the thing. Answer: (1) The seller, even if not questioned, is bound to disclose all substantial defects of the thing, both in itself and in relation to the buyer’s known purpose, or all those that make the thing different or render it harmful or notably useless; otherwise he is bound with respect to the price. (2) When questioned, the seller is bound to disclose all hidden defects, even if they would not render the thing harmful or useless; otherwise he would commit fraud. Consequently, if the fraud was truly the cause of the purchase, the contract can be rescinded. But if the fraud was merely incidental, so that the buyer, knowing the defect, would still have bought, though not for so much, the seller must restore only the amount by which the buyer would have paid less, because otherwise scarcely any sale could take place. But if the seller is not questioned and the hidden defect does not render the thing useless, he must reduce the price in proportion to the defect. The reason is that otherwise the thing would be sold for more than it is worth. (3) The seller, even if questioned, is not per se bound to point out accidental defects that are of themselves manifest, provided that he reduces the price proportionately to the defect. The reason is that then no injustice is done to the buyer, either on account of the price, which is reduced, or on account of the defect; for if the buyer did not see it, he must impute that to himself. Except, however, if the buyer is very ignorant, because with respect to him the defect is considered hidden.”

²¹ Gury, l. c., n. 834: “It is asked whether a seller is bound for all losses following from a defect in the thing sold. Answer: He is bound only for foreseeable losses, because he could not assume an obligation regarding those which he did not foresee even in a general way.”

The price or value of an object is either legal (pretium legale sive legitimum), i. e., fixed by law or public authority, or natural (pretium naturale sive vulgare), i. e., market price or value, determined by the common judgment or the estimation of those who are best acquainted with all the factors that determine social value in that particular case, or a fancy price (“price of affection,” as the theologians call it), which is often paid willingly for rare or single objects for which there is no market price, e. g., a first folio of Shakespeare’s dramas or a painting by a great master.

Since the judgments of men concerning the value of an object differ greatly, and the market price is subject to constant fluctuations, the so-called natural or just price of a commodity is distinguished into the highest (pretium summum vel rigorosum), the lowest (pretium infimum seu pium), and the mean or just price (pretium medium sive moderatum). The highest is that above which the commodity in question is not commonly sold; the lowest is that below which it is not usually sold; and the mean is between the two. Justice will be observed if the price at which a thing is sold is not above the highest nor below the lowest price at which the thing sells at the time and in the place in question.²² Hence the following rules: α) The legal price is to be regarded as just and to be observed by all; β) Where no legal price has been fixed, the common price may be considered just, at least for such objects as have a market price; γ) As a rule no commodity should be bought below the lowest or sold above the highest price.²³

²² Slater, A Manual of Moral Theology, I, 524.—Gury, Comp. Theol. Mor., Vol. I, n. 840: “A just price is twofold: (1) legal, which is determined by law; (2) natural or common, which corresponds to the value of the thing according to the common estimation of men. The natural price, however, is: (1) the highest, above which a thing is not usually valued; (2) the lowest, below which a thing is not generally valued; (3) the mean, which lies between the two.”—Cfr. J. Biederlack, S.J., Die soziale Frage, 7th ed., pp. 144 sqq.—Under the American civil law, a reasonable price is “generally the market price at the time and place fixed by the contract or by law for delivering the goods, but not always. Under unusual conditions the market price does not furnish the only test. Said the court in one of these cases: a reasonable price may or may not agree with the current price of the commodity at the precise time of making it. The current price of the day may be highly unreasonable from accidental circumstances, by the action of the seller himself in purposely keeping back the supply.” (A. S. Bolles, Putnam’s Handy Law Book for the Layman, p. 231).—J. Kelleher, “Market Prices,” in the Irish Theological Quarterly, Vol. X (1916), nos. 38, 39, 40.

²³ Gury, Comp. Theol. Mor., I, n. 841: “The legal price, or that established by civil authority, must be regarded as adequate to the value of the thing and therefore observed under obligation of restitution. The reason is that it belongs to civil authority to determine whatever pertains to public commerce, since it can make laws for the common good. In the absence of a legal price, only that price is to be regarded as just which is determined as such by common estimation, if the matter concerns merchandise that is valued among the people; for the adequate price of such things is derived from their usefulness for common uses. Moreover, the appraisal of such usefulness cannot be made better,” than by common estimation. But if things do not have a common valuation, as in the case of gems, valuable paintings, and so forth, they are more probably to be valued according to the judgment of experts in this matter, with attention to the circumstances and regard for the thing’s novelty, antiquity, rarity, and so forth. The reason is that they are regarded as competent judges in these matters, just as the general public is in ordinary matters. The contrary opinion nevertheless appears probable, because in that case the just price seems to be the one upon which the contracting parties agree. . . . In practice those are not to be disturbed who, in good faith and freely, agree at their own discretion in such matters. A fortiori, that price upon which both parties agree is to be regarded as just if the price is wholly unknown, because then each party is exposed to the risk.

δ) Fancy prices may be foolish, but they are not unjust, unless the buyer exploits the necessity of the seller.²⁴

²⁴ Ibid., n. 842: “It is asked whether a seller may sell a thing at a higher price because of the special affection he feels for it, or because of the advantage he derives from it. Answer: To the first: affirmative; the reason is that the owner’s affection for his thing is truly capable of valuation in money, since deprivation of the thing is a greater loss for him. To the second: affirmative, even more strongly, as is clear; for deprivation of a special advantage makes the thing much more valuable to the seller, and it is equitable that he increase the price in proportion to the greater loss he suffers.”—Cfr. M. Cronin, The Science of Ethics, Vol. II, pp. 316 sqq.—D. Barry, “Special Knowledge and the Just Price,” Irish Theol. Quarterly, Vol. X (1915), No. 37.

Special kinds of sale contracts are those known as resale (retrovenditio), sale by auction (venditio sub hasta sive licitatio), monopoly (monopolium), and brokerage (venditio per proxenetas).

(1) Retrovenditio is a contract in which the seller reserves to himself the right to purchase the commodity which he sells on condition that he refunds to the buyer all his expenses and pays him for any increase in value. This is permitted under the following conditions: (α) that the price be reduced in proportion to the burden which is imposed upon the buyer; (β) that the price of repurchase be the same; (γ) that the buyer assume all ordinary risks unless the price be made so as to cover them; (δ) that the subject-matter of the contract be resold in the same condition in which it was sold, either with or without the accruing fruits.²⁵

²⁵ Gury, Comp. Theol. Mor., I, n. 849: “Resale is a contract by which the seller reserves for himself the right to redeem his property, on condition that he reimburse expenses, improvements, or similar outlays. The conditions required for this are: 1. That the price be reduced according to the estimated burden imposed upon the buyer; 2. That there be no agreement for resale at a higher or lower price; an agreement that it be resold at the same price is lawful, even if the thing increases in price; 3. That it not be imposed that the risk of the thing sold fall to the seller’s loss, since that risk of itself belongs to the buyer, unless the price is increased according to the estimated risk; 4. That the thing be resold as it was delivered, unencumbered or with its fruits.”

The so-called contractus mohatra, by which the buyer was compelled to resell to the seller immediately at a lower cash price a commodity which he had purchased from him at a higher price or on credit, this higher sum to be considered the original loan or sum owed, was condemned as “veiled usury” by Innocent XI.²⁶

²⁶ For instance: You need money and ask me for a loan (mutuum), for which I should not (in those days) have been allowed to charge interest. To circumvent the law I sell you a horse for 100 dollars, on credit, with the understanding that you must resell it to me at once for 80 dollars cash. Thus you receive 80 dollars cash, but you owe me 100 dollars and I am 20 dollars to the good. Do not money-sharks practice similar tactics to-day in loan transaction?—Prop. damn. sub Innoc. XI, n. 40: “A mohatra contract is lawful, even with respect to the same person, and with a contract of resale previously entered into with the intention of profit.” (Denzinger-Bannwart, n. 1190).—Cfr. Gury, op. cit., I, n. 850; Göpfert, Moraltheologie, II, p. 181; P. Cleary, The Church and Usury, Dublin 1914, p. 13.

(2) An auction is a contract by which one party binds himself to transfer and the other to acquire the ownership of some property, whether real or personal, at the highest price to be got at a public sale. There are various methods by which such sales are conducted, and descriptions of the property to be sold and the conditions of sale are usually notified to the public by printed catalogues or circulars. The bidding proceeds in an orderly manner, each bid being in the nature of an offer, which may be revoked until the auctioneer signifies his acceptance by the fall of his hammer or in any other customary way. By this a contract is concluded with the last bidder and the property becomes his.²⁷

²⁷ Slater, A Manual of Moral Theol., Vol. I, p. 533.

Auctions may be forced or voluntary. A forced auction is one by which property is sold by public authority, as in the case of a bankrupt merchant to satisfy his creditors. A voluntary auction is one held by the owner of his own accord, either in person or through an authorized representative. The owner may request his friends to bid for the goods put up at auction in order that the latter be not sold too cheaply, to his own detriment or that of his creditors, but he is not permitted to run up the price by means of fictitious bidders (licitatores ficti) because this would involve an injustice to the bona fide bidders. Similarly, the bidders present at an auction may not conspire together to make inadequate bids, or to use illegitimate means (intimidation, fraud, or violence) to hinder others from bidding.²⁸

²⁸ Ibid.—Cfr. St. Alphonsus, Theol. Mor., l. III, n. 808 (ed. Gaudé, I, nn. 851–854); Göpfert, Moraltheol., Vol. II, 6th ed., pp. 192 sqq.—An auctioneer, under our civil law, is primarily the owner’s agent only to the moment when he accepts the purchaser’s bid and knocks down the property to him. Authority may be conferred on an auctioneer in the same way as on any other agent for the sale of similar property, verbally or in writing. Authority to sell property does not of itself imply authority to sell it at auction. If goods are sent to an auction room to be disposed of, this is deemed sufficient evidence of authority to sell them by auction and to protect whoever buys them. The seller is not bound by any terms stated by the auctioneer differing from those given to him by the owner. If the owner has imposed no terms on him, he has the implied authority usually existing in such cases. An auctioneer cannot, consistently with his duty, refuse to accept bids from anyone, unless the bidder is irresponsible, or unwilling to comply with the terms of the sale. He is justified in rejecting the bids of insane persons, minors, drunken persons, trustees of the property, and, perhaps, in some cases, of married women. It is impossible with good faith to combine the inconsistent capacities of seller and buyer, crier and bidder, in one and the same transaction. The auctioneer has no authority to warrant the property sold unless such authority has expressly been given to him. He must use ordinary and reasonable care in keeping the goods entrusted to him for sale, but is not responsible for their safety. (A. S. Bolles, Putnam’s Handy Law Book, pp. 16 sqq.)

The auction price of an article is not the same as the ordinary buying price, which latter is supposed to represent the real value of the article. The auction price may fall far below the infimum pretium or rise far above the summum pretium. The just auction price is determined by the highest bid, whatever that may be. The element of equality required for all just contracts is provided in the case of auction sales in the equal chances afforded to seller and buyer, of profit and of loss. On the side of the buyer, as Fr. Cronin says, there is the chance of his succeeding in knocking out all other bidders; in favor of the seller there is the equal chance of each bidder being knocked out by the rest.²⁹

²⁹ Cronin, The Science of Ethics, Vol. II, p. 320 sq.

(3) A monopoly (from the Greek μονοπωλία, single or sole selling), is the exclusive right or power secured to one or more persons, to sell some commodity or to carry on some branch of trade or manufacture. A monopoly is permissible if it is granted by law for the common good. Thus in some countries the government controls the sale of salt or tobacco. This is called a legal monopoly (monopolium legale seu legitimum). A legal monopoly may be private, namely, if it is granted by law to private persons, such as inventors or authors (monopolium privatum). This, too, is licit, provided it does not result in an undue raise of prices or in what has become known since the World War as “profiteering,” namely, buying up the necessaries of life with a view to reselling them at enormous profits.

“A natural monopoly arises from one or a few who band together and who are the owners of the sole source of supply of some commodity. . . . A natural monopoly . . . is . . . lawful, but if the commodity or service which is thus monopolized is necessary or very useful for the common good, natural equity prescribes that the price demanded should be fair and reasonable, even if it be not regulated by positive law. If the subject-matter of the monopoly belongs to the class of nonnecessaries and luxuries, as for example, a mine of diamonds or rubies, of special quality, it cannot be said that the price is fixed and determined by natural conditions, and the owner will be justified in taking any price that he can get without fraud or misrepresentation. Even capitalistic monopolies of commodities or services which are necessary or very useful to the community are not morally wrong if the prices charged are fair and reasonable, and if there is nothing reprehensible in the method of conducting business. The public may derive considerable advantages from these monopolies. They are capable of effecting great savings in the costs of production, advertising, distribution, and general management, and they may secure a large return on their capital and at the same time sell cheaply to consumers. They obviate, too, the wastes and the recurring depressions in trade which follow from unlimited competition. Monopolies, however, are morally wrong when the prices demanded for necessary or useful articles of consumption are excessive, or when the methods of business are unjust, uncharitable, or generally unlawful. The prices will be excessive when much more than a fair return for the capital employed is obtained, after all the costs of production and distribution have been defrayed, and when as a natural consequence they are higher than would rule if there were no monopoly. When means are used to crush rivals in order to secure a monopoly, when bribery of public officials is practiced to obtain from government specially favorable laws or treatment, when discriminating rates are obtained from railways and other companies, when workmen are tyrannically and unjustly treated, when prices of raw material are unduly depressed and producers are robbed of a fair compensation for their toil and trouble, and in general when fraud or force is used to accomplish the end in view [viz., excessive profits] the methods of business are immoral and monopolies which employ such methods are to be condemned. If prices demanded by a monopoly are in the estimation of prudent men higher than are fair and reasonable, injustice is committed, and there is consequently an obligation to make restitution to the buyers who have been robbed [or to the community]. If the prices charged are not altogether unfair and unreasonable, but high, and above what in the circumstances would be considered moderate, there will be a sin committed against charity, in that private advantage has been unduly pursued to the detriment of the people, who have been compelled to pay higher prices for the enrichment of the monopolists. “From what has been said it is clear that what are called ‘rings’ and ‘corners’ in wheat, cotton, and other such commodities are morally wrong, in that they cause the financial ruin of many people, and produce wide distress and instability of trade. Trusts, too, and combinations in trade are full of danger for the community. They wield immense power, and the temptations to abuse it, especially as a company has no conscience, as the saying is, are too great for the common run of business men. It is well that the government should have the right of examining and inspecting the affairs of such bodies and of applying the necessary remedies in case of abuse.”³⁰

³⁰ Slater, A Manual of Moral Theol., Vol. I, pp. 535 sqq.—In the United States the only monopolies that the laws look on with favor consist of the post office, which is a government monopoly, and the rights granted to individuals under the patent and copyright laws. Monopolies commonly known as trusts are regarded as odious, and various States and the Federal Congress have enacted laws making them illegal. (Cfr. Cyclopedia Americana, Vol. X, s. v. “Monopoly,” and Vol. XV, s. v. “Trusts”).—Cfr. J. A. Ryan, “The Moral Aspect of Monopoly,” in the Irish Theological Quarterly, Vol. III (1908), No. 11.—St. Alphonsus, Theol. Mor., l. III, nn. 815–817.—J. P. Gury, Comp. Theol. Mor., I, nn. 855–857.—M. Cronin, The Science of Ethics, Vol. II, pp. 325 sqq.

(4) We come now to brokerage. A broker is a person who makes it his business to negotiate sales or contracts as an agent, or to make sales and purchases for a commission (venditio per proxenetas). A broker is ordinarily a mere agent, and his sales are private.

There are many kinds of brokers: bill and note brokers, stock brokers, shipping brokers, insurance brokers, real estate brokers, pawn brokers, merchandise brokers, etc. A broker may not appropriate to himself a larger sum than the commission agreed upon between him and his client, or fixed by law, unless indeed he has added considerably to the value of a commodity by extraordinary diligence or with the permission of the owner.³¹

³¹ A. S. Bolles, Putnam’s Handy Law Book, pp. 45–47; Gury, Comp. Theol. Mor., Vol. I, n. 858 sq.; Göpfert, Moraltheol., Vol. II, 6th ed., pp. 191 sq.

Not a few brokers nowadays deal in stocks and bonds and other valuable papers, buying and selling these at a commission, either in the open market or to private customers. If no illicit means (such as the circulation of fictitious reports, the use of illegitimately discovered secrets, etc.) are employed in speculations of this kind, they cannot in themselves be condemned as immoral. Nay, it must even be admitted that, to a certain extent, speculation in stocks and bonds is useful, inasmuch, namely, as it facilitates the purchase of valuable papers for the investment of capital and their sale for the provision of ready cash. It also aids in the placing of government bonds. The great evil of the stock exchange is that it easily advances speculation and gambling beyond all due limits and favors fraudulent undertakings. In the nature of the case, lying and fraud are often applied as means in speculation. The so-called financial crises are for the most part artificial “bull and bear periods” in which the speculators by every imaginable and often dishonest means endeavor to raise or depress the price of certain stocks and bonds.

(5) In this connection a word concerning dealings in “options” and “futures” may not be out of place. One is said to deal in “futures” when the goods contracted for are not in his possession, nay do not even belong to him at the time the sales contract is made. If the terms of the contract leave to the seller the choice either to deliver the stipulated goods at a fixed price or to pay the difference between the price agreed upon and the actual market price when the term of the contract arrives, the contract is called an “option.”

“From such an ‘option’ contract to mere ‘time bargains’ or ‘difference transactions’ or ‘margin’ is but a step. In these transactions real delivery of goods to the buyer is not contemplated by either party; they merely make use of the market price of wheat, or cotton, or stocks and shares, or bacon, or other commodity, as matter for wager. . . . It is a subject of hot debate whether such gambling has a good or bad effect on genuine trade. There is, of course, a great increase of business for commission houses, brokers, and agents generally resulting from fictitious bargains, and it is to be expected that such classes will be loud in defense of time bargains, or ‘options’ and ‘futures,’ as they are often indifferently and loosely called. On the other hand, producers of foodstuffs and manufacturers of raw material into cotton goods seem generally persuaded that their trade is seriously injured by gambling transactions on ‘change. Within the last few years several governments have given serious attention to the problem.”

From the moral point of view dealings in futures must be judged as bets or wagers, for a speculative contract in “futures” is to all intents and purposes nothing but a wager or bet concerning a future and uncertain event. The question whether it is lawful or not depends on the broader question concerning the lawfulness of betting.

Applying the Catholic moral doctrine on betting to the question before us, Fr. Slater, whom we have just quoted, says: “We are compelled to admit that a deal in futures in itself is not wrong if it is accompanied by the conditions laid down [i. e., that the money risked belongs to him who risks it; that the transaction is free from fraud and deceit; and that, finally, the chances are fairly equal on both sides]; but that it is wrong if any of these conditions are wanting. However, even though the requisite conditions may be present, it is a dangerous pastime, and should be discouraged, like any other form of gambling, in the interests of public and private morality.” Passing from the abstract to the concrete, namely, to the form in which betting is actually carried on in the exchanges of the great commercial centres of the world, the same eminent English moralist, after carefully weighing the arguments often adduced in favor of the practice, says: “On the other hand producers and consumers alike seem generally to have made up their minds that gambling in futures has a disastrous effect on trade. Competitors are almost indefinitely multiplied; the area of competition is vastly enlarged; and producers of wheat, for example, in countries where land and labor are dear, where taxes are burdensome and skies unpropitious, find themselves forced to compete with others who live under opposite conditions. Tariffs may remedy the evil to a certain extent, as far as effective contracts which contemplate actual delivery are concerned, but they cannot shut out the subtle influence of gambling transactions. In addition to this, gambling in futures falsifies prices. In a healthy condition of the market, the price of an article will depend on the costs of production and the law of supply and demand. As long as these factors dominate the situation, producer and consumer can satisfy themselves that they have full value for their goods or for their money. But when natural prices are interfered with from without by speculators who do not contemplate effective delivery of commodities, and who are only interested in differences, effective dealers can have no security that they get full value in their transactions. Prices are falsified and markets are reduced to an unnatural condition. . . . There are also some more general considerations which cannot be overlooked by the moralist. Betting, as we have seen, is not in itself unlawful, provided it is accompanied and safeguarded by certain conditions. When, however, it becomes a habit, and degenerates into gambling, our verdict in ordinary cases must be different. . . . If it becomes a passion, if the gambler seeks to make it a substitute for honest toil, and strives to make it support him or bring him wealth, serious harm has already been done. The gambler produces nothing; he adds nothing to the wealth of the community; he soon learns to shun honest work; he becomes a parasite who preys on society, and eventually brings ruin on others as well as on himself. So that dealing in differences, even if regarded merely as a form of gambling and speculation, must fall under the censure of the moralist. . . . But it would be a comparatively small matter if the evil connected with gambling in futures were confined to the parties immediately concerned in the transaction. Unfortunately, too often many good and innocent people, who never dream of speculating on ’change, suffer loss from the operations conducted there. A rise or fall in the price of wheat means for the operator the winning or losing of his bet, but for many a farmer a fall in the price means that he is robbed by the ‘bears’ of the fruit of his toil; it may mean the bankruptcy and ruin of many a respectable family. On the other hand, a rise in prices means an additional hardship on the poor, a greater difficulty in making ends meet, a robbing of many a poor family of the staff of life. On many grounds, therefore, the verdict of the moral theologian on the question of the lawfulness of dealing in futures must be that in practice the transaction is immoral and wrong.”³²

³² T. Slater, S.J., Questions of Moral Theology, N.Y. 1915, Ch. IX, “Deals in Options and Futures,” pp. 145–158.

(6) Advertising, that is, the use of extraordinary means of publicity for the purpose of calling attention to certain goods or products, is not per se illicit, nay, to a certain extent at least, may be considered necessary for the ordinary conduct of business, industry, and commerce. Unfortunately the practice is only too often made a means of deceiving and cheating the public.

Göpfert lays down the following rules for keeping advertising within proper bounds: (α) The advertiser may praise the quality of his goods and call attention to their merits, provided the price he asks is not unfair; but it is a violation of charity to advertise so as to injure competing merchants. (β) It is immoral and forbidden to misrepresent the quality or value of the goods advertised, and if such misrepresentation actually results in loss to others, it entails the duty of restitution, not only to the defrauded buyers, but likewise to the competitors whose business has been damaged by such illicit means.³³

³³ Göpfert, Moraltheol., Vol. II, 7th ed., p. 187; see the same eminent author’s paper “Zur sittlichen Beurteilung des modernen Reklamewesens” in the Theologisch-praktische Quartalschrift, of Linz, 1900, pp. 593 sqq.

4. The contract known in Scholastic parlance as census (French, rente) is an agreement by which a person (censuarius) transfers the right of ownership and the usufruct of an object to another (censualista) in consideration of an annuity or pension.³⁴

³⁴ Gury, op. cit., Vol. I, n. 874: “Census (French, rente) is the right to receive an annual pension from a thing or a person. Census can be manifold, namely: 1. Reservative (rente foncière), that is, an annual pension to be received from a thing whose ownership has been alienated; 2. Consignative (rente constituée), that is, an annual pension to be received from a thing or person by title of purchase; 3. Real or personal, according as the pension is constituted in a fruitful thing or in a person’s labor and industry; 4. Temporary or perpetual or life-long (rente viagère), according as it is established for a time, e.g., for 20 years, or in perpetuity, or for the life of a man; 5. Redeemable by one or both parties, according as it can be redeemed at the option of one or both, or irredeemable, if by agreement the seller or censuarius cannot free himself by restoring the principal; then the buyer or censualista necessarily retains his right in the census.” Cfr. nn. 875–878.

The juridical distinction between this sort of contract and an investment of capital consists in this that the property transferred in consideration of an annuity cannot be demanded back like money simply loaned to another. Formal justice is safeguarded by the legal fiction that the investor merely receives back in small portions what he has entrusted to another. What he receives, therefore, in the form of interest, is his own property, whereas the other party to the contract gets for his trouble whatever gain he can make with the capital or property confided to him.

The question which has worried many a moralist, whether one may live on rentes without productive work, is theoretical rather than practical. “Nature itself,” says Linsenmann, “compels children who are not yet old enough to support themselves, old men who are no longer able to work, and those disabled by illness, to live off the labor of others. Moreover, a considerable number of men and women are destined by natural law and the so- cial order to devote themselves not to productive bodily labor, but to the higher intellectual and spiritual tasks of humanity. To this class belong most public officials, priests, nuns, authors, teachers, etc. . . . If their right to participate in the productive labor of their fellows is conceded, it is no longer a theological, but purely an economic question whether the fructification of capital had better take place in the limited form of census, rentes, or annuities, or in the freer form of modern investments. Catholic moralists, being conservative, admitted the justification of the contract called census more readily than the lawfulness of the more modern forms of investment, for the reason that it seemed to them more conducive to the stability of property rights, though already in the Middle Ages it was perceived that the irrevocability of census contracts sometimes involved unnecessary and unfair harshness.”³⁵

³⁵ Linsenmann, Lehrb. d. Moraltheol., pp. 554 sq.—Cfr. J. A. Ryan, The Church and Interest-Taking, St. Louis, 1910.—P. Cleary, The Church and Usury, pp. 121 sqq.

5. A money-changer is a person who exchanges money at a prescribed rate for gain. The underlying contract is called cambium. It is qualified as cambium manuale or minutum if the exchange takes place in cash; locale seu per literas,³⁶ if effected by means of a bill drawn in one place or country upon a drawee in another place or country. If the profit (agio, commission) which the money-changer (campsor, argentarius, nummularius, trapezita) makes, is moderate, i. e., according to law or custom, the business is unobjectionable. It is wrong, however, to issue bills of exchange to a fictitious address (cambium fictum vel siccum) and to demand more than the regular fee or commission.³⁷

³⁶ Gury, Comp. Theol. Mor., I, n. 870: “Exchange is an exchange of money with some profit for the money-changer. Exchange, however, in general means the same as exchange either in money or in other things. Exchange is distinguished in various ways, namely: 1. Real or true exchange and fictitious or dry exchange. The former is that by which money is actually exchanged for another thing. The latter is that in which an exchange is feigned, but it is nothing other than a disguised loan, as, e.g., when money is given as though to be received in another place, although it is received in this same place; 2. Manual or petty exchange and local exchange or exchange by letters. The former occurs when money of one form or material for money of another form or material. The latter, however, occurs when present money is exchanged for absent money to be paid in another place.”—Cfr. S. Alph., Theol. Mor., l. IV, nn. 850–856; Schwane, Die theologische Lehre über d. Verträge, pp. 155 ff.

³⁷ Schwane (op. cit., p. 156, n. 1) says: “Some derive the name siccum from the fact that this sort of business was unprofitable for the recipient of the bill; others think that the Venetians and the Genoese called it thus because it was drawn in appearance upon trans-oceanic trading places, but in reality was paid on dry ground in Venice or Genoa.”

To exchange the money of one country for that of another requires a certain capital and personal service, which must be paid for out of the commission charged. All that can be demanded from the standpoint of Moral Theology is that the profits be not larger than they would be in any other legitimate business in which the same amount of capital is invested under similar conditions. The State should supervise the business of money-changing in order that it may be honestly conducted.³⁸

³⁸ Linsenmann, Lehrb. d. Moraltheol., p. 576.—Of the iusta merces of money-changers Noldin says: “The common estimation of this service determines the just fee, which may be greater in proportion as greater expenses are required so that the money-changer may ordinarily satisfy his clients. Moreover, to avoid injustice in exchanges and bills of exchange scarcely anything else is required except that the statutes of the law and the practice of upright money-changers be observed.” (Summa Theol. Mor., Vol. II, 13th ed., p. 630).

6. Loaning money at interest is generally done by means of a contract in which a definite sum (census, interesse) is agreed upon as a recompense for the temporary use of the amount loaned.³⁹ The permissibility of taking interest can be demonstrated from Holy Scripture and ecclesiastical tradition. a) In some passages of the Old Testament the taking of interest is strictly forbidden,⁴⁰ whereas in others it is forbidden only on loans made to brothers or the poor,⁴¹ and in still others it is expressly permitted when the lenders were foreigners, i. e., non-Israelites.⁴² Since Holy Scripture, therefore, makes a distinction between Israelites and non-Israelites, and permits interest to be taken from the latter, it follows that interest cannot be per se forbidden by the moral law of nature, for if it were, God could no more have permitted the Jews to practice it than He could have permitted them to rob or murder foreigners.⁴³ Hence it is certain that the Old Testament prohibition of interest-taking was purely a matter of civil law. The economic system of the Jews under Moses was such as to limit loans among themselves to cases of urgent necessity, whereas the gentiles borrowed Jewish capital for purposes of speculation and production. In view of this fact Moses allowed his people to take interest from strangers, but not from fellow-Hebrews. Thus we find the key for the correct solution of this much-debated problem in the Mosaic law.

³⁹ See the bibliography at the end of this Section, p. 314.

⁴⁰ Cfr. Ps. XIV, 5; LIV, 12. J. Hejel, Das alttestamentliche Zinsverbot, Freiburg i. B. 1907, pp. 62 sqq.; Benzinger, Hebräische Archäologie, 2nd ed., pp. 292 sq.

⁴¹ Cfr. Ex. XXII, 25; Lev. XXV, 35 sqq.; Ez. XVIII, 8, 13; Ps. LXXI, 14.

⁴² Deut. XXIII, 19 sq.: “Thou shalt not lend to thy brother money to usury [i. e., on interest], nor corn, nor any other thing: but to the stranger. To thy brother thou shalt lend that which he wanteth without usury [i. e., interest].”—Cfr. Lev. XXV, 36; 2 Esdr. V, 7; Ehrlich, Randglossen zur hebr. Bibel, II, 95.—Cfr. P. Cleary, The Church and Usury, Dublin 1914, Ch. I, “Usury among the Hebrews,” pp. 1–18.

⁴³ Cfr. K. J. Hefele, Beiträge zur Kirchengeschichte, Vol. I, p. 36.

The New Testament contains but one text that is commonly referred to interest-taking. It is Luke VI, 34 sq., where Christ is quoted as saying: “And if you lend to them of whom you hope to receive, what thanks are to you? for sinners also lend to sinners, for to receive as much (τὰ ἴσα). But love your enemies, do good and lend, hoping for nothing thereby (δανείζετε μηδὲν ἀπελπίζοντες).” This text, however, throws no light on the problem of interest-taking, for in it Christ does not advise His hearers to refrain from taking interest, but to give away the capital itself.⁴⁴

⁴⁴ Luke VI, 34 sq.—Cfr. D’Annibale, Summula Theol. Mor., Vol. II, 5th ed., p. 449: “That Luke’s words [vi, 34] do not pertain here is now known almost even to the bleary-eyed and barbers.”—A. Vermeersch, S.J., Quaest. de Iustit., 2nd ed., p. 452: “As regards the New Testament, it contains nothing, not even in appearance.”—P. Cleary, The Church and Usury, pp. 32 sqq.

Hence it may be safely held that the Bible does not prohibit interest-taking. b) The Fathers of the Church and the early councils, on the other hand, sternly condemned the practice, mainly for reasons drawn from the Old and New Testaments and under the influence of the Greek and Roman philosophers of antiquity, who seem to have opposed the taking of interest.⁴⁵ Some of the Fathers expressly refer to Aristotle’s well-known teaching that money is an unproductive thing. A good deal of the feeling displayed against interest-taking in the early Church was no doubt a result of the shameless way in which usury was practiced at that time. Most of the early ecclesiastical writers use “interest” and “usury” as synonymous terms. Beginning with the fourth century, however, the law against loaning money on interest was enforced only against clerics, whilst the laity were left free to do as they pleased.

⁴⁵ Matth. V, 42; VI, 12; XVIII, 23–35; cfr. Luke VI, 34 sq.; the teaching of the ancient philosophers is discussed by Cleary, The Church and Usury, pp. 19 sqq., 26 sqq.

The teaching of the Fathers on the subject of interest, says Dr. Funk, “was not without its defects, and the early Church seems to have made allowance for this fact when she employed her penal power in this matter against clerics only, and left the laity unmolested.”⁴⁶

⁴⁶ F. X. Funk, Geschichte des kirchlichen Zinsverbotes, p. 7.—Cfr. P. Cleary, The Church and Usury, pp. 37 sqq.

c) During the Catholic Middle Ages the prohibition of interest-taking was adhered to, at least in principle.

d) After the thirteenth century the question began to be dealt with in a more scientific way by the Scholastics, who, not content with the authority of Sacred Scripture and the Fathers, searched for arguments against interest-taking in reason and the natural law. One of the principal arguments they evolved was based on the nature of money. They held that money is a commodity which is consumed in the first use and has no other use which can give it an additional value, and that, consequently, in the business of exchange, its substance (res) cannot be separated from its use (usus rei), nor can it be separately valued without an offence against distributive justice. Thus a man who would sell to one buyer the substance of a bottle of wine (vinum), and to another the right to drink it (usus vini), would violate justice because he would sell the same commodity twice, or sell something which had no real existence. In other words, the fair price for a bottle of wine is the money equivalent of the value which the wine has for drinking, because the value of the first consumption of a commodity is the value of the commodity. Money, considered as a medium of exchange, they argued further, is a commodity whose value is identical with the value of the first consumption of it, and, therefore, it is per se unlawful to charge a compensation (usura) for its use (usus). Hence the Schoolmen regarded all gain or profit derived from the use of an unproductive or unfruitful commodity, or from a loan as such (lucrum ex mutuo ratione mutui), as unjust and usurious.

St. Thomas puts it thus: “To take usury [interest] for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality, which is contrary to justice. In order to make this evident, we must observe that there are certain things, the use of which consists in their consumption: thus we consume the wine when we use it for drink, and we consume wheat when we use it for food. Wherefore in such like things the use of the thing must not be reckoned apart from the thing itself, and whoever is granted the use of the thing, is granted the thing itself; and for this reason, to lend things of this kind is to transfer the ownership. Accordingly, if a man wanted to sell wine separately from the use of the wine, he would be selling the same thing twice, or he would be selling what does not exist, wherefore he would evidently commit a sin of injustice. In like manner he commits an injustice who lends wine or wheat, and asks for double payment, viz.: one, the return of the thing in equal measure, the other, the price of the use, which is called usury. On the other hand there are things, the use of which does not consist in their consumption: thus to use a house is to dwell in it, not to destroy it. Therefore in such things both may be granted: for instance, one may hand over to another the ownership of his house while reserving to himself the use of it for a time, or, vice versa, he may grant the use of the house whilst retaining its ownership. For this reason a man may lawfully make a charge for the use of his house, and, besides, reclaim the house from the person to whom he has granted its use, as happens in renting and letting it. Now money, according to the Philosopher, was invented chiefly for the purpose of exchange, and consequently the proper and principal use of money is its consumption or alienation, whereby it is sunk in exchange. Hence it is by its very nature unlawful to take payment for the use of money lent, which payment is known as usury; and just as a man is bound to restore other ill-gotten goods, so is he bound to restore the money which he has taken in usury.”⁴⁷

⁴⁷ St. Thomas, Summa Theol., 2a 2ae, qu. 78, art. 1. “To take usury for money lent is unjust in itself, because what does not exist is sold. By this an inequality is manifestly established, which is contrary to justice. To make this evident, it must be known that there are certain things whose use is the consumption of the things themselves, just as we consume wine by using it for drink and wheat by using it for food. Hence, in such things, the use of the thing ought not to be reckoned separately from the thing itself, but to whomever the use is granted, by this very fact the thing is granted, and for this reason ownership is transferred in such things by a loan. Therefore, if someone wished to sell the wine separately and wished to sell the use of the wine separately, he would sell the same thing twice, or would sell what does not exist; hence he would manifestly sin through injustice. And for a similar reason he commits an injustice who lends wine or wheat, asking that two recompenses be given him: one, indeed, the restitution of an equal thing, and the other the price of its use, which is called usury. But there are certain things whose use is not the consumption of the thing itself, just as the use of a house is habitation, not its destruction. And therefore in such things either may be granted separately; for example, when someone hands over to another the ownership of a house, reserving its use to himself for some time, or conversely when someone grants another the use of a house while reserving its ownership to himself. And for this reason a man may lawfully receive a price for the use of a house and, besides this, demand the house lent for use, as is evident in the hiring and letting of a house. Money, however, according to the Philosopher [Ethic., l. V, c. 5; Polit., l. I, cc. 5–6], was principally invented for making exchanges; and thus the proper and principal use of money is its consumption or alienation, according as it is expended in exchanges. And for this reason it is in itself unlawful to receive a price for the use of money lent, which is called usury; and just as a man is bound to restore other things unjustly acquired, so he is bound to restore the money which he received through usury.” On the teaching of St. Thomas and the Scholastics generally see Cleary, The Church and Usury, pp. 78 sqq.

β) All through the Middle Ages canonists and theologians were unanimous in condemning the taking of interest on loans made for consumption only (mutua), as distinguished from loans for use, reckoning money as an article of consumption. When, however, some external reason seemed to justify the taking of interest, it was not regarded as usury. Such a reason was called titulus mutuo extrinsecus. The principal “titles” held to justify interest were: (1) damnum emergens, i. e., a loss or damage arising to the lender from the loan; (2) lucrum cessans, i. e., profit lost to the owner by not having the money in his control; (3) periculum sortis amittendae, i. e., the danger of losing the capital lent; and (4) poena conventionalis, i. e., a penalty agreed upon between the contracting parties for remissness in repaying the money loaned. Where one of these “titles” could be alleged, it was permissible to demand and receive a moderate charge over and above the capital lent. This charge was not paid for the use of the money loaned, but for the danger incurred by the lender, or to indemnify him for the loss he had sustained and which he was not bound to take upon himself gratuitously.⁴⁸

⁴⁸ P. Cleary, The Church and Usury, “Extrinsic Titles,” pp. 91–105.—Gury, Comp. Theol. Mor., I, n. 818: “Emerging loss is a detriment which the lender suffers on the occasion of a loan made to his neighbor. If the lender suffers loss because of the loan, it is a legitimate title for receiving something above the principal or the thing lent. The reason is that it is not equitable that you should bear loss from the loan; for no one is bound to confer a benefit at his own loss except in the neighbor’s necessity.”—Ibid., n. 819: “Ceasing gain is that which the lender would have gained from his property or money, had he retained it, if he had employed it in another lawful contract. Ceasing gain is a legitimate title for demanding something above the principal. The reason is: 1. Because then there truly is an emerging loss; 2. Because the hope of gain is extrinsic to the loan and therefore capable of valuation in money.”—Ibid., n. 820: “Risk to the principal is a well-founded fear that the principal may not be recovered. There is a twofold risk: 1. Common, intrinsic to every loan, e. g., the fear that all the borrower’s goods may perish in a fire, etc.; 2. Extraordinary, e. g., if a loan is given to a prodigal or to a man of doubtful credit or to one going by sea, or if great expenses in recovering the principal are feared.”—Ibid., n. 821: “Nothing can be demanded for the common risk. The reason is that such a risk is entirely intrinsic to the loan and therefore cannot be separated from it. Extraordinary risk is a legitimate title according to the more common and more probable opinion. The reason: 1. Because, if the hope of gain is capable of valuation, much more so is the danger of probable loss; 2. Because things placed in safety are valued more highly than things placed in danger; 3. It is established by a decision of the S. C. de Propaganda Fide for the Chinese missionaries, approved by Innocent X (cf. S. Alph., l. III, n. 765 [ed. Gaudé, II, 211]). Except: 1. If the borrower is poor, because then the precept of lending is urgent; 2. If the borrower secures the principal by a pledge, because in that case the risk ceases.”—Ibid., n. 822: “A contractual penalty consists in this, that the borrower binds himself to pay something above the principal if he does not repay it at the appointed time. A contractual penalty is a legitimate title for receiving, besides the principal, that which was agreed upon. The reason is that in this way provision is made for the firmness of the contract and at the same time the borrower’s negligence is forestalled. The required conditions are: 1. That the debtor’s delay be notable and culpable; 2. That the penalty be moderate and proportionate to the fault; 3. That a usurious intention be absent, that is, that the lender not desire the other party’s culpable delay.”—Funk, Zins und Wucher, pp. 119 sqq.; Ratzinger, Die Volkswirtschaft, 2nd ed., pp. 278 sqq.; Göpfert, II, 172 sqq.

Other and more practical exceptions from the law prohibiting interest were made in favor of those who purchased rentes (supra, pp. 293 sqq.) and in favor of State loans or charitable institutions (montes pietatis).⁴⁹ Thus it came about that, towards the end of the Middle Ages, the law against interest was more often violated than respected, for while Church and State still insisted that it was forbidden to take interest on loans made purely for consumption (ratione mutui), in matter of fact interest was quite generally demanded and taken on the strength of various “extrinsic titles,” which practically neutralized the prohibition.

⁴⁹ Denzinger-Bannwart, n. 739.—Funk, Zins und Wucher, pp. 62 sqq., 80 sqq.—IDEM, Geschichte des kirchl. Zinsverbotes, pp. 42 sqq.—H. Holzapfel, O. F. M., Die Anfänge der Montes Pietatis, Munich, 1903.

d) In modern times the ancient definition of usury was still adhered to, not only by Catholic theologians,⁵⁰ but also by Luther and Zwingli, who forbade their followers to take interest on loans.⁵¹

⁵⁰ H. Busembaum, Theol. Mor., l. III, tr. 5, c. 3, dub. 7: “Usury is gain arising immediately from a loan, so that the lender gains, above the principal (i. e., the capital sum), something which can be valued in money, in such a way that such gain is intended precisely by reason of the loan. This is plainly unjust and a grave sin against human and divine law, since the lender acquires gain from a thing which is no longer his, because the thing lent has already passed into the ownership of the borrower, as is evident from the definition. And the general rule is: Every act or burden or charge added to a loan beyond that which is proper and intrinsic to it renders the contract usurious.”—Cfr. St. Alphonsus, Theol. Mor., l. III, nn. 758–759 (ed. Gaudé, II, 203 sqq.); Gury, I, nn. 815–817.

⁵¹ P. Cleary, The Church and Usury, pp. 147 sqq.; Walther, Thesen über den Wucher, St. Louis, 1876.

But in spite of many synodal decrees, the capitalistic function of money led to a change in ideas and practice. Of particular importance in the process of evolution was the practice of selling rentes and the recognition of the so-called contractus trinus,⁵² i. e., a combination of three different contracts, one social and the other two insurance. In evolving this new form of contract, the Scholastics, in Funk’s opinion, did a great thing: “Though they had not succeeded in storming the fortress of the anti-interest law, they had surrounded it from two sides and laid a double breach for modern Capitalism. The capitalist through this teaching was enabled to invest his money profitably by means of a contractus trinus, which was always feasible when there was a question of lending capital for productive purposes. Or he could buy rentes, since this species of contract was now no longer hedged in with the former limitations, but the contracting parties were left free to make whatever agreement they chose. The seller could pay his indebtedness at any time, and the buyer was free to demand his capital back whenever he wished. The only precaution that had to be observed was to avoid the terms ‘loan’ and ‘interest,’ for paying interest on loans was still regarded as usury and forbidden under pain of mortal sin.”⁵³

⁵² See infra, pp. 329 sq.; Cleary, The Church and Usury, pp. 126 sqq.

⁵³ Funk, Geschichte des kirchl. Zinsverbotes, pp. 57 sqq., 60,— IDEM, Zins und Wucher, pp. 84 sqq.

Soon the civil governments revoked the laws forbidding interest-taking and confined themselves to punishing usury in the modern sense, and the Church and her theologians acknowledged the titulus legis civilis as an additional reason justifying interest. The last important papal decision on the subject is the encyclical letter of Benedict XIV, “Vix pervenit,” issued November 1, 1745. It condemns taking interest on a loan merely for the sake of the loan (omne lucrum ex mutuo ratione mutui), but recognizes the extrinsic titles enumerated above.⁵⁴

⁵⁴ The text of the encyclical in Migne, Theol. Cursus Compl., XVI, 1059; cfr. Busembaum, Theol. Mor., II, 59 sqq.; St. Alphonsus, Theol. Mor., ed. M. Haringer, Vol. III, Ratisbon 1846, pp. 356 sqq.; Denzinger-Bannwart, nn. 1609–1612; Cleary, The Church and Usury, pp. 160 sqq.

A substantial mitigation of ecclesiastical discipline was initiated by the Apostolic See in the early part of the XIXth century, when it repeatedly declared, in response to inquiries, that those who took interest at a moderate rate should not be disturbed in their peace of mind, provided they were ready to submit to such decisions as the Church might see fit to make on the subject in future.⁵⁵ At first these declarations were limited by the clause that interest might be taken to the extent permitted by the civil laws of the respective country (titulo legis civilis), but this clause, too, was soon omitted, and the permission to take interest was extended to clerics, monasteries, and ecclesiastical foundations.⁵⁶

⁵⁵ “They are not to be disturbed, provided they are prepared to abide by the mandates of the Holy See.”—Cfr. Cleary, The Church and Usury, pp. 168 sqq., 174 sqq.

⁵⁶ S. C. Offic., decree of Feb. 28, 1872 (Collectio Lacensis, VI, 690); cfr. Gury, Comp. Theol. Mor., Vol. I, n. 823 sqq.

The New Code expressly says: “If a fungible thing is given to someone in such a way that it becomes his and afterward an equal amount is restored to him in the same kind, no gain may be received by reason of the contract itself; but in the furnishing of a fungible thing it is not in itself unlawful to stipulate for lawful gain, unless it is clear that it is immoderate, or even for greater gain, if a just and proportionate title supports it,”⁵⁷—that is to say, in loaning goods to be consumed by the borrower, when return is made in the same kind, no interest may be charged by reason of the contract itself; but in loaning fungible goods, a reasonable interest may be charged if there is a just and proportionate title. “The quintessence of this canon, according to Father Augustine, O. S. B., is “that interest on loans is permitted according to the usual and legal rate, not precisely by reason of the contract, but by reason of the risk incurred and other circumstances.”⁵⁸

⁵⁷ C. I. C., can. 1543.

⁵⁸ A Commentary on the New Code of Canon Law, Vol. VI, p. 609. Fr. Augustine refers to Benedict XIV’s encyclical “Vix pervenit” and to the instructions of the S. C. of the Propaganda of 1873 (Coll. S. C. P. F., n. 1303), where, he says, “the documents referring to these subjects are given and the question is treated ex professo.”

The changed attitude of the Church on interest-taking is perfectly justified in view of the fact that money is no longer, as it was before the dawn of the industrial era, a mere means of exchange for articles of consumption and a measure of their value, but the chief form of capital. Today “no wealth-producing object of importance can be undertaken without a supply of money,” says Fr. Slater, “and money is now readily exchangeable for land, machinery, means of distribution, and other instruments for the production of wealth. Capital is one of the factors necessary for the production of wealth, and it is the chief instrument of its production. Money, then, looked upon as capital, is not a mere fungible; it is not a commodity which is consumed in the first use of it; it is the main instrument necessary for the production of wealth, and it thereby acquires a new function: it becomes virtually productive and puts on the nature of land and machinery, with which it is so readily exchangeable. Indeed now-a-days land can hardly put forth its natural productivity without the aid of capital, and machinery cannot be worked for the production of wealth without it. It follows then that now-a-days money is not merely a means of exchange, it is also an instrument of production, and just as money may be charged for the use of land, or of a house, so money may be charged for the use of money. Money now has its fair and reasonable price like any other commodity, and the sin of usury is committed not by taking a fair and reasonable interest for a loan, but by exacting excessive interest.”⁵⁹

⁵⁹ Slater, A Manual of Moral Theol., I, 515 sq.

“If,” says Father H. Pesch, S. J., by way of a demonstratio ad absurdum, “moderate interest were objectively and per se forbidden by the moral law of nature, the Church would not only have mitigated her demands in favor of a generation living under Capitalism, but she would be tolerating, positively and for all classes of human society, a most atrocious crime, namely, usury, which is admittedly opposed to the natural law and, in consequence, intrinsically and essentially evil.”⁶⁰

⁶⁰ H. Pesch, “Zinsgrund und Zinsgrenze,” in the Zeitschrift für kath. Theologie, Innsbruck, 1888, p. 37; cfr. P. Cleary, The Church and Usury, pp. 200 sqq.—The whole problem is admittedly a thorny one, and though many solutions of it have been proposed, none has found general acceptance. One of the latest writers on the subject, Fr. J. B. McLaughlin, O. S. B., thinks the dispute arose from ambiguity about the term mutuum. Benedict XIV, who, by the way, in his encyclical letter spoke with authority as teacher of the universal Church (“lest the purity of Catholic doctrine, the deposit of which was entrusted to us by Christ, be defiled by this stain of error”), used the term mutuum in its precise technical sense, in contradistinction to investments. His meaning was that “if the money passed so that they might become rich, then it is not mutuum, but of a nature altogether different from the nature of a mutuum. If it is mutuum, then it is not so that they might become rich; the purpose for which the money is to be used does not enter into a mutuum contract, which necessarily turns upon equality between what is given and what is returned, and in nothing else. . . . The root difference seems to be this. There is such a thing as enriching yourself by impoverishing your neighbors. And there is such a thing as enriching yourself by enriching your neighbors. The first is usury, the second is the investing of capital. My neighbor needs a loan; I shall have to help him; I will take the opportunity to annex some of his belongings. That is usury. I have not added to the wealth of the country; I have merely transferred some of it from his pocket to mine. On the other hand, is the fact expressed in such sayings as, ‘I could make my business a success if I had more capital’; ‘This country only needs capital to make it prosperous’; ‘If these islanders had a steamboat to take their fish to a market; if a bridge were built here, a railway there, a creamery opened, a pit sunk, the whole district would become prosperous.’ It is in this way that countries have become rich, and that their standard of living has been raised. Money employed in these ways is employed for the enriching of others; and you who so employed your money have a right to your share of the new riches. Not simply to a return of your money; but to a share in the increased wealth that is flowing in to us each year. Further; in a highly ‘developed’ country, the existing machinery of production must be kept efficient merely to maintain the present standard of living, apart from any question of improving it. Therefore there is a continuous demand for new capital, for the purposes of upkeep and replacement; and you who provide this capital are saving the country from impoverishment, and can claim a share in the wealth you are helping to produce. A ‘legal rate’ of interest, mentioned in the Canon Law, would seem to be an attempt to estimate what your fair share should be. This seems to have been in St. Thomas’s mind when he wrote of the man who takes up a business for the public utility, that the country may have what it needs for its life; and seeks a profit, not as his final purpose, but as his reward for what he has done. Similarly Benedict XIV says, ‘It cannot be doubted that in these contracts we have a manifold lawful method and system for preserving and improving human intercourse and profitable trade, to the public good.’ (“Vix pervenit,” § 3, 4; Denzinger-Bannwart, n. 1478). Whereas usury causes poverty: ‘Far be it from Christian minds to suppose that profitable commerce can flourish through usuries or similar injuries to others.’ (ibid.). The natural way to help a man in a difficulty is to give him the money he needs and let him make the best he can of it, binding him to return you the same amount later on. Whereas the natural way to help to develop the country is to lend your money for that purpose to some one who can use it for that purpose. The giving in the one case and lending in the other do not at first glance seem to be essentially tied up with the two contrasted purposes; but St. Thomas and Benedict XIV and the Codex unanimously put this distinction at the very root of the matter. In the Codex we read, ‘Si res ita alicui detur ut eius fiat,’ in contradistinction to ‘sed in praestatione rei’; and St. Thomas and Benedict XIV are equally explicit. Unfortunately, besides the two processes I have mentioned, enriching yourself by impoverishing others, and enriching yourself by enriching others, there is a third—enriching yourself by enslaving others. You can use your capital, not to enable me to develop my business, but to buy up my business and make me pay you revenue if I want to continue it. It is this process of gaining control of all the means of livelihood, and taking toll of the fruits of all men’s industry, that seems to many to be the main occupation of the capitalist at present. After the war, a cotton-mill valued by its owners at three and a half millions was bought by a syndicate for five millions. Those who work that mill in future have to pay interest on the extra million and a half. One reads of an American millionaire keeping a staff of experts to advise him on one point, the new businesses in which his yearly revenues are to be invested and which are to pay him tribute for the future. Leo XIII speaks of ‘the concentration of so many branches of trade in the hands of a few individuals; so that a small number of very rich men have been able to lay upon the teeming masses of the poor a yoke little better than that of slavery itself.’ This party holds in its grasp the whole of labor and trade; manipulates for its own benefit and its own purposes all the sources of supply.’ His remedy is ‘to induce as many as possible of the humbler classes to become owners.’ (The Pope and the People, pp. 179, 208).”

e) So much from the point of view of justice. Charity, of course, imposes additional duties. With a hard pressed debtor the creditor should not only have patience, but is bound ex caritate, in proportion to his own ability and the degree of his creditor’s necessity, to aid him by giving alms or renouncing his legitimate compensation for damage sustained or profit lost. A loan without interest made to a person in need is a true act of charity, and to demand interest in such a case would be to enrich oneself unjustly at the expense of a needy fellowman. For the distinguishing mark of usury may be owing to the economic condition of the borrower.

The lawful rate of interest, like the fair and reasonable price of other commodities, depends upon circumstances and, proximately, upon the common consent of intelligent men.⁶¹ For the farmer who earns no more than three or four per cent. on his capital, says Ratzinger, five or six per cent. on loans would be a usurious rate of interest, whereas the merchant who makes a profit of ten per cent., can pay from four to six, and the manufacturer or trader who cleans up a net gain of from thirty to forty per cent., can be charged from twelve to twenty per cent. for short term loans without usury.⁶² Of course, in de- ciding this question, the civil laws of each country have to be taken into consideration.⁶³

⁶¹ Slater, I, 515.

⁶² Ratzinger, Die Volkswirtschaft, 2nd ed., p. 261 sq.—Cfr. Seneca, De Benefic., l. VI, c. 13: “I am not so unjust that I owe him nothing, who, while being useful to me, was also useful to himself. For I do not demand that he consult my interest without regard for his own; indeed I even desire that the benefit given to me should have profited the giver more, provided that he who gave, having both of us in view, gave and divided it between himself and me. Although he himself possess the greater part of it, if only he admitted me into partnership, if he considered both of us, I am ungrateful, and not merely unjust, unless I rejoice that what profited me also profited him. It is the height of malice not to call anything a benefit unless it has affected the giver with some inconvenience.” (Opera Omnia, I, ed. I. Lipsius, Amsterdam 1672, p. 794).

⁶³ A. Vermeersch, S. J., s. v. “Usury” in the Catholic Encyclopedia, Vol. XV, pp. 235 sqq.; Maingie, La Théorie de l’Intérêt et ses Applications, Brussels, 1911; H. Parkinson, A Primer of Social Science, p. 157; P. Cleary, The Church and Usury, Dublin 1914.

READINGS.—Th. Meyer, S. J., Inst. Iuris Nat., Vol. II, pp. 221 sqq.—Sporer-Bierbaum, Theol. Mor., Vol. II, 2nd ed., pp. 788 sqq.—St. Alphonsus, Theol. Mor., l. III, n. 793 sqq. (ed. Gaudé, I, 232 sqq.).—F. X. Linsenmann, Lehrbuch der Moraltheol., pp. 552 sqq.—V. Cathrein, S. J., Moralphilosophie, Vol. II, 5th ed., pp. 358 sqq.—J. Schwane, Die theol. Lehre über die Verträge, pp. 120 sqq.—M. Cronin, The Science of Ethics, Vol. II, pp. 315 sqq.

On the WAGE CONTRACT: F. M. Schindler, Der Lohnvertrag, Vienna 1892.—K. Eberle, Arbeit und Lohn, Stans 1894.—Ch. Antoine, Cours d’Économie Sociale, 7th ed., Paris 1922, pp. 589 sqq.—Theo. Meyer, S. J., Die Arbeiterfrage und die christlich-ethischen Sozialprinzipien, 4th ed., Freiburg i. B. 1904.—F. X. Eberle, Kath. Wirtschaftsmoral, Freiburg i. B. 1921, pp. 53 sqq.—D. Merino, Natural Justice and Private Property, Eindhoven (Holland), 1922, pp. 103 sqq.—J. A. Ryan, A Living Wage, N. Y. 1906.—O’Grady, A Legal Minimum Wage, Washington 1915.—J. A. Ryan, Social Reconstruction, N. Y. 1916, pp. 323 sqq.—H. Parkinson, A Primer of Social Science, N. Y. 1913, pp. 160 sqq.—J. M. Harty, “The Living Wage: Its Ethical Basis,” in the Irish Theol. Quarterly, Vol. II (1907), Nos. 6, 8; Vol. III (1908).—W. McDonald, “The Living Wage,” ibid., Vol. III (1908), No. 9.

On STRIKES AND LOCKOUTS: A. Lehmkuhl, S. J., Arbeitsvertrag und Streik, 4th ed., Freiburg 1904.—H. Parkinson, A Primer of Social Science, pp. 128 sqq.—M. Cronin, The Science of Ethics, pp. 354 sqq.—C. S. Devas, Political Economy, pp. 548 sqq.—J. Kelleher, “The Morality of Strikes,” in the Irish Theol. Quarterly, Vol. VII (1912), No. 25.—Thos. Slater, S. J., On the Morals of To-day, N. Y. 1920, pp. 66 sqq.

On INTEREST-TAKING: F. X. Linsenmann, Lehrbuch der Moraltheol., pp. 556 sqq.—V. Cathrein, S. J., Moralphilosophie, Vol. II, 5th ed., pp. 362 sqq.—A. Vermeersch, S. J., Quaestiones de Iustitia, 2nd ed., pp. 450 sqq.—D’Annibale, Summula Theol. Mor., Vol. II, 5th ed., pp. 446 sqq., Rome 1908.—F. X. Funk, Zins und Wucher, Tübingen 1868.—IDEM, Geschichte des kirchlichen Zinsverbotes, ibid., 1876.—IDEM, Zur Geschichte des Wucherstreites, ibid. 1901.—H. Hay, De Mutuo et Usura, Angers 1902.—D. Lanna, Delle Usure, Giuliano 1902.—F. Schneider, Das kirchliche Zinsverbot und die kuriale Praxis im 13. Jahrhundert (in “Festgabe . . . H. Finke gewidmet”), Münster i. W. 1904, pp. 129 sqq.—B. Duhr, S. J., Geschichte der Jesuiten in den Ländern deutscher Zunge, Vol. I, Freiburg i. B. 1907, pp. 713 sqq.—Schaub, Der Kampf gegen den Zinswucher, pp. 26 sqq., 61 sqq.—K. Lessel, Die Entwicklungsgeschichte der kanonistisch-scholastischen Wucherlehre im 13. Jahrhundert, Luxemburg 1905.—M. Hainisch, Die Entstehung des Kapitalzinses, Leipsic and Vienna 1907.—L. Garriguet, Prêt, Intérêt et Usure, Paris 1907.—Seipel, Die wirtschaftsethischen Lehren der Kirchenväter, pp. 162 sqq.—F. X. Eberle, Kath. Wirtschaftsmoral, pp. 65 sqq., Freiburg i. B. 1921.—Jos. Landner, Das kirchliche Zinsverbot und seine Bedeutung, Graz 1918.—P. Cleary, The Church and Usury, Dublin 1914.—J. M. Harty, “Historical Evolution of the Catholic Teaching on Usury,” in the Irish Theol. Quarterly, Vol. V (1910), No. 17.—IDEM, ibid., Vol. VII (1912), No. 28.—J. A. Ryan, The Church and Interest-Taking, St. Louis 1910.