Chapter — Konings, Theologia Moralis
CHAPTER IV: ON EXCHANGE (Exchange)
- Exchange is the permutation of money with some profit of the money-changer (Money-changer, Banker). Yet exchange in general sounds the same as permutation, whether in money, or in other things.
Today exchange is distinguished as only twofold, namely manual or petty exchange, and local exchange or exchange by letters. The former is made when money of one form or matter is exchanged with money of another form or matter. But the latter has place when present money is exchanged with absent money to be paid in another place.
If in manual exchange money of the same nation is exchanged, no wage is now usually exacted for the exchange, but only the difference of the current value (premium): but for those who exchange money of one nation for money of another nation, it is licit to receive moderate profit. - For the most part exchange is made by letters not only between diverse nations, but also between diverse cities of the same nation, indeed even between citizens of the same city. For money-changers now everywhere are joined among themselves by the commerce of letters: whence if, for example, money is to be transmitted from New York to another place, coin is not transmitted, since this could not be done without peril and greater expenses, but the money is handed over to a New York banker, letters having been obtained from him by which in that other place that money can be obtained by him to whom it was to be transmitted. These letters are called "bills of exchange." From these the letters called "promissory notes" differ to this extent, that by the former another is ordered or asked to pay money to someone, by the latter payment of money is promised to someone. By letters which are called "checks" or "drafts," a banker (a banker) is ordered or asked by someone who often uses his services (a customer), that he pay money to some third person or to his mandatary (to his assignee or indorsee), or to anyone possessing the letters (to the bearer) as soon as it is demanded (on demand).1
Notes to n. 1024. (1) The person making an order or request for the payment of a sum of money, is called the drawer; the person to whom it is addressed, the drawee, and, if he accepts it by signing his name under the name of the drawer or on the face of the instrument, the acceptor; the person in whose favor it is made, the payee. The owner of a bill is called the holder, or, where it is transferable by delivery, the bearer. In a promissory note the promissor is called the maker; and the promissee is called the payee. - A bill is said to be "at maturity" when it becomes due, and to be "taken up" when it is paid; and when a person is said to "retire" a bill, it is generally meant that he pays it before maturity; but sometimes the term is applied to a payment by the acceptor at maturity. Indorsements are either in full or in blank. A full or special indorsement is one which mentions the name of a person in whose favor it is indorsed. An indorsement in blank is one which is effected by the holder merely writing his own name on the bill (usually and properly on the back of it), without making it payable to any one in particular. - Where the drawee cannot, will not, or does not accept, some other person sometimes accepts the bill for the honor of one of the parties (acceptance for honor). The refusal to accept or pay a bill is technically termed dishonor. The acceptance for honor is generally, if not invariably, after a protest, and hence is often termed an acceptance supra protest. - The words "at sight" or "... after sight" designate the time when a bill is made payable; the words "on demand" denote that the debt is due and payable immediately, so that an action will be a sufficient demand. But though a bill or promissory note be expressed to be payable on or after a particular day, time, or event, yet it is not really payable till the expiration of a certain number of days afterwards. These days are called "days of grace." Their number depends upon usage in some of the States, and in others the subject has been regulated by statute. - A paper is called negotiable when the legal right to that which is secured by it, and the right of action on it in case of default, are transferable from one person to another, so as to enable the latter to sue upon it in his own name. Such are, generally speaking, bills of exchange, promissory notes, checks, or drafts.
- Principle. - Real exchange, whether petty or local, is licit, provided the profit does not exceed the current price, which is usually announced daily in the public papers. The reason is that there are various titles from which the banker can receive profit, namely 1° industry, by which he has procured an abundance of money in a far region or in another city of the same region, so that he might serve the convenience of others; 2° emergent damage from the misfortunes of debtors; 3° expenses and cares in maintaining the money-changing office.1
Notes to n. 1025. (1) L. IV. 851, 853. Kenr. Tr. XI. 127.
- Note. - The division of exchange into real or true, and fictitious or dry, today pertains to antiquated things. St. Alphonsus treats of it L. IV. 853. 854.