LITTLE APPENDIX: ON MOUNTS OF PIETY, PUBLIC TABLES OF BANKERS, AND SHARES GENERALLY

949. • A mount of piety is called an accumulation of money or other lendable things collected for this, that the poor, a pledge having been given, may be able to receive from it by loan those things which are necessary to themselves.

I. Its conditions are these: 1° whatever is given by loan from it ought to be given for a certain time, for example for a year, but nothing for an indeterminate time; 2° it is licit to give a loan from a Mount of Piety to the poor only, unless it is so abundant that, without damage to the poor, satisfaction can also be made to others; 3° the borrower ought to give something beyond the principal on account of expenses necessary for the wages of the ministers and the administration of the house; 4° he ought also to hand over a pledge equivalent to the thing lent, which, unless he returns what was accepted at the stated time, must be sold. - Thus commonly.²

II. Mounts instituted under these conditions are licit, nor are they usurious in any way, independently of any other title whatever for profit. The reason is that, even independently of any other title, they savor of no stain of usury, since satisfaction must be made for the expenses of the Mount and to the ministers, whose labor and care is truly estimable by price.¹

950. • Query. Can Mounts of Piety be instituted by private persons?

Resp. More probably affirmatively with Lessius. The reason is that it matters little for the notion of usury whether the institution is public or private, provided the private person accepts no more than that which has been established by law or legitimate custom. Among us, however, private persons alone have, or imitate, not to say simulate, Mounts of Piety, and they are called Pawn-brokers. But when pledges happen to be sold on account of the loan not returned, the excess of the price will have to be returned to the owners, or, if these do not appear within the time established by law, custom, or in defect of these by agreement, it will have to be applied to pious causes.² But the sale of a pledge by our laws, outside the case of contrary agreement between the parties, is rescindible unless it is made after the debtor (pawnor) has been warned beforehand concerning the time and mode of sale, or in Louisiana after sentence of the judge.³

951. • Public tables of bankers exist by force of a contract of society entered among several persons contributing money, which they cannot seek back, but from which they expect an uncertain annual interest, namely that part of the fruits of the money which the directors of the bank (the directors of the bank) shall have adjudged at the stated times. The part of the money contributed by individuals is called a share (action or share). Individuals can indeed alienate this, for example by sale, but the society is not therefore taken away, nor the peril of damage; for he to whom the share has been transferred occupies the place in the society of him who withdraws. - Once here, and still elsewhere, there was a power of tables to emit promissory notes (bank-notes). - The ends of tables are: 1) that the money of merchants and others can be deposited with some for the sake of security, with others also for the sake of a modest increase, to be withdrawn at will if it has been deposited for the sake of security, but only after a defined time if for the sake of increase; 2) that money can be accepted from them as a loan at legal interest; 3) that exchanges be moderated.

952. Resolutions. - The directors of tables sin, and those cooperating with them:^*^

1° If they continue to accept deposits after they know that they are unequal to paying; for they deceive the trust of depositors with grave damage to these.

2° If they emit promissory notes beyond the limits designated in the Charter of incorporation: for thus they seek profit from promissory notes emitted without legitimate authority, and make these become cheap.

3° If they exact excessive increase, or profit from bills of exchange (checks, drafts) greater than that which the general consent of money-changers bears.

4° It sometimes happens that promissory notes of foreign banks are brought to a public table, either in payment of debt, or in the place of a deposit. If these are offered by someone from the common people, they are either not accepted, or are held for less than they are commonly worth; but if they are offered by a friend of the chief banker, or by someone from the directors of the table, they will be accepted, and indeed at the value at which they are commonly accepted, or even at the value of gold or silver, because the banker will have abundance, by managing affairs skillfully, of receiving the whole value. In that manner of acting there is manifest injustice, unless a special cause is present for making a discrimination of this kind. Perhaps this special cause could be present in benefits conferred on the table, for example in very much money deposited by someone with it, from which he perceives no increase.

5° If they use money deposited to promote their own utilities, whether because from it they buy shares in a foreign table, or because they use it in any other mode against the laws of the table: for they abuse the trust of the creditors or partners of the table, who will that deposits be expended for increasing the common matter with their own profit, and perhaps cast away the money into danger.

953. • Shares are distinguished as 1) of tables, concerning which it was said in n. 951; 2) of societies for constructing railways, for digging canals, for publishing newspapers, for erecting industrial factories, and for almost every kind of thing; 3) of Governments, or also of municipalities (bonds). If those shares are emitted for a licit end, they are licitly compared, and profit from them is licitly perceived. It can indeed affix a cross to someone, that very many things are done by the directors or officials of tables or societies which cannot seem just; but since the very institution of those tables and societies is joined with great utility for all, and very many reasons of honorable profit from those shares are available, partners can safely permit to the consciences and judgment of the directors and officials what is licit or not in each matter.

***** "He who helps a usurer only in counting money, writing accounts, ... can be excused from the sin" of cooperation "by the sole reason of service." L. II. 78. "But I would not excuse one exacting" unjust usuries "from the sin of cooperation by the reason of service alone." L. IV. 789.

Notes to nn. 949-953 - printed sequence 1.

2 L. IV. 765. in fine.

Namely 1° concerning sale and purchase; 2° concerning society and the triple contract; 3° concerning lease and hire; 4° concerning exchange; 5° concerning census; 6° concerning suretyship, pledge, and hypothec; 7° concerning insurance, wagering, drawing of lots or lottery, and game.