Case 12. A Proposed Monopoly

Julius, a Catholic priest, when he had bought shares in a certain company that manufactured soap for a large sum of money, received notice that on a certain day the shareholders would discuss whether the company should join itself to a new soap monopoly. Julius ordinarily takes no active part in the business of the company, but he would like to know whether he is bound to cast a vote against the proposal, inasmuch as many things are written in newspapers against the monopoly, but especially that it sells fifteen ounces of soap in place of sixteen, that several officers have already been dismissed as unnecessary, and that the more injurious suspicions are not without foundation in view of the things that we hear concerning monopolies in America. Hence it is asked:

1. Is it lawful for a cleric to trade?

2. What is a monopoly, and is it lawful?

3. Can anyone sin against justice by abstaining from action?

4. What is to be said of the case?

1. Is a cleric allowed to trade?

No; a cleric is forbidden by ecclesiastical law to trade in the strict sense; that is, to buy commodities with the intention of selling them unchanged for profit. It is probably not unlawful for clerics to have shares in industrial companies, provided that they do not take an active part in the business, e.g., as directors.¹

1 Manual of Moral Theology, vol. i, p. 616.

2. What is a monopoly, and is it allowed?

A monopoly is the exclusive right belonging to one or to a certain number to sell some commodity. A monopoly is not morally wrong, provided that there is nothing reprehensible in the method of conducting business and the prices are fair and reasonable.²

2 The same work, p. 535.

3. May a sin against justice be committed by simply abstaining from action?

Yes; such negative co-operation is a sin against justice whenever one’s office or duty require one to prevent an unjust action.

4. The case. Julius, a priest, bought shares in a soap company. One day he got notice of a meeting to be held by the shareholders to decide whether the company should join a new monopoly of soap-makers. Julius was not clear as to whether monopolies are wrong and whether he was not bound to vote against the proposal.

From what has been said it is clear that monopolies are not necessarily immoral if prices are fair and if there is nothing wrong in their business methods. Hence it is a question of fact in each case. The soap monopoly sold fifteen ounces of soap for sixteen. If this was publicly known and the price was reasonable, there was nothing immoral in this. Several officials had been dismissed as unnecessary. This, too, might have been perfectly lawful. Suspicions resting on what some monopolies and trusts are sometimes guilty of can not afford sufficient ground for condemning all monopolies. Julius should make inquiries about the directors of the monopoly and its methods of doing business, and if he finds nothing objectionable, he will not be bound to vote against the proposal. If he does find anything objectionable, he will be so bound, for the shareholders are responsible for the acts of the company which does business in their name and for their benefit. If the monopoly is formed, Julius should keep an eye on its business methods, and if he discovers anything unjust or uncharitable in them, he should endeavor to correct it, or withdraw from the company.