Exchange

616. Notion and division. Exchange of money is a contract by which money is exchanged for money.

a. He who exchanges money is called the money-changer; but he who seeks that it be exchanged in his favor is named the customer. A money-changer who by exchanging monies exercises trade is called a banker, money-dealer, money-changer, or trapezite.

b. Ownership of money handed over by common law is transferred to the customer already by the handing over of the money, before the latter has returned the money.

c. It differs from mutuum, both because mutuum can be made not only in money but also in other things, and especially because it belongs to the nature of mutuum that a delay of time intervene between the handing over of the thing and its returning; but exchange of money of itself requires that for money handed over another money be returned at once, and only per accidens does some time intervene between the handing over and its returning.

Division. Exchange of money is divided in diverse ways: a. Into manual or small exchange, if present money is exchanged with other present money in the same place and at the same time, for example, gold for silver, smaller money for larger, paper for coin; and transfer exchange, if present money is exchanged with absent money, namely to be received in another place or at another time.

b. Transfer exchange is local when present money is given for money to be received in another place, which is customarily done through bills of exchange, as if Titius here gives money to a money-changer, but the money-changer gives letters so that Titius or another in his name may receive money elsewhere within a very brief time; and it is temporal when present money is given for money to be received after a notable time in the same place.

It is clear that exchange of money can be mixed, that is, local and at the same time temporal, as if someone gives present money in this place so that after some time he may receive other money of the same value in another place.

617. In order that exchange of money be just, it is required:

a. That money of the same value be handed over.

Yet various causes exist on account of which future money is not worth as much as present money; therefore the money-changer justly requires more than he himself hands over to the customer, especially where there is question of temporal exchange.

b. That the payment which is required be equivalent to the service furnished by the exchange.

The common estimation of this service determines the just payment, which can be greater the greater expenses are required so that the money-changer may habitually satisfy customers.

Note. Besides, for avoiding injustice in exchanges of money and bills of exchange scarcely anything else is required except that the statutes of law and the usage of upright money-changers be observed.

I. Notion. Exchange is said from cambire, that is, to exchange, and is a profitable exchange of money with different money. He who asks for the exchange of money is called the campsarius; he who satisfies the request is the campsor.

II. Division. Exchange is divided as twofold: manual or small exchange, and local exchange. It is manual when money is exchanged with other present money, for example gold with silver, the coinage of one region with the coinage of another, paper money with metallic money. It is local when money is exchanged with other money at a distance, as if I pay in Amsterdam money which is owed to me in Rome.

III. Profit from exchange is licit, because it rests on just titles, of which kind are, for example, "the labor of the money-changer in counting the money, likewise diligence in gathering money of every kind, so that he may be ready for whatever customer asks" (St. Alphonsus, III, 851), likewise the wages of servants and the risks annexed to the virtual or real transfer of moneys. Insofar as any of the said titles is present, even a private person, that is, one who does not exchange by office, can receive profit from exchange (St. Alphonsus, III, 851-855).

"Whether a servant receiving gold money from his master, so that he may satisfy the master's creditors, can profit by exchanging it with copper money? It is affirmed, because it is the fruit of industry" (St. Alphonsus, III, 856).

Corollary I. At the request of either party it is lawful to exchange intentions, while the unequal stipend is retained, if this is done so that offices are exchanged;¹ otherwise, if it is done principally for the sake of taking profit.² The reason for the former is that every base gain is absent. The reason for the latter is that illicit gain does not seem to be absent; cf. canon 827 (St. Alphonsus, VI, 322, doubt 4).

Corollary II. One who by office has care of distributing stipends can demand a moderate payment from those to whom the Masses are distributed (St. Alphonsus, VI, 322, doubt 8). And generally, one who transmits Masses can deduct expenses of administration and transfer.³ Administrators of churches, however, cannot retain part of the stipend for the expenses of altars, servers, light, wine, hosts, etc., unless the church is pressed by poverty⁴ (St. Alphonsus, 322, doubt 5). Nor is it lawful to subtract anything from the manual alms which the faithful are accustomed to hand over to more celebrated shrines, in order to provide for their dignity and ornament.⁵

Corollary III. One who unduly retains part of a stipend sins against strict justice, and therefore is bound to restitution from the same virtue, as follows:

1. An executor of a testament who retains part of the sum to be expended in Mass stipends certainly violates strict justice. The same, according to the Constitution of Benedict XIV Quanta cura, § 1 sq., must be said of those who collect stipends for this end: that Masses be celebrated elsewhere, where stipends are smaller.

2. There is dispute about others; but with St. Alphonsus (VI, 322, doubt 1) it seems altogether to be affirmed. For ownership of the stipend is not acquired except according to the intention of the giver. But the intention of the giver seems to be that the one who fulfills the burden also receive the stipend. Objection. Nothing prevents the recipient of the stipend from fulfilling the burden through another. Response. Granted; but from the intention of the one giving the stipend, in other words, by force of this contract, that other person who fulfills the burden seems to receive a right in the stipend given. From what has been said, against some authors it is also deduced that the stipend must be restored to the celebrant, not to the one giving the alms (St. Alphonsus, VI, loc. cit.).

¹ For example, a missionary occupied with spiritual exercises takes upon himself the Mass and intention announced for the sixth hour, so that a chaplain, a sufficiently sick old man, may be able to celebrate; and he hands over to this chaplain his own intention to be discharged, without any discussion about exchanging stipends.

² For example, someone has a Mass with an ample stipend to be celebrated today. But, hindered unexpectedly from celebrating, he summons another priest and proposes to him, who has a smaller stipend, that the Masses be exchanged, namely so that he himself takes upon himself the other priest's intention to be discharged on the following day.

³ Sacred Congregation of the Council, in the Breda case, 25 February 1905, Mens est.

⁴ Constitution of Innocent XII, Nuper, ad VII.

⁵ Decree of the Sacred Congregation of the Council Ut debita (article 11).

Forms of Contract.—The chief forms of contract are the following:

(a) gratuitous contracts, which are those that confer advantage on only one of the contractants, or those in which no payment or compensation for his acts or goods is made to one party by the other party. They include unilateral contracts, which produce obligation on one side only (e.g., a promise, gift, testament), and bilateral contracts, which produce obligation on both sides. The bilateral contracts are also known as bailments, or understandings whereby a thing or business is transferred from one person to another in trust, on condition that a return will be made to the owner, They include the following contracts: loans, in which return must be made of the identical things borrowed (commodatum), or of a thing similar in kind (mutuum); deposit, in which a thing must be returned after safekeeping (depositum); an agency, in which one conducts the business of another with the obligation of making returns, either from express contract (mandatum) or from imputed agreement (negotiorum gestio). In commodatum and mutuum the advantage is had by the bailee, in the other three by the bailor;

(b) onerous contracts of certain event, which are those that confer an advantage on both parties, and in which the thing agreed on is certain and definite. They include contracts in which one party transfers ownership to the other (e.g., buying and selling, barter, loan at interest, contracts for annuities, stocks and bonds) or useful dominion (e.g., lease of property, contractor’s agreement, hire of labor), and contracts in which both parties transfer rights to a moral person of which they are the members (partnership);

(c) onerous contracts of uncertain event, which are those that confer advantage on both parties, but in which the thing agreed on is contingent and uncertain. Examples are insurance, wager, gaming contracts, lottery, and stock market speculation;

(d) subsidiary contracts, which are those that are made in order to give security to principal contracts to which they are annexed or for whose sake they are made. Such are guaranty and surety, pledge and pawn, and mortgage.

"1. Whether for alienations of bearer securities belonging to ecclesiastical entities, or to pious causes subject to the guardianship of the Church, the Apostolic beneplacitum is necessary, just as for alienations of immovable goods and precious things? 2. Whether the same faculty is required for exchanging the same into other titles or securities, even immovable ones? 3. Whether sellers and acquirers are subject to the ecclesiastical penalties sanctioned by Trent, c. 11, s. 22, de R., and by the Extravagant Ambitiosae, as well as by the Constitution Apostolicae Sedis? Resp. To the 1st: Affirmatively. - To the 2nd: Affirmatively, except in the case of urgent necessity, in which there is danger in delay and time is lacking to have recourse to the Holy See, the beneplacitum of the Ordinary nevertheless having been had in these circumstances, and under the law that the exchange be made into titles as safe as possible. - To the 3rd: Affirmatively as regards the penalties established in the Extravagant Ambitiosae and in the Constitution Apostolicae Sedis." S. C. C., Jan. 17, 1906. - E. M.

What is exchange of money? - Exchange of money is: the exchange of money with money, with some profit to the money-changer. Generally, he who deals in money and seeks profit is called a banker. But the one from whom exchange is sought is called the money-changer; the one who seeks it, the exchange-seeker. That emolument which the money-changer receives from the exchange of money with money is commonly called aggio. Exchange of money differs from sale, because in sale merchandise is exchanged for money, but in exchange money is exchanged for money. C. A. 1046. Ownership of the money is immediately acquired by the one accepting, before he has rendered what he owes, even according to Roman Law, since by this Law in exchange ownership is immediately acquired before the contract is completed from the other side. L. Cum precibus C. de Rerum permut.; L. 850.

How many kinds of exchange of money are there? - Exchange of money is one kind real, another dry. Dry exchange is fictitious exchange, e.g., when money to be handed over to another is feigned to be carried from place to place, so that thus something can be demanded for the transfer, although in truth it is not transferred. Real exchange is true exchange, by which money is truly and really exchanged for money; for instance, if gold is given for silver. Real exchange is one kind small or manual, when present money of one form or material is exchanged with money of another form or material; another kind is local, when present money is exchanged with absent money. This is done either when the money-changer receives money in this place to be restored by him in another place, or when the money-changer gives money in this place to be restored by the exchange-seeker in another place, e.g., at Paris. This exchange is ordinarily made through exchange letters, commonly cambiali. The money-changer drawing at Rome, the exchange-seeker also remitting at Rome, and the one who will pay at Paris, is called the drawee. And if a surety is added to those letters of exchange, this is called aval. - L. 851-854.

Whether dry or fictitious exchange of money is licit? - Resp. Negatively, of itself. The reason is that in it there is no title for receiving profit, since it is not true exchange, but a fiction of exchange. Hence St. Pius V, in the bull In eam, 1571, expressly declared it usurious; for it is disguised usury. It is said of itself, for by reason of mutuum there is licit profit, that which is licit in mutuum. E. M.

Whether real exchange of money, both manual and local, is licit?

Resp. Affirmatively, provided the profit does not exceed the price determined by law or by the custom of places. The reason is that there are several just titles for such profit: 1. The hiring of labor and office for seeking out, counting, and transmitting money. 2. Expenses in retaining a toll. 3. Insurance of the money up to the place where the money is to be paid. 4. Profit ceasing, loss incurred, and risk of the capital from the misfortunes of debtors. 5. The varying value of money in various places, whence it happens that money is worth more in that place in which it is to be restored by the money-changer than in that in which it is received by the money-changer. But if the contrary were the case, namely if the money were worth more in the place in which it is received than in the place in which it is restored, then by this title nothing would be licitly received; indeed compensation would have to be made up to equality. L. 851-854.

Whether the Frankfort exchange is licit, in which, namely, the money-changer gives money to be restored at the next fairs, so that a greater profit is demanded for a greater delay? Resp. Affirmatively, if there is the title of loss incurred, or another similar title. Affirmatively again, by reason of mutuum, if the legal rate is not exceeded. - Negatively, if it is demanded precisely by reason of delay; for it is usury. L. 855.

Whether exchange is licit for those who do not have the public office of exchanging money? Resp. Affirmatively. The reason is that they provide a thing useful to another. L. 851.

Whether a servant receiving gold money from his master, in order to satisfy the master's creditors, can make a profit by exchanging it with other money? "It is affirmed, because it is the fruit of industry, unless it is against the express or tacit will of the master." L. 856.

Whether one who receives counterfeit money can spend it? Resp. Negatively. The reason is, "because a defective thing cannot be handed over to another when the defect has not been disclosed. Nor from the fact that he himself was deceived can he deceive others, since the action by which he was deceived gives him no right to this." But if you have already spent it in good faith, you are bound to restitution "by force of the contract itself, by which you are obliged to pay the just price for the thing bought." L. 855. Yet you are bound to nothing if the other also has already spent it in good faith, since he has suffered no damage. But after that money has passed to others, now, practically speaking, it is morally impossible to know who has suffered damage, and therefore regularly no obligation of restitution is imposed; and when the matter concerns money of small value, for this reason also the penitent should not be disturbed. C. I. Poen. 440;

Lugo d. 28, s. 2, n. 6.

What can money-changers receive by reason of mutuum? They can receive 5 or 6 per 100 according to the legal rate for merchants, because they practice commerce in money. Indeed, it is permitted to them to receive 6 or 7 per 100 because of the dangers, expenses, and labors which they must undergo. For ordinarily money-changers need much money and many assistants in order to be able to discharge such an office, and they are exposed to many dangers. Cf. 1104.

What of the Bull of St. Pius V concerning exchanges? St. Pius V placed various restrictions to remove usury; nevertheless they testify that these no longer have force in most places. Lessius 93; Lugo d. 28, n. 107; L. 852; Benedict XIV, de Syn., l. 10, c. 5.

Whether stock-exchange games are licit? - Various stock-exchange games, more or less complex, are reduced to the following simple mercantile and business contracts. 1. Someone buys a title, e.g., of 1000 lire, at the current price, and with counted money of 900 lire. The annual revenue of the title is 50 lire, namely at the rate of 5 per 100. Through days, through months, through a year, through several years, the buyer receives the aforesaid revenue. Certainly nothing illicit is present in this matter, for it is a certain simple purchase, or a simple consignative census, or a simple constitution of revenue. But if the buyer, when a good occasion is offered and seized because the price of public revenues has increased, sells the title of that annual revenue of 50 lire, at the current price and for counted money, for 1100 lire, he indeed receives a great profit, but again there is nothing illicit in this matter; for it is a certain simple sale, and the profit is owed from the changed price of titles in the market. And if someone, intending this profit, buys several titles of annual revenues at the current price and for counted money when the price is lowest, so that he may resell them for counted money when the price is highest, business properly is had, which of itself has nothing illicit.

2. If someone again buys a title of annual revenue of 50 lire at the current price of 900 lire, not for counted money, but on credit to a term, e.g., for fifteen days, for a month, then either the title is immediately given, or only when the term arrives, or the fixed day, which day is called the day of liquidation: the first, the fifteenth of the month. If the first occurs, nothing is had except a certain purchase made on credit, by which the buyer can profit if on the appointed day the value of the title increases, or on the contrary the seller can profit if on the appointed day the value of the title decreases. Nothing indeed illicit is in this matter. But if meanwhile the seller demands the legal interest of the money until the price is paid, he can do this by right, since it is not equitable that the buyer retain the thing and the price for himself and enjoy the utility of both. Then sale and purchase and mutuum intervene at the same time, or a simple mutuum.

If the second is verified, then the danger of detriment is equal for buyer and seller, and likewise the hope of profit is equal for both; for meanwhile the value of the title can increase and can decrease. Therefore when the day arrives on which the seller must hand over the title and the buyer the price, if the value of the title has increased, the profit will belong to the buyer; if the value of the title has decreased, on the contrary the profit will belong to the seller. Therefore, since equality of both is preserved, nothing illicit is had here of itself.

3. The seller and buyer likewise make a contract to a term or to a day, but the seller does not hand over the title to the buyer in the present, nor does he oblige himself to hand over the title to the buyer when the day arrives. Similarly the buyer neither hands over the price to the seller in the present, nor obliges himself to hand over the price of the title to the seller when the day, or the constituted term of the contract, arrives. Therefore the seller and buyer oblige themselves, when the day arrives, only to hand over the difference of the value or price of the title in the present, or today, and of the value or price of the same title on the constituted day. It is therefore a certain wager concerning the increase or decrease of the price, in which again equal danger and equal hope exist for seller and buyer. For if, when the day arrives, the value or price of the title has increased, the buyer gains this difference of value, to be handed over to him only by the seller without the title. But if the value of the title has decreased, then the seller gains that difference of value, which the buyer alone must hand over to him, without the remaining price of the title, namely the excess of the former price constituted on the day of the contract over that lower price which the title obtains on the established day. Wherefore neither is anything illicit of itself had here, just as nothing illicit would be had in the simple contract of wagering concerning an increase of the value of the title on the part of the buyer, who hopes that it is to be increased, and therefore buys; and concerning the diminution of the value of the title on the part of the seller, who fears it, and therefore sells. But this contract would be illicit if someone certainly knew, by private knowledge, that the value of the titles was soon to be increased. For then by the contract someone would give nothing to the other; he would not give the right to profit if the price were diminished, which would be altogether fictitious. And although the other is ignorant of this, that false and empty right does not for that reason cease to be such, since the price is certainly to be increased and the other certainly knows this.

4. The buyer, buying a title, with only part of its price immediately paid, to a term or to a day, reserves to himself the right, when the day arrives, either of demanding execution of the contract, or of withdrawing from the contract, leaving to the seller that price already given. Since the right which the seller grants to the buyer is appreciable by a price, this contract is just if the price is proportionate. The proportion of this price depends on various circumstances and on the varying concurrence of sellers and buyers. The right of rescinding the contract is sometimes conceded to the seller himself, with a premium left to the buyer. This conditioned purchase and sale is called operation with premium; the two preceding ones are called operations to a term.

5. A mercantile relation, or reportus, is a certain species of retro-sale. It consists first in selling for a lower current price, immediately paid, any titles which are sold in the money market, and immediately redeeming the same at a price to be paid at a term, or on a day, but higher. C. I. Comm. 73. Here also no illicitness of itself appears; for there is a double sale of the same thing, or the sale of a thing with its immediate retro-sale, and if due equality of price is preserved, certainly there is no injustice. In the second sale, or in that immediate retro-sale, the thing indeed is sold at a term for more than it was bought. But this arises from the fact that within a short time the price of these titles is changed according to common estimation. But from the fact that the thing will probably be worth a certain amount on the constituted day, the seller can take the norm of the price. Wherefore this second sale, or retro-sale, is an aleatory contract by which both the seller and the buyer can profit, namely if the price of the title, on the constituted day, has grown or decreased still more than the price foreseen by the seller and to be paid by the buyer. Gur. Cas. 946-950. According to C. B. 764, the contract of paying by the loser to the gainer the difference between the agreed price of merchandise or of a monetary title and the price at the time of delivery is considered as a game. Cf. 1247.

Is trade lawful for clerics? - Trade properly so called is interdicted to clerics constituted in sacred orders, and to all religious, so that they sin gravely if they devote much labor to trade. Trent s. 22, c. 1 de R.; C. 15, 16 de Vit. et honest. cler.; C. 1, 3, 6 Ne cler. vel monach.; L. l. 3, n. 381; S. Th. 4, d. 16, q. 4, a. 3, q. 3.

Trade properly so called is when someone buys a thing with the intention that, by selling or exchanging it whole and unchanged at a dearer price, he may gain. Can. 3, caus. 14, q. 4; S. Th. 2. 2. q. 77, a. 4. Properly so called, or lucrative; for there is usually also distinguished economic trade, by which things necessary for sustenance are bought and superfluous things are sold; and artificial trade, by which something is bought so that, changed either naturally or by one's own industry, it may be sold. Neither of these is prohibited in itself. But if things are changed by another's industry, or by hired workers, or if things are sold in a public workshop, this too is unbecoming to the clerical state. For this artificial trade denotes a gain-seeking mind, equally as lucrative trade does, in either case. Cf. Bizzarri ed. 1885, p. 238.

Constituted in sacred orders; for the common opinion is that trade is not prohibited to clerics in minor orders. But it is doubted whether it is forbidden to beneficed clerics in minor orders. Molina, etc., deny it. But the opposite is better to be held with the common opinion, which Lugo, etc., hold. L. l. c.

If they devote much labor to trade; for a cleric does not sin gravely by exercising trade two or three times when it is not shameful and not in a great quantity, because the laws speak of one exercising it. Hence, even if he trades only once or again in grave matter, Cajetan, Salas, etc., probably hold that he does not even sin gravely. L. l. 3, n. 831. For trade to be forbidden to clerics, there is required the mind of buying more cheaply so that it may be sold more dearly; hence it is lawful for them to sell more dearly so that they may buy more cheaply. L. l. c. 336.

Benedict XIV, Bull Apostolicae servitutis, February 25, 1741, established that the penalties inflicted against cleric-traders must also be extended to clerics illicitly trading in any way under the name of a layman, just as if they illicitly exercised those same businesses by themselves and in their own name. These penalties are of ferendae sententiae as regards clerics and monks. But as regards missionaries of the East Indies and of America, to whom trade and commerce are more gravely interdicted, these penalties are incurred by them by the fact itself from the Constitution of Urban VIII Ex debito, February 22, 1633; Clement IX, Sollicitudo pastoralis officii, June 17, 1669; and Resolution of the S. O., March 6, 1817. Cf. 1218.

Clement XIII, Bull Cum primum, September 17, 1759, again prohibited clerics from trading through interposed persons, and especially from exercising active exchange through others, namely from acting the parts of a money-changer; adding that if necessity of the family is present, or if a business comes to him by some title from laymen, a cleric still cannot trade without permission of the Apostolic See in Italy, and outside Italy, without permission of the Bishop. Moreover he adds that if a doubt arises concerning some contract, whether it can licitly be entered by a cleric, "the most expeditious way is to write to the S. Congregation of the Council, which will decide the doubt." L. l. c. 832, 833. But from received customs, if a cleric has succeeded his father in businesses of this kind together with his brothers, he is permitted to exercise them through others. Likewise no permission is needed if someone trades in order to procure the necessities of life for himself, and not only for his state.

It is certain that it is not lawful for clerics or religious to lease the things of laymen for the sake of making gain. The reason is that although this is not properly trade, but only a certain species of trade, nevertheless it is forbidden by the Council of Chalcedon, C. Pervenit 1, caus. 21; C. 1 Ne cler. vel mon. And therefore from another's farms it is not lawful to fatten sheep, swine, etc., so that they may afterward be sold, unless somewhere a contrary custom flourishes. To lease; for he who succeeds to the lessee will be able to retain it. Fagnan on C. 1, n. 81 Ne cler. vel mon.

By no law is it forbidden to clerics to give a loan to others, and consequently to buy obligations of companies, or even shares, provided however that the companies set no illicit end before themselves, that they do not involve themselves in the administration and trade of those companies, and that they abstain from any trade of those obligations and shares. S. O., April 15, 1885.

Neither by an obligation nor by a share can one be said to exercise commerce and trade through an interposed person. For the company itself, whether industrial or even trading, certainly does not exercise industry or trade by mandate or in the name of such a bondholder or shareholder, but altogether independently of him. The bondholder and shareholder only cooperates by helping with his money given. La-Croix l. 3, p. 2, n. 1005, 1006; Molina d. 339, n. 2; Lugo de Inst. d. 26, n. 29; Resp. Mor. l. 3, d. 20; L. l. 3, n. 834, 835; Benedict XIV de Syn. l. 10, c. 6; S. Th. 2. 2. q. 77, a. 4 ad 3; E. M.

The obligation of a company is a title for receiving a certain fixed emolument from money given to the company as a loan. Wherefore through an obligation someone becomes a creditor of the company. A share of some company is a title by which someone, on account of the sum contributed to the company, has a right to receive a variable, proportionate emolument. Through a share someone becomes a partner of the company, but not for that reason an administrator.

It is likewise prohibited to all clerics to exercise the offices of president, moderator, secretary, treasurer, and similar offices in money chests, rural banks, savings banks, and other similar works for the temporal assistance of the faithful. S. C. Consist., November 18, 1910.

927. • Exchange is the permutation of money with some profit of the money-changer. Yet exchange in general sounds the same as permutation, whether in money or in other things.

Exchange is variously distinguished, namely:

1. Manual or small exchange, and local exchange or exchange by letters. The former is made when money of one form or material is permuted with money of another form or material. The latter has place when present money is commuted with absent money to be paid in another place.

2. Real or true exchange, and fictitious or dry exchange. The former is that by which money is in fact commuted with another. But the latter is that by which a permutation is feigned, but it is nothing other than a cloaked mutuum, as, for example, when money is given as if to be received in another place, which nevertheless is received in this very place.

3. Fictitious exchange is customarily made thus: for example, Titius, needing money in this present place, asks 100 coins from a money-changer. But the money-changer does not give otherwise than as to be paid in a distant place, and he seeks from him the price which is exacted for similar places. But Titius receives the money and nevertheless does not think of money to be repaid in such a place, and this is manifest to the money-changer. Whence that contract is a mere cloaked mutuum ¹.

¹ There is now no custom of this contract, nor necessity or occasion.

928. Principles. - I. Real exchange is lawful, whether small or local, provided equality is observed, or the profit does not exceed the just price determined by law or by the custom of places. The reason is that there are various titles from which the money-changer can receive profit, namely 1. insurance of the money up to the place of insurance; 2. hiring of work and office for counting and transmitting the money; 3. emergent damage from misfortunes of debtors; 4. expenses and cares in keeping the exchange-office. - St. Lig. n. 851-852, and others.

II. Fictitious exchange is illicit per se. The reason is clear; for there is in it no title of accepting profit, since no exchange properly so called is made, since there is no real transfer of money, but only a fictitious one, whence it is nothing but a cloaked mutuum. - Thus all. - St. Lig. n. 853. - I said per se, because by reason of a mutuum it is lawful to follow the laws of this contract, according to what was said above, n. 863.

St. Pius V in the Bull on exchanges placed various restrictions concerning exchange: Haunold, however, testifies that it is in force in few places, at least as to all things contained in it. St. Lig. n. 852 speaks of it.

929. Questions. - Q. 1. Whether exchange is lawful for those who do not have the public office of exchanging?

Resp. Affirmatively. The reason is that the same reasons are operative; for everyone has a right to profit for his labor and skill. But these money-changers ought to beware lest they exact profit greater than equitable. - Thus St. Lig. n. 851. - Salmant. c. 4, n. 8. - Carriere, n. 1038.

Q. 2. Whether the exchange commonly called Frankfort exchange is lawful, in which the money-changer gives money to be repaid at the next fairs, so that greater profit is exacted for greater delay?

Resp. 1. Affirmatively, if there is a title of ceasing profit, emergent damage, etc. - St. Lig. n. 854.

Resp. 2. Otherwise it is disputed; but probably it is lawful in this to follow the civil laws for a mutuum, according to what was said above where treating of Usury, n. 863.

930. • Q. 3. What can money-changers receive by reason of a mutuum?

Resp. They can receive 6 for 100, according to the legal rate for merchants, because they exercise a certain commerce of money. For ordinarily money-changers need much money, so that they may be able to discharge such an office, and many servants, and they are exposed to various dangers. Indeed in various places they are permitted to accept 7 for 100 on account of the dangers and labors which they must undergo in transferring money elsewhere and insuring it. - See Cases, n. 988 and following.

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.

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).

Permutation is a consensual, bilateral contract by which one transfers to another, for a thing, a thing into ownership, or promises to transfer a thing into ownership.

According as the law admits the translation of dominion by consent alone, or besides requires handing over or inscription in the records, the contract will transfer or will not transfer dominion.

Each contracting party ought to warrant eviction to the other.

In ecclesiastical law, special cautions are established concerning the exchange of benefices. None can validly be done without the consent of the bishop or quasi-bishop, or of the Vicar general furnished with a special mandate. Cf. c. 1487, 1488 and Epitome, II, 810.

Exchange. is a contract by which a money-changer, for the party desiring exchange, changes monies with some gain beyond the principal.

It is said only of the changing of money; and it is distinguished as manual or small exchange, when present money is exchanged for other present money; local or trajectitious exchange, when money accepted in one place is to be restored in another place. Since this is for the most part done by a written mandate, it is called exchange by letters (campsory letters). Finally, it is temporal exchange, by which present money is given for money to be paid after a certain time in the same or another place. This use is frequent in banks which, after retaining interest, pay in advance to merchants the monies owed to them (sconto).

Because exchange, especially temporal exchange, gave place to disguised usury, theologians were accustomed to raise various questions concerning various exchanges under the aspect of usury, which now have become entirely obsolete.

But today, after the war, the unstable ratio of exchanges among various nations has enriched some with immense profits, while others have suffered great losses of fortunes from it. Deceivers are to be marked with injustice, who vitiate exchanges by frauds.

Corollaries or Scholia. 1. He who has received money for paying another's debt can exchange that money into another legal money, provided he does this not only for his own gain, but also at his own risk.

What if there is question of Mass stipends? Here various cases seem to have to be distinguished. a) Titius received a mandate to carry from France into Italy stipends of Masses, paid to him in francs. After he has arrived in Italy, since he could immediately hand over to the celebrants the sum such as he received, he can thus convert it into Italian money and pay for the Masses the Italian monies so obtained. So obtained, I say, and therefore not with the gain perceived from the change. For the same reason he himself could as it were act as money-changer for those monies, hoping after some time for a greater gain. But he could not, after this formal or virtual conversion has been made, if he has been cast down from his hope, hold the same conversion as void: he acted at his own risk, and therefore he must give as many lire as, on the day of this kind of conversion, he obtained or would have obtained. b) Titius, after undertaking the burden of celebrating Masses, since he saw that French money was standing below Italian money, fearing a greater loss, converted it into Italian money. But, since the turns have changed, he asks whether he can now commit those Masses to be celebrated by others by handing over Italian monies? Resp. He converted the French money as his own: he acted at his own risk. Therefore he must hand over either French money or Italian money, but observing, in the conversion, how much they are worth by the relative value of the French money on the day on which he hands over the Masses to others. - c) Caius, having undertaken the mandate of transmitting Mass stipends, and fearing lest the relative value of the money received should decrease, converted it into another. But the opposite happened: the money increased in value. What stipends must he pay? Because in good faith he wished to conduct that business usefully for the church, it is enough that he hand over the monies obtained by the conversion.

2. What if false money has been thrust upon you by an unknown person?

Resp. Properly false money, for example leaden money imitating silver, or false paper money, can in no way be spent again by him who has accepted it out of ignorance. The theft which you suffer gives you no license of stealing. But if there is question of true money which has been deprived of legal currency, one must see whether or not in fact it is accustomed to be given and accepted. If, in fact, it is commonly received, it will be lawful to spend it.

But he who has given money not received, although he has acted badly, nevertheless often will be excused from restitution, because the damage inflicted will not be established. For perhaps the other has already spent the money which he received. But in no way is it to be advised that adulterated monies be given as a gift to beggars: thus they would tacitly be invited to frauds.

I. Notion. So called from the sign of an inn or place at Bruges where merchants were accustomed to assemble, a Bourse is called a market where goods are present only by samples (campioni) or by titles. A bourse of goods and a bourse of securities are distinguished. Besides various and true dealings of the same kind, very many others are mixed with game or wagering, or are discharged by mere game. The reasons are often more entangled; yet they can be reduced to these almost simple forms.

1. Market for a day. Values or goods to be handed over afterwards are now bought-sold, namely on the day on which "liquidations" are accustomed to take place (for example the 1st and 15th day of each month), for the price which will then obtain. According as the thing has increased in price or has become cheaper, either contracting party will carry off a profit from the contract, which thus is mixed with a certain wagering (agio, in the broad sense). Often, on the appointed day, nothing must be handed over, but only that profit must be paid. The matter then ends in game.

That game is merely aleatory, when the unskilled indulge in it (which happens too often); but it must be called mixed when skilled merchants make a prudent estimation of the future event.

2. A market with premium is a purchase-sale under penitential earnest-money, in which either contracting party reserves to himself the faculty of rescinding the contract, with the premium paid. When the day is approaching, he either confirms the market or rescinds it by paying the premium. These again can be done in a true or fictitious contract.

3. Certain accessory contracts of sale-back, etc., which contain a virtual loan of money or lease of goods, whose interest is the price, are respectively called report, déport. Or otherwise you have report, if the prorogation is made by the buyer; déport, if by the seller.

II. Moral judgment. These games of themselves are not unjust, but the principles concerning monopoly, concerning sale-back, concerning wagering and game must be applied. Very often excesses are to be reproved here, and justice is easily offended, whether because the wagerer often does not have whence to pay debts at the appointed time, which invalidates the contract unless the other was conscious of that unstable condition; or because, by deceit, for example by false rumors and reports, false increases or decreases of things are obtained; or because by buying up a monopoly is procured, by which thereafter abuse is made for changing prices more than is right, whence come the ruins of many who are deceived by these arts.

Nevertheless it is not fitting that, on account of excessive abuses, we should take away every goodness from these dealings. When passions, whether political or lucrative, do not attempt to turn everything upside down, the anticipatory estimations of experts contain useful indications for others and prevent values from either being depressed too much or increasing too much, but foster a certain tempered equilibrium. If, after a serious market for a day, a new agreement has diminished the obligations undertaken, that can incur no reprehension. And it also happens that by a market for a day which, as was agreed from the beginning, is to have its end without any handing over of goods or titles, someone seriously provides for his affairs. Suppose someone gives his labor to a dangerous business, so that he would lose everything if the titles which he holds should decrease in value. By now adding a fictitious sale of those titles, the damage will be compensated by profit and he will carry on the business securely.

Positive laws concerning these markets are uncertain enough. The German Code, 764, and the Swiss Code of Obligations 513 equate markets for a day which are concluded by payment of a premium with games. In a similar way the tribunals of Belgium and France estimate these things. What the judges of the Netherlands think is less certain (cf. Duynstee, op. c. n. 299). But particular laws perhaps enacted concerning this argument must also be observed. Thus the French law of 28 March 1885 pronounced legitimate all markets for a day, even if they should end in mere payment of a premium. But this is not understood to have been established concerning markets which from the beginning tended to this from the will of the parties. In Italy, the laws of 14 June 1874 and 24 Sept. 1876 protected by action, with a certain form observed, markets for a day concerning public titles. Concerning this argument cf. also arts. 73-75 of the commercial Code, the ordinance of 27 Dec. 1882, royal decrees 9 June, 13 and 14 Nov. 1907 (Pacifici-Mazzoni, V, 2, 377-384).

1142. I. Exchange (echange) is a contract by which two or more persons bind themselves mutually to giving one thing for another.

It differs from sale in this, that its price consists in a thing, since merchandise is constituted as the price of another merchandise. For the rest, it is generally subject to the same rules as sale. Several special things must be read in civil Law.⁰¹

1143. II. Money exchange (change) is an exchange of money for money with profit of the one exchanging. He from whom the exchange is sought is called the money-changer; he who seeks it, the exchange-seeker.

It differs from loan for consumption, because it is of the nature of loan that money be given immediately for use and yield to the good of the one receiving; but in money exchange, money is primarily handed over for exchange and yields to the good of the one giving.

Money exchange is twofold: manual, or small, or trajectitious, according as moneys of diverse account are exchanged from hand to hand, or present money is commuted with absent, through bills of exchange (lettres de change).

Trajectitious exchange is called: a) local or by letters, if the money-changer here, for example at Rome, first accepts moneys, which afterwards, when letters have been given, he refunds elsewhere, for example at Paris, through his factors; b) real or also temporal, to markets, Frankfort, etc., if the money-changer first gives moneys under this law, that he receive them after a certain time elsewhere with profit; c) dry, or fictitious, when the money must be restored indeed in the same place in which it was given, but a diverse place is feigned, which may be a title for the money-changer of perceiving greater gain. This contract is a true loan for consumption, and therefore the same things must be held about it as about loan for consumption (III, 850). For the rest, such a manner of acting is no longer had recourse to.

1144. PRINCIPLE. True money exchange is licit, provided equality is preserved, or the profit does not exceed the just price determined by law or custom. The reason is that there are various titles from which the money-changer can perceive profit, namely: 1. securing of money up to the place of transmission; 2. hiring of work for counting and transmitting money; 3. damage emerging from misfortunes of debtors; 4. expenses and cares in holding the exchange-office (III, 851).

1145. • Questions. QUAER. 1. Whether money exchange is licit for those who do not have a public office of exchange?

Resp. Affirmatively, unless laws stand in the way, for example if it is a question of clerics (III, 831 ff.; H. Ap., X, 192). For anyone has a right to profit to be perceived from his labor and industry.

Hence, a servant receiving from his master a gold coin so that he may satisfy his creditors can exchange it with other coins of equal value, retaining for himself the profit of exchange. Except unless the master wished or ought to have satisfied with a gold coin (III, 856).

QUAER. 2. Whether one accepting an adulterine coin can expend it?

Resp. "If the coin is not materially false, namely if it has been impressed with the sign of the prince, and the material is good and of the same weight, you will be able to expend it, since you infer no damage on another" (III, 855). - But he who would make such a coin would act against the penal law of the State.

"But if an adulterine coin is also materially false, then certainly you will not be able to use it." And if you have expended it in good faith, you are held to restitution, according to the truer opinion: because you are held to pay the just price for the thing bought, which you do not do by paying, for example, tin money for silver (III, l. c.). - Say the same of him who would expend a coin which was outside use. Yet the injustice is less than if he were to give one materially false (Ami du Cl., 1908, p. 347; 1911, p. 637 and 829).

1024. • 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

1025. 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

1026. 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.

567. Exchange (change; wissel) is a contract in which money is exchanged for money in some way diverse, with the profit of him (the exchanger, changeur, wisselagent) who exchanges in favor of another.

It is said: in some way diverse, because in this consists the essence and utility of exchange, and from this it comes that the exchanger justly receives profit. Moreover, that diversity can consist in quantity, as if smaller money (divisionnaire) is given for greater; in quality, as if new coins are given for old, current coins for obsolete ones (not reprobated); by reason of species, as if gold is given in place of silver money; by reason of place, as if money is given at Louvain and letters are returned by which other money is received at Rome. These letters are called letters of exchange (lettre de change; wisselbrief, postwissel).

Exchange differs:

1. From purchase-sale: in this latter, merchandise is exchanged for money; in exchange, money for other money;

2. From deposit, letting, and commodatum, in which dominion is not transferred, while in exchange it is transferred;

3. From mutuum: a) mutuum can be made in money and in other things; exchange in money alone;

b) mutuum is made for some time; exchange can be made in the present;

c) mutuum is perfected by the handing over of the principal alone with the obligation of returning; exchange by mutual handing over;

d) in mutuum a thing of the same value is returned; in exchange a thing of lesser value is returned, and therefore, that equality may be made, the exchanger must give utility.

568. Species of exchange. Exchange:

A. One kind is real or true, when in fact one money is exchanged for another as regards thing or place, and it is twofold:

1. Small or manual, when in the same place, as if from hand to hand, present money is exchanged with other present money of a diverse kind, for example, domestic with foreign, gold with silver. Those who exercise this office, offering diverse monies set forth, are properly called exchangers, changeurs, wisselaars;

2. Local, or by letters, or transmarine, when present money received in one place is exchanged with absent money, to be paid in another place, as if you give money here to someone and he gives you letters by means of which you (or another to whom you concede the right) receive the same sum at Rome (a son ordre, par une banque). Bankers exercise this office. Moreover, this can be done in a twofold way: either a) the money is to be paid by him who received it, and then it is called personal exchange, and the writing is called billet a ordre, billet a domicile; betaal-orderbriefje; or b) the money is to be paid by a third party, and the writing is called traite, lettre de change, or mandat a ordre; wisselbrief (cf. Belgian law of 20 May 1872, and 20 June 1873, and 31 May 1919).

B. Another kind is fictitious (change sec; pret dissimule), which has only the appearance of exchange, because no transfer of money is made, but in itself it is a mutuum with usury disguised; concerning this the things to be said about mutuum have force. Such is temporary exchange (change a terme), by which money is given to be returned after a certain time in the same place, with an increase greater or lesser according as the money meanwhile will have been worth more or less; for example, if someone receives from an exchanger one hundred gold pieces to be paid later in the same place with the price of exchange customarily given for distant places.

569. Real exchange is licit and just, provided that the just price determined by law or by the common estimation of places is observed; indeed it is very advantageous and useful, and almost necessary for commerce. Certainly the exchanger has a title of just profit, because he is not held gratis to procure monies, whether in the same place or in another, with labor, expenses, and danger, for all of which compensation is owed. This also has force concerning local exchange, in which there is virtually made a transfer of money from one place to another, with security; this is estimable by price, and no less than real transfer demands industry, nor is it made without expenses and danger.

Nor is it an obstacle that money formally as such has a legal price. For here it is considered materially, according as it consists of diverse materials and coins, and one coin is more precious than another, more advantageous, more apt for several uses, received in several regions; and thus it is merchandise which has only a common price. That price is determined not only on the part of the exchanger, but from the abundance of money to be sent into some city, or to be withdrawn, from the ease of commerce with such a city, from dangers, from the diversity of monies in diverse kingdoms and their intrinsic value, from the riches and debts of diverse nations (cours du change), whence it is frequently changed according to various circumstances. From this theologians conclude:

1. That profit from common estimation can ordinarily be received by the exchanger, even if he himself had no expenses or damages, indeed if it is more useful to the exchanger to receive the money here, because otherwise he would have had to take care that it be transferred here: for this is by accident and to be attributed to good fortune;

2. That in the same way it can happen by accident in local exchange that the exchanger himself sometimes makes profit;

3. Indeed, that even a private man who does not exercise the office of exchanger and exchanges one money for another seems able to take profit from it, because he can sell money at the common price established by common estimation; for money is merchandise sellable by anyone at a just price.

570. Observations. 1. Exchange, as being a species of trading, is prohibited to clerics.

2. On re-exchange (rechange; herwissel) see art. 72-81 in the law of the Commercial Code. One who in fact has not borne expenses cannot demand them, since they are attributed to him only by title of indemnity.

3. A bank, or money-changer's table, is called that institution in which all operations of credit are disposed, duly ordered, and brought together. These operations are reduced to three principal categories:

a) Deposit, and the operations which are referred to it, namely, the transfer of accounts and computations to the creditor, transcription to another, recovery, compensation (clearing), mandated instruments of transfer (checks), current accounts or computations, and emissions of paper money.

b) Commerce of monies and their substitutes, which comprehends the trading of precious metal, the exchange of monies, exchange properly so called, namely of paper money, the purchase and sale of titles, and the discounting of capitals (escompte, disconto).

c) Emissions of loans, which consists in the emission of titles of credit.

Considered in themselves and merely according to principles, the aforesaid banking operations in no way seem illegitimate, since they are nothing but onerous services furnished and loans at interest under various forms, to which, today at least, just remuneration ordinarily is owed. But most unhappily, bankers sometimes abandon the honorable practices of their office and not rarely give themselves to speculations more or less usurious, as often happens in issuing loans.

The procuring of large loans is entrusted to bankers, whether solitary or federated, which certainly has nothing illegitimate. Nevertheless, by these operations it can happen that the metallic reserves of banks are weakened, or even that the cash which circulates from them suffers an excessive contraction harmful to the market. But graver inconveniences more often accompany negotiations of loans or titles.

Loans or titles are put on the market below the indicated price, by reason of a certain fictitious interest. Certain titles or "shares" are ceded gratis or for a lesser price to some persons so that they may be willing to recommend the purchase publicly. When the titles have been issued, they are eagerly sought, for this reason, that the bankers studiously buy back their own shares. Hence the price of titles quickly grows and brings about an elevation of values; wherefore outside persons, seeing the great favor which the titles enjoy, themselves fervently buy. But when the last titles have been sold, depression begins, and just as quickly the price decreases, so that the later buyers perceive too late that they have been deceived and fraudulently despoiled.

The responsibility of bankers is of great moment:

a) A banker who has great deposits of enormous value is thereby easily inclined to use them in speculations of the stock exchange and dangerous aleatory operations, although his own shipwreck and the fall of the deposits is carried along with it.

b) If he grants many loans with insufficient security, the fall of some of his debtors can notably diminish or even overturn the condition of the bank itself.

c) Between the capitals entrusted to him in deposits, and the capitals lent to others with a certain discount, there is always this difference: that the former can be demanded back without delay, while the latter are not to be returned except after a determined time. This difference is sufficient to bring about ruin, if the pecuniary reserves are insufficient, or if many depositors, moved by some fear, withdraw their deposits at the same time.

These things being considered, the oversight of public power over banks must be said to be necessary; and, in present-day circumstances, it is often insufficient, so that security is lacking. And yet by the frequent fall of banks, much money carefully gathered by the labor or thrift of citizens is squandered, and is lost to them!

I. QUESTION I. What is exchange, and of how many kinds is it? ANSWER. It is a contract of the commutation of moneys for moneys, with gain to the exchanger. He who gives the moneys is called the exchanger; he who seeks the exchange, the exchangee; and the art itself is called exchanging.

II. It is divided into real and dry. Dry exchange is a mask of usury, or a palliated loan, namely the delivery of money without distance of place. You are in need of money here at Rome, and here it is to be restored, but according to the value of the exchanges at Naples, Genoa, Milan, and so forth. Real exchange is that in which money is truly commuted for money, whether present for present of a diverse quality, or present for absent and distant. It is divided into manual, or small, in which gold money is commuted for silver, or silver for gold, or the contrary; and into local, or by letters, in which present money is exchanged for money distant in another place, or money distant in another place for present money.

III. QUESTION II. By what title is manual exchange lawful? ANSWER. First, it is an advantage to the commonwealth. Second, there is the labour and inconvenience of gathering moneys of every kind, of preserving and distributing the same; for the performing of all which there are required ministers, houses, and no light expenses. Third, according to some, there is the intrinsic diversity of the coins themselves. The fixing of the gain is defined by common and public consent in the marketplaces. It is not lawful for the servants of exchangers to commute coins to their own advantage and gain: because, since they have let out their labours and industry to their masters, they cannot gain from their masters' moneys, whatever some may say to the contrary.

IV. QUESTION III. By what title is local exchange with gain lawful? ANSWER. All affirm that that exchange is lawful by which money is delivered in one place and paid elsewhere, or the contrary: because a just title of gaining is the carrying of moneys, exceedingly necessary to the commonwealth, and because it frees from the dangers of robbers, from labour, and from many other inconveniences, all of which are appraisable at a price.

V. QUESTION IV. What is to be thought of exchange with re-exchange? ANSWER. Exchange with re-exchange, commonly con la ricorsa, is a trading paradox involved in so many turns and circumlocutions that, lest I seem to jest and to mock my readers, I shall set it forth in the words of Fr. Tamburini, who in Book IX On Contracts, chapter 5, § 2, no. 1, thus sets forth that exchange: “The practice of this exchange (which is called Besançon or Piacenza in Lessius, Book II, chapter 23, no. 39) is in our age most frequent, and is of this kind. Titius an exchanger here at Palermo, for example, gives to Caius a hundred gold pieces, to be paid by that same Caius at the next fairs to be celebrated at Piacenza, or in some other place of Italy or of Sicily. But because Caius has no one at Piacenza, or in those other places, who may pay in his name what Caius himself owes, therefore Titius offers to the same Caius his own correspondent named Seius residing in those places. He offers him, I say, that, just as he is the correspondent of Titius with every power granted to Seius himself by the same Titius, so in this business also he may be the correspondent of Caius, and may pay the exchange, that is, the said hundred gold pieces with the gain there wont to be determined among the merchants, or in the market. Let this gain now be, for example, five gold pieces. The offer being accepted, Titius writes to Seius in the name of each — namely of Titius himself and of the said Caius — that Seius accept the credit of Titius and the debt of Caius, and, as now the correspondent of Caius, pay the exchange and its gain, that is, a hundred and five gold pieces; and, as the correspondent of Titius, receive those gold pieces, and thus the exchange be extinguished. But because Seius as the correspondent of Caius has no money, therefore the same Seius, as the correspondent of Titius, or in the name of Titius, offers and gives that money to himself as the correspondent or procurator of the aforesaid Caius: he gives it, I say, at an exchange which certainly will be a second exchange, or (as we speak) a re-exchange, to be paid by Caius at Palermo. With this money therefore Seius, as the correspondent of Caius, extinguishes or pays, as has been said, the aforesaid first exchange celebrated at Palermo, so that Caius owes nothing at all more for the said first exchange. Read Lessius, who rightly notes that if the said Seius should flee or become bankrupt, the exchanger Titius could not act in his own name against the exchangee Caius: for that Caius has already paid the exchange to the exchanger Titius himself. Second: but because the said second exchange ought to bring forth its own gain, which will be, for example, another five gold pieces, which are to be paid by Caius at Palermo, therefore Caius will have to pay at Palermo to Titius a hundred and ten gold pieces, that is, a hundred from the first capital, five from the gain of the first exchange extinguished at Piacenza with the money had from the procurator of Titius, and five from the gain of the exchange to be extinguished at Palermo by the same Caius. Third: I suppose, for the justice of the second exchange, that Caius or his procurator is not compelled to the said second exchange. For Caius, or his procurator, could extinguish the first exchange with present money, without the necessity of taking a re-exchange; or certainly he could take a re-exchange from another than the correspondent of Titius. Fourth: but it is wont to occur that Caius has not even at Palermo ready that sum which he owes to Titius, whence again he binds himself to pay that same whole sum, as if he had again received it from Titius at exchange, with its gain, again at Piacenza or elsewhere, where again will be done what we have just said in no. 1: and thus exchanges and re-exchanges are continued sometimes through many years, until Caius pays Titius the capital itself in truth with money counted down, together with all the intervening gains. For therefore the merchants call this also exchange with recurrence. For it recurs whence it had begun. And observe above all that the whole business, except the first delivery of those hundred gold pieces counted out and given to Caius by Titius, and except this last payment which at last will have to be made counted down, is transacted and despatched by mere written obligations, or by acceptances and givings of credit and debt, which are written down in the books of the giving and receiving.”

VI. Observe above all, says Fr. Tamburini, that this whole business, except the first delivery and the last restitution, is despatched by mere written obligations and by given and accepted credits, through that intermediary Seius, who counts out and pays the exchange to himself. Hence the same Fr. Tamburini in the place cited, § 3, testifies that many rightly disapprove this exchange, which otherwise, he says, is most frequent. Many nevertheless (he adds) — as Navarrus — report that a certain most learned man of the Society of Jesus, Boninsegni, so thought. But Sá, Diana, Lessius, de Lugo, and others, whom I follow, teach that this exchange is probably lawful, with the explanation to be given in § 4. It is proved. Because if Caius the exchangee had at Piacenza some friend who should there pay the exchange contracted at Palermo, it would be a just exchange, as we have seen. Therefore also, and so forth.

VII. The argumentation of those who make this exchange lawful comes back, unless I am mistaken, to this. If the exchange were real, it would be lawful. Therefore it will also be lawful, even though it be feigned. Since, they say, although money be not really and truly present at Piacenza, it is nevertheless present virtually and equivalently. Most happy would debtors be if they could pay their debts with this virtual money! That stone would be more precious than any philosopher's stone.

VIII. That you may perceive the iniquity of the usury: Caius, compelled by necessity, asks of Titius a hundred gold pieces, thinking nothing at all of exchange. Crafty Titius sees that he betrays himself as a usurer if he deliver the gold pieces with an accession above the principal; therefore, that he may feign to decline usury, he suggests to him the Piacenza exchange. And how can this be done? replies Caius. Most easily, replies crafty Titius. I have there my procurator Seius, who will transact all those things which have been narrated. Who does not touch with his hands the crafty circumlocution devised for palliating usury? Since indeed, the circumlocutions being removed, Titius in fact intends nothing else save gain from the loan which he delivers to Caius. And Caius intends nothing else save to receive money to be restored to Titius in that place where he receives it. All the rest are figments. How can Caius want an exchange, if he has no need of one, but has need of moneys there where he must restore the same?

IX. St. Pius V in the year 1571 published a constitution by which he condemned all such disguised exchanges, whose beginning is In eam pro, and so forth. Read it entire in our Vol. VII, Book 3, dissertation 4, chapter 5. They answer that the Pian constitution has been received in few places, almost nowhere. And so it must be seen what natural law prescribes. But who are the interpreters of that natural law? Are they not the Pontiffs? Did St. Pius V not see, did the theologians by whose study that usage stands not see, what the law of nature prescribes? Do the bulls of the Pontiffs oblige in matters of faith and not so in the precepts of morals? But why has the Pian constitution not been received in usage? Because it is not observed by very many merchants. Is not this an excellent reason! Many other things which St. Pius V condemns in this constitution are explained in the place cited.

X. QUESTION V. What is to be said of exchange at the fairs? ANSWER. Merchants celebrate fairs in certain places or cities three or four times in the year, where debts are paid. They count out money there, to be restored at the second or fourth fairs with so much the greater gain as the longer time flows between. Lessius, Layman, and others assert that this exchange is lawful, but nevertheless that it is not to be persuaded. Other graver theologians disapprove it as usurious, because gain is exacted on account of the delay of time alone. There are wont to be alleged the titles of ceasing gain and emerging loss; but, as Genet observes, merchants scarcely ever suffer loss from such an exchange. Because they scarcely exchange, payment being deferred, save when they abound in idle money; therefore this exchange, he says, is always usurious.

XI. QUESTION VI. What is to be said of civic exchange at Rome? ANSWER. Caius has need of a hundred gold pieces, which he asks of Titius an exchanger, to be restored in that same place with gain at a term — namely at the first, or second, or third fairs. There is no one who does not condemn that exchange as feigned and usurious. Since indeed the exchangee has money neither at Rome nor elsewhere to be exchanged. They are wont to disguise that exchange in this manner. Caius at Rome testifies to the exchanger that he receives the coins either for exercising exchange at Naples, Lyons, Milan, and so forth, or for entering upon other trading contracts. And this, if need be, he confirms by oath. All these things nevertheless are false. For Caius receives money at Rome to be spent either upon settling his daughter or upon relieving his own necessities. Titius refuses to entrust money to Caius unless either a pledge or a surety be accepted. And Caius must pay gain to the surety and at the same time to the exchanger. How many interests in one crime! Exchangers and brokers commonly have all these fictions thoroughly known. They answer: is there not some title governing this usury? Some say: since either Caius trades with the money received from Titius, or not. If the first, the exchange is real. If the second, it is through Caius's fault that the money does not become gainful. Further, Titius ought not to bear the loss from Caius's fault. But all these are mere figments, since the titles of contracts must be real, not feigned.

XII. By another agreement they are wont to exercise this exchange, which they call obligation. Sempronius the borrower says to Caius the lender: Do you deliver to me on loan a thousand gold pieces: I will destine an equal sum of money to trade, or will deliver it at exchange for your advantage and utility; and I will pay you every year as much as I shall gain from the trade or from the exchange, until I shall have restored the sum received. All these are chimerical, as Benedict XIV, Supreme Pontiff, declared, Book 7, chapter 48, no. 9, On the Synod, saying: For what more absurd, what more incredible, can be feigned than that Titius, in need of the thousand gold pieces which he receives on loan from Caius, should have just as many ready at once to be remitted to the fairs, and to be laid out in active exchanges, for the utility of Caius the lender?

XIII. This circumlocution is so puerile and inept that it needs no confutation. Nor does it matter that the decisions of the Rota are adduced in confirmation. Since in a tribunal the parties prove by lies and circumlocutions that a feigned exchange was real. For the rest, if in the forum it appeared that the exchange was a mere figment, the judges would never approve it. And in this sense is Cardinal de Luca to be understood, who On Exchanges, Book 5, title Exchange, says: No one seems to approve the exchange described. For no one master of his reason can approve such an exchange, if it be feigned, as in truth it is and is everywhere reduced to practice. If you desire more concerning exchanges, read Vol. VII, Book 3, dissertation 4.

CAMBIRE means the same as to change; yet not every change of some thing is called Cambium; as if you were to change a horse for clothes, you would not be said to cambire except broadly: But this contract is most usual among Merchants, and Changers, inhabitants of different cities; and is most apt for carrying money hence and thence: yet its bond binds principally the Campsor and Campsarius, of whom below. It differs indeed from sale, because the latter claims money for a thing of another species; it differs also from a loan, because that is made in things of diverse nature, as in wheat, wine, and the like; but Cambium demands money for money, as will appear from its definition below.

Cambium IS DEFINED: It is an exchange of different moneys: Or an exchange of money for money.

CAMBIUM is twofold, one Real, one Dry. The Real, which is called true Cambium, is a legitimate exchange of money for money: But the Dry is that which is not true Cambium, but covered with the cloak of a loan, and true usury, because merely on account of the delay of time, or an expected payment, or when it is feigned that the payment is to be made elsewhere, and it is made in the same place, something is received beyond the principal, and therefore it is called Dry, and sterile for producing legitimate profit; for the distance of place, required in it for true Cambium, is converted into an expectation of payment, because the money is truly to be paid in that place in which it is received.

The real CAMBIUM is divided into Minute, and Locale: Minute is, when one gives greater moneys for lesser, or the contrary; or old coin is exchanged with new; native with foreign; golden with silver; or silver with copper.

THIS Cambium is also wont to be called Manuale, because the money being counted from hand to hand is wont to be completed at the same time and place. Locale Cambium is when present money is exchanged with absent, which is also wont to be called Cambium per litteras, because letters are wont to be sent to the place where the money is to be received or paid.

This Cambium is very USEFUL to the Republic, and because men often need lesser moneys for contracts, or need to transfer moneys to remote places, and indeed to exchange lesser and inferior ones restored into greater.

But there are MANY causes for which in this Cambium it is licit to receive profit.

The FIRST is by reason of the office of Changing, on which the burden lies of gathering moneys from different Principalities, that he may distribute them; to hire the shop; to count at the customs-house, etc. Which is understood not only in a public, but also in a private Campsor, as Molina teaches disput. 399. Bassaeus V. Cambium, num. 4. and others at his side.

The SECOND is lucrum cessans, which the Campsor would otherwise have received. See Bassaeus num. 5.

The THIRD by reason of the purity of the material, as one changing coins of gold of Ophir, with copper ones.

The FOURTH by reason of the commodity for transporting, as double crowns, or Zechini, which are valued more than little coins.

YOU WILL SAY. The Prince in these coins, having regard also to the metal, etc. set the tax e. g. that Zechini be worth two ounces of silver coin, and as much as 200. dipondii. Therefore it is not licit to receive anything beyond these.

IT IS ANSWERED, this was taxed by the Prince as he is the measure of vendible things, but not according to the conditions and circumstances adduced above. See elsewhere in Casas disp. 6. sect. 1. For these are to be estimated by the Campsor, as D. Bonavent. notes quaest. 4. to be allegatus. But the profit ought to be moderate, and less in a private Campsor, as Bassaeus says. Bassaeus notes num. 8. that it is to be estimated by the judgment of the upright, warning that falsities in the coin, in the value, etc. be warded off.

IT MUST BE ASSERTED, with the common opinion, that such a Campsor can receive something.

IT IS PROVED, because there two legitimate titles to profit intervene. One is virtual, or equivalent; as the translation of money to the place where he has correspondents. The second is assurance, because he takes upon himself the peril.

NOTE first, that the distance of places and the greater perils make it possible to receive greater profit. Similarly that a real translation is to be valued at more than a virtual one. Thus the DD. at Bonacina disput. 3. quaest. 5. and Bassaeus num. 10.

NOTE, that in a Cambium by letters, the first Campsor giving, that he may receive elsewhere, can gain something, either from the virtual transportation of money, or from a greater estimation of the money. See Casas sectione 4.

UNDERSTAND that in Exchange by letter, four parties intervene, that the Exchange may be perfect. The first is the Banker: the second the Banker's correspondent: the third the Banker's Respondent: the fourth the Respondent of the correspondent. The Banker therefore gives money to the correspondent, and from him in turn receives a promise that it be paid elsewhere. He assigns this obligation to his Respondent, so that he may receive the money there; and likewise the correspondent writes to his respondent, that he pay it; the payment having been made, the Exchange is perfect; and about this there is no controversy, whether it be licit; for there is a true permutation, transfer, and payment of money. But often the correspondent has no respondent in the place of payment, and so he has recourse to a merchant, who writes to his agent dwelling in that city, say Rome, that he pay such money to the agent, or respondent, of the Banker who has advanced it in this city, say Brescia. This too is licit, provided three other conditions intervene. The same must be said if the payment there is made through a servant out of the moneys of that same servant.

THE CONTROVERSY is in the case in which the Banker has no respondent in that place, but a servant, and the Banker writes to him, that out of the Banker's own proper moneys he pay to himself on behalf of the correspondent that money which he received in another province.

THIS Exchange they proclaim to be usurarious: Sotus de Iust. lib. 6. quaest. 10. art. 1. and quaest. 13. art. 1. Comitol. lib. 3. quaest. 15. and 16. Molina tract. 2. disp. 404. Mercatus de contract. lib. 4. cap. 7. Tanner. 2. 2. disp. 4. quaest. 7. dub. 5. num. 149. and 150. Roderic. lib. 3. de annuis redditibus, quaest. 5. num. 27. Romoaldus Coli Tract. de Cambiis, cap. 22. Palacius lib. 3. de contract. cap. 3. Rebell. 2. lib. 11. quaest. 6 concl. 3. Iustinianus in tract. de Cambiis, Lupus in cap. ult. Naviganti, §. 2. sub num. 29. Tom. 7. Cavata tract. de Cambiis, tit. de Usura, V. quaero Campsores. fol. 242. and very many others, among whom Faber de restit. in 4. disp. 47. cap. 9. num. 292.

YET the opposite opinion he judges probable: Azor part. 3. lib. 10. cap. 9. quaestio 2. Megala 1. 2. lib. 2. cap. 16. quaest. 3. Naldus verb. Cambium, Author consil. 31. among the consilia, Navar. tract. 2. lib. 5. tit. de usuris, Salas Tract. de Cambiis, disp. 17. Lessius de iustitia, lib. 2. cap. 23. dub. 7. num. 71. Sà verb. Cambium, Homobonus de exam. part. 2. Tract. 9. cap. 17. quaest. 56. Salvatorius de Cambiis, part. 3. num. 5. Filliucius Tom. 2. tract. 35. part. 2. cap. 8. num. 436. Batthol. a S. Fausto in speculo, disp. 16. quaest. 22. num. 2. Tanner. disp. 4. quaest. 8. dub. 5. Salon de iustitia, Tom. 2. quaest. 4. de Cambiis, art. 2. controv. 12. Thomas Boninsignus cap. 7. de Cambiis, num. 7. and 9. Scortia in constit. Pontif. epitome 107. Theorem. 291. and an anonymous Theologian in a tract de Cambiis, published at Milan, apud Bidellum in the year 1623. where he cites Marinus Fornarius, and Cosmas Stella of the Society of Jesus. Diana p. p. Tract. 8. resol. 2. who asserts that very many of his own Religion, and of the Society of Jesus, hold this; Caspensis tract. 19. sect. 5. who says it does not seem damnable, since it is practiced by all the Merchants in Spain, France, Italy, and the Low Countries, with the supreme Pontiffs knowing, or at least the Ordinaries of the places, who would not permit it if the contract were usurarious.

IN St. Bonaventure I find nothing, except sermon 4. on several holy martyrs; where he says the office of money-changers is to test gold, or silver, or whatever metal struck into denarii.

THEREFORE this Exchange is proved licit by them first from the letter of Pius V. to the Bolognese, where he speaks thus: Che ogni persona possa dar danari a Cambio, e che le lettere syno recapitate sopra essi datari, e cosi tener li suoi Cambii sino che saranno imborsati da chi havera preso i danari. There the Pontiff speaks absolutely, without distinction of a proper or another correspondent; of one's own, or another's money.

THIS same was thus declared by the Sacred Congregation of the Most Eminent Cardinals to the Archbishop of Palermo, in the year 1574. the matter having been referred to the Most Holy Gregory XIII.

THEY also strive to prove this Exchange by reasons, because it suffices for a real Exchange that in the place where the exchange is made the correspondent have money in very truth, actually or in credit: but the correspondent, in this second manner, there has money, because there the Banker lends it: Therefore. It is confirmed, for if the servant were to lend his credit, which he has with the Banker, he could pay him, and so forth.

I CONFESS that these, or other reasons, do not move me; for in that place the correspondent has not real money, but fictitious money from the Banker. For what credit does he have with the Banker? Nay rather it seems express simulation; for an Exchange requires a diversity of moneys, a diversity of persons; but here there is one true person, that is, the Banker, who feigns that he is also the correspondent, and pays to himself. It is also one money, the Banker's. It is confirmed: Contracts of permutation require real permutations; but permutation is of several, and of one with another, that it may be proved whether commutative equality be present; and therefore the holy Doctor says that the money-changer, by his office, if he be a true money-changer, is to test the variety, and diversity of money, and to examine whether a true permutation intervene in the price, etc.; otherwise what comparison of the same with itself?

NOR let them say, with Diana loco cit. Caspensis num. 28. Lessius num. 63. Scauia de commerciis, et Cambio, §. 6. that the Banker's servant represents two persons, namely the Banker's and the correspondent's; such Metaphysical subtleties often vanish in moral matters; for Persons are multiplied insofar as they contract, and are dealers in moneys; not, however, as they run about, as they are men; for in this they are too much materially constituted. Thus formally they are several, inasmuch as they are contracting; but there is no commutative contract, unless there is a real permutation. Let them tell me, where indeed is the permutation of the Banker's money with the Banker's money? Granted that it were carried even by many beasts of burden, promised by a herd of menservants and maidservants, etc.

I REVERE the decree of the supreme Pontiff, if it existed; but this which they adduce does not concede this manner of Exchange, but only a real Exchange, che possano dar danari a Cambio, but where indeed is the exchange of denarii in this case? See Iustinianus.

AS TO the Sacred Congregation, I say that it declared only that this Exchange is not contained in the things forbidden by Pius V. in the Extravagant, in which three kinds of Exchange are condemned. The first, in which the letters are not sent. The second, in which they are sent, but return empty. The third, when payments are made in the same place: whether it be licit is not declared by the Sacred Congregation.

THIS opinion therefore I judge dangerous, as even Diana confesses, and therefore this Exchange is not to be praised, or recommended, whether by counsel, or by persuasion. The same confess Filliucius num. 438. Caspensis num. 29. and others with Tanner num. 147.

I urge this, however, by the argument of St. Bonaventure in the speculum animae, cap. 2. §. tertius principalis fructus iniustitiae.

LET US DEAL, my money-changers, sincerely, and in friendship, and let us doff the cloak, and search the naked exchange down to the Anatomy. You surely do not pursue this most frequent contract out of CHARITY, but for gain: Therefore you give most frequently, and of set purpose, for gain, so that it be restored in the same place, and thus you intend to take gain from the delayed payment. This you seriously intend; the rest are childish rattles, and comic, as when a servant plays the parts of the correspondent and the Banker too, distinct by merely Scotist formalities. I exhort you therefore earnestly that you come to your senses, and seriously weigh the salvation of your souls; for God cannot be deceived.

This then is that Exchange called cum La Ricorsa, which almost coincides with the Exchange of continuation, in which the re-exchange is multiplied; it smells ill.

THEY ASSERT: Lessius lib. 2. cap. 23. dub. 9. numero 82. Salas de Cambiis disp. 22. Fillicius tomo 2. tract. 35. part. 2. cap 10. num. 471.

YET Diana resol. 5. with Scortia in Bulla Pontif. epist. 107. Theor. 189. teaches that these recambes are licit, not only by reason of lucrum cessans, and damnum emergentis, but also licit by the nature of Exchange itself, because they are new exchanges, and repeated purchases, and sales.

IT SEEMS to me that the holy Doctor, ad cap. 2. Ioannis, stands for the first opinion; for, explaining those words: Eiecit nummularios, namely those lending money under caution; for it was forbidden to give at usury, and that for this very reason: because even if they were not certain that so much gain would accrue to them from the delay, yet they exacted those gains under caution; which the second opinion admits, and the first denies; as is seen in Fillucius, and Caspensis.

BY the name of provisions I understand, with Lessius dub. 8. and Caspensis sect. 8. the fee, and gain, which money-changers, and bankers deduct from money to be counted, by reason of the work they render in writing, counting deposited money, keeping it, obliging themselves for another; and managing the business of another.

By immemorial custom in the provision of Exchanges there is due to money-changers a third part of a scudo for every hundred scudi, according to the money on which the exchange is paid, or the assignment made. So Molina disp. 408. Caspensis sect. 8. Boninsignus de Cambiis, cap. 7. Romoald. Cod. de Cambiis, cap. 21. Scaccia de commerc. §. 3. Gloss. 3. num. 12. Scortia in Bullas Pontific. Epitome 107. Theor. 291. Fillincius tom. 2. tract. 33. part. 2. cap. 10. num. 475. and others with those whom Diana reports resol. 6.

THEREFORE a money-changer, or money-broker may take a just fee for the custody of money, and the obligation of returning it. For these things are estimable in price. But if in the name of the depositor he disburses, and counts to another, let him still receive a fee from him in whose name he pays, and whom he serves. So Nauar. cap. 17. numero 293. Caspensis loco cit.

IT IS PROVED by Valentia puncto 3. because the whole is for the benefit of him by whose order the payment is made. Advert, however, that this exaction is licit if it has been stipulated, or if custom obtains. Say the same of the respondents of the money-changer, and of the correspondent, for the same reason.