1 Three kind of money changing.
205. These three forms of money changing are just.
The first kind is when a money changer in a case of small money changing makes a moderate profit following the usage of his native land. It is termed small money changing because the money changer in return for a gold ducat gives the usual money that is current in that country; or, vice versa by giving something less than what he receives. In this way natural fairness is observed by the fact that some consideration has to be given for the money changer's activity and work. Because it is permissible for agents in the other arts to receive recompense for their respective exchanges of labor and industry, there is no doubt that money changers who engage in exchanging coins are permitted to do the same as well. Therefore, those who maintain that such profit alone is permitted to money changers hold a reasonable position. Thus, if a private citizen has to exchange a gold ducat, he should make no profit, for the exchanging of native coins does not vary in value like the rest of the exchanging but is set. For example, a gold ducat is valued at twelve marcelli. Just as it is not just to violate equity in other exchanges, the same is true in changing coins. Consequently, it is not permissible to receive more than is given in a small exchange of money except in two cases. Either, it is in recompense for service, that is, in carrying out the state function of money changer--we are not concerned here with counting money, as some think (because it frequently happens that a money changer counts less than the receiver, and the act of counting is not properly mercenary but is accustomed to be given free of charge, like making use of a book and the counting of one giving money corresponds to the counting of the money changer). Or, it is because of the inconvenience that someone suffers by the removal of such a kind of money from himself or the quality of the coins (as will be discussed later). In general, these things are not found in individuals who are not money changers.
206. Second, there is the case of a money changer who makes a moderate profit from the fact that Peter who has a certain sum of money in Milan gives it to a money changer to have an equal sum of money given to himself or to another in Rome. If a money changer makes a profit from this, the fee is just, for the money changer plays the part of a middleman in this activity. It is not fair to take away his profit from his service.
207. Third, there is the case of a money changer making profit because he transfers money from one place where its value is less to another place where it is more. This act of business is dealing in coins, and so it seems to have been the very beginning of the art of money changing, as is stated in the first book of the Politics. (1) It is permissible just as it is permissible in other businesses to increase profit.
208. There is, however, no doubt that two forms of money changing are unjust. The first instance occurs when the money changer profits or aims at profiting from the fact that he gives a certain sum of money under the guise of money changing from Lyons or London to Peter who needs it in Milan. It is a known fact that in truth restitution is required in this instance on both sides: whether or not letters for money changing are made and presented. As a matter of fact, this is clearly an instance of money changing in name only and is really a loan with profit or the hope of profit inasmuch as it was done in a different way.
209. The second instance comes down to the same thing: A money changer for profit gives Peter in Milan the hundred ducats he needs and receives from the same Peter a month from now their value in Venice according to the money-changing rate of ten pounds of groats that are normally equal to one hundred ducats, however, in the process of exchanging in Venice the value of the money is up at one time and down at another. Truly, this transaction is a lending contract, cloaked in the name of money changing, and takes place with a hope for profit against that statement in Luke 6. (2) Lend, expecting nothing in return. It is generally carried out in the probable expectation of gain because it is generally accustomed to be at that time worth more than ten pounds of groats, although on occasion, but rarely, the value is less. Therefore, this transaction is one of usury. There is no excuse for it except in the case where Peter needed those hundred ducats, and the money changer was prepared to make a real exchange for those one hundred for the Venetian money in that way and at Peter's insistence that he would give them to him on this agreement. This is a licit contract of true money changing and will be discussed later.
210. Of the questionable types of money changing, some are so because of money changers, some are so because of the recipients of money changing.
Questions arise on the money changer's side from two sources. Either one puts the value of the foreign coin lower that its common value where it has to be restored and for this there must be restitution; or one puts a higher value on one's own coin that he gives than its common value in the place where it has to be restored. Wherever they occur, all solid money changing can be reduced to these two types that are very close and come to the same thing. Money changing in Lyons works the first way: A money changer in Milan gives sixty scudi to Peter who needs a mark of gold that is commonly worth sixty scudi there, but that is not according to the value of a scudo in Lyons. There a scudo is commonly valued at 30 groats but here in Milan at 28 groats. In this way, he gives himself so great a sum of money that comes to 60 scudi at the rate of 28 groats for a scudo. The second way is found in money changing in both London and Bruges. Here, a money changer in Genoa gives Peter, who needs them, 1,000 ducats but not according to the value of the ducat current in Bruges or London, for the value of the ducat there is 50 groats, but in Ghent its value is 52 groats. So the person receiving the exchange is held to give 52 groats in Bruges and London for each ducat. The remaining money exchanges are similar on the part of money changers. The actual money involved is not important: Our examples are for the readers' understanding.
211. The introduction of temporal relationship increases the ambiguity of the aforesaid money exchanges. The money changers admit that the more distant the time of paying out the money is, the less is the value of the money in the first case and the greater in the second case.
212. On the part of persons receiving the exchanges, the exchanges can vary in six ways: according to the difference of the same or dissimilar money, and the difference of definite or doubtful or accidental profit. These things seem to give rise to some sort of difference per se in money changing. First of all, Peter can happen to give a money changer in Milan a hundred gold Florentine ducats and want the same number of Florentines in Florence. Second, Peter can happen to want silver money in Florence, say Florentine groats, but as many as are equal to 100 gold Florentine ducats in Florence.
Third, Peter can happen to want good, gold or silver, money at Florence for those ducats, in accordance with what they are worth at the time of their payment, say on market days in Florence.
213. Each of these possibilities could happen in two ways: that is simply as presented or with some added, definite profit, so, for example, Peter wants not only the aforesaid 100 ducats in Florence as described, but he also wants four other ducats to be given him beyond this. Because the principal question does not concern them but those that are connected with the money changer, there will not be much talk about them. They will be discussed at the end of the treatise. To avoid trifling with or confusing our readers, let the money exchanges that are to be discussed be called real, although many call them solid money exchanges or money exchanges by letters.
(1) Cf., no. 248.
(2) Verse 35.
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|Title Annotation:||On Exchanging Money (1499)|
|Author:||Brannan, Patrick T.|
|Publication:||Journal of Markets & Morality|
|Date:||Mar 22, 2007|
|Next Article:||2 The opinions of those who say usury is present in real money exchanges.|