[Footnote 4: _Epist. ad Rustic.u.m_, c. ix.]

The scholastics, in addition to condemning commerce on the authority of the patristic texts, condemned it also on the Aristotelean ground that it was a chrematistic art, and this consideration, as we have seen above, enters into Aquinas's article on the subject.[1]

[Footnote 1: Rambaud, _op. cit._, p. 52.]

The extension of commercial life which took place about the beginning of the thirteenth century, raised acute controversies about the legitimacy of commerce. Probably nothing did more to broaden the teaching on this subject than the necessity of justifying trade which became more and more insistent after the Crusades.[1]

[Footnote 1: On the economic influence of the Crusades the following works may be consulted: Blanqui, _Histoire de l'Economie politique_; Heeren, _Essai sur l'Influence politique et sociale des Croisades_; Scherer, _Histoire du Commerce_; Prutz, _Culturgeschichte der Kreuzzuge_; Pigonneau, _Histoire du Commerce de la France_; List, _Die Lehren der Handelspolitischen Geschichte_.]

By the time of Aquinas the necessity of commerce had come to be fully realised, as appears from the pa.s.sage in the _De Regimine Principum_: 'There are two ways in which it is possible to increase the affluence of any State. One, which is the more worthy way, is on account of the fertility of the country producing an abundance of all things which are necessary for human life, the other is through the employment of commerce, through which the necessaries of life are brought from different places. The former method can be clearly shown to be the more desirable.... It is more admirable that a State should possess an abundance of riches from its own soil than through commerce. For the State which needs a number of merchants to maintain its subsistence is liable to be injured in war through a shortage of food if communications are in any way impeded. Moreover, the influx of strangers corrupts the morals of many of the citizens... whereas, if the citizens themselves devote themselves to commerce, a door is opened to many vices. For when the desire of merchants is inclined greatly to gain, cupidity is aroused in the hearts of many citizens.... For the pursuit of a merchant is as contrary as possible to military exertion. For merchants abstain from labours, and while they enjoy the good things of life, they become soft in mind and their bodies are rendered weak and unsuitable for military exercises....

It therefore behoves the perfect State to make a moderate use of commerce.'[1]

[Footnote 1: ii. 3.]

Aquinas, who, as we have seen, recognised the necessity of commerce, did not condemn all trade indiscriminately, as the Fathers had done, but made the motive with which commerce was carried on the test of its legitimacy: 'Trade is justly deserving of blame, because, considered in itself, it satisfies the greed for gain, which knows no limit, and tends to infinity. Hence trading, considered in itself, has a certain debas.e.m.e.nt attaching thereto, in so far as, by its very nature, it does not imply a virtuous or necessary end. Nevertheless gain, which is the end of trading, though not implying, by its nature, anything virtuous or necessary, does not, in itself, connote anything sinful or contrary to virtue; wherefore nothing prevents gain from being directed to some necessary or even virtuous end, and thus trading becomes lawful. Thus, for instance, a man may intend the moderate gain which he seeks to acquire by trading for the upkeep of his household, or for the a.s.sistance of the needy; or again, a man may take to trade for some public advantage--for instance, lest his country lack the necessaries of life--and seek gain, not as an end, but as payment for his labour.'[1] This is important in connection with what we have said above as to property, as it shows that the trader was quite justified in seeking to obtain more profits, provided that they accrued for the benefit of the community. This justification of trade according to the end for which it was carried on, was not laid down for the first time by Aquinas, but may be found stated in an English treatise of the tenth century ent.i.tled _The Colloquy of Archbishop Alfric_, where, when a doctor asks a merchant if he wishes to sell his goods for the same price for which he has bought them, the merchant replies: 'I do not wish to do so, because if I do so, how would I be recompensed for my trouble? but I wish to sell them for more than I paid for them so that I might secure some gain wherewith to support myself, my wife, and family.'[2]

[Footnote 1: II. ii. 77, 4.]

[Footnote 2: Loria, _a.n.a.lysi de la proprieta, capitalista_, ii. 168.]

In spite of the fact that the earlier theory that no commercial gain which did not represent payment for labour could be justified was still maintained by some writers--for instance, Raymond de Pennafort[1]--the teaching of St. Thomas Aquinas was generally accepted throughout the later Middle Ages. Canonists and theologians accepted without hesitation the justification of trade formulated by Aquinas.[2] Henri de Gand,[3] Duns Scotus,[4] and Francois de Mayronis [5] unhesitatingly accepted the view of Aquinas, and incorporated it in their works.[6] 'An honourable merchant,' says Trithemius, 'who does not only think of large profits, and who is guided in all his dealings by the laws of G.o.d and man, and who gladly gives to the needy of his wealth and earnings, deserves the same esteem as any other worker. But it is no easy matter to be always honourable in all mercantile dealings and not to become usurious. Without commerce no community can of course exist, but immoderate commerce is rather hurtful than beneficial, because it fosters greed of gain and gold, and enervates and emasculates the nation through love of pleasure and luxury.'[7] Nider says that to buy not for use but for sale at a higher price is called trade. Two special rules apply to this: first, that it should be useful to the State, and second, that the price should correspond to the diligence, prudence, and risk undertaken in the transaction.[8]

[Footnote 1: _Summa Theologica_, II. vii. 5.]

[Footnote 2: Ashley, _op. cit._, p. 55.]

[Footnote 3: _Quodlib_., i. 40.]

[Footnote 4: _Lib. Quat. Sent._, xv. 2.]

[Footnote 5: iv. 16, 4.]

[Footnote 6: See Jourdain, _op. cit._, p. 20 _et seq_.]

[Footnote 7: Quoted in Janssen, _op. cit._, vol. ii. p. 97.]

[Footnote 8: _Op. cit._, iv. 10.]

The later writers hi the fifteenth century seem to have regarded trade more liberally even than Aquinas, although they quote his dictum on the subject as the basis of their teaching. Instead of condemning all commerce as wrong unless it was justified by good motives, they were rather inclined to treat commerce as being in itself colourless, but capable of becoming evil by bad motives. Carletus says: 'Commerce in itself is neither bad nor illegal, but it may become bad on account of the circ.u.mstances and the motive with which it is undertaken, the persons who undertake it, or the manner in which it is conducted. For instance, commerce undertaken through avarice or a desire for sloth is bad; so also is commerce which is injurious to the republic, such as engrossing.'[1]

[Footnote 1: _Summa Angelica_, 169: 'Mercatio non est mala ex genere, sed bona, humano convictui necessaria dum fuerit justa. Mercatio simpliciter non est peccatum sed ejus abusus.' Biel, _op. cit._, iv.

xv. 10.]

Endemann, having thoroughly studied all the fifteenth-century writers on the subject, says that commerce might be rendered unjustifiable either by subjective or objective reasons. Subjective illegality would arise from the person trading--for instance, the clergy--or the motive with which trade was undertaken; objective illegality on account of the object traded in, such as weapons in war-time, or the bodies of free men.[1] Speculative trading, and what we to-day call profiteering, were forbidden in all circ.u.mstances.[2]

[Footnote 1: _Studien_, vol. ii. p. 18.]

[Footnote 2: _The Ayenbite of Inwit_, a thirteenth-century confessor's manual, lays it down that speculation is a kind of usury. (Rambaud, _Histoire_, p. 56.)]

We need not dwell upon the prohibition of trading by the clergy, because it was simply a rule of discipline which has not any bearing upon general economic teaching, except in so far as it shows that commerce was considered an occupation dangerous to virtue. Aquinas puts it as follows: 'Clerics should abstain not only from things that are evil in themselves, but even from those that have an appearance of evil. This happens in trading, both because it is directed to worldly gain, which clerics should despise, and because trading is open to so many vices, since "a merchant is hardly free from sins of the lips."

[1] There is also another reason, because trading engages the mind too much with worldly cares, and consequently withdraws it from spiritual cares; wherefore the Apostle says:[2] "No man being a soldier to G.o.d entangleth himself with secular business." Nevertheless it is lawful for clerics to engage in the first-mentioned kind of exchange, which is directed to supply the necessaries of life, either by buying or by selling.'[3] The rule of St. Benedict contains a strong admonition to those who may be entrusted with the sale of any of the products of the monastery, to avoid all fraud and avarice.[4]

[Footnote 1: Eccles. xxvi. 28.]

[Footnote 2: 2 Tim. ii. 4.]

[Footnote 3: _Summa_, II. ii. 77, 4, ad. 3.]

[Footnote 4: _Beg. St. Ben._, 57.]

On the whole, the att.i.tude towards commerce seems to have grown more liberal in the course of the Middle Ages. At first all commerce was condemned as sinful; at a later period it was said to be justifiable provided it was influenced by good motives; while at a still later date the method of treatment was rather to regard it as a colourless act in itself which might be rendered harmful by the presence of bad motives. This gradual broadening of the justification of commerce is probably a reflection of the necessities of the age, which witnessed a very great expansion of commerce, especially of foreign trade. In the earlier centuries remuneration for undertaking risk was prohibited on the authority of a pa.s.sage in the Gregorian Decretals, but the later writers refused to disallow it.[1] The following pa.s.sage from Dr.

Cunningham's _Growth of English Industry and Commerce_ correctly represents the att.i.tude of the Church towards commerce at the end of the Middle Ages: 'The ecclesiastic who regarded the merchant as exposed to temptations in all his dealings would not condemn him as sinful unless it were clear that a transaction were entered on solely for greed, and hence it was the tendency for moralists to draw additional distinctions, and refuse to p.r.o.nounce against business practices where common sense did not give the benefit of the doubt.'[2] We have seen that one motive which would justify the carrying on of trade was the desire to support one's self and one's family. Of course this motive was capable of bearing a very extended and elastic interpretation, and would justify increased commercial profits according as the standard of life improved. The other motive given by the theologians, namely, the benefit of the State, was also one which was capable of a very wide construction. One must remember that even the manual labourer was bound not to labour solely for avaricious gain, but also for the benefit of his fellow-men. 'It is not only to chastise our bodies,' says Basil, 'it is also by the love of our neighbour that the labourer's life is useful so that G.o.d may furnish through us our weaker brethren';[3] and a fifteenth-century book on morality says: 'Man should labour for the honour of G.o.d.

He should labour in order to gain for himself and his family the necessaries of life and what will contribute to Christian joy, and moreover to a.s.sist the poor and the sick by his labours. He who acting otherwise seeks only the pecuniary recompense of his work does ill, and his labours are but usury. In the words of St. Augustine, "thou shalt not commit usury with the work of thy hands, for thus wilt thou lose thy soul,"'[4] The necessity for altruism and regard for the needs of one's neighbour as well as of one's self were therefore motives necessary to justify labour as well as commerce; and it would be wrong to conclude that the teaching of the scholastics on the necessity for a good motive to justify trade operated to damp individual enterprise, or to discourage those who were inclined to launch commercial undertakings, any more than the insistence on the need for a similar motive in labourers was productive of idleness.

What the mediaeval teaching on commerce really amounted to was that, while commerce was as legitimate as any other occupation, owing to the numerous temptations to avarice and dishonesty which it involved, it must be carefully scrutinised and kept within due bounds. It was more difficult to insure the observance of the just price in the case of a sale by a merchant than in one by an artificer; and the power which the merchant possessed of raising the price of the necessaries of life on the poor by engrossing and speculation rendered him a person whose operations should be carefully controlled.

[Footnote 1: Cunningham, _Growth of English Industry and Commerce_, vol. i. p. 255.]

[Footnote 2: P. 255.]

[Footnote 3: _Reg. Fus. Tract._, x.x.xVII. i.]

[Footnote 4: Quoted in Janssen, _op. cit._, vol. ii. p. 9.]

Finally, it must be clearly understood that the attempt of some modern writers to base the mediaeval justification of commerce on an a.n.a.lysis of all commercial gains as the payment for labour rests on a profound misunderstanding. As we have already pointed out, Aquinas distinctly rules out of consideration in his treatment of commerce the case where the goods have been improved in value by the exertions of the merchant. When the element of labour entered into the transaction the matter was clearly beyond doubt, and the lengthy discussion devoted to the question of commerce by Aquinas and his followers shows that in justifying commercial gains they were justifying a gain resting not on the remuneration for the labour, but on an independent t.i.tle.

-- 8. _Cambium_.

There was one department of commerce, namely, _cambium_, or money-changing, which, while it did not give any difficulty in theory, involved certain difficulties in practice, owing to the fact that it was liable to be used to disguise usurious transactions. Although _cambium_ was, strictly speaking, a special branch of commerce, it was nevertheless usually treated in the works on usury, the reason being that many apparent contracts of _cambium_ were in fact veiled loans, and that it was therefore a matter of importance in discussing usury to explain the tests by which genuine and usurious exchanges could be distinguished. Endemann treats this subject very fully and ably;[1]

but for the purpose of the present essay it is not necessary to do more than to state the main conclusions at which he arrives.

[Footnote 1: _Studien_, vol. i. p. 75.]

Although the practice of exchange grew up slowly and gradually during the later Middle Ages, and, consequently, the amount of s.p.a.ce devoted to the discussion of the theory of exchange became larger as time went on, nevertheless there is no serious difference of opinion between the writers of the thirteenth century, who treat the subject in a fragmentary way, and those of the fifteenth, who deal with it exhaustively and systematically. Aquinas does not mention _cambium_ in the _Summa_, but he recognises the necessity for some system of exchange in the _De Eegimine Principum_.[1] All the later writers who mention _cambium_ are agreed in regarding it as a species of commerce to which the ordinary rules regulating all commerce apply. Francis de Mayronis says that the art of _cambium_ is as natural as any other kind of commerce, because of the diversity of the currencies in different kingdoms, and approves of the campsor receiving some remuneration for his labour and trouble.[2] Nicholas de Ausmo, in his commentary on the _Summa Pisana_, written in the beginning of the fifteenth century, says that the campsor may receive a gain from his transactions, provided that they are not conducted with the sole object of making a profit, and that the gain he may receive must be limited by the common estimation of the place and time. This is practically saying that _cambium_ may be carried on under the same conditions as any other species of commerce. Biel says that _cambium_ is only legitimate if the campsor has the motive of keeping up a family or benefiting the State, and that the contract may become usurious if the gain is not fair and moderate.[3] The right of the campsor to some remuneration for risk was only gradually admitted, and forms the subject of much discussion amongst the jurists.[4]

This hesitation in allowing remuneration for risk was not peculiar to _cambium_, but, as we have seen above, was common to all commerce.

Endemann points out how the theologians and jurists unanimously insisted that _cambium_ could not be justified except when the just price was observed, and that, when the doctrine attained its full development, the element of labour was but one of the const.i.tuents in the estimation of that price.[5]

[Footnote 1: 'c.u.m enim extraneae monetae communicantur in permutationibus oportet recurrere ad artem campsoriam, c.u.m talia numismata non tantum valeant in regionibus extraneis quantum in propriis (_De Reg. Prin._, ii. 13).]

[Footnote 2: In _Quot. Lib. Sent._, iv. 16, 4.]

[Footnote 3: _Op. oil_., IV. xv. 11.]

[Footnote 4: Endemann, _Studien_, vol. i. pp. 123-36.]

[Footnote 5: _Ibid._, p. 213.]

All the writers who treated of exchange divided it into three kinds; ordinary exchange of the moneys of different currencies (_cambium minutum_), exchange of moneys of different currencies between different places, the justification for which rested on remuneration for an imaginary transport (_cambium per litteras_), and usurious exchange of moneys of the same currency (_cambium sicc.u.m_). The former two species of cambium were justifiable, whereas the last was condemned.[1]