A Letter on Credit Sales and Usury

by Thomas Aquinas

translated by Alfred O'Rahilly,
"Notes on St. Thomas III - St. Thomas on Credit." Irish Ecclesiastical Record, 5th series, 31 (1928): 159-68
reprinted by Vernon J. Bourke in The Pocket Aquinas, 223-25, New York: Pocket Books, 1960.

html-formated by Joseph Kenny, O.P.

Prooemium Opening
Carissimo sibi in Christo fratri Iacobo Viterbiensi lectori Florentino, frater Thomas de Aquino salutem. To his very dear brother in Christ, James of Viterbo, Lector at Florence, from Brother Thomas of Aquin: Greetings.

Caput 1 Chapter 1
Recepi litteras vestras cum quibusdam casibus super quibus electi Capuani et meam sententiam petebatis. Super quibus collatione habita cum eodem Capuano electo et postmodum cum domino Hugone cardinali, duxi ad primum casum taliter respondendum: I received your letter containing some cases concerning which you requested the opinion of the Archbishop Elect of Capua and myself. After a discussion thereon with the aforesaid Archbishop Elect and afterwards with Cardinal Hugh, I decided that the following reply should be made to the first case.
quod —supposito quod illa consuetudo de dilatione solutionis usque ad spatium trium mensium, sicut proponitur, sit ad commune bonum mercatorum, scilicet pro expediendis mercationibus, et non in fraudem usurarum introducta— videtur esse distinguendum. Quia aut vendit venditor suas mercationes ad terminum praedictum ultra quantitatem iusti pretii propter expectationem, aut secundum iusti pretii quantitatem. Assuming that the custom of deferring payment for three months, as is set forth in the case, has been introduced for the common good of merchants, that is, for facilitating commerce, and not for fraudulent usury: then a distinction must be made. For the vendor, while granting credit for the aforesaid interval, sells his goods either (1) for an amount exceeding the just price on account of his waiting for payment, or (2) for an amount equal to the just price.
Si primo modo, non est dubium usurarium esse contractum, cum expectatio temporis sub pretio cadat. Nec potest esse excusatio si secundus venditor sit primi minister, cum ob nullam causam liceat pro termino expectationis pecuniae pretium augeri. In the first alternative there is no doubt that contract is usurious, inasmuch as the waiting for a certain time is included in the price. And this is not excused by the fact that the second vendor may be employed by the first, since for no cause whatever may the price be increased on account of the interval for which payment is deferred.
Si autem secundo modo, non est usura. Nec obstat si pro minori pretio daret si statim pecunia solveretur. Quod per simile potest in aliis debitis videri; quia si alicui debeatur aliquid ad certum terminum, quandocumque de eo quod est sibi debitum dimitteret si sibi citius solveretur, in quo casu constat eum cui debetur ab usurae peccato omnino esse immunem. Licet enim plus accipere de debito propter temporis dilationem usuram sapiat, minus tamen accipere ut sibi citius solvatur usuram non sapit, maxime ex parte eius qui minus recipit, quamvis ex parte eius qui minus dat ut citius solvat, videatur esse aliquis modus usurae cum spatium temporis vendat. Unde etiam in casu proposito plus esset de usura timendum emptori qui ubi ante tres menses solvat, minus iusta extimatione pannos emit, quam venditori qui minus accipit ut citius ei solvatur. In the second alternative, there is no usury. Nor does the fact that he would sell for less were payment made immediately make any difference. This can be seen by comparison with other debts. If an amount due to a person is payable after a certain date, even though he might remit a portion of the debt if it were paid him sooner, still in this case it is clear that the creditor is entirely immune from usury. For though it smacks of usury to take more than is due on account of delay in payment, to take less than one may be paid sooner does not smack of usury, especially on the part of him who gets less, though on the part of him who gives less on paying sooner, there seems to be some kind of usury since he sells an interval of time. Hence also in the case proposed there is no more fear of usury in connection with the buyer who, when he pays before three months, buys the cloth for less than the just value, than in connection with the seller who takes less that he may be sooner paid.

Caput 2 Chapter 2
Ex quo etiam patet quid sit dicendum ad secundum casum. Quia si mercatores Tusciae portantes pannos de nundinis Latiniaci, ut eos usque ad tempus resurrectionis expectent, plus vendant pannos quam valeant secundum communem forum, non est dubium esse usuram. Si autem non plus quam valeant sed quantum valent, plus tamen quam acciperent si statim eis solveretur, non est usura. From this it is also clear what should be said concerning the second case. For if the merchants of Tuscany, bringing cloth from the Fair of Lagny to wait until Easter [for payment], sell the cloth for more than it is worth in the general market, here is no doubt that this is usury. But if they sell it, not at more than its worth but at its worth, yet at more than they would take for it if payment were made immediately to them, there is no usury.

Caput 3 Chapter 3
In tertio casu similiter dicendum videtur. Quia si illi qui pecuniam mutuo cum usuris accipiunt, illam usuram recuperare volunt plus vendendo pannos quam valeant propter expectationem praedictam, non est dubium esse usuram cum manifeste tempus vendatur. Nec excusantur ex hoc quod volunt se conservare indemnes, quia nullus debet se conservare indemnem mortaliter peccando. Et licet expensas alias licite factas, puta in portatione pannorum, possint licite recuperare de eorum venditione, non tamen possunt recuperare usuras quas dederunt, cum haec fuerit iniusta datio; et praesertim cum dando usuras peccaverint tanquam occasionem peccandi usurariis praebentes, cum necessitas quae ponitur - ut scilicet honorabilius vivant et maiores mercationes faciant - non sit talis necessitas quae sufficiat ad excusandum peccatum praedictum. Patet enim a simili quia non posset quis in venditione pannorum recuperare expensas quas incaute et imprudenter fecisset. In the third case a similar reply should be made. For if those who accept money with usury wish to recover that usury by selling the cloth at more than its worth on account of the aforesaid delay, there is no doubt that this is usury since time is clearly sold. Nor are they excused by the fact that they wish to indemnify themselves, for no one should indemnify himself by committing mortal sin. And although they can in selling the cloth lawfully recover other expenses lawfully contracted, for example, the cost of transporting the cloth, still they cannot recover the usury they paid, for this was an unjust payment; especially since by paying usury they sinned in giving the usurers an occasion for sinning, since the necessary which is urged—namely that they may live more respectably and do a bigger trade—is not such a necessity as suffices to excuse the aforesaid sin. This is clear by comparison; for a man could not in selling cloth recover expenses which he might have incurred carelessly and imprudently.

Caput 4 Chapter 4
Patet etiam ex praedictis quod in quarto casu quaerebatur. Nam ille qui ad certum terminum debet, si ante terminum solvit ut ei de debito aliquid dimittatur, usuram committere videtur, quia manifeste tempus solutionis pecuniae vendit. Unde ad restitutionem tenetur. Nec excusatur per hoc quod solvendo ante terminum gravatur, vel quod ad hoc ab aliquo inducitur, quia eadem ratione possent omnes usurarii excusari. From what has been said the query in the fourth case is also clear. For if he who owes money payable on a certain date pays before this date that a portion of the debt may be remitted to him, he seems to commit usury, inasmuch as he sells time for paying the money. Hence he is bound to restitution. Nor is he excused by he fact that he is inconvenienced by paying before the date or that he is induced to do this by someone, for all usurers could be excused on the same ground.
Haec est mea et praedictorum, scilicet electi Capuani et Hugonis cardinalis, in praedictis casibus firma et determinata sententia. Vale. This is the firm and definite decision of myself and the aforesaid, namely, the Archbishop Elect of Capua and Cardinal Hugh, concerning the aforesaid cases. Farewell.