An “exception” of sorts applies for cases of theft, fraud, and negligence

An “exception” of sorts applies for cases of theft, fraud, and negligence

Actual money in 24 hour pawn shops in New Mexico possession (financial securities or other property conventionally used for exchange), or other property securing the loan, can be alienated from the borrower and repossessed if the borrower stops making census payments

30) If the sovereign should decline to enforce usurious contracts, doesn’t it follow that the sovereign should decline to enforce any contract of exchange whatsoever which empowers one party to pursue a deficiency judgment against the other party personally, independent of any real assets posted as security?

Yes. See questions 35 and 36. But in these kinds of cases the content of the contract itself is irrelevant: any extrinsic title that the wronged party has to damages in the case of negligence or crime is a title he has no matter what the contract says (see Question 49).

31) I really don’t get it. Why again do you say that fixed-income investments in (e.g.) corporations (corporate bonds) are not usury?

A (non-usurious) corporate bond is not secured by any personal guarantees: it is only secured by the corporation itself, which is an asset (something which can be owned and sold) not a person or persons. An example of a census is an investor paying for seed and supplies for a farmer in exchange for a fixed quota of the farm’s expected output, converted into a regular cash payment. This is morally licit as long as it is secured by the farm as a bundle of assets or property, not by a personal guarantee from the farmer.

Pope Pius V declared in the bull Cum Onus (January 19, 1569) that the difference between a licit census and usury was that in a licit census, the income and principal were guaranteed by the assets – the farm – and not personally guaranteed by the farmer. Licit census contracts must be secured by a ‘fixed, immobile good’ – alienable property – not by a personal guarantee of repayment.

Modern economic theorists have misunderstood this by assuming that ‘money’ is not a ‘fixed, immobile good’, and therefore conclude that usury doctrine depends upon some particular theory of money which at best no longer applies. But in doing so they fail to make the distinction clearly made by Aquinas (see Question 52) and the Magisterium between actual money (or other alienable property) in the possession of the borrower and a mere personal promise, by the borrower, to repay.

It isn’t that ‘money’ (understood equivocally) fails to be a ‘fixed, immobile good’: it is that a personal IOU, a mere personal promise to repay, fails to be a ‘fixed, immobile good’. Personal IOU’s cannot be alienated from the borrower and repossessed.

A corporate bond is a kind of contract which used to be called a census

Personally guaranteed census contracts were declared to be illicit, as were census contracts where redemption of the principal could be forced by the buyer (“lender”) before the term of the census contract expired, as were census contracts which could not be redeemed at any time by the seller (“borrower”).

… part of the usufruct of the field on which the census is constituted is bought. Then, … by another contract, which is implicitly contained in the very constitution of a real census, it is agreed by the parties that, for the hope of the fruit which the buyer has from that usufruct, the seller binds himself to pay such an annual payment of money; – and in this way the prior contract is reduced to the obligation of paying only an annual sum, by which the seller redeems the partial usufruct of the field which he had sold; the field itself, however, remaining really obliged in the manner of a pledge for the payment of the promised money …

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We utilize the financial statement footnotes to obtain the required information on sectoral loan portfolios

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