A Manual of Moral Philosophy

by Andrew P. Peabody

Thus also, when, in anticipation of a scarcity of some one commodity, a merchant so raises the price as essentially to diminish the sale, he earns his increased profits; for an enhanced price is the only practicable check on consumption. For instance, if at the actual rate of consumption the bread-stuff on hand would be consumed a month before the new harvest could be made availing, no statistical statement could prevent the month of famine; but experienced grain-merchants can adjust the price of the stock in hand so as to induce precisely the amount of economy which will make that stock last till it can be replaced. They will, indeed, obtain a large profit on their sales, and will be accused by ignorant persons of speculating on scarcity and popular apprehension; but it will be due wholly to their prescience that the [pg 140] scarcity did not become famine, and the apprehension suffering; and they will have merited for this service more than the largest profits that can accrue to them.

The same principles will apply to speculation in stocks, which is in many minds identified with dishonest gain. Stocks are marketable commodities, equally with sugar and salt. They are liable to legitimate fluctuations in value, their actual value being affected, often by facts that transpire, often by opinions that rest on assignable grounds. Now if a man possess skill and foresight enough to buy stocks at their lowest rates and to sell them when they will bring him a profit, he makes a perfectly legitimate investment of his intelligence and sagacity, and in facilitating sales for those who need to sell, and purchases for those who wish to buy, and thus preventing capital from lying unused, or remaining inconvertible at need, he earns all that his business yields him by the substantial services which he renders.

The legitimate business of the merchant and the broker is contingent, as we have seen, on fluctuations in the market, and he who has the sagacity to foresee these fluctuations and the enterprise to prepare for them, derives from them advantage to which he is fairly entitled. But it is precisely at this point that the stress of temptation rests, and the opportunity presents itself for dishonesty in ways of which the laws take no cognizance, and on which public opinion is by no means severe. The contingencies which sagacity can foresee, capital and credit can [pg 141] often create. Virtual scarcity may be produced by forestalling and monopoly. When there is no actual dearth, even famine-prices may be obtained for the necessaries of life by the skilful manipulation of the grain-market. So too, in the stock-market, bonds and shares, instead of being bought or sold for what they are worth, of actual owners and to real purchasers, may be merely gambled with,—bought in large amounts in order to create a demand that shall swell their price, or so thrown upon the market as to reduce their price below their real value, and all this with the sole purpose of mutual contravention and discomfiture. By operations of this kind, not only is no useful end subserved, but the financial interests and relations of the community are injuriously, often ruinously, deranged; while not a few private holders of stock have their credit essentially impaired by a sudden fall of price, or by the inflation of nominal value are led into rash speculations.

In the cases cited it may be seen how closely the right abuts upon the wrong, so that one may over-pass the line almost unconsciously. Yet it is believed that a man may determine for himself on which side of the line he belongs. The department of business, or the mode of transacting business, which cannot by any possibility be of benefit to the community, still more, that which in its general course is of positively injurious tendency, is essentially dishonest, even though there be no individual acts of fraud. He [pg 142] really defrauds the public who lives upon the public without rendering, or purposing to render any valuable return; and if there be any profession or department of business to which this description applies, it should be avoided or forsaken by every man who means to be honest.

Among the many mooted cases in which the question of honesty is involved, our proposed limits will permit us to consider only that of usury[14] (so-called). There can be no doubt that usury laws and the opinion that sustains them sprang from the false theory, according to which money was regarded, not as value, but merely as the measure of value. It is now understood that it owes its capacity to measure value solely to its own intrinsic value; that its paper representatives can equal it in purchasing power only when convertible at pleasure into coin; and that paper not immediately convertible can obtain the character of money only so far as there is promise or hope of its ultimate conversion into coin. It follows that money stands on the same footing with all other values,—that its use, therefore, is a marketable commodity, varying indefinitely in its fitting price, according as money is abundant or scarce, the loan for a long or a short period, and the borrower of more or less certain solvency. For ordinary loans the relations of supply and demand are amply competent to regulate the rate [pg 143] of interest, while he who incurs an extra-hazardous risk fairly earns a correspondingly high rate of compensation. There is, therefore, no intrinsic wrong in one's obtaining for the use of his money all that it is worth; and while we cannot justify the violation of any laws not absolutely immoral, dishonesty forms no part of the offence of the man who takes more than legal interest.[15]

Section V.

Beneficence.

We have a distinct consciousness of the needs of human beings. If we have not suffered destitution in our own persons, we yet should deprecate it. What we should dread others feel. The things which we find or deem essential to our well-being, many lack. We, it may be, possess them or the means of procuring them, beyond our power of personal use. This larger share of material goods has come to us, indeed, honestly, by the operation of laws inherent in the structure of society, and thus, as we believe, by Divine appointment. At the same time we are conscious, in a greater or less degree, of the benevolent affections. We are moved to pity by the sight or knowledge of want or suffering. Our sense of fitness [pg 144] is painfully disturbed by the existence of needs unsupplied, of calamities unrelieved. We cannot but be aware of the adaptation of such superfluity of material goods as we may possess to beneficent uses; and it can hardly be that we shall not rest in the belief that, in the inevitable order of society, it is the predetermined design and purpose of abundance to supply deficiency,—of the capacity of service, to meet the ever pressing demands for service. Beneficence, then, is a duty based on considerations of intrinsic fitness.

But beneficence must be actual, not merely formal, good-doing. Some of the most easy and obvious modes of supply or relief are adapted to perpetuate the very evils to which they minister, either by destroying self-respect, by discouraging self-help, or by granting immunity to positively vicious habits. The tendency of instinctive kindness is to indiscriminate giving. But there can be very few cases in which this is not harmful. It sustains mendicants as a recognized class of society; and as such they are worse than useless. They necessarily lose all sense of personal dignity; they remain ignorant or become incapable of all modes of regular industry, and it is impossible for them to form associations that will be otherwise than degrading and corrupting.