The Rights of War and Peace

by Hugo Grotius

XV. In buying and selling we must observe, that the bargain is completed from the very moment of the contract, even without delivery, and that is the most simple way of dealing. Thus Seneca says, that a sale is a transfer of one's right and property in a thing to another, which is done in all exchanges. But if it be settled that the property shall not be transferred immediately, still the seller will be bound to convey it at the stated period, taking in the mean time all the profits and losses.

Whereas the completion of bargain and sale, by giving the purchaser a right of possession and ejectment, and conveying to him the hazard with all the profits of the property, even before it is transferred, are regulations of the civil law not universally observed. Indeed some legislators have made the seller answerable for all accidents and damages, till the actual delivery of possession is made, as Theophrastus has observed in a passage in Stobaeus, under the title of laws, where the reader will find many customs, relating to the formalities of sale, to earnest, to repentance of a bargain, very different from the rules of the Roman law. And among the Rhodians, Dion Prusaeensis informs us that all sales and contracts were confirmed by being entered in a public register.

We must observe too that, if a thing has been twice sold, of the two sales the one is valid, where an immediate transfer of the property has been made, either by delivery of possession, or in any other mode. For by this means the seller gives up an absolute right, which could not pass by a promise alone.

XVI. It is not every kind of monopoly that amounts to a direct violation of the laws of nature. The Sovereign power may have very just reasons for granting monopolies, and that too at a settled price: a noble instance of which we find in the history of Joseph, who governed Egypt under the auspices of Pharaoh.[30] So also under the Roman government the people of Alexandria, as we are informed by Strabo, enjoyed the monopoly of all Indian and Ethiopian goods.

A monopoly also may, in some cases, be established by individuals, provided they sell at a reasonable rate. But all combinations to raise the necessary articles of life to an exorbitant rate, or all violent and fraudulent attempts to prevent the market from being supplied, or to buy up certain commodities, in order to enhance the price, are public injuries and punishable as such.[31] Or indeed ANY WAY of preventing the importation of goods, or buying them up in order to sell them at a greater rate than usual, though the price, UNDER SOME PARTICULAR CIRCUMSTANCES, may not seem unreasonable, is fully shewn by Ambrose in his third book of Offices to be a breach of charity; though it come not directly under the prohibition of laws.

XVII. As to money, it may be observed that its uses do not result from any value intrinsically belonging to the precious metals, or to the specific denomination and shape of coin, but from the general application which can be made of it, as a standard of payment for all commodities. For whatever is taken as a common measure of all other things, ought to be liable, in itself, to but little variation. Now the precious metals are of this description, possessing nearly the same intrinsic value at all times and in all places. Though the nominal value of the same quantity of gold and silver, whether paid by weight or coin will be greater or less, in proportion to the abundance or scarcity of the things for which there is a general demand.

XVIII. Letting and hiring, as Caius has justly said, come nearest to selling and buying, and are regulated by the same principles. For the price corresponds to the rent or hire, and the property of a thing to the liberty of using it. Wherefore as an owner must bear the loss of a thing that perishes, so a person hiring a thing or renting a farm must bear the loss of all ordinary accidents, as for instance, those of barrenness or any other cause, which may diminish his profits.[32] Nor will the owner, on that account, be the less entitled to the stipulated price or rent, because he gave the other the right of enjoyment, which at that time was worth so much, unless it was then agreed that the value should depend upon such contingencies.

If an owner, when the first tenant has been prevented from using a thing, shall have let it to another, all the profits accruing from it are due to the first tenant, for it would not be equitable that the owner should be made richer by what belonged to another.

XIX. The next topic, that comes under consideration, is the lawfulness of taking interest for the use of a consumable thing; the arguments brought against which appear by no means such as to command our assent. For as to what is said of the loan of consumable property being a gratuitous act, and entitled to no return, the same reasoning may apply to the letting of inconsumable property for hire, requiring a recompence for the use of which is never deemed unlawful, though it gives the contract itself a different denomination.

Nor is there any more weight in the objection to taking interest for the use of money, which in its own nature is barren and unproductive. For the same may be said of houses and other things, which are unproductive and unprofitable without the industry of man.[33]