[The following is from The Framework of a Christian State by Rev. E. Cahill, S.J., Imprimi Potest: Eduardus, Archbishop of Dublin, May 23, 1932. Regarding the first part of this article, the subject is evidently very timely; read Johann Hari: How Goldman gambled on starvation.]
Speculation in stocks and shares means broadly an attempt to make profit out of changing prices, and like other forms of gambling, is not in itself unlawful. But without being in any way useful to the community, this type of activity is specially liable to abuse and in many of its forms is immoral and unjust. Thus, speculating and making profits from speculation in stocks by means of faked news and lies is definitely unjust. So also is the concerted buying or selling of goods or stocks with the object of raising or lowering prices to levels not corresponding with their real value.
Another type of speculation which is mostly unjust, and almost always injurious to the public interest, is the fictitious buying and selling of what are called “futures,” “options,” and “margins.” This type of transaction has the effect of creating immense quantities of fictitious produce and thus lowering the prices to the producer without in any way lessening, and sometimes even increasing considerably the cost to the consumer. The profits go to the group of parasitical speculators who live on the toil and grow rich on the losses of others. Thus, it is said that not more than five per cent of the transactions on the London Stock Exchange are bona fide transactions, the rest being fictitious or speculative buying of this kind without any intention of accepting delivery of the goods or supposed goods. It is to transactions of this type that Pius IX specially refers when he writes:
“Easy returns, which an open market affords to anyone, lead many to interest themselves in trade and exchange, their one aim being to make clear profits with the least labor. By their unchecked speculation prices are raised and lowered out of mere greed for gain, making void all the most prudent calculations of manufacturers…
“A stern insistence on the moral law, enforced with vigor by civil authorities could have dispelled, or perhaps averted, these enormous evils. This, however, was too often lamentably wanting.” Quadragesimo Anno
Another well known type of fraud is the promotion of worthless or bogus companies. The public subscribe under the delusion (which promoters bring about by publishing false news, bribing the Press, and fictitious buying and selling) that they are investing in a real business enterprise. In the end the promoter disappears with the money which has been subscribed.
It is the duty of government to suppress or keep in check by penal enactments, rigorously enforced, all these fraudulent activities which are disastrous to the public good.
Dealing in futures means the buying up of a crop or the produce of a mine long before it is actually realized. If the seller really means to deliver the goods and the buyer to receive them at some future specific time, and if besides, there is no intention of setting up a monopoly, the transaction, although creating an element of chance or gambling, would be lawful. But, as a matter of fact, the sale is usually fictitious: for neither buyer nor seller has any intention of giving over or receiving the goods in question of which they know little or nothing.
Options differ from “futures” in that no actual sale of a crop or produce is usually contemplated. The person buying an option pays a certain amount to a broker, and in return obtains the right to purchase by a certain date the commodity mentioned. He has, however, no intention of accepting delivery, and the deal is just a gamble on the future price. It has been reckoned that in America, the quantity of wheat thus fictitiously sold each year, is more than a hundred times the quantity that is actually produced!
Margins are of the same general nature as “options.” The transaction may be thus described. Let us suppose that a person wishes to gamble on a “margin” to the extent of $50. He pays this sum to his stockbroker plus whatever commission the latter charges. The broker acquires stock to the value of a much larger amount. As long as this does not depreciate below $50, he holds it, but when it drops below this figure the client has to pay an amount representing the extent of the fall or lose his existing interest in the transaction. If the value of the stock rises the client can sell and make a profit.
The rights and duties of the State in education, not being founded upon a title of fatherhood, are on a completely different plane from those of the Church and family. The State, unlike the Church, is in no sense the parent of its members, who exist before it and whose rights are prior to those of the State. The end and object of the State’s existence is to secure for its members the free exercise of their rights, and to assist them to attain to the highest spiritual and temporal well-being.
The principle implied in the shibboleth, “Free Education for all,” which have been gaining ground in modern times, under the influence of Liberalism and Socialism, are full of danger to the interests of family life, especially where the free education is to be given at the public expense in State schools. The danger becomes greater when the State or the municipal authority supplies books, stationery, and medical attendance, and sometimes even free meals, to the children. (If free meals be needed owing to the extreme poverty of some of the parents, the expedient should be regarded as abnormal and temporary; and the meals should, where at all possible, be supplied through the medium of the parents themselves or some religious or charitable organization; and every effort should be made by the rulers of the State to adjust the economic life of the country in such a way that the abnormal state of destitution which makes such an expedient necessary, should cease or be very rare.)
This system, suggesting as it does that the children belong to the State rather than to the parents, tends to withdraw both teachers and children from the parents’ control. Besides, parents do not, under a system of the kind, take the same interest in the child’s education as they do when they themselves defray at least some portion of the expenses. Hence it seems most desirable, in the best interests of both child and parent, that the latter should in all cases pay directly at least a small portion, and, where possible, even a considerable portion of the educational expenses
The general attitude of the Church towards the question of the civic rights of women, their education and their work, may be thus briefly summarized: Woman’s most important sphere is the home; and her primary social duties are those of wife and mother. The purity and virtue of womanhood lie at the very foundation of Christian society; and no consideration of real or apparent public good can justify any custom or any law by which these may be seriously endangered.
Apart, however, from these fundamental principles and in dealing with non-essentials, the Church pays a wise regard to the sentiments and customs of different nations and to the social needs and circumstances of particular times. She contents herself with proclaiming the essential doctrines that secure the dignity and safeguard the virtue and true interests of women. Hence, no work and no study, for which women are not physically unfit, is discouraged by the Church, provided always that there be nothing in either contrary to Christian modesty, or prejudicial to the order and discipline and interests of the Christian family. These latter conditions are to be regarded as essential. On this subject Leo XIII writes: Women are not suited for certain occupations: a woman is by nature fitted for home work; and it is this which is best adapted to preserve her modesty and to promote the good bringing up of children and the well-being of the family. (Rerum Novarum)
The work of women underground in mines and the employment of girls and young men mixed together in modern factories would violate the requirements of Christian modesty (Quadragesimo Anno — Pope Pius XI), while the employment of mothers, day after day, and all day away from home, would be contrary to the interests of the family. But neither condition would be violated by women, who are not prevented by domestic duties, undertaking rough, open-air work, or on the other hand, by their reaching the highest excellence in literature, science and art.