Money, Bank Credit, and Economic Cycles - The Ludwig von Mises ...

124 Money, Bank Credit, and Economic Cycleslegality of the other (the deposit of money). 7 In conclusion,the legal arguments used by Cantillon in his defense werederived from theories regarding the monetary irregulardepositcontract, and if we consider them valid, then they alsojustify Cantillon’s obvious swindling of his customers and thehost of irregular and fraudulent activities later performed inconnection with irregular deposits of securities in the othercountries, especially Spain. Catalonian bankers carried outsuch fraud well into the twentieth century, and Spanish scholarshave correctly and unanimously recognized the dishonest,criminal nature of their behavior. 8THE MISTAKEN DOCTRINE OF COMMON LAWThe doctrine equating the monetary irregular-deposit contractwith the loan or mutuum contract has also prevailed inAnglo-Saxon common law, via the creation of law in the bindingcase system. At the end of the eighteenth century andthroughout the first half of the nineteenth, various lawsuitswere filed by which depositors, upon finding they could notsecure the repayment of their deposits, sued their bankers formisappropriation and fraud in the exercise of their safekeepingobligations. Unfortunately, however, British case-lawjudgments fell prey to pressures exerted by bankers, banking7 The opposite would be an inadmissible logical contradiction; FlorencioOscáriz Marco, however, makes such an error. He maintains thatdeposits of bulk goods are not irregular deposits “because there is nopower to use them and even less to take them at will, only power to mixthem,” while in the case of deposits of another fungible good (money),he mysteriously does consider there to be a transfer of power over useand availability, a transfer converting deposits into “loans.” In additionto this conceptual error, Oscáriz makes an error in terminology: he citesthe decision of the Spanish Supreme Court regarding a deposit of oilmade by some olive dealers (Spanish Supreme Court decision of July 2,1948) in an analysis of the “unique case” of deposits of bulk goods. Inactuality the bulk goods deposit is the best model example imaginableof a deposit of fungible goods or irregular deposit. See Oscáriz Marco,El contrato de depósito: estudio de la obligación de guarda, pp. 110–12.8 See La cuenta corriente de efectos o valores de un sector de la banca catalanay el mercado libre de valores de Barcelona.