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

The Legal Nature of the Monetary Irregular-Deposit Contract 33as irregular deposits and then deliberately delaying repayment,thus authorizing the charging of interest. If these contractshad from the beginning been openly regarded as loan ormutuum contracts they would not have been permitted bycanon law.Finally, we find evidence in the following extracts (amongothers) that Roman jurists understood the essential differencebetween the loan or mutuum contract and the monetary irregular-depositcontract: number 26, title 3, book 16 (passage byPaul); number 9, point 9, title 1, book 12 of the Digest (excerptsby Ulpian); and number 10 of the same title and book. However,the clearest and most specific statements to this effectwere made by Ulpian in section 2, number 24, title 5, book 42of the Digest, in which he expressly concludes that “To loan isone thing and to deposit is another,” and establishesthat once a banker’s goods have been sold and the concernsof the privileged attended to, preference should be givenpeople who, according to attested documents, depositedmoney in the bank. Nevertheless, those who have receivedinterest from the bankers on money deposited will not bedealt with separately from the rest of the creditors; and withgood reason, since to loan is one thing and to deposit isanother. 4444 In bonis mensularii vendundis post privilegia potioremeorum causam esse placuit, qui pecunias apud mensamfidem publicam secuti deposuerunt. Set enim qui depositisnumis usuras a mensulariis accepurunt, a ceteris creditoribusnon separantur; et merito, aliud est enim credere, aliuddeponere. (Ibid., vol. 3, p. 386)Papinian, for his part, states that if a depositary fails to comply with hisresponsibilities, money to return deposits can be taken not only fromdeposited funds found among the banker’s assets, but from all thedefrauder’s assets. The depositors’privilege extends not only to deposited funds still among thebanker’s assets, but to all of the defrauder’s assets; and this isfor the public good, given that banking services are necessary.However, necessary expenses always come first, since the calculationof assets usually takes place after discounting them.(The principle reflected here of bankers’ unlimited liabilityappears in point 8, title 3, book 16 of the Digest.)