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

34 Money, Bank Credit, and Economic CyclesIt is therefore clear from Ulpian’s writings in this sectionthat bankers carried out two different types of operations. Onone hand, they accepted deposits, which involved no right tointerest and obliged the depositary to maintain the full, continuousavailability of the tantundem in favor of the depositors,who had absolute privilege in the case of bankruptcy.And, on the other hand, they received loans (mutuum contracts),which did obligate the banker to pay interest to thelenders, who lacked all privileges in the case of bankrupcy.Ulpian could show no greater clarity in his distinctionbetween the two contracts nor greater fairness in his solutions.Roman classical jurists discovered and analyzed the universallegal principles governing the monetary irregulardepositcontract, and this analysis coincided naturally withthe development of a significant business and trade economy,in which bankers had come to play a very important role. Inaddition, these principles later appeared in the medieval legalcodes of various European countries, including Spain, despitethe serious economic and business recession resulting fromthe fall of the Roman Empire and the advent of the MiddleAges. In Las Partidas (law 2, title 3, item 5) it is established thata person who agrees to hold the commodities of another takespart in an irregular deposit in which control over the goods istransferred to him. Nevertheless, he is obliged, dependingupon agreements in the corresponding document, to returnthe goods or the value indicated in the contract for each goodremoved from the deposit, either because it is sold with theauthorization of the original owner, or is removed for other,unexpected reasons. 45 Moreover, in 1255 the Fuero Real (law 5,45 In Las Partidas (c. 1312) deposits are called condesijos [hidden deposits],and in law 2 of this work we read thatControl over the possession of goods given another for safekeepingis not transferred to the receiver of the goods, exceptwhen the deposit can be counted, weighed or measured whenhanded over; and if it is given the receiver in terms of quantity,weight or measure, then control is transferred to him.However, he must return the good or the same amount ofanother equal to that given him for safekeeping.