The School of Salamanca

Extract from a royal pragmatic of 1598 condemning dry exchange

… And we likewise condemn as dry exchange subject to the said penalties all transactions in which the party who takes the money in exchange has no money, credit, or correspondent of his own in the markets and places outside our realm for which he takes the money, and in which it is agreed at the time of the contract that the money may be retained for the period of several fairs ahead to the prejudice of the party who takes it, and that the interest falling due at the first fair be added to the principal so as to yield more interest at the second fair, and from the second to the third, and so on. And we hereby command that the simple word or oath of persons who have given money in exchange shall not be accepted as proof that bills drawn on places abroad have been duly remitted to the said markets and places, and have been duly accepted and met, or that bills remitted from places abroad are true and genuine, or that the rates were actually those contained and declared in the said bills, or that any other requisite of a true and genuine Bill of Exchange has been complied with, and we order that all this must be proved by public and authentic documents, or by witnesses or other sufficient evidence approved by law: otherwise the contract shall be deemed null and void.

Note: A Papal Bull of 1566 condemns dry exchange in similar terms.