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

Historical Violations of the Legal PrinciplesGoverning the Monetary Irregular-Deposit Contract 89As we see, Saravia de la Calle’s analysis, along with hiscleverness and humor, is impeccable and free from contradictions.However, in his criticism of bankers, he perhaps placestoo much emphasis on the fact that they charged and paidinterest in violation of the canonical prohibition of usury,instead of emphasizing that they misappropriated demanddeposits.Another writer who examines the monetary irregulardepositcontract is Martín de Azpilcueta, better known as“Doctor Navarro.” In his book, Comentario resolutorio de cambios(Resolutory commentary on exchanges), first published inSalamanca at the end of 1556, Martín de Azpilcueta expresslyrefers to “banking for safekeeping,” which consists of thebank contract of monetary demand-deposit. For Martín deAzpilcueta, banking for safekeeping, or the irregular depositcontract, is fully just and means that the banker isguardian, depositary and guarantor of the money givenhim or exchanged for whatever purpose by those who giveor send him money, and that he is obliged to make paymentsto merchants or persons to whom depositors wantpayments made in such and such a way, [for which] hemay legitimately charge a fair fee to the republic or thedepositors, as this trade and responsibility are useful to therepublic and free from iniquity; for it is fair for a worker toearn his wages. And it is the moneychanger’s job toreceive, safeguard and keep the money of so many merchantsready, and to write and keep their accounts, withgreat difficulty and at times risk of error in their recordsand in other things. This arrangement could be formalizedin a contract by which a person commits himself to holdother people’s money in deposit, make payments and keeprecords as arranged by them, etc., since this is an agreementto hire a person for a job, which is a well-known, justand blessed contract. 8686 Martín de Azpilcueta, Comentario resolutorio de cambios (Madrid: ConsejoSuperior de Investigaciones Científicas, 1965), pp. 57–58. In ourstudy of Dr. Navarro’s doctrines we have used the first Spanish edition,