Felipe a la Princesa Regente de España.

London,

His Majesty has been consulted on the points mentioned in letters from Spain, and has decided on the replies to be given with regard to the following. The despatch has been drawn up ready for his Majesty's signature, and will be sent off by special courier as soon as Eraso arrives in Flanders. I am availing myself of the opportunity offered by a messenger now going, in order to save time in signifying to you what is to be done in accordance with his Majesty's commands; and you will let me know the measures that have been adopted.

With regard to the regulation of the rates of exchange, the price of money and importations from France, I have seen the report that was drawn up after these points had been debated and sent off. The rates of interest are so high that bankers are demanding leave to export coin from Spain, and I believe good will be done by a rise in the price of money and by permitting certain commodities and goods to be imported from Spain, but not any other categories the admission of which would be harmful. We have therefore decided in favour of these three measures, together with others that they will render necessary, so they are at once to be put into execution in the manner set forth in the report, which is again being sent to you. We are sure that the results will be beneficial to Spain and its inhabitants, though in view of our needs here there will certainly be some difficulty; and we would ask nothing better than that the payments on sums taken up at exchange should be punctually effectuated in Spain, though in war-time this is impossible because of the calls that are continually being made on the exchequer and the grave consequences that would attend any delay in producing the necessary sums for facing the expenses contracted by the army during the campaign.

You will at once see to the publication of the referred-to measures, so that if possible the new regulations as to exchanges may begin to be applied in this October fair. Let the Council of Aragon deliberate as to what steps shall be taken to prevent any but the specified varieties of goods entering Aragon, Valencia or Catalonia any more than they enter Castile, for otherwise there would certainly be a rise in the rates of exchange from Castile to the above-mentioned kingdoms, because all the money would pour out of them into France. If any difficulties crop up you will let us know of what remedies might be applied and are suggested, so that we may be able to issue the requisite orders over here. In the meantime, see to it that no prohibited goods find their way into Aragon, Valencia or Catalonia, either over-land or through the sea ports, for unless that abuse is put down all our measures will fail of their purpose and we shall be obliged to close the Spanish frontier to all commerce, including that with Flanders, England and Portugal . . . .

(The rest of this letter deals with proposals for raising money by the sale of privileges of various sorts, monastery lands, etc.)

Holograph. Spanish.