History - Spain - Charles I: Economy 1

Front 1

Foreign capital and Liberal legislation 1

Back 1

. Already in the time of Cisneros it had become apparent that Spain woulld need foreign capital for its expensive colonising ventures - In the 1520s there occurred a passing phase of liberal legislation

. This 'liberal legislation' was an attempt to attract foreign investment

. In 1538, the entry of all foreigners into America was again prohibited - Although many would still continue to obtain passages, either by securing special licences or by acquiring naturalisation as Castilian citizens

. In 1524, Charles V allowed foreign merchants to trade ith the Indies

. In 1525 and 1526, subjects from any of the Emperor's dominions were given the right of entry into America

Front 2

Foreign capital and Liberal legislation 2

Back 2

. In 1529, the Crown went so far as to allow 10 Castilian ports to trade directly with the New World

. The decrees ran into trouble as a result of growing indignation among Spanish merchants at the extent of foreign competition

. In spite of various loopholes in the legislation, from the end of the 1530s the principle of monopoly had triumphed - Favourable to the Crown of Castile but especially Seville

. Essentially the monopoly of trade through Seville was maintained

. From now until 1680, when it yielded its primacy to Cadiz, Seville was the mistress of the Spanish Atlantic

Front 3

Discoveries in South America in 1545

Back 3

. The conquests of Mexico and Peru brought in their train the discovery of gold and silver mines, culminating in 1545 in the finding of the silver mines of Potosi, to the south-east of Lake Titicaca

Front 4

Spanish settlers 1

Back 4

. The first Spanish settlers in America needed almost everything from home - e.g their arms, clothes, horses, corn and wine

. Even after the colonists had become established in America, they continued to remain heavily dependent on Castile for many of their essential supplies

. Agriculture in the Indies was slow to develop, and demand was outpaced by the growth of the population

Front 5

Spanish settlers 2

Back 5

. There may have been some 118,000 colonists in the New World by 1570 - These colonists clung nostalgically to the Spanish ways of life

. The ships would leave Seville laden with Castilian or Catalan cloth, and with wine, oill and corn from Andalusia, and would bring back silver and other desirable colonial produce in return

. Thus, Spanish commerce was still vital in the trade with teh New World; it was not until much later that the New World was able to provide for itself

Front 6

Almojarifazgo

Back 6

. A tax on American trade

. 7.5% duty payable on goods imported into America from Europe

. Levied and organised through the House of Trade in Seville

Front 7

New World trade difficulties

Back 7

. How to measure the stimulus given to the economic ife of Castile by the expanding American market

. How to gauge the consequences for Castile of the influx of American silver

Front 8

3 economic regions of Spain

Back 8

. There was Seville and its hinterland facing towards America

. There was northern Castile, traditionally orientated towards Flanders and northern Europe

. There was the Crown of Aragon, still laregely concerned with its Mediterranean markets

. By the 1530s the population of Seville began to recover after the epidemics of the early 1500s - It increased dramatically, until they may have risen to as high as 150,000 by 1588 from some 60,000 or 70,000 in around 1500

. This spectacular increase made Seville one of the boom cities of the 16th century - Larger than any other Spanish city and surpassed in size by one Paris and Naples

. Seville was crowded with foreign merchants, Italians, Flemings, Portuguese

. Seville acted as an irresistable magnet to the inhabitants of northern and central Spain, who thought of it as an El Dorado in its own right and as the gateway to the untold riches of America

Front 9

New World Trade effects on Aragon and the North 1

Back 9

. During the 16th century, the inhabitants of northern Spain moved southwards in their thousands from Cantabria - This great movement of internal coloniation, which gradually tilted the demographic balance of Castile away from the north and towards the south and west, was in a sense the final phase of the Reconquista

. It was a long southward trek of the Castilians into Andalusia in pursuit of wealth

. Many Andalusian peasants were growing rich on the sales of their crops, and were becoming owners of extensive holdings of land

Front 10

New World effects on Aragon and the north 2

Back 10

. The Crown of Aragon shared only marginally in this new-found prosperity - The Catalans unsuccessfully sought permission to establlish consuls in Seville and Cadiz, and to obtain special privileges in connexion with the American trade

. However, they benefitted indirectly from it in the increased sale of their cloths in the fairs of Castile - 75% of all those cloths being bought for shipment to the New World

. Therefore, although there were some benefits from the New World trade to Aragon, it was by no mean even with Castile

. The connection between Seville and the north was very close - Ships from northern dockayrds played an important part in the Carrera de las Indias, and there was constant traffic aand interchange between the 3 great commercial centres of Burgos, Medina del Campo, and Seville - signs of commerce developing

Front 11

Prosperity of northern Castile 1

Back 11

. The prosperity of northern Castile equalled or surpassed that of Andalusia in the early part of the 16th century

. This prosperity was reinforced by the benefits that came with the developing economy of the Spanish Atlantic - It was based on the solid foundations that had been laid in the 15th century

. The spectacular expansion of Castile's international trade in the 15th century had come largely from the Flemish demand for merino wool, which continued to grow

. There was considerable demand in France for the iron of Vizcaya

Front 12

Prosperity of northern Castile 2

Back 12

. Demand in northern Europe and Italy for the products of Spain's luxury industries; ceramics, leather, silk, Toledo blades

. Castilian industry was benefitting from an increased European demand in an age of international economic expansion

. The most widespread industryt was the teextile industry, particularly vigorous in Segovia, Toledo, Cordoba and Cuenca - The demand was largely Spanish and American

. Most of Castile's cloth went to supplying the home market, which seems to have been growing

. The population of Castile has been estimated at some 6,270,000 for 541, and this is believed to suggest some advance since the late 15th century

Front 13

Internal weaknesses of the Castilian economy 1

Back 13

. Both industry and agriculture suffered from internal weaknesses, and were exposed to external strains which slowed down their progress and partially crippled their performance

. Castilian agriculture, having been persistently disparaged by a royal policy which favoured the wool interest, was now called upon not only to meet the rising demand at home but also to supply the needs of the American market

. Capital and resources in the south of Spain tended to be diverted from corn-growing to the cultivation of vines and olives for selling wine and oil to the Indies

Front 14

Internal weaknesses of the Castilian economy 2

Back 14

. The corn-growers of Old Castile couldn't tackle the obstacle of drought to a large increase in corn-production - capital was heavily engaged in commercial projects and not irrigation schemes - Spain rapidly became a net importer of grain

. Money required to develop eroded land was done by means of the senso al quitar, a short-term loan at 7.14% rate

. In theory, the peasant should have benefitted by the increase in agricultural prices and by the legal right conceded in 1535 to repurchase the censo at any time

. In practice, his profits were reduced by the tasa, which was definitively re-established on grain prices in 1539, and he was usually in no position to repurchase

. Thus, there were no effective schemes which led to increasing productivity and output of grain

Front 15

Internal weaknesses of the Castilian economy 3

Back 15

. The textile industry also rested on precarious foundations - There were problems of quality, as little trouble was taken about the technical training of cloth-orkers who produced an amount of low quality home-produced wares

. Labour was also a problem - In 1540 the poor law of 1387 was renewed, imposing harsh penalties on vagrants and authorising local authorities to set them to work without pay

. It seemed as if Spani was very ill-equipped for an industrial expansion

. Castilian good were appreciably more expensive than goods imported from abroad, and in some cases (e.g textiles) often inferior in quality