Economy Flashcards
(17 cards)
Describe the consequences of the reconquista under Isabella and Ferdinand
- 1484 crown sought to counterbalance detrimental impact caused by expulsion of Jews by publishing edicts inviting foreign workers to spain: initially granted exemption from taxed for 10yrs
-granted licenses for commercial voyages to those who had financial independence
-Genoese merchants considered more important than Jews- oversea expansion impossible w/o them- they supplied funding for conquest of Canary Islands and the voyages of Columbus - Jews filled important roles which were left empty now
Describe the crisis in agriculture under Isabella and Ferdinand
-Mesta controlled Castillian sheep farming and wool marketing
-1488 governments chief tax farmer was made treasurer general of the hermandad, whose officials were used to collect the cruzada and tax on sheep
-1500 presidents of the Mesta promoted to a senior position on the Royal council
-1501 Mestas dominance led to law od land lease granting the Mesta the right to use any land it had once used as pasture
-1506 Spain developed such serious grain shortages that the population was dependant on large scale imports of wheat
-crown was reluctant to promote agriculture because they were pressurised by demands of military campaigns and the reconquista
How did Isabella and Ferdinand raise money?
-1470 income stood at 800,000 maravedis
-raised through custom duties
-80-90% of money came from alcabala, tax on sales and purchases
-2/3 of revenue came from Old and new castile which included important trading centres scubas as Toledo and Seville
-70% of royal revenues were drawn from extraordinary sources which previously stood at 30%
-church- revenues from cruzada doubled to 112m maravedis by 1504
-loans
-1500-1504 castillian cortes gave special tax of almost 300m maravedis
-1504 income stood at 22m maravedis
What were the limitations of finance during Isabella and Ferdinand?
-still not enough money to meet increased expenditure which meant they had to resort to loans from spanish nobility which they had to repay at 10% interest in the form of juros which was a financial burden to the crown as by 1516, it was costing them 131 million maravedis
What did Isabella and Ferdinand need to raise money for?
-sustaining the war effort in Granada and Italian campaigns
-mobilisation of armies and the deployment of artillery 1495-1504 military expenses amounted to 500m maravedis
-by 1504, crown spent 80m maravedis on royal militia
-2 expeditions to Naples cost 454m
-consolidating territorial gains, mainly building and maintenance of fortresses: number of fortresses increased from 70 in 1474 to 160 in 1492
-by 1504, crown spent 35m on their royal residences, ambassadors and court ceremonial
Describe the economy in the beginning of Charles’ reign
-numbers employed in the silk and cloth industries rose from 10,000 in 1525 to 50,000 in 1550
-Medina del Campo retained its prominence in controlling financial transactions as well as maintaining influential links with European trade
-Sevilles population grew substantially and it secured a virtual monopoly of American trade that was sufficient to energise castillian industry for a generation
-1523 council of finance was established to regulate all income and expenditure
Describe how dominance of the nobility in the cortes caused longer-term economic problems for Charles
-1548, cortes demanded importation of cheaper cloth from abroad on the grounds that the poor could not afford spanish cloth- motivated by wish to pressurise Castilian manufacturers into producing cheaper cloth
-cortes called for the prohibition of numerous imports from the Indies including cloth, silk, leather, iron and steel in order to make commodities cheaper at home
-impact of nobility on local industry was replicated in the country side
-1525 decree ordered that all pasture land should be brought under tillage in the first 8yrs of Charles reign to be placed at the disposal of sheep farmers
-after communeros revolt, northern castile lived almost exclusively on imported wheat which required a far-reaching export trade, which would be difficult to achieve
-majority of castiles wool production went abroad bc her domestic manufacturers were too weak to compete for it, preventing the development of a formidable domestic textile industry
-burden of paying for wars against French, lutherans and ottomans fell increasingly on castile
-province was able to support foreign campaigns as its cortes presented little constitutional resistance to higher taxation
-aragon was in economic decline and provided minimal sums: 6 meetings and approximately 500,000 ducats for each 5yr period starting 1528 up to 1552
-Netherlands economy was exhausted by 1530’s
-naples was poor but did provide sum of 1.75m ducats 1525-1529 in taxed
How was Charles dependant on ordinary revenue to fund his military campaigns and household expenses?
-most lucrative indirect tax remained the alcabala
-1534, Madrid cortes, Charles granted the principle of encabezamiento which allowed towns to convert the alcabala into a fixed sum
-alcabala amounted to 75% of crown revenues by 1550
-Charles’ ordinary revenues failed to keep pace with inflation
Describe how Charles raised money in general
-considerable wealth from church: clergy heavily taxed even without alcabala: terciareales (1/3 of tithes), subsidio (500,000 ducats in 1551) and the crusade (1523-1554 121,000 ducats annually)
-sale of royal lands produced 1.7m ducats between 1537-1551
-taxes emerged as response to military pressures: 1538, the German, North African and French campaigns necessitated the imposition of new tax, sisa, which was tax on foodstuff
-1520s, Cortes gave 130,000 ducats annually
-1550’s, cortes gave 410,000 ducats annually
-the move from indirect to direct tax imposed a greater fiscal burden on ordinary taxpayers
-new world amounted to 270,000 ducats annually (20% of crowns ordinary revenue)
Describe how Charles raised money through borrowing
-specifically from foreign bankers such as the Fuggers and the Welsers
-for imperial election alone, fuggers and welsers supplied 543,000 and 143,000 florins out of the total of 850,000 spent by Charles
-1522, repayments of loans consumed 36% of normal revenue and by 1543, this rose to 65%
-borrowing came close to 30m ducats and interest payments on loans stood at 10m ducats
-much borrowing came from military campaigns: 1552, borrowed 4m ducats to finance war against France, unsuccessful campaign at Metz cost him 2.5m ducats
-interest charges paid by crown rose from 18% of annual revenues in 1520s to 49% in 1550s-increased influence and control of foreign finances on the spanish treasury: they secured sufficient stranglehold on Spains finances that they could buy offices and lands
-1524-38 Charles rewarded foreign bankers by giving them permits to trade directly for America eg. Welsers started to colonise Venezuela
What major economic problems did Charles face?
-1511-1559, price of wheat doubled and price of oil tripled in Andalusia
-numbers of poor increased-inflation led to fall in living standards as salaries could not match price rises
-in Valladolid, 1511-1550 wages rose by 30% price of wheat rose by 44% and wine by 64%
-1530-1555 land rents rose by 86%
-partly caused by introduction of bullion: bad market to buy from but good to sell to
-1542 and 1547, temporary reduction in the no. of shipments of American treasure
-1546- most of crowns treasure was sold or pledged up to end of 1549
-Cobos and council of finance adopted desperate measures in 1540’s confiscating all treasure from the Indies and seizing all coins in spain in order to finance Charles’ victory at Muhlberg
-Kingdom virtually bankrupt
Describe Philips financial inheritance
-he inherited debt of 20m ducats and the liability of juros, which was at 50m ducats
-1557 spain was in virtual bankruptcy and gov was forced to suspend payments to creditors and substitute them with juros bearing 5% interest
-Sicily, naples and the duchy of Milan and the Low Countries were unwilling to contribute to the defence of the empire when their own interests weren’t involved
-council of finance tended to be rather backward in its approach and lacked expertise
-spain lacked a state bank and so was reliant on private bankers- transfer of money was central to the administration of a large empire ,spanish was dependant on leading banking families
-they provided money and generated government revenue before it was due
- in exchange, the Genoese had monopoly over the sale of playing cards in Spain and control of salt works in Andalusia and the Fuggers were in charge of the mercury mines of Almaden and silver mines of Guadalcanal and were granted the property of the military orders
How did Philip secure the movement of money?
-problematic getting funds to the Low Countries, partially after the rise of English privateering
-1568, Duke of Albas pay ships were seized and there were further threats from the dutch sea beggars from 1572 onwards
-1566-1581 one of the objectives of spanish diplomacy was to secure the transport of money across France: 1572 500,000 ducats reached duke of Alba via France
-after 1578, alternative route was established across the western mediteranean from Barcelona to Genoa
-Substantial sums of money reached Farnese via Milan in 1584, 1586 and 1588
-there was an increase in agricultural production, this wasn’t matched by an increase in efficiency, much land remained infertile and birth rates fell after 1580
-wool represented the single most important export and the Mesta continued to dominate proceedings
-Sheep provided castile with its main source of foreign income and the wool trade affected every aspect of the Spanish economy
-little land was cultivated so there was increasing reliance on imported grain
Describe Crown income under Philip
-1559-1590’s royal income tripled from 3m ducats to 10m
-Castile’s inhabitants were pressurised by increased taxation and by the imposition of new duties or the modification of old ones
-1556-70 taxation increased by 50% and 90% between 1570-1600
-1571-1577 7m ducats were received by the mediteranean fleet and 11.7m by the army of Flanders
-alcabala continued to be most important tax- revenues rose by 14% and custom duties tripled in spain
-Philip made the most of church revenues and continued the susbidio tax on church rents, lands and clerical incomes which was made permanent from 1561
-Bishop of Toledo denounced the spanish regimes meddling in church finances declaring that spain was setting a worse example than its lutheran counterpart in the HRE
-Church revenues amounted to 20% of crown revenues
-Asientos and loan contracts made 1m ducats and bankers demanded substantial interest rates for their loans. Asientos became largest financial transactions in Europe
Describe new taxes under Philip
1567, Excusado, tax on the property of each parish
1589, Millones, these were voted in the aftermath of the Spanish Armada, all of Castiles inhabitants were taxed on meat, wine, oil and vinegar; 8m ducats were collected within 10yrs
Describe Crown expenditure under Philip
-rising faster than crown income
-multiple state bankruptcy (1557, 1560, 1576, 1596)
-by declaring a decree of bankruptcy, Philips gov sought to convert short-term debt at high interest into long-term debt at low interest. Interest from debts absorbed half of the Crowns income (5.5m ducats per annum) and by the time of Philips death, gov was 85m in debt
-by 1570’s Spains military campaigns were costing government 700,000 ducats per month
-1571 castile paid 18.5m ducats for the Dutch and Mediteranean campaigns
-1587-90 French catholic league received 3m ducats from spanish gov
-towards ends of Philips reign, spain spent 21m in the low countries
-Armada campaign cost 900,000 ducats per month
-Philips final decade of his reign, his regime spent 30m ducats in France
Describe income from the new world under Philip
-Crown was entitled 1/5 of all the minerals mined in the New world
-by 1590’s revenue from new world was 270,000 per annum
-throughout whole of Philips reign, New world generated 65m ducats in gold and silver
-American bullion never represented more than 1/5 of all state income but provided hard cash for the regime
-influx of bullion determined the timing of military campaigns: 1566, 1.5m ducats funded the Duke of Albas expedition to the netherlands
-new world silver explains why bankers continued to lend vast sums to the spanish regime
-high inflation
-1530-1600 Spanish inhabitants could afford 20% less goods
