Ferdinand and Isabella - Economic and Fiance (until 1500)


Role of Cortes and other groups in raising finance


  • Alcabala (90% of income from taxation - intorduced 1342)
  • Customs duties (tax of 19%)
  • Servio y montazgo (the Mesta - paid for movement of sheep)
  • Salinas (salt production)
  • Tercias Reales (2/9 of tithes - granted by the Pope to monarchs for their part in the war against Islam)
  • Extraordinary taxation (granted by the Cortes) e.g. servicios which raised money for war

Issue of debt was significant

Gold and silver in the Americans didnt immediatly benefit the country - as money poured in, prices rose

Main source of revenue for the gov was the alcabala - first introduced C14th. Had to be paid by all but became an agreed sum so it became difficult for monarchs to increase rates. Limtied revision unitl Charles' reign

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Taxation and Crown Debt


Crown often in debt despite wide range of sources for raising taxes - repaid with use of juros (state loan which charged 10%  interset)

Encabezamiento - cities paid lump sum instead of individuals (change = loss of regular flow of income - less able to regulate finances systematically

Survived 'without major financial problems' however Kamen's view in 'constant debt'. Woodward believes only considered short-term

Military expenses e.g. Granada. Cortes rarely called and monarchs household expenses grew for status purposes

Total revenue from taxation increased from 900,000 reales to 26 million (1474-1504) - Elliot

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Agriculture and Trade

Castile most productive - 4 times larger

Elliot 'as active in legislating for the national economy as they were in religious and administrative reform'. 'content to build upon already existing foundations'

97% of land in Castile belonged to 3% of the population (overmighty nobility - passed on)

Fairly small scale existing trades (e.g. soap, cloth etc.) which were hampered by regulations - Granadan slik

Voyages of Columbus - papal bull Inter Caetera (1493) gave Spain rights to territory

A and C commercial rivalry continued = healthy activity e.g. Castile gave priveldges to the carters' guild and A developed postal service in Barcelona

Trade controlled and encouraged by monarchs through licensing and fairs

Tolls on bridges ports and fronteirs remained diferent - Vives 'F & I did not aspire to the attainment of an effective [economic] unity in Spain'

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Sheep Farming - Strengths

  • Sheep considered important to economh by monarchs - shown by appointment of royal councillar as president of Mesta in 1500
  • Aragon sheep not always allowed to move through cultivate land (greater control)
  • Consulado (trading organisation) formed to regulate trade - acted as guild and court
  • Port of Burgos given monopoly in the export of wool
  • Mesta gave monarchs a monopoly of wool trade overall - allowed them to extend the tax on a herd of sheep into a tax per sheep
  • Became Castiles main export
  • Controlled approx 2.8 million sheep
  • Able to encourage wool trade's development through influence abroad (e.g. appointed agent in European countries like Bruges who would liase with Mesta to promote trade)
  • Competition between Spanish towns for trade: Burgos, Bilbao, Santander
  • Wool sold in Flanders, England and France and Spain imported textiles in return
  • Sold at trade fairs in Spain itself (e.g. Medina del Campo)
  • Vives 'benefits for the ports of northen Spain, such as Santabder and Corunna. It was also a good source of revenue for the Crown'
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Taxation and Crown Debt - Administration failures

Officers - negligent and guilty of embezzlement e.g. noted 1497 'crown had lost 20 million maravedis to the deviousness of officals in the treasury'. Investigation showed taxes not collected or given to treasury

Tax farming (system where individuals bought right to collect taxes and charged more to make profit)

Regressive tax system (wealthy paid less then middle and lower classes)

Attempts to improve (e.g. keeping more detailed records) were too marginal and slow

Nobles collected merceses not entitled to

Large number of potential taxpayers (e.g. eventually clergy excused alcabala) were exempt

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Sheep Farming - Weaknesses

  • 1501 sheep farmers (castile) given right to graze their sheep on any land which had been previously grazed - conflicts begun which were resolved by local magistrates
  • Reliance on wool - economically weak
  • Arable farming suffered - shortages of food and imbalance, howver 'the five forbidden things'
  • Uneven economic development (slik trade hampered by customs duties)
  • Vives - 'initially led to high level of unemployment, only easing later as manpower was required in the New World'
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Food production and policy

Period up to 1500 more food produced as increase in arable land which was needed to due increase in population

1500 - agreed to free up trade in grain - part of Sentence of Guadaloupe (1486) and consequence of peadant rebellion that same year

  • Peasants given ownership of their land (considerable sum of money)
  • Produce could be sold freely with the exception of wheat to Muslim territories - stricture relaxed 1500
  • Taxes could be suspended in certain circumstances - e.g. harsh weather
  • Exports allowed when crops plentiful
  • As population grew, increased demand not always met and there were serious food shortages at times (worse in early years of C16th). Provoked tensions and some became conflicts
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Historical Overview

Mercantilist lines

Theory = highly organised system run by government with clear ground rules - e.g. promote national industries rather than importing goods, regulating producers, prohibited export of gold and silver, imposing customs duties on imports (e.g. duties were imposed in 1498 on French cloth imported into Spain)

Piecemeal and Inconsistent

E.g. still many internal tolls to cross bridges or to take goods throigh ports - increased the price of locally produced goods

Can't argue attempt made to standardise curency accross the territories of New Monarchs

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