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The Castilian Bankruptcy of 1575

Published online by Cambridge University Press:  11 February 2009

A. W. Lovett
A. W. Lovett
Affiliation:
University College, Dublin
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The Historical Journal , Volume 23 , Issue 4 , December 1980 , pp. 899 - 911
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Copyright © Cambridge University Press 1980

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References

1 The standard accounts of Castilian finance for this period are to be found in: Modesto Ulloa. La Hacienda Real de Castillo en el Reinado de Felipe II (2nd edn, Madrid, 1977)Google Scholar; Van Klaveren, Jakob, Europäische Wirtschaftsgeschichte Spaniens im 16. u. 17. Jhdt. (Stuttgart, 1960)Google Scholar. Haebler, Konrad, Die wirtschaftliche Blüte Spaniens im 16. Jhdt. u. ihr Verfall (Berlin, 1881)Google Scholar still has many useful things to say. For the broad setting consult Braudel, Fernand: The Mediterranean and the Mediterranean world in the age of Philip II, I (London, 1972)Google Scholar, ch. 2: ‘Economies: precious metals, money, and prices’; Rich, E. E. and Wilson, C. H. (eds.), Cambridge Economic History of Europe, V (Cambridge, 1977)CrossRefGoogle Scholar, ch. V: ‘Money, credit, and banking systems’ (H. Van der Wee). I have also discussed the Spanish case in my Philip II and Mateo Vázquez de Leca: the government of Spain (1572–1592) (Geneva, 1977)Google Scholar, ch. V: ‘The financial problem of the monarchy’.

2 From the many accounts two deserve special mention: Genard, P., La furie espagnole. Documents pour servir à l'histoire du sac d'Anvers en 1576 (Antwerp, 1876)Google Scholar; and for a brief and masterly account of the circumstances, Swart, K. W., William the Silent and the revolt of the Netherlands, Historical Association, General Series 94 (London, 1978)Google Scholar.

3 Martin, Felipe Ruiz, ‘Las finanzas de la monarquía hispánicay la Liga Santa Cuadro’ No. 9 & 10 (p. 332)Google Scholar in a Benzoni, cura de Gino, Il Mediterraneo rulla seconda melà de '500 all Luce di Lepanto (Florence, 1974)Google Scholar. In addition to this Felipe Ruiz has written a number of articles which throw much light on Spanish finances. See ‘Las finanzas españolas durante el reinado de Felipe II’ in Cuadernos de Historic. Annexes de la Revista Hispania, no. 2 (1968)Google Scholar; ‘Los hombres de negocios genoveses de Espana durante el siglo XVI’ in Kellenbenz, H. (ed.), Fremde Kaufleute auf der Iberischen Halbinsel (Cologne, 1970)Google Scholar; ‘Crédito y Banca, Comercio y Transportes en la Etapa del Capitalismo Mercantil’ in Adas de la I Jornada de Mctodología Aplicada de las Ciencias Históricas, vol. 3: Historia Moderna (Santiago de Compostela, 1975)Google Scholar; ‘Procedimientos crediticios para la recaudación de los tributos fiscales enlas ciudades castellanas durante los siglos XVI y XVII: el caso de Valladolid’ in Otazu, Alfonso (ed.), Dinero y Credito (Siglos XVI al XIX) (Madrid, 1978)Google Scholar. On the specific question of Lepanto see Lesure, Michel, Lépante, la crise de l'empire ottoman (Paris, 1972)Google Scholar, and the interesting study by Hess, A. C., The forgotten frontier, A history of the Ibero-African frontier (Chicago, 1978)CrossRefGoogle Scholar.

4 Rachfal, F., Le registre de Franciscus Liscaldius, trésorier général de l'armée espagnole awe Pays-Bas de 1567 à 1576 (Brussels, 1902)Google Scholar.

5 For a bibliography of Ovando's career see González, Angel Martín, Gobernación Espiritual de Indias Codigo Ovandino Libra Io (Guatemala, 1978)Google Scholar. The introduction to this work is marred by several basic errors.

6 I(nstituto) V(alencia) de D(on) J(uan) Envío 76 fos. 458r–459v and fo. 460r/v.

7 Ibid. fos. 473r–7r for details of Ovando's age.

8 IVDJ Envío 24 fo. 37, 23 Jan. 1574 (hand of Mateo Vázquez) ‘Su Md al Pte. Presida de hazdada. …me resuelvo en q el Preste de Indias presida en el conso de hazienda’. Ibid. fo. 48. ‘Heno (sic) 1574. Respta del Pte de Indias a lo del cuidado y Superintenda de la Hazda Acepta el cargo de el (sic) gouierno de la hazienda. Q el titulo del es mas conve el e Pte q el de visitador/con las preeminencias de los otros Prestes de Conso y Chancillerias.’

9 IVDJ Envío 72 fos. 32r–4r.

10 ibid.

11 Ibid. Ovando: ‘…no me falta por hazer sino un libro de caxa por deue y a de auer en q por su alfabeto se pusiesen todas las partidas en q la hazienda Real es deudo y acreedor como cada ginoves lo tiene de su hazienda’. See also Envío 24 fo. 282, 8 May 1581, consulta of council of finance: ‘Al principio que se formaron los libros de la Razon de la hazienda de VMd el principal yntento q hubo para q hubiese los dhos libros fue por q se tubiese en ellos por una mano la quenta y razon de las ventas adbitrios [sic] y expedientes de q se husaba entonces y del dinero q desto y de otras cosas y rentas extraordinarias entraba y salia en la tesoreria general… [things had been relatively simple until the time of Charles when]… se fueron haziendo y han hecho tantos asientos cambios y otras contrataciones de dinero… [Under the pressure the inadequacy of existing procedures began to show itself].’

12 IVDJ Envío 76 fos. 491–503 for the April estimates which are discussed in my ‘Juan de Ovando and the Council of Finance (1573–1575)’, The Historical Journal, XV (1972)Google Scholar.

13 Ibid. fo. 473r–7r, 10 Aug. 1574, Ovando to king and a variant ibid. fos. 461r–2r: ‘P. Juan de Ovando sobre el desempeno y la nueva hazienda’. For additional contemporary estimates consult Envío 24 fo. 31 11 Nov. 1574 where Garnica and Ovando jointly estimated royal income at 61½ million (ducats) for 1575; and ibid. fo. 55 where Juan Fernández de Espinosa estimated royal revenue for 1575 (Tiene Su Magd de hazienda fixa para el ano de 1575…) at 9,620,000 ducats. N. G. Parker has given misleading descriptions of these and other documents on several occasions. His use of Envio 24 fo. 22 to construct a Spanish budget, 1571–6 is unwarranted (‘Spain, her enemies, and the Netherlands, 1559–1648’, Past & Present, 49 (1970), p. 85)Google Scholar. The figures from this document are hypothetical, as the author specifically states, and the hypothetical figure for royal income does not tally with Parker's original statement (P & P, 49) or subsequent emendations (e.g. P & P, 55). Parker's table of the Spanish budget (P & P, 49) has a further curiosity. Under the column Revenue estimates are given for the years 1571–6 inclusive. For the years 1571–3 Parker estimates revenue at 5½ million ducats; for 1574 he gives 5,978,535 ducats and for 1575–6 the figure of 6 million. How was Parker able to extrapolate these variations from a single figure – itself of doubtful provenance?

14 IVDJ Envío 47 fos. 509 y 512 [sic] for a draft which indicates the line of Ovando's thought. It opens: ‘Yo pedi audencia para consultar a vmt en presencia quatro cosas muy importantes en materia de hazienda q son 1. Composicion de las cosas de flandes sin esta no puede auer Remedio en la hazienda 2. La materia del desempeno de los juros situados 3. de losjuros de Resguardos y deudas sobre que corre interese y cambio 4. de las gracias q se pretenden.’ The document bears no date; but it probably forms part of the large collection of drafts and memorials prepared during the period 1573–5.

15 Ibid. fos. 507r–8v, 11 April 1574, Ovando to king: ‘…si lo de flandes no se ataja es imposible poderlo sustentar y perseverando en hazer las provisiones que de alia se piden se acabara de perder tan presto lo de aca’. See also Envío 72 fo. 40r, 19 de Xe 1574, ticket in hand of Mateo Vázquez: ‘Ya aura entendido v.s. loq vino ayer de flandes de auerse amontinado los Hespanoles q estauan en Holanda/q son los q no lo hizieron la otra vez/ y comencarlo las otras naciones/ y aun temerse de los demas Hespanoles/ sin auer un real q darles.'

16 IVDJ Envío 76 fos. 467r–70v, 26 July 1574, Ovando to king. Granvelle, although less well informed, drew attention to the same fact. Envío 47 fo. 128, 19 Aug., Granvelle to king Dorse: ‘Dize el dano de q participen en estas cosas los ministros de la hazda de v mt/ lo q jamas se solia permitir/ y q le han dado a entender q tienen liea y facultad de v mt para ello.’

17 Ibid. Envío 76 fos. 473r–7r, to Aug. 1574.

18 As above.

19 Ibid. fos. 461r–2r.

20 As note 12.

21 IVDJ Enví 76 fos. 473r–7r.

22 Ibid. fos. 580r–2r n.d.

23 And even if a restoration took place the ‘asentista’ could profit. He was allowed to purchase state bonds (‘juros’) at well below par, and these the exchequer was then obliged to accept at face value. See also Envío 24 fo. 16 (6 Feb. 1574? The cover says 1571) Pero Luis Torregrosa to Ovando: ‘… auiendo vendido los primeros juros q les dieron en Resguardo en precios razonables han procurado despues medios para estimar los en menos y que fuesen de menos valor al tiempo q ellos los auian de volver a pagar’. At the time of writing Pero Luis was a ‘veinticuatro’ (alderman) of Seville and was involved in the farm of the ‘almojarifazgo mayor’ of the Indies. Parker, G. refers to Pero Luis as ‘an experienced Treasury official’ (Spain and the Netherlands, 559–1659 (London, 1979), p. 210)Google Scholar when citing his letter to Ovando. This is a misleading exaggeration. Torregrosa did not come to prominence as a royal servant until 1580. He was appointed a ‘contador mayor’ on 9 July 1580 (A(rchivo) G(eneral) de S(imancas) Consejo y Juntas de Hacienda leg. 298).

24 Juan Fernández de Espinosa repeated this figure time and again during the negotiations which led to the general settlement (‘medio general’) of 1577.

25 Actas de las Cortes de Castilla (Madrid, 1861–1915), IV, 1Google Scholar.

26 Adas, IV, 91ff., 7 Aug. 1573.

27 The composition of the sales tax represented the largest single item of Crown revenue. It brought in a third, sometimes more, of royal income, Ulloa, M., La Hacienda, p. 171Google Scholar.

28 IVDJ Enví 24 fo. 43. Juan Fernández de Espinosa lamented the absence of a spokesman empowered to negotiate on behalf of all the cities ‘…no teniendo como no tienen ny se puede criar entre ellos cabeza a quien hayan de obedezer…’.

29 Actas, IV, 214, 3 July 1574; ibid. 225, 17 July 1574; 228, 20 July 1574, where the ‘procurador’ from Granada (Rui Diaz de Mendoza) referred to the ‘floating’ (unfunded) debt as ‘este cáncer que va consumiendo el Patrimonio Real’.

30 Actas. IV, 239, 3 Aug. 1574; 241ff., 4 Aug. 1574.

31 Actas, IV, 283, 22 Sept. 1574, Proposicion al Reyno cerca del nuevo crecimiento.

32 Actas, IV, 310–11.

33 Actas, IV, 315ff., 20 Nov. 1574.

34 Ulloa, M., La Hacienda, p. 178Google Scholar.

35 IVDJ Envío 76 fo. 606r, 14 March 1578. The original membership had been ten (six of whom had died in the interim). The functions of the junta were to discuss the decree, the freeing of Crown rents, and the (increase in) the composition of the sales tax. A later account (AGS CJH leg. 292, 21 July 1592 ldo Laguna to king) adds the detail ‘se sacaron estas causas del consejo de haz da y por q parecio q ni al Consejo Real ni a otro tribunal podrian quadrar, se formo la junta de Presidentes’.

36 For Auñón's, activities see ‘La Hacienda Real de España en el Siglo XVI. Cuentas de Cargo y Data de Gastos e Ingresos de la Tesorería General del Reino (Aprobadas en 1574, a favor del Tesorero Marques de Aunon)’ in Papeles Historicos Inéditos del Archivo de la Secretaría de la Real Academia de la Historia Julio 1920–Marzo 1922 (Madrid, 1922)Google Scholar. I am indebted to Mme Véronique Gérard for the reference.

37 IVDJ Envío 76 fo. 540V, 30 July 1574. Acceptance of the decree was clearly stated on 18 Aug. (fo. 541 v) ‘…q el decreto se deue hazer como esta acordado’.

38 Ibid. fo. 541V, 18 Aug. 1574.

39 Ibid. fo. 542V, 21 Aug. 1574.

40 Ibid. fo. 551r/V, 16 Oct. 1574.

41 IVDJ Envío 22 Bk B fo. 365r/V, 29 Aug. 1575 (holograph), Francisco Gutiérrez de Cuéllar (to king). Notice the date of this piece – two days before the publication of the decree.

42 The Genoese ambassador, Giovanni Battista Lercaro, who was sent over to discuss the effects of the bankruptcy with Madrid in 1576, claimed that the Crown had suspended repayment on its loans on 9 Sept. 1575, but that the official proclamation of suspension had not been published until 24 Dec. 1575; cf. IVDJ Envío 22 Bk B fos. 350–1, 30 March 1577. For a copy of the Decree see AGS Contadurías Generates No. 309. This copy indicates that there was an initial decree on 1 Sept. 1575 and another of 15 July 1576, which specified how the royal creditors were to be paid.

43 IVDJ Envío 47 fo. 42, 22 Jan. 1575, Granvelle to king. ‘Es tan delicada cosa el mantener o perder el creditohellip;q me pesa infinite q se aya puesto en platica delante de v m dhellip;’.

44 Ibid. Envío 22 Bk B fos. 335–9. ‘Copia de algunos capitulos de carta del CMor de Castilla (sc Requesens) de 30 de Enero de 1576 para Domingo de Cavala su secretario.’

46 Ibid. fos. I27r–33r, 29 July 1577, Juan Fernández to king. In the margin the king states, in the hand of his secretary, Mateo Vázquez, ‘…el decreto se hizo sin oilles [sc. the bankers]’.

46 For a recent account of Genoese activities see G. Doria: Un quadrienniocritico: 1575–1578. Contrasti e nuovi orientamenti nella società genovese nel quadro della crisi finanziaria spagnola in Fatti e idee di storia economica net secoli XII–XX. Studi dedicati a Franco Borlandi (Bologna, 1977)Google Scholar. A useful collection of letters bearing on the theme can be found in B(ritish) L(ibrary) Add MS 28, 416–17.

47 He has expressed this view in a number of places as in Lettres marchandes échangées entre Florence et Medina del Campo (Paris, 1965)Google Scholar and more recently in his ‘Joan y Pau Sauri: Negociantes Catalanes que Intervienen en las Empresas Imperiales de Felipe II’ in Homenaje al Sr D. Juan Reglà Campistol (Universidad de Valencia, 1975), I, 457–77Google Scholar: ‘… había terminado [namely Philip II] por adherirse al proyecto que le presentara la facción ultra de sus áulicos, consistente en eliminar a los asentistas genoveses y sus imitadores, que con sus torcidas tretas eran causa de los estragos que padecía el erario’ (p. 470). Fernand Braudel has incorporated this interpretation into his The Mediterranean and the Mediterranean world, thereby making it almost canonical.

48 AGS Estado 1405, fo. 59, 8 Sept. 1575, Philip II to Juan de Idiáquez (his representative in Genoa) ‘…y viendo q estas (sc. apretura & necesidad) van cresciendo cada dia mas/y q ya no queda de q echar mano me he resuelto de valerme de las consignaciones q teniamos dadas a mercaderes asi en el dino q viene de las indias como en otras cosas…’ The explanation here given is simple and convincing.