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A History of Spain by Charles E. Chapman

Sidenote Difficulties over coinage


[Sidenote:

Medieval character and inconsistencies of mercantile legislation.]

The legislation of the period reflected the prevailing economic ideas, such as the exceptional importance attached to precious metals, the insistence that the balance of trade should favor exports (lest imports should result in specie going out of the country), the favor shown toward the policy of protection, and in a measure the continuance of the medieval penchant for government regulation of industry. The state was not consistent, however, varying its laws according as the needs of the treasury or of European diplomacy or of any passing crisis might direct. Thus prohibitions against foreign goods were often maintained, while at other times the greatest freedom of entry was allowed. In the treaties of peace of the sixteenth century care to safeguard the commercial interests of Spain was employed, but in the seventeenth century they were often sacrificed through the indiscretions of ministers or for political reasons. Thus Spain's need of allies against France occasioned the grant of a right for the free entry of goods into Spain (but not into the colonies) to the Protestant Netherlands, England, Denmark, and Portugal, with reductions in duties. Treaties of 1665 and 1667 with England abolished Spain's right to inspect English boats or to search the houses of British subjects, amounting to a virtual invitation to smuggling, which was in fact the result. Smuggling in connivance

with Spanish officials became so general (not altogether by Englishmen) that it was regarded as a necessary evil. The government displayed a tendency to facilitate internal commerce,--as by the suppression of interior customs lines,--but the protective and regulative spirit of the Middle Ages was too often apparent. Thus prices were fixed and exclusive rights of sale granted. A curious instance of the latter (though not out of keeping with the age) was the permit given to the religious orders of Madrid to open taverns for the sale of beverages accruing from their crops. When certain abuses and some scandal resulted the privilege was withdrawn, but was later renewed subject to certain conditions, one of which was that friars should not serve the wines to customers.

[Sidenote: Difficulties over coinage.]

Legislation with relation to money was particularly abundant. One grave error of the past was constantly committed from the time of Philip II to the close of the era, the debasement of the coinage with a view to relieving the difficulties of the treasury, but the results were not more favorable than in former years. Despite governmental care in the matter of coinage, diversity of coins was still a problem. In addition to the national moneys there were regional pieces and numerous foreign coins. Attempts were made to fix the relation between them, but without great success. One factor which was not appreciated at the time was that of the cheapening of money through the enormous importation of precious metals from the Americas, resulting in a corresponding advance in prices. The high prices were ascribed to the exportation of precious metals from Spain, and stringent laws were passed to prevent it. It was difficult, however, to keep the gold and silver in the country.


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