Spain's Road to Empire

by Henry Kamen

  English merchants who did not trade directly to the peninsula relied on the West Indies for their profits. It is a common error to view the European powers in the Caribbean as dedicated to undermining Spain's power. They were in practice its firmest backers. The English authorities in Barbados, in an attempt to justify the 1662 agreement to supply slaves to Peru even though such trade was formally illegal, pointed out that it was impossible to refuse an offer that ‘filled the island with money’.138 American silver continued to turn the wheels of empire, and the vast American market lay wide open to the world's merchants. The English pressed home their chance of good trade in the Caribbean by agreeing on the Treaty of Madrid in July 1670. There were many political obstacles, but trade continued to flourish. In 1680 an Englishman, agent for the Spanish government, appeared in Jamaica with a commission to buy black slaves. The governor, no less a person than the ex-pirate Henry Morgan, wrote: ‘It is confidently reported that we shall shortly have free trade with Spain. This will speedily make this island very considerable, for all the current cash that we now have is brought here by private trade with them.’139 There were objections in Jamaica, principally from plantation owners who did not wish to lose slaves to the Spanish. Eventually in February 1690 the English government gave formal permission for both Barbados and Jamaica to trade in blacks with the Spanish. By the end of the seventeenth century the British were in the comfortable position of having penetrated the Spanish commercial system so extensively that it was in their interest to maintain it unimpaired. As the duke of Marlborough wrote to the Dutch leader Heinsius in 1706: ‘As a good Englishman I must be of the opinion of my country, that both by treaty and interest we are obliged to preserve the monarchy of Spaine entire.’140

  The same picture applied to the former Dutch rebels. The financing of war was an international business that always worked to the detriment of the belligerent country, but Spain had no option. In sending bullion to the Low Countries, it was in effect helping the Dutch rebels, who benefited from the boost to their trading system. ‘By the commerce with Spain that the rebels have had in the past twenty-two years’, stated a report made to Philip III in 1607, ‘they have received in their towns and provinces quantities of silver and gold in exchange for cheese, wheat, butter, fish, meat, beer, and other products of the Baltic, and thereby have obtained much greater treasures than they could have got with their fisheries and their trade.’141 This astonishing but inevitable trade between the Dutch and the Spaniards continued throughout the years of war, and accelerated during the twelve years of truce from 1609 to 1621.

  There were three main routes for the flow of bullion to the Dutch. First, there was the direct trade with Seville and Cadiz, conducted through agents resident in Spain or through third parties who disguised their affiliation with the rebels. Throughout the later years of the century, large quantities of the bullion arriving from America were destined for bankers in Amsterdam. The English ambassador reported in 1662 that at least a third of the treasure arriving in the ships that year would go to the Dutch, and the proportion continued to be roughly the same with every fleet arrival.142 Second, there were bankers and traders – mainly Genoese between 1577 and 1627, and Portuguese between 1627 and 1647 – whose trade with Spain was paid for with bullion that immediately found its way to the Dutch market with which the same bankers also traded.143 For example, an English merchant in Livorno in 1666 reported that a large part of the American silver going to Genoa and Livorno was in fact the property of agents for the Dutch in those cities.144 A policy of embargo on trade with the Dutch after 1621 did not appreciably reduce the flow of bullion to the rebels. Finally, there were the direct imports of precious metal by the Spanish authorities, to pay their costs; it has been calculated that ‘between 1566 and 1654 the military treasury in the Netherlands received a minimum of 218 million ducats from Castile’,145 of which a good proportion found its way to the Dutch. All these three routes made use of the international trade system, so that in a sense Spain needed the existence of the Dutch market in order to conduct its financial transactions, a situation that has been correctly described as ‘mutual economic dependence’.146 Even within the Iberian peninsula, Spain recognized that it was irremediably in tow to its Dutch enemies for two fundamental necessities: raw materials for shipbuilding, and wheat for the Spanish consumer.147

  The shoring-up of the universal monarchy by its enemies was recognized by many observers, among them the marquis of Varinas, a distinguished Spanish colonial administrator, who observed in 1687 that ‘the French, English and Dutch, who see that nothing suits them better than that the Indies remain with Spain, so they can exploit them more cheaply thanks to the lack of application by Spaniards’,148 were the main defenders of the existing colonial system. Each European power knew that if the Spaniards were displaced other Europeans would move in to take their place. The most convenient arrangement was for Spain to remain in control.

  The collaboration of friend and foe alike in the task of supporting the Spanish empire paid off handsomely. The thirty-five years’ reign (1665–1700) of the last Habsburg king of Spain, the desperately ill Charles II, seemed to many to be the lowest point reached by the once-great world empire.149 Foreign observers saw only decay. ‘The ancient valour of Spaniards has perished’, a Venetian ambassador claimed in 1678. Another reported: ‘There are no navies at sea, no armies on land, the fortresses dismantled and unguarded, everything exposed, nothing protected. It is incomprehensible how this monarchy survives.’ The French ambassador in 1689 was equally damning. ‘Informed people agree’, he said, ‘that the House of Austria is leading them to total ruin.’ Yet the monarchy soldiered on as it had always done, and it did so with the help of all those its money could buy. In the prolonged border war within the peninsula against the rebel Portuguese, some two-thirds of the infantry in the Spanish army were foreign.

  France, which by its military aggression was doing most to undermine Spain's power in the Western world, was at the same time the nation that most underwrote Spain's economy. Lord Godolphin, who was English minister in Madrid, reported in 1675 that ‘of all others the French are the greatest gainers by the Spanish trade’. Every year thousands of French workers passed into the peninsula to help with the harvest and to perform other tasks. In Andalusia, according to a French visitor, ‘their employment was carrying water to the houses, selling coal, oil and vinegar in the street, serving in hostels, ploughing the soil, harvesting and tending vines’. Most of the French returned home after a while, their pockets full of Spanish coin. ‘They live humbly while they are here’, an indignant Aragonese politician claimed, ‘but put on fine and sumptuous clothes on returning to their own country.’ Over and above their role in the labour force, the French controlled most of Spain's foreign trade. They supplied one third of the imports into Andalusia, nearly forty per cent of the imports into Valencia, and the virtual totality of imports into the kingdom of Aragon. Between them, English and French merchants controlled the foreign trade of Spain's chief Mediterranean port, Alicante.

  And all the while the riches of the New World came pouring in. Spain's bullion imports in the great era of its power had dazzled contemporaries. Those imports now multiplied, to a degree that historians had seldom realized before new research was done in the 1980s.150 The apparently supine empire was producing unprecedented riches, as the American mines picked up on production. At Potosí in Bolivia, at Parral and Zacatecas in northern New Spain, output rose. In the 1590s, commonly thought to have been the period when most silver was sent, bullion imports into Seville had peaked at an average seven million pesos a year. Between 1670 and 1700, by contrast, the average rose to around eight millions a year. Since the fleets from America came very infrequently, sometimes at intervals of five years, the actual totals per voyage were in reality much higher than this average. The French consul in Cadiz calculated that the galleons from the isthmus of Panama brought home twenty-four millions with each shipment. He concluded with good reason t
hat ‘the trade in this port is the greatest and most flourishing in Europe’.

  And the trade, of course, belonged to everybody, not just to the Spaniards. In order to preserve face (as well as avoid taxes) the Spanish commercial agents tended to doctor their documentation, so that the norms of the official monopoly could be seen to be observed. Most of the cargo statements drawn up by officials and carefully preserved in the archives at Seville, where they continue to mislead diligent researchers, took pains to disguise the truth. The foreign consuls in Spain, on the other hand, carefully noted what was really happening. A French consul noted in 1691 that ninety-five per cent of the goods traded to America in the fleet that year were non-Spanish. By the same token, the bulk of the silver coming to Europe really belonged to foreigners. It was money they owned not only because of the direct trade from the peninsula, but also because of payments due to them from the Spanish government for military costs throughout the monarchy.

  When the great ships sailed in from the Atlantic they hovered outside the bay of Cadiz as though preparing themselves for the obligatory inspection by the authorities. While they did so, they would unload surreptitiously on to foreign vessels a good part of the silver they were carrying. The French consul documented how in March 1670 fifty per cent of the silver on board the recently arrived fleet from New Spain was taken away in foreign vessels bound for Genoa, France, London, Hamburg and Amsterdam. Another French consul in 1682 reported how the Panama galleons that year, carrying twenty-one million pesos in silver, unloaded two-thirds of this cargo on to vessels that sailed away to France, England, the United Provinces and Genoa.

  ‘What use is it’, a Castilian writer protested in the 1650s, ‘to bring over so many millions worth of merchandise, silver and gold in the galleons, at so much cost and risk, if it comes only for the French and Genoese?’151 The indignation was misplaced. Since the days of the emperor, if not before, Spain had been able to exploit its limited resources precisely because it was drawn into a global network that supplied essential services – credit, recruitment, communication, shipping, armaments – which allowed the empire to function. The silver had to work outside the country, otherwise it would have been useless. Till the end of the Habsburg dynasty, Spaniards stubbornly refused to recognize that their wealth had to be shared in order to be productive. Only under a new regime, that of the Bourbons in the eighteenth century, did it become possible to break with the old way of looking at the empire, and turn towards new perspectives.

  10

  Under New Management

  At the same time that we are pursuing these goals for the greater glory of God, we are also promoting the welfare of the Spanish nation because of the great wealth that can be taken from those areas.

  Jorge Juan and Antonio Ulloa, Confidential report on America

  Childless and chronically sick, just before he died in November 1700 the last Spanish ruler of the Habsburg dynasty, Charles II, named as his successor the grandson of Louis XIV of France. The new king, Philip Duke of Anjou, succeeded to the throne as Philip V, and arrived in Madrid the following April. Both in Spain and in France the succession of the Bourbon dynasty was greeted with enthusiasm, as offering hope for the recovery of an empire that was universally viewed as being in decay. ‘The present state of the realm’, the marquis of Villena, subsequently founder of the Royal Academy of Language, wrote to Louis, ‘is the saddest in the world.’

  Philip was barely seventeen, little more than the age at which his most illustrious predecessor, Charles V, had also succeeded to the throne. Like Charles, the young Philip spoke no Spanish and had no personal experience of the Iberian peninsula. He therefore came accompanied, as Charles had been, by a host of foreign officials and advisers. The French were fully aware of the reaction that had taken place in Castile against Charles's Flemish court, and had strict instructions not to interfere in affairs. But the international situation in 1700 was not comparable to that in 1500. Louis XIV's acceptance of the Spanish inheritance threatened to lead to a war with all the principal European powers, which over preceding decades had arrived at agreements to prevent the vast Spanish empire falling into the hands of any single dynasty, whether of France or of Austria. As soon as the French succession took place, there was agitated diplomacy in the other courts, with Britain and Austria taking the lead in forming an alliance against Louis XIV. Louis strengthened France's northern borders by agreeing with Spain to assume the defence of the Southern Netherlands, where French soldiers took over the main fortresses. He also sent his forces into Milan to occupy the Italian fortresses controlled by Spain, but had to contend with an opposing Imperial army under the command of Prince Eugene of Savoy. In September 1701 a military alliance was agreed at The Hague between England, the United Provinces and the emperor, and official hostilities followed soon after. On 15 May 1702 the powers simultaneously declared war on France and Spain, and were able to count from May 1703 on the alliance of Portugal. Their formal aim was to replace Philip V with a Habsburg candidate, the emperor's younger son Archduke Charles.

  The war came, for Spain, at a particularly vulnerable moment. The empire at the beginning of the Bourbon dynasty was nearly two centuries old, and had shown a remarkable capacity for survival. But it had also become heavily dependent on the protection of others. Support that it enjoyed from the Dutch and English in the later seventeenth century was now followed by that from the French, who found to their dismay that the Spanish inheritance was both bankrupt and defenceless. The control exercised by foreign nations could not easily be dislodged. Even while war waged in the peninsula the French ambassador Amelot was urging his government to allow the enemy powers to continue trading with Spain. ‘It is absolutely necessary’, he wrote, ‘for the king of Spain to issue passports to the English and Dutch to come and fetch wool, otherwise the flocks cannot be maintained.’1

  The perspective that greeted the French was almost exactly that which greeted Philip II when he returned home in 1559. In 1701, as in 1559, the country had virtually no naval forces and was completely exposed at sea. There were no royal warships in the Mediterranean, only a handful of galleys; in the Atlantic and America there were in theory twenty warships, four of which were reserved for protection of American shipping. The fortresses of the peninsula were badly fortified and poorly manned. In the whole of Spain the crown had at its disposal just over ten thousand infantry soldiers and five thousand cavalry, but both infantry and cavalry lacked adequate armament and were therefore not equipped to fight. The meagre dimensions of Spain's forces may be contrasted with those of France, which was estimated at the same date to have a total army of over half a million men.2

  From Madrid Louis XIV's ambassadors advised him that it was essential to take over the machinery of government, which functioned in a way that the French could neither understand nor tolerate. Already in 1689 one diplomat had reported that ‘what is needed is a complete revolution before establishing good order in this state. Such a revolution can be found only by changing the form of government.’3 Writing to his ambassador in 1702, Louis concurred: ‘it is to be wished that one could carry out a general reform in all the different states of the monarchy. But as this idea is too vast, he [the ambassador] must try as far as possible to remedy the most pressing evils and think principally of enabling the king of Spain to contribute in some way to the war that the king [of France] is preparing to endure.’4 A whole team of French administrative experts and military officers descended on Madrid. With the support of a small number of Castilian officials (and the opposition of a great many more) France prepared to change the system that had operated, for better or worse, throughout the period of Habsburg rule. Fresh management was in control.

  Rapidly and efficiently, the new masters moved in to manage their inheritance. It was a sea change in the constitution of the world monarchy. In the Spanish Netherlands, control was handed over to administrators who overturned the whole structure of the government, the army and the tax system. The provinces had i
n practice ceased to be Spanish since July 1690, when France defeated the united Spanish-Dutch army commanded by the general in Dutch employ, Georg Friedrich, Count of Waldeck, at the battle of Fleurus. Since that memorable defeat, the last field battle fought by Spain in defence of the Southern Netherlands, the provinces had been under Bavarian administration. In Spain itself there were fundamental changes in the court, the administration, and the army; and the aristocracy was excluded from any significant part in government. The much-prized slave trade to America was adjudicated to a French consortium, the Guinea Company. As may be imagined, none of the changes was greeted with enthusiasm by those who had controlled the machinery of state. There were intrigues and conspiracies against the new regime in all the realms, from Castile to Naples, followed by arrests and detentions.

  Philip's advisers were discovering to their horror that Spain did not have the resources to wage a war of any sort. Louis XIV sent to Madrid a French official, Jean Orry, to check on the state of Spain's finances. Orry confirmed that in 1704 only three and a half million escudos a year were available for the war, when perhaps twelve million were needed.5 He found that the government of Castile could count on only half the money that it normally collected in taxes (the other half went to creditors); that the treasury received virtually no silver from America, because the bullion went to creditors of the government; that the soldiers of Spain had outdated military equipment and no uniforms; and that ‘the king of Spain received almost no gunpowder from the realm’. ‘Spain is entirely your responsibility’, the head of Philip V's household wrote to the French war minister, ‘without troops, without money, without a navy, in a word lacking in everything that pertains to the defence of a monarchy as extensive as this.’ In consequence, the Madrid government was persuaded to change its entire military system and adopt the French one, particularly since military supplies could only be obtained from France. Spain abolished all its antiquated weapons (the arquebus, the pike) and adopted the French flintlock with bayonet; in September 1704 the old tercios were abolished and substituted by ‘regiments’; and for the first time, an order was made in 1703 for all soldiers to wear a standard French-style military uniform. The war effort, effectively, was put into French hands.