The Cambridge Modern History. R. Nisbet Bain
the case of all nations; all the rivals desired to accumulate treasure, as the means of equipping ‘or of hiring armies; but there were different methods by which this aim could be attained, and different subordinate objects to be pursued, according to the circumstances of each particular country. To these we must now turn; for by briefly tracing the special schemes of territorial development which were adopted in Spain, England, and France respectively, we shall see most clearly the nature of the enlarged body economic which has come into prominence in modern times. The discovery of America by Colombo gave the Spaniards access to an enormous territory of which they were complete masters, and which they were free to develop on any lines that seemed good to them. It is no part of our present purpose to discuss by itself the colonial policy which the monarchs followed; we have rather to consider the aims pursued by them for their empire as a whole. The large mass of bullion that was imported, together with the great commerciahopportunities that were opened up, exercised a remarkable influence upon economic conditions in the peninsula. The amount of gold and silver which the Spaniards acquired was quite unprecedented, and’might have been used to form a very large capital indeed. The West India islands supplied increasing quantities of gold from the time of their discovery until 1516. In 1522 the exploitation of Mexico began; silver was acquired in greater and greater masses, and the introduction, in 1557, of a simpler process of reduction of the ore by means of quicksilver diminished the cost of production and still farther augmented the yield of bullion. In 1533 the Spaniards also obtained access to Peru, from which additional supplies of silver were procured. Altogether, an enormous stream of bullion poured into Spain during the whole of the sixteenth century.
The Spaniards were able to rely on the best possible advice as to the organisation of business of every kind. Genoese financiers were ready to give every assistance, and the South-German capitalists, who had so much experience of mining and enterprise of every sort, were closely attached to the interests of Charles V; after his accession to the throne of Spain they were attracted to that country in large numbers, as great privileges were conferred upon them. They were able to take part in colonisation, and to engage directly in mining. The Fuggers undertook to develop the quicksilver deposits of Almaden; they formed business connexions in the New World, and founded settlements in Peru. The Welsers established a colony in Venezuela, and undertook copper-mining in San Domingo. There was at the same time an incursion, chiefly to Seville, of other German capitalists, who were prepared to devote their energies to developing the industrial arts of Spain. With all these material and technical advantages it seems extraordinary that the dreams of Charles V and Philip II were not realised, and that they failed to build up such a military power as would have enabled them to establish a complete supremacy in Europe.
It would be exceedingly interesting if we were able to examine in detail the extent to which the precious metals came into circulation in Spain, and the precise course of economic affairs in different parts of the country; but the material for such an enquiry does not appear to be forthcoming. Yet one thing is obvious; the Spanish colonists devoted themselves almost entirely to mining for the precious metals, and they were largely dependent for their supply of food of all kinds on the mother country. This caused an increased demand for corn in Spain and a rapid rise of prices there, as the colonists were able to pay large sums for the necessaries of life. Charles V, indeed, endeavoured to carry out works of irrigation, and to increase the food-supply by bringing a larger area under cultivation. But tillage could not be developed so as to meet the new demands. The methods of cultivation already in vogue were as high as was generally practicable in the existing state of society; the vine- and olive-growers on the one hand, and the pasture-farmers on the other, resented any encroachments on the land at their disposal, so that it was impossible to bring a larger area under crop. So powerful were the Mesta, a great corporation of sheep-farmers, that they were actually able in 1552 to insist that Crown- and Church-land which had been brought under tillage should revert to pasture. The result was inevitable; food became dearer, and the government was forced to recognise the fact by raising the maximum limit of price; as a consequence, the necessary outlay of all classes increased, while a large part of the population were not compensated by the profit obtained through the new facilities for trade.
Under ordinary circumstances the increase in the price of food would have been merely injurious to industry; it would necessitate a larger outlay in the expenses of production, and would leave less margin for profit, and no opportunity for the formation of capital. Ultimately, this seems to have been the effect on Spanish manufactures, and the high cost of production in the peninsula rendered it possible for other European countries, where the range of prices was lower, to undersell the Spanish producer in the home market. No serious attempt was made by the government to check this tendency, as the policy pursued was in the main that of favouring the consumer, and protective tariffs were not introduced.
The circumstances which prevailed in Spain at the opening of the sixteenth century were, however, quite exceptional, and as a matter of fact there seems to have been a considerable, though short-lived, development of industry. The colonists not only imported their food, but manufactures as well; there was a sudden increase in the demand both for textile goods and for hardware, to meet the American requirements, and of course there was a great rise of prices. The small independent masters, working on the old industrial system, were unable to cope with this new state of affairs; but the foreign capitalists saw their opportunity. Manufacturing of every kind was organised on a large scale at Toledo and other centres; wages rose enormously, and a great influx of population was attracted into the city. This was doubtless drawn to some extent from the rural districts; but the stream must have been considerably augmented by the immigration of French and Italians. Hence it appears that this rapid industrial development was merely an excrescence, which had no very deep attachment to the country; the Spaniards themselves appear to have regarded it as an intrusion, and to have resented it accordingly. The Spanish gentry had no means of paying the increased prices which the colonial demand had occasioned, for natural economy was still in vogue in many rural districts, Indeed, this revolution in industry must have given rise to many social grievances; the craftsman of the old school would suffer from the competition of the capitalist in his own trade, while the great rise of prices to consumers was attributed to the greed of the foreigner. The government was persuaded to pass measures which imposed disabilities on foreign capitalists; it succeeded in forcing the withdrawal of the French and Italian workmen, as well as in expelling the Moriscos. As these changes ensued, the foreign capitalists were doubtless successful in transferring large portions of their capital to other lands; but the decline of alien competition on Spanish soil did riot enable native manufacturers to take their place or to recover the lost ground. With the new scale of outlay they had little opportunity for forming capital, and the bourgeois class may not have had the skill for organising business on the new lines. On the whole it appears that the large colonial demands for food on the one hand, and the large supplies of foreign manufactures on the other, prevented a healthy reaction of commercial on agricultural and industrial development; Spain was left •exhausted by the feverish activity which had been temporarily induced, and which passed away.
The Spanish government was firmly convinced that the best means of promoting the power of the country was by hoarding the large share of the produce of the mines which came into their possession, and they made frequent efforts to prevent the export of any bullion into other parts of Europe, though the Genoese and German capitalists had special licenses which allowed them to transmit it. It is obviously impossible that the government could have succeeded in enforcing this prohibition, under the existing conditions of trade; most of the bullion which arrived at Seville belonged to the merchants and manufacturers who were concerned in supplying the colonial demand for goods. The ingots which were not taken to the mint may have been hoarded for a time; but the foreign capitalists would not allow their money to lie idle, and much of it must have been exported, in spite of all laws to the contrary, to pay for the cheaper manufactures which were coming in from abroad. Comparatively little coin could have passed into general circulation in Spain itself; payments from the towns for agricultural produce would scarcely overbalance the payments due from the country for the dearer manufactured goods.
The Spanish rulers had ignorantly and unintentionally pursued the precise course of policy recommended by Machiavelli. They had sought to accumulate treasure in the coffers of the State, and they had by their mistaken measures allowed the subjects to continue poor. The wealth which passed into