Expansion of the royal judiciary.

The expansion of officialdom in the peninsula made its presence felt in the judiciary as elsewhere. The three judicial salas of the Consejo Real and in some cases the Sala de Gobierno as well became the fountain-head of justice, under the king. This was especially true of the full Consejo, which met weekly. This body also named special judges, such as visitadores, both to procure information for the Consejo and to inspect the tribunals of lower grade. The number of audiencias was increased until there were five in the peninsula and one each in Majorca and the Canary Islands, besides a number in the Americas.[55] Below these was the hierarchy of the lesser officials. There were still various outstanding jurisdictions, such as those of the towns, the military orders, the Inquisition, and the church, but one of the keynotes of the era was the advance of the royal courts at the expense of the others. The administration of justice left much to be desired, however. As a result of the wars and civil conflicts and the general state of misery and lack of discipline, public security was almost non-existent. Banditry and crime went unsuppressed, and legislation served for little in the face of the corruption of officials and the lack of means to make the laws effective.

Vastness of the royal expenditures.

Frequent references have already been made to the desperate state of Spanish finances in the era of the House of Austria and to its importance as an ultimate factor affecting Spanish dominion in the Americas. Vast sums were expended for political and military ends, the only compensations for which were extensions of territory and power and a satisfaction of the desire for glory, without reflecting themselves in an increase of public wealth, the well-being of Spaniards, or even in commercial advantage; on the contrary, economic development was checked or hindered by the continual wars in which the kings engaged. Expenditures very greatly increased over what they had been before. It will be sufficient to explain this if some comment is made on two noteworthy objects to which state revenues were devoted: the maintenance of the court; and the cost of the wars. The ordinary expenses of the royal family jumped under Charles I to about 150,000 ducats ($2,250,000) a year,—more than ten times the amount required by the Catholic Kings. To this should be added the vast sums granted to the princes; in 1550 Philip (the later Philip II) received 55,000 ducats (over $800,000) in the course of four months. The expenditures of the court constantly increased. In 1562 the ordinary court expenses amounted to 415,000 ducats (well over $6,000,000), and under Philip III they were 1,300,000 (nearly $20,000,000) annually. In addition there were the fiestas (festivities) and royal marriages, on which tremendous sums were squandered. As for military expenditures the war in Flanders alone consumed 37,488,565 ducats (nearly $600,000,000) in the space of eleven years, 1598 to 1609, and other campaigns were costly in proportion,—and this in spite of the fact that supplies were often not provided and salaries were left unpaid, leading to tumults on the part of the soldiery. To gain an adequate idea of the vastness of these sums one must bear in mind, not only the greater purchasing power of money in that day and the comparatively small population of the peninsula, especially the small number of taxpayers, but also the fact that the resources of the Spanish state then were as little, as compared with those of the present day, as they were great in comparison with those of medieval Spain.

Tremendous increase in taxation in Castile.

It is no wonder that the people through their representatives in the Cortes began to ask for peace and the termination of military adventures, even in the period when victories were frequent; the nobles also favored an end of the wars,—when the kings endeavored to get them, too, to grant a subsidy. One result of the greater financial requirements of the state was an increase in taxation, both in the collection of the existing taxes at a higher rate, and in the imposition of new ones. The grants, or servicios, of the Castilian Cortes were frequent and large in amount. In 1538 there appeared the new tax of the millones, so-called because it was calculated in millions of ducats. This was an excise on articles of prime necessity,—meat, wine, oil, and vinegar. It was extended soon to powder, lead, sulphur, red ochre, vermilion, sealing-wax, and playing cards, which together were called the siete rentillas (seven little rents). Salt, gold, silver, mercury, and many other materials were the subject of a state monopoly, and to them were added in the reign of Philip IV the monopoly on tobacco, which was to prove an exceptionally profitable source of revenue. The diezmo and cruzada (otherwise Bula) continued to be collected from the church, together with several new rents which were authorized by the pope. One of these was the subsidio de galeras (subsidy of the galleys), or galeras, so-called because it was theoretically designed to assist in the expenses of the galleys used in fighting the Moslem peoples. This was granted in 1561, and consisted of an annual subsidy of 420,000 ducats (over $6,000,000). The alcabala and the various customs duties were increased. Stamp taxes were extended to new types of documents. The nobles were required to pay a tax called lanzas (lances) in lieu of military service. Various offices and titles were made subject to the media anata (half annates), a discount of a half year’s salary, or rents, in the first year of enjoyment. The transmission of a title of nobility to one’s heir was also taxed. Vanity was seized upon as likely to yield a revenue, and money was collected in return for the privilege of using the word “Don” before one’s Christian name. In like manner illegitimate children were pronounced legitimate on payment of a specified sum. Other methods were employed to obtain ready cash which tended ultimately to dry up certain sources of revenue: the coinage was debased; portions of the government rents were disposed of; public offices and royal towns were granted in perpetuity; and the title of hidalgo was sold to many persons, who thereby entered the non-taxpaying class. Other ways of acquiring funds were made use of, ranging from the high-handed to the shameless. Under the name of donativos (gifts) the government resorted to forced loans, or even trickery, to exact money from the nobles and churchmen; confiscations of goods for offences against religion and for other delinquencies were frequently ordered; and most disgusting of all was the limosna al rey (alms for the king), which was collected by gentlemen of the court, each accompanied by a parish priest and a friar, in a house to house canvass of the citizens, who were asked to give what they could spare. If the kings and their favorites thought of the most obvious way to accumulate funds, economy in expenditures, they at least did not try to put it into practice; the court fiestas were held, even if the king’s gentlemen had to beg the money and the nation had to starve.

Taxes in the other kingdoms.

The above refers to taxes collected in Castile, but the other dominions of Spain, peninsula and otherwise, produced considerable amounts for the state. Aragon, Catalonia, and Valencia yielded much less than Castile. The Low Countries were profitable for a time; Charles I procured 450,000 ducats a year (nearly $7,000,000) at the outset of his reign. Under Philip II, however, they were the scene of heavy expenditures. The Americas have often been considered as the principal financial resort of the Spanish kings, and although this is not certain and may even be doubtful they did yield vast sums. Prior to the conquest of Mexico the annual revenues were only some 70,000 ducats (about $1,000,000), but the conquests of Cortés, followed soon by those of Pizarro in Peru, resulted in an enormous increase. Under Philip II they amounted annually to about 1,200,000 ($18,000,000) according to some writers, and to as much as 2,000,000 ($30,000,000) in the opinion of others. Castilian taxes were applied in the new world, together with certain others arising out of the special circumstances of colonial affairs, such as the royal fifth on precious metals from the mines and the poll tax collected from the Indians. Data are not at hand for an accurate estimate of the entire revenues of Spain, but it seems clear that they increased enormously in the period. They may have reached their highest point under Philip III, when it was estimated that they were some 24,000,000 ducats ($360,000,000) a year, of which not more than half reached the Spanish treasury. An estimate made toward the close of the century gave the revenues as about 17,750,000 ($270,000,000), of which only a third was actually available.

Growth of the national debt.

Despite these relatively great sums the national debt was a constant factor, and advanced greatly in amount under Philip II, who is said to have left a debt of 100,000,000 ducats ($1,500,000,000). This was reduced in later reigns, but was still 70,000,000 (well over $1,000,000,000) in 1690,—a huge sum as national debts went then, even though creditors were frequently scaled down or not paid at all. One of the important elements in the debt was that of the loans made by Flemish, German, and Italian bankers, especially those of Genoa. The frequency with which these loans were sought and the high rate of interest required have caused Spain to be characterized, with accuracy, as a mere bridge over which the wealth of the Americas (and, to be sure, that of the peninsula itself) passed to other nations as interest and part payment of the nation’s debts. In 1539 this form of indebtedness amounted to about 1,000,000 ducats ($15,000,000), and in 1560, some 7,000,000 (over $100,000,000). When the Spanish kings were unable to pay a note that had become due, as much as 33-1/3 per cent might be charged for its renewal; indeed, the ordinary rate of interest ranged from 15 to 30 per cent. The inability of Philip II to meet his obligations caused all but the Genoese bankers to refuse him credit, and they joined with the others when he suspended the payment of interest on their notes. Unable to get funds in any other way, Philip surrendered to the Genoese, who exacted as part payment for fresh loans a share in various revenues of the Spanish state, such as in that of the salt monopoly and in certain of the taxes collected from the church,—thus belying the original object for which the latter had been imposed. The Cortes, though it had declined in other respects, was perhaps the most important organ of public finance. It not only voted subsidies but also collected them, a function which it had exercised in previous eras. It had charge of several other taxes as well, such as the productive alcabala and the millones. For these purposes special committees of the Cortes were formed. Nevertheless, the Consejo de Hacienda, founded in 1593, grew rapidly in functions and in power, and by the close of the seventeenth century is said to have had over 60,000 employes. This vast number was due in part to the variety in the origin and character of the various tributes. Without taking into consideration the inevitable accompaniment of graft, such a horde of officials involved the state in a heavy cost for the collection and administration of the revenues.