How seriously did the financial demands of the crown affect the Spanish economy?

Essay by katief November 2005

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The Spanish discovered silver in South America in 1545. This helped with Charles' financial problems. 200,000kgs of silver were mined each year which secured Charles about 252,000 ducats a year. The income which Charles received from the South American silver added to his income from Spain and helped him to increase his wealth and live a very lavish lifestyle, as he said, "I cannot be sustained by my Spanish realms." The income from the silver also went towards his 12million ducats of debt which Charles had accumulated through burrowing money. Martin Jones claims that "America never funded King Charles." This was because the maximum revenue which Charles received from the silver was only 15% of his income. However he does state that "America was a unique windfall." Charles also benefited from the sugar and pearls which American produced and received 1/5th of all of the bullion. Brice said the "billion helped to finance Charles' wars."

The bullion also allowed Charles to burrow from the Fuggers as they knew that even if he didn't have enough money to pay them back, he had enough silver. The silver did not seem to solve Charles' financial problems. The discovery of silver in Bolivia and inflation meant that the value of the South American silver was reduced. Charles also allowed other countries into South America, e.g. France, which exploited it and prevented Charles from gaining extra income.

According to Martin Jones "agriculture was the core of the Spanish economy" with grain being the most lucrative crop. Bread was the prime food of this time but due to the huge rise in population, of which 80% lived in Castile, there was a struggle to feed the people. Therefore there was a need to import grain which put a constant drain on...