The General Settlement of 1577: An Aspect of Spanish Finance in the Early Modern Period

Abstract

The states of sixteenth-century Europe fell into two financial groups. France and Spain, in a class of their own, enjoyed an apparently total freedom for much of the time from the normal constraints, and this in spite of their rapidly escalating debts. The other European states which made up the second category were compelled to observe far more stringent controls. The distinction between the two groups was further underlined by the question of credit. Although the Habsburg and Valois monarchs spent in a way that was both financially reckless and socially unpitying, the moneyed classes were only too eager to advance additional funds. Repeated, and sometimes spectacular, failures seemed rarely to have damped their enthusiasm. The smaller states seldom found such ease of access to credit. For most of the time they were obliged to maintain a semblance of order by sustained and sordid frugality - the bilking of minor creditors, the levying of dubious ‘loans’, or the dissipation of capital. While no strangers to these devices, France and Spain were able to operate for prolonged periods free from ordinary limitations. But even for these privileged beings the moment of truth eventually arrived. Resources were finite; and even an imperial state could exhaust the credit, if not the credulity, of its principal bankers. Such an intrusion of reality took the form of a public bankruptcy.

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