Downfall of the Spanish Empire

How Silver eroded their power

Trade Policy

• The House of Trade (Casa de Contratación)– Established by Queen Isabella I in 1504– Regulated commercial functions with colonial

economies• Registered Ships• Created map & charts• Tax collection

– Enforced trade policies to enhance royal treasure• 1/5 of all gold and silver mined in new world went to

the Spanish crown

Silver Imports

• Several large scale silver mines were established in the new world– 1520 Mexico’s

Guanajuato region– 1546 Mexico’s Zacatecas

region– 1546 Bolivia’s Potosí

region

Years Amount bullion imported in kilos

1531 – 1580 2,628,000

1581 - 1630 11,461,000

1631 – 1660 2,896, 000

Total 16,985,000

Imports of Gold and Silver from New World

Habsburg Dynasty

• Habsburg dynasty was not only controlled Spain, but the Holy Roman Empire

• Goals– Access to resources from colonies– Undermine power of France– Maintain Catholic Hegemony• Defend Catholicism against the Protestant Reformation• Defend Europe against Islam

Combined lead to Loss of Power

• The Habsburg dynasty used the Spanish Empire in its attempt to maintain power– Demanded import of silver and gold to fund their projects

• With excessive importation, value of gold and silver plummets

– Funded military action against its enemies• Mainly the French

– Actions bankrupted Spain repeatedly• Number of rebellions stretched the exhausted economy of

Spain further. – Fear of further bankrupt kept Olivares from pushing to reclaim the

Netherlands.– Gave enemies time to regroup and defeat his forces at Rocroi

signaling the end of Spain’s power

Sources

• Wikipedia – Spanish Empire• Gale Encyclopedia of World History:

Governments: Spanish Empire• History of Spain and Portugal: Volume 1 –

Stanley Payne