Spain and the New World System

Spanish Exploration, Conquest and Empire

The effect of Columbus’ discovery of the New World, or more properly, the island of Hispaniola (Haiti and Santo Domingo today) was transformative politically and economically for Spain and ultimately Europe.  He actually didn’t return until March of 1493.  Rumors and speculation of large amounts of gold, he only brought back a few traces on the initial voyage, spurred interest in financing of direct colonization. He captured and brought back some natives, who were seen as an exotic and alien race devoid of any value than as exploitive sources of local knowledge of resources, gold and other valuables and as labor source.

This inaugurated the era of overseas exploration and colonialism that dominated the era of the modern world ever since. Columbus actually had Portuguese experience, even though he had grown in the port city of Genoa in Italy, he gained the bulk of his experience in Portugal.  He was married to one of Prince Henry the Navigator’s captains and who as a governor of the Portuguese colony of Madeira.  The couple lived there on that island for a while and he must have had a very thorough knowledge of the island and Portuguese influence and contacts with the West Coast of Africa.  There is a lot of good speculative evidence that these Portuguese mariners had been exploring various parts of the middle Atlantic, and possibly may have reached Brazil, but not fully announced it.

Altogether he made four voyages, 1492, 1493, 1948 and 1502 completing his tour of the de Gulf of Mexico.  It was Columbus who coined the phrase new world or mondo novo.

Asia and Latin America.

Once Europeans reached the mainland of Central and South America they also began expanding into the Indian Ocean and toward the Pacific. Almost immediately competition between Spain and Portugal came to a confrontation that had to be settled by a Papal decree as intermediary, who drew the Treaty of Tordesillas in 1494 that divided east and western South America between Portugal and Spain.  Spain was the victor of course.

The plantation system became a necessary implement of colonization, because disease, starvation and outright working and beating and killing depleted the native populations.  The answer was to import slaves in large numbers from Africa.

On the mainland of Central America, the Spanish encountered the Aztecs a strong centralized government and city state that had an empire throughout central Mexico.  When in 1519 Hernando Cortes (1485-1547) led a group of 600 men and several hundred horses to the Mexican coast he made allies among the Tlaxcalan and other native peoples who opposed Aztecs. Many joined because of the threat of bombardment by Corte4s. Cortes gained more allies from among the Aztecs enemies after a long battle took Tenochtitlan from the weakened Aztec forces. He fought Aztec armies until 1521 when he had taken permanent control of the whole empire.  He shipped Aztec art back to Europe – admired by Albrecht Durer.

Ten years later Francisco Pizarro conquered the Inca Empire.  He was already rich from his settlement in Panama City.  He captured the Incan leader Atahualpa 1500 – 1503 and killed thousands of Incas.  Now the Incans at the time were under strain their powerful ruler Huayna Capac ruled 1493 to 1525 had recently died in a plague which explains part of the main problem of resistance. Atuahualpa paid a huge ransom for release but the Spanish killed him anyway and Pizarro founded the city of Lima, Peru’s capital.  Pizarro would later be killed by another Spanish rival for the governorship

But it was the discovery of silver mines that transformed this conquest into an economic system of persistent robbery and exploitation.

The global economy spurred by the introduction of bullion and wares and commodities from the New World, the Americas an d Asia provided new outlets for European goods.  It also brought the so-called Columbian exchange.  Tomatoes, corn, bell peppers, rum and spices.  Disease and livestock to the New World.  Trade of products with the New World reached up the rivers of Europe and particularly the Lowlands of the Scheldt River.  Antwerp by now had 100,000 people.  In 1609 Hugo Grotius published his treatise on the freedom of the seas in 1609, subtitled:  Freedom of the Seas:  The Right Which Belongs to the Dutch to Take Part in the East India Trade.  There were threats of rivalry, between Portugal and the Dutch over the East Indies Sea, and we shall see that the Dutch eventually rival and gain precedence in Japan over the Portuguese.

Price Revolution and Depression:

The rise in population and economic boom of the 16th century brought a considerable rise in prices, particularly in the last decades of the century (Merriman 170).  Between 1500 and 1600 a pound of mutton cost as much as a whole sheep used to.  Between 1500 and 1600 the price of wheat rose by 425 percent in England, 650 percent in France, and 400 percent in Poland.  Prices rose dramatically even before the arrival of silver form Latin America, a cause of continued inflation during the second half of the century.  Cost of living far outdistanced wage increases as real income fell for ordinary people.  This created problems for landless laborers and wage earners, the poor and small and poor nobles.  The price revolution caused many to blame greedy landlords, greedy merchants, hoarders of grain etc.

This all resulted in a long depression following the economic expansions of the early-mid 16th century.  Various economic crises had appeared by the 1570s when the entire city of Antwerp became bankrupt.  This also showed in a relative decline of Mediterranean trade, symbolized by end of Venetian supremacy by 1600.  All of this came to a major crisis, the Thirty Years War 1618 to 1648 that disrupted trade and manufacturing. International trade fell of dramatically.  Spaniards had exhausted many gold and silver mines of Latin America, disrupting the money supply.  Yet, ports such as Amsterdam, Hamburg and Liverpool grew with expansions of Atlantic trading system.

No country symbolized the rise and fall of riches and gains and losses from the new Atlantic economy than Spain.  The sponsorship of Columbus’ discovery of 1492 and the conquest of the last of the Muslim principality of Granada, ushered in a moment of supreme Spanish hegemony that lasted through most of the reign of Ferdinand and Isabella’s descendant, Charles V (r. 1519-1558).

During the first years of Spanish colonial period, Mexican gold helped finance the next wave of conquest. In 1545 Spaniards discovered the rich silver mines of Potosi in Peru and now in Bolivia.  A year later they uncovered more significant deposits in Mexico.  Convoys from the port of Aria in northern Chile brought back the silver and allowed for payment of slaves to be bought in Africa.

Initially the Castilian economy developed rapidly.  The wool trade formed the basis of the Castilian export economy.  The mining of sliver lead iron and merculry alsto developed in Spain as well.  Spanish royal revenue came from peasant obligations owed on royal domains as well as from taxes on commerce and manufacturing and import and export taxes. Payment from the Church for collecting tithes the ecclesiastical tax of 10 percent of revenue.  The crown imposed protectionist measures against foreign goods and banned export of gold and silver.

Charles V reign as emperor only briefly resided in Catalonia and rarely visited it.  He preferred to stay in Madrid.  In 1520 he left Spain for his campaigns in Italy and later in Tunis.  He was confronted by a revolt of the Comuneros urban communities in Toldedo.  This spread to other towns in northern Castile.  Royal forces burned the town of Medina del Campo in north central Castile in August 1520, and the young king switched tactics.  He suspended supplementary tax collections and agreed not to appoint any more foreigners to office in Spain.  When uprisings continued Charles’ army gradually restored order, brutally executing leaders of the rebellion.

He also arranged the marriage of his son Philip; to the English princess Mary Tudor of England in 1554. He formally abdicated as Holy Roman emperor in 1558 dividing the Habsburg domain between his son Philip and his brother Ferdinand.  Philip II ruled (1556-1598) and inherited Spain, the Netherlands and the Spanish colonies in the Americas. Ferdinand (I ruled 1558-1564 was elected Holy Roman emperor, and inherited the Habsburg ancestral domains, Austria, and Italy.