Skip to main content
×
Home
    • Aa
    • Aa

PHILIP II AGAINST THE CORTES AND THE CREDIT FREEZE OF 1575-1577*

  • Carlos Álvarez-Nogal (a1) and Christophe Chamley (a2)
Abstract
ABSTRACT

Numerous archival documents show how the suspension of payments by Philip II, in September 1575, on the contracts with Genoese bankers (asientos) induced a freeze of the domestic credit market in Castile through the bankers’ intermediation for asientos and the credit interconnections. Commercial fairs stopped, banks failed and trade suffered while the king granted legal protection to the Genoese bankers. The evidence strikingly confirms that by his strategy, Philip II was able to remove the de facto ceiling on the domestic debt (juros) imposed by the fixed revenue commitment of the Castilian cities in the Cortes. The agreement with the bankers was signed in December 1577 immediately after the cities had agreed to the doubling of their commitment.

RESUMEN

La documentación archivística muestra que el decreto de suspensión de consignaciones de 1575-77 paralizó el mercado de crédito de Castilla por la estrecha relación que había entre los asientos de los banqueros del rey y el crédito local. Durante esos años, las ferias dejaron de celebrarse, muchos bancos locales quebraron y el comercio sufrió una grave parálisis, pero el rey no dudó en proteger a sus banqueros de sus acreedores castellanos. La documentación confirma que gracias a esta estrategia, Felipe II logró romper el techo de su deuda pública (juros) que dependía de la contribución fiscal de las ciudades reunidas en las Cortes de Castilla. El acuerdo con los banqueros no se firmó hasta Diciembre de 1577, sólo inmediatamente después de que las ciudades hubiesen aceptado duplicar su contribución.

Copyright
Footnotes
Hide All
*

Financial support was received from the Ministry of Economy and Competitiveness (Spain) Project ECO2012-38028, Project HAR2012-39034-C03-02. Chamley gratefully acknowledges the support of the Banco Santander through a Chair of Excellence at the University Carlos III.

a

Departamento de Ciencias Sociales and Instituto Figuerola, Universidad Carlos III de Madrid, Calle Madrid, 126, 28903 Getafe, Madrid, Spain. carlos.alvarez@uc3m.es

b

Department of Economics, Boston University, 270 Bay State Road, Boston, MA 02215, USA. chamley@bu.edu

Footnotes
Linked references
Hide All

This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

C. Álvarez-Nogal , and C. Chamley (2014): «Debt Policy Under Constraints: Philip II, the Cortes and Genoese Bankers». Economic History Review 67 (1), pp. 192-213.

J. M. Carretero Zamora (2013): «La Colectoría de España en el siglo XVI: los Mecanismos de Transferencia Monetaria entre España y Roma (cambios y créditos)». Hispania 73 (3), pp. 79-104.

J. Conklin (1998): «The Theory of Sovereign Debt and Spain Under Philip II». Journal of Political Economy 106 (3), pp. 483-514.

M. Drelichman , and H.-J. Voth (2010): «The Sustainable Debts of Philip II: A Reconstruction of Spain’s Fiscal Position, 1566-1596». Journal of Economic History 70, pp. 814-843.

M. Drelichman , and H.-J. Voth (2011): «Serial Defaults, Serial Profits: Returns to Sovereign Lending in Habsburg Spain, 1566-1600». Explorations in Economic History 48 (1), pp. 1-19.

D. Gale , and M. Hellwig (1985): «Incentive-Compatible Debt Contract: The One-Period Problem». Review of Economic Studies 52 (4), pp. 647-663.

C. Jago (1981): «Habsburg Absolutism and the Cortes of Castile». The American Historical Review 86 (2), pp. 307-326.

C. Jago (1985): «Philip II and the Cortes of Castile: The Case of the Cortes of 1576». Past and Present 109, pp. 24-43.

R. M. Townsend (1979): «Optimal Contracts and Competitive Markets with Costly State Verification». Journal of Economic Theory 21 (2), pp. 265-293.

Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Revista de Historia Economica - Journal of Iberian and Latin American Economic History
  • ISSN: 0212-6109
  • EISSN: 2041-3335
  • URL: /core/journals/revista-de-historia-economica-journal-of-iberian-and-latin-american-economic-history
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Keywords:

Type Description Title
WORD
Supplementary Materials

Álvarez-Nogal supplementary material
Appendix

 Word (38 KB)
38 KB

Metrics

Full text views

Total number of HTML views: 2
Total number of PDF views: 44 *
Loading metrics...

Abstract views

Total abstract views: 262 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 24th August 2017. This data will be updated every 24 hours.