[215] One of the major points of this study is that Madrid created a community of interests in Spain that transcended regional boundaries. As part of a dynamic relationship between Madrid and Castile that precluded a reversion to the economic life of the sixteenth century, that community of interests nurtured historical structures that have made Spain resistant to modernization. Recent scholarship has shown the basic differences between the Spanish coastal and inland economies in many ways. In English, the best-known work is Earl J. Hamilton's; although he does not address regional contrasts directly, Hamilton's price data extending from 1350 to 1800 repeatedly demonstrate the vulnerability of the Spanish interior to subsistence crises. The coastal provinces, with access to maritime trade, were relatively safe from such crises and could adjust their agriculture to incentives offered by external markets. Catalonia and Valencia also had separate monetary systems which afforded some protection from the manipulations of the Castilian coinage. ⁽¹⁾

Pierre Vilar has documented both the sluggishness of the Catalán economy and the expansiveness of Castile's in the sixteenth century, and the reversal of the situation in the eighteenth. ⁽²⁾ Vicens Vives notes the close interaction of the two economies in the sixteenth century. The woolens crisis of 1548-58 and price rises later in the century were felt with comparable intensity in both regions; but unlike Castile, Catalán prosperity was not the result of domestic development--indeed, Catalonia's late sixteenth-century expansion was externally induced by diversion of traffic from the Sevilla-Castile-Burgos circuit [216] into the Mediterranean because of hostilities in the Atlantic. The seventeenth century saw depression in both areas, with only Catalonia showing much sign of recovery before 1700. By the eighteenth century, population, commercial, and wage trends in Madrid and Barcelona diverged in a manner that clearly identifies Catalonia as a much more dynamic region. ⁽³⁾

Historians often refer to the coastal periphery of Spain as though it were a unified economic system providing convenient contrast with a static, homogeneous, and isolated interior. In fact, of course, neither the interior nor the coastal fringe was as homogeneous as our framework in Chapter 1 suggested, and some aspects of the dualism are as well explained by the differing social structures of Castile, Aragón, and Portugal as by geography. Nevertheless, to understand how Madrid affected the course of events we must have a clear perception of the economic evolution of both the peninsular interior and its maritime periphery.

Sixteenth-century Castile proved that a narrow base of movable surpluses could be used to create an urban network, an industrial sector, and a mercantile system capable of linking regional economic life to external markets. The domestic components of this commercial system were vulnerable to population growth, diminishing returns, and international price differences; but the factor that most precisely paralleled the actual breakdown of this fragile economic structure was the emergence of Madrid. Sustained by rents, taxes, and commodities drawn from a worldwide political empire, Madrid reoriented the limited marketable supplies in Castile. The impact on the regional urban network resulted in Toledo's fall from primate city to provincial backwater and can be seen in the history of commercial activity in other interior cities.

The coastal areas had no such common point of reference, though they all shared access to the sea. Some regions became involved in long-distance maritime exchange, Barcelona and Sevilla-Cádiz being the preeminent examples. Others, like the northern coastal districts from San Sebastián to Vigo, developed a self-sufficiency analogous to, but qualitatively different from, that of interior areas. Coastal trade meant that Galicia sometimes ate French wheat and Vizcaya sometimes used Gallego wine. Despite its inward orientation, Guipúzcoa, for example, was constantly preoccupied with supply by sea, and never experienced the supply crises that crippled seventeenth-century Castile. ⁽⁴⁾

Whatever linkages and common social patterns may have existed between coastal and interior parts of the peninsula in the sixteenth century, by the eighteenth they clearly operated under distinctive economic conditions. Provincial variations in the prices of basic foodstuffs indicate substantial differences in market conditions between the interior and the periphery. During subsistence crises, food prices in the interior fluctuated two to three times as much as on the periphery. ⁽⁵⁾ This pattern persisted into the second half of the nineteenth century and has been documented for the crises of 1856-57 and 1866-69, when the price of wheat in the interior rose to four times as much as in coastal towns. ⁽⁶⁾ Such evidence is not the entire story behind regional differences, and we must not succumb entirely to geographical determinism. But the fact remains that social structures limited by the geography of the Spanish interior had fewer economic options than similar ones with access to the sea and cheap transport. Their possibilities may not always have been exploited, and the reasons may lie in social not geographic realities, but the most traditional coastal region has an economic history quite different from that of an interior region organized by the same society.

While much of the interior became oriented to Madrid, Madrid in turn depended on periphery and empire. So long as the empire included a commercial system that provided taxes and private fortunes, Madrid prospered and the Crown could mediate between empire on the one hand and interior on the other. Centralization caused tensions between the Crown and Catalonia and the Basque provinces, as witnessed by the Catalán revolt of 1640, the Bourbon conquest of Catalonia in the War of Succession, and the attacks on Basque autonomy in the seventeenth and eighteenth centuries. But the economic subjugation and stagnation of the interior in the seventeenth century, while European commerce encouraged coastal regions to specialize for distant markets, aggravated the tension between the landlocked and maritime economies tied together by Crown and capital city. By the end of the eighteenth century, though ostensibly successful, the peninsular system had become extremely fragile. Since Madrid lived in two economic worlds, we must [219] trace the chronologies of both to perceive how the capital followed the trends of the larger world while reshaping the urban system of Castile.

Three Spanish coastal centers were perennially linked with the maritime world of Europe--Barcelona, Cádiz/Sevilla, and the Basque provinces--and each had a different relationship with its peninsular hinterland. At Barcelona, overseas commerce interacted with the Catalán hinterland and the economy of the port itself. Barcelona functioned as an entrepot between the international market and a regional economy featuring specialized agriculture and craft industries that were moving toward industrial development on the English pattern by the end of the eighteenth century. Sevilla and Cádiz were entrepots for European goods on the way to America and colonial products on the way to Europe. In the mid-sixteenth century, Sevilla served as an entrepot like Barcelona, linking Indies trade with Andalusian agriculture and the Castilian textile industry. But by the seventeenth century, Sevilla and Cádiz were little more than clearinghouses for trade between the Spanish empire and Europe. Except for export of wool, sherry, and olive oil, the links between seaport and hinterland were confined to urban supply and provision of the mercantile fleet.

The third maritime center was in the Basque provinces, part of the maritime fringe of the northern coast. Vizcaya became the transit area for departing Castilian wool and incoming European manufactures destined for the Spanish interior--a trade that involved Castilian markets but had few links with the Basque hinterland. Associated with these three areas were the coastal trading circuits of the Mediterranean and northern littorals, also part of what we have referred to as the "periphery."
 
I. From Barcelona to Sevilla
 
A. Catalonia
 
Thanks to Pierre Vilar, we can construct a profile of commercial trends in Catalonia based on port duties in Barcelona and in the smaller ports of the Catalán littoral (see Tables 10.1 and 10.2). These figures verify that in the first two-thirds of the sixteenth century Barcelona recovered very slowly from its medieval depression. Adjusted for changes in the composite Spanish price indices, the value of traffic at Barcelona appears static until 1578, and only in the last quarter of the century did it increase significantly. ⁽⁷⁾ This reflects the [220] diversion of Italian capital that had financed the medieval Italy-Barcelona-Valencia-Balearics trade circuit to the Italy-Sevilla-Lisbon-Bruges circuit. In the late sixteenth century, however, the situation in northern Europe disrupted that trade, diverting Spanish wool to Mediterranean ports and causing a shift of Spain's European commerce to the Barcelona-Genoa-Austria route. ⁽⁸⁾ The induced nature of Barcelona's revival is attested by the tendency for prices there to follow those of Sevilla, indicating that Barcelona was exposed to inflationary pressures originating in America.⁽⁹⁾
 

Seventeenth Century(c)
 

Period	Index of Nominal Value  (1679-82=100)	Index Adjusted for  Barcelona Prices
1664-74	69.7	_
1679-82	100.0	100.0
1686-87	52.3	65.9
1693-99	99.0	89.7

Source: Based on Vilar, Catalunya, vol. 2, pp. 245, 384. See also Robert S. Smith, The Spanish Guild Merchants, p. 140.
a. Sixteenth-century values ranged from 133,000 to 645,000 Catalán llures.
b. Includes 1548-54, 1557-58, 1559-60.
c. The highest totals for this period, in 1697 and 1699, were well over 1,000,000 llures, the lowest, in 1686-87, was 500,000.

Barcelona lost considerable ground in the first half of the seventeenth [221] century, but by the third quarter of the century there was a substantial recovery that survived the deflation and subsistence crises of 1677-85. When adjusted for Barcelona prices, the average yield in 1693-99 was 10% below that of 1679-82, but the level of traffic sustained through the fourth quarter remained high. The recovery in Barcelona may have begun during the French occupation in the 1640's, and was furthered by the penetration of French capital into the Mediterranean and Cádiz trades. ⁽¹⁰⁾

The growth of Barcelona and its hinterland was more apparent in the eighteenth century, as reflected in the indices of port duty yields (Table 10.2). Port duty revenues rose 378% between 1760-64 and 1790-98, and it is unlikely that adjustment for inflation could change this impression of spectacular growth. ⁽¹¹⁾ Moreover, the port duties (lleuda) in the outlying ports of the Catalán coast, collected as fixed fees and therefore immune to inflation, increased an impressive 188% by 1790-98. If the Barcelona series could be accurately deflated, it would still show a similar rate of growth. The indicators for both the region and the capital show steady expansion of commercial activity in the first half of the eighteenth century, extending the trend of the late seventeenth. Growth accelerated after 1750 as the city's population rose from 30,000 inhabitants early in the century to 100,000 by 1800. ⁽¹²⁾

From the mid-seventeenth century, Barcelona was becoming a center of Mediterranean trade and an intermediate stop between Marseilles and Cádiz, as French activity at Cádiz created a flow of traffic along Spain's Mediterranean [222] coast. The parallel expansion of traffic in Barcelona and the smaller regional ports indicates that economic expansion took place in the context of a network of ports, rather than at a single convenient stopping place. ⁽¹³⁾ This commercial growth reflected the development of domestic industry and intensive agriculture in Catalonia; a re-export trade giving Spanish-American sugar-growing importance in the Mediterranean; and a growing stream of Catalán and French manufactures destined for Málaga, Cádiz, and America. ⁽¹⁴⁾ The expansion of commercial activity at Barcelona after 1796, however, is an illusion reflecting the impact of price inflation on ad valorem duties. But if the real value of traffic at Barcelona stagnated or declined, it rose in the outports as the regional market system adjusted to disruption of commerce in its major port.

Even this sophisticated regional economy, however, was limited by geographic realities. Its direct connections with the Castilian interior were few, and its economic activities did not penetrate very far inland. Economic change remained slow in the mountain and inland regions of Catalonia and, while rents rose rapidly along the coast, they remained much lower inland. The impressive investments in drainage and irrigation were concentrated near the coast or the Ebro River, and most of it was within 30 miles of Barcelona itself. ⁽¹⁵⁾ The peripheral nature of this development is documented by its location on the coastal fringe and by its orientation to Spain's maritime economy. ⁽¹⁶⁾
 
B. Sevilla-Cádiz
 
Spain's second major link with the maritime world was the Indies trade, first at Sevilla and later at Cádiz. Whether measured by the tonnage of trade with the Indies in the sixteenth century or by its contribution to national income as measured by the Catastro of 1750, the importance of this port complex is manifest. ⁽¹⁷⁾ Between colonial remittances, customs duties, alcabalas, and tobacco monopoly revenues, the old province of Sevilla (modern Sevilla, Huelva, and Cádiz) provided nearly half of royal revenues in the late eighteenth century. Its network of merchant families, Andalusian nobles, and [223] privileged guilds formed an integral part of the imperial power structure, reflecting the interpenetration of public and private interests and providing the Crown with a major source of credit.
 
1. Maritime Activity
 
Four indicators provide a long-term profile of overseas commerce in this port complex--the familiar figures on the tonnage of Indies trade to 1650, a small ad valorem tax on goods handled by the Consulado of Sevilla (1551-1700), a 0.5% aduanilla collected ad valorem by the city of Cádiz (1656-1800), and the estimates of Indies tonnage developed by Garcia-Baquero for the eighteenth century. These are presented as index numbers in Tables 10.3, 10.4, and 10.5, indicating where appropriate both nominal and price-adjusted levels of tax revenue.

These figures suggest that the recovery of Andalusian commerce, so apparent in the eighteenth century, actually began between 1650 and 1700, and that it was in the later seventeenth century that the drastic decline of the official American trade monoply was reversed. The transition is obscured by evidence of contraband, monetary instability, and the fact that García-Baquero's tonnage estimates only begin in 1680. Without a longer perspective, they suggest an end-of-century decline prolonged by the War of Spanish Succession. Table 10.4 contradicts this trend and, even when adjusted for price fluctuations, shows a substantial recovery of port activity after a low point in the 1660's. The most pronounced change coincides with the official transfer of Indies trade to Cádiz, but the concurrent doubling of port duty revenue at Sevilla is noteworthy. The volume of trade in question was undeniably small, but the trend is similar to that in Barcelona--recovery in the third quarter of the century, with a mild setback in the final decade. 

The magnitude of this recovery after the 1660's should not be overstated. Hamilton's silver prices indicate that the silver equivalent of the Sevilla Consulado tax in the 1690's was only about 12.5% of that for 1601-10, but [226] the proportionate drop in Indies tonnage was far greater. ⁽²¹⁾ Nevertheless, the seventeenth-century decline had been reversed. The fact that port duties in both Andalusian ports follow the same chronology indicates a quickening of regional commercial life only partly connected with the American trade. ⁽²²⁾ This is reinforced by the trend of traffic on the ferry from Cádiz to Puerto Santa Maria, outport for the Jerez district. Revenue from this ferry rose 150% from the late 1650's to the 1680's and remained fairly high in the 1690's. Since the fare was not an ad valorem tax, revenues were not affected by prices.

The eighteenth century saw an expansion of commerce at Cádiz that can now be seen as a continuation of the modest expansion of the last quarter of the seventeenth (see Table 10.5). Indies tonnage, the aduanilla of Cádiz, and the cross-bay ferry all show a recession during the War of Spanish Succession. This began in the 1 690's for the Indies monopoly; but in the years from 1709 to 1720, all of these trends were sharply reversed. Indies tonnage rose 175% between the 1720's and the 1770's, as did the nominal value of the port tax in Cádiz. Adjusted for Andalusian prices, however, the value of that revenue rose much more slowly. The price-adjusted aduanilla suggests a long-term increase in port activity from 1680 to about 1725. Then, while the volume of Indies tonnage rose, the port revenue drifted downward until 1760, followed by a sustained increase in real value until 1792. Traffic in the bay area, as shown by revenue from the barca de Sancti Petri, rose sharply after the succession war. In part this reflects suppression of the Puerto Real and Puerto Santa Maria ferries; and when the royal highway to Cádiz was completed, ferry revenues dropped substantially.

Tonnage data is not available after 1778, but following the reforms of that year the official value of legal Indies trade rose dramatically, and in 1792 it was five times that of 1778. ⁽²³⁾ This is an increase far in excess of the unadjusted aduanilla revenue, indicating a trend independent of the regional economy served by Cádiz. After 1797 the Indies trade was subjected to violent fluctuations due to the international situation, and declined rapidly. The value of exports in 1797 was about 300 million reales, slightly over half of which were registered as of domestic origin. In several subsequent years the value dropped to 10% of that figure, while the intervening peaks never reached the earlier highs. In 1815-21, the value of exports was typically 75 million reales, two-thirds of domestic origin. The demise of the colonial trade [227] of the eighteenth century was completed by 1828, when Spain's total foreign trade was less than a quarter of that of 1792, and exports from Cádiz totaled less than 9 million reales. ⁽²⁴⁾
 
2. The Ports and the Interior
 

This bare outline of commercial trends in Sevilla and Cádiz summarizes a commercial life that in the later eighteenth century represented half of all of Spain's exports and imports. Yet the ties to Madrid and the interior were surprisingly sparse, consisting of a few commercial links and a structure of credit, taxes, and political influence. This was not always the case, and it is instructive to look briefly at the history of the connections between maritime trade and the interior.

The middle decades of the sixteenth century saw a close association between the expansion of the Indies trade and the growth of the textile industries in Malaga, Granada, Toledo, Segovia, and other Castilian towns. The wine and wheat production of Andalucía was similarly affected. Consequently, the Andalusian urban system evolved like that of the Castilian towns. Córdoba, largest town of inland western Andalucía, grew from 5,851 vecinos in 1530 to about 13,000 by 1594. Thereafter depression set in, as demand for cloth declined, taxes rose, and epidemics hit the region. Urban growth ceased and the city began to decline. ⁽²⁵⁾ This pattern was repeated in relatively small communities such as Pedroches to the north of Córdoba, where sixteenth-century expansion was also followed by rapid decline. ⁽²⁶⁾

As the sixteenth century wore on, domestic industry was unable to satisfy the Indies trade, and a growing proportion of the rising volume of exports came from foreign sources. This marks a critical phase in the separation of the Spanish interior from the economy of the Sevilla-Cádiz zone. Long before the tonnage of the Indies trade reached its peak in 1610, domestic industrial exports were in full decline, and the capture of imperial trade by non-Spanish merchants was generally recognized. It was paralleled by Italian takeover of the wool trade, as wool exports were diverted from northern outlets and taken over by Italian merchants in the southern and eastern ports of the peninsula. ⁽²⁷⁾ In the early seventeenth century, Spanish America, Andalucía, and central Spain experienced depressions, each for different immediate causes. ⁽²⁸⁾ The Andalusian ports remained an avenue for legal trade between [228] Europe and Spanish America, but played an increasingly passive role. The merchant community of Sevilla became a group of commission agents dependent on government maintenance of an obsolete commercial structure. ⁽²⁹⁾

The marginalization of Spanish commercial activity at Sevilla is illustrated by the trend of the tax that the Consulado collected there. The real value of its revenue rose 15-20% between 1551 and 1590, then began to decline rapidly well before the tonnage of the Indies trade. This reflects the declining participation of Castilian products in imperial trade and correlates with the decline of the smaller textile centers of the interior. The loss of contact with the interior is also apparent if we contrast the distribution of bullion from Sevilla to the interior in 1575 with the distribution of letters of credit held by a major Sevilla trading firm in 1603. ⁽³⁰⁾ Of 253 peninsular credit instruments, 77% involved western Andalucía and 18% the Mediterranean coast. Only 9.8% mentioned interior locations, and virtually all of those were from southern Extremadura. This dismantling of commerce into the interior reflects the situation in Toledo, where merchants were unable to maintain their coastal trading connections after 1600. ⁽³¹⁾

The dissolution of the commercial links between the Andalusian ports and Old and New Castile is illustrated by the portazgo of Zafra, owned by the Duke of Medinaceli and situated on the main route from Sevilla through Extremadura toward Madrid and Valladolid. To the extent that traffic was not being diverted to the Sevilla-Madrid route along the Guadalquivir valley, this road toll illustrates the decline of traffic from Sevilla to the interior. The scattered figures for the sixteenth century suggest a rising volume of traffic that peaked in 1604-05. Comparison with the Chaunus' figures on the tonnage at Sevilla indicates that the inland traffic through Extremadura was well developed before the expansion of the Indies trade (see Table 10.6).

Traffic at Zafra expanded 30% in the last half of the sixteenth century, while the Indies trade trebled and the real value of the ad valorem tax on merchandise at Sevilla increased 15-20% (1551-90). The Zafra toll revenues fell by a third between 1604-05 and 1630, then collapsed drastically with the revolt in nearby Portugal. The trend at Zafra follows closely the timing of trends in the Indies trade--but its decline, even before the Portuguese revolt, was far more rapid (58% vs. 35% to 1640). Thus while Spanish participation in the Indies trade declined, the role of the interior in the maritime economy declined even faster. The portazgo of Zafra continued to fall drastically in the [229] 1650's, as the war with Portugal continued; it recovered slightly in the '60's and '70's, then became negligible.
 

Despite the continued decline of sugar, Granada's population apparently followed the pattern seen in Córdoba. Revenues from the brokerage on wheat are available from the 1650's through the 1680's, and their stability suggests that any urban population decline occurred before 1650. ⁽⁵⁸⁾ This is also the demographic trend in Jaén, Granada's most important urban satellite, where population fell from 5,596 vecinos in 1594 to about 4,000 around 1650 and then leveled off. ⁽⁵⁹⁾ The increasing self-sufficiency of the inland regions is also implied by the decline of dried fish imports for distribution to the interior. In contrast to the similar duty in Cartagena, the volume taxed in Málaga declined 50% from 1631 to 1670 (see Table 10.15). This again prompts the inference that even though the population of Granada stabilized after mid-century, the regional economy was becoming much more isolated and self-contained.
 

The combined tax on cartage and fish leaving the city (the correduría) also produced increasing revenue during the eighteenth century, but with a different chronology (see Table 10.17). After very low yields in 1720-36, it expanded substantially between 1736 and 1764, but then declined until 1785. Strong expansion is apparent only at the very end of the 1780's when, adjusted for prices, the average of the decade was 10% higher than in the 1750's.

No indicators of port activity are available for eighteenth-century Valencia, but there is evidence of a similar trend. Following the recovery of port activity in the late seventeenth century, the provincial population rose from 255,000 inhabitants in 1718 to 960,000 in 1794. Even though the margin of error inherent in the early figure is considerable, the growth is spectacular. The city of Valencia had 75,000 to 100,000 inhabitants by the end of the century and was the center of an urban network of several towns and ports with 10,000 to 20,000 people. The city produced 2 million varas of silk annually, and the province exported 420,000 arrobas (5,200 tons) of figs a year and 330,000 arrobas (4,100 tons) of barilla for the Venetian glass industry. Its trade connections reached Venice, Sicily, Corsica, France, Africa, Cádiz, Portugal, and England. ⁽⁶¹⁾ With the exception of the silk industry, the eighteenth-century trade pattern was remarkably like that of Málaga.