ECONOMIC REFORMS, 1700-1808
[Sidenote: Bases of the economic reforms of the era.]
[Sidenote: Economic reforms in the Americas.]
If a review of the political and ecclesiastical institutions of this
period displays the enlightened despotism on its despotic side, a study
of the economic reforms effected, or tried, reveals the benevolent or
enlightened attitude of the autocratic state endeavoring to improve the
lot of the people. In addition to the philanthropic aspect of these
attempts, they were influenced, also: by the general current of
eighteenth century thought, giving attention to economic problems; by
the very evident necessity for reforms in Spain, which country had found
itself in a condition of utter misery at the close of the preceding era,
with the result that a multitude of pamphlets had been written to
explain the decline and suggest remedies; and by the desire to attain
other ends, such as that of defence against the aggressions of England,
which had to be based in the final analysis on the economic recovery of
Spain. Not only in Spain but also in the Americas, and almost more
strikingly, this was an age of economic reform, based primarily on
Spain’s need of the colonial markets as a factor in her own
regeneration. Nevertheless, this was the period when the old monopoly
utterly fell, in part because of the entry of foreigners into the
colonies or their establishment in Spanish ports to take over the goods
coming from the Americas, and in part as a result of a deliberate
policy, throwing open the commerce of the new world, if not directly to
all nations, at least indirectly through the intervention of the many
Spanish cities which came to enjoy the privilege of the overseas trade.
The American situation cannot be dealt with here, but it must be held in
mind as one of the vital elements in Spain’s economic progress.
[Sidenote: The reformers and their achievements.]
[Sidenote: Statistics of population.]
The most genuine representative of the century’s political economists in
Spain was Campomanes. Although a follower of the French physiocratic
school, which maintained that agriculture was the principal sustain of a
nation’s wealth, he did not fail to recognize the importance of
manufacturing, and endeavored to foster that industry through the
dissemination of works of an educative character, the enactment of
protective laws, and the founding of model establishments. Of equal rank
with Campomanes, though not as effective in achieving reforms, was
Jovellanos, while there was hardly a minister of prominence in the
entire period who did not attain to some distinction as an economist.
The general effect of the reforms was beneficial, making itself felt in
all branches of the production, exchange, and consumption of goods, as
well as in an increase in population. Thus the 5,700,000 inhabitants of
Spain at the beginning of the era had nearly doubled by 1787, when the
total was 10,409,879 (or 10,286,150 by another estimate), and had still
further increased to 10,541,221 in 1797. The following table of
occupations for these two years is interesting both as showing the
economic distribution of the population and as indicating the direction
of the reforms.
-------------------------------+------------+-----------
| 1787 | 1797
-------------------------------+------------+-----------
Ecclesiastics | 182,425 | 168,248
Nobles | 480,589 | 402,059
Employees (of the government?) | 41,014 | 31,981
Soldiery | 77,884 | 149,340
Students | 50,994 | 29,812
Farmers and (farm?) laborers | 1,871,768 | 1,677,172
Manufacturers and artisans | 310,739 | 533,769
Servants | 280,092 | 174,095
Merchants | No figures | 25,685
-------------------------------+------------+-----------
The discrepancies between the two columns are in part accounted for by
the fact that Spain was at peace in 1787, and at war with England in
1797. In a total of some 3,000,000 workers it is notable that the
majority were devoted to agricultural pursuits (including about 100,000
engaged in pastoral labors), showing that the cultivation of the soil
was the principal basis of the national life. The vast number of
ecclesiastics, nobles, and servants, nearly a third of the total, is
eloquent of the social problem which the government had to face. In the
course of ten years they had fallen away to less than a fourth of the
whole. Statistics as to density of population showed Guipúzcoa,
Valencia, Asturias, Navarre, and Vizcaya in the lead, with respectively
eighty, forty-eight, forty-seven, forty-three, and forty-two inhabitants
to the square kilometer. Andalusia had thirty-nine, Granada and
Catalonia thirty-four each, Aragon only twenty-one, while Extremadura
with fourteen and La Mancha and Cuenca with thirteen each brought up the
rear. In total population Galicia led with 1,345,000. Catalonia had
814,412, Valencia 783,084, Andalusia 754,293, Granada 661,661, and
Aragon 623,308. Large urban groups were rare; there were fewer than
forty cities with a population of 10,000, and seventeen of them were in
Andalusia. The four largest cities were Madrid (156,000), Barcelona
(115,000), Seville (96,000), and Valencia (80,000). Economic prosperity
did not correspond exactly with these figures, for the factors of
climate, soil, irrigation, and nearness to the sea entered into the
situation.
[Sidenote: Wretched state of domestic life.]
[Sidenote: Obstacles in the way of economic reforms.]
Despite the great body of reforms carried out, the problem was
overwhelming, and much of the country was still in a backward state at
the end of the era. Aragon and Old Castile were in a miserable
condition, not nearly equalling their agricultural possibilities, and La
Mancha was in a far worse plight. The number of large-sized towns in
Andalusia gave that land an appearance of wealth and prosperity which
was not borne out by the facts, if the situation of the country
districts were taken into account. The character of Spanish houses at
this time was also expressive of the national economic shortcomings.
Cave houses and adobe huts with roofs of straw abounded in Castile. The
houses of Galicia were described as having walls of unpolished stone,
often without cement, reaching scarcely higher than a man’s head, with
great slabs of rock for a roof; the doorway and a hole in the roof
served as the only means for the penetration of light and for the escape
of smoke; and the domestic animals and the family made common use of the
wretched house. In the Basque provinces, Navarre, and Valencia the homes
were much better, besides being cleaner, although a lack of glass
windows, chimneys, and furniture was quite general in all parts of
Spain. Through French influences these defects were beginning to be
overcome as the era approached a close. If to this miserable state of
the domestic life there is added the ignorance of the people (who
resisted innovations designed to benefit them), the economic inequality
resulting from the concentration of vast landed estates in a few hands,
the difficulty of communications, the burdens of taxation, the
mismanagement of the administration (despite the efforts of enlightened
ministers), the frequency of wars, and the persistence of a spirit of
repugnance to labor (leading to a resort to mendicancy or vagabondage or
to a reliance upon a somewhat questionably desirable charity) it becomes
clear why the economic situation should have been considered perhaps the
most urgent problem which the Spanish ministers had to solve, and their
failure to overcome all of the difficulties can be understood. According
to Campomanes there was an army of 140,000 beggars and vagabonds in
Spain in his day, most of whom were able to work and might have found
something to do. He and the other ministers of Charles III endeavored to
solve the matter by putting the physically able women in workhouses, the
men in the army and navy, and the old and infirm in homes for the aged
and in hospitals, but owing to the lack of funds these projects could
not be carried out in entirety.
[Sidenote: Constructive attempts of the state and private individuals to
overcome economic evils.]
The evils of the economic situation being clear, efforts were made,
especially in the reign of Charles III, to correct them at their
sources. To combat the ignorance, indifference, and in some cases the
laziness and prejudice of the masses with regard to labor technical and
primary schools were founded and model shops and factories established;
prizes were awarded for debates and papers on various industrial
subjects; printed manuals, including many translated from foreign
languages, were scattered broadcast; teachers and skilled laborers from
foreign lands were induced to come to Spain, and Spaniards were
pensioned to go abroad to study; privileges, exemptions, and monopolies
were granted to persons distinguishing themselves by their initiative
and zeal in industry; and laws were passed to raise the dignity of
manual labor. In this campaign the government received substantial aid
from private individuals. In 1746 the first of the _Sociedades
Económicas de los Amigos del País_ (economic societies of the friends of
the country) was founded. In 1766 its statutes were published, serving
thenceforth as the model for other like institutions in Spain, all of
them devoted philanthropically to the encouragement of agriculture and
other phases of the economic life of their particular district. Nobles,
churchmen, and members of the wealthy middle class formed the backbone
of these societies, of which there were sixty-two in 1804. Many of them
published periodicals, or founded schools for the study of such subjects
as agriculture, botany, chemistry, the various trades, stenography, and
economics. To promote the cultivation of the soil the state itself
assisted in schemes for the colonization of waste lands. The most famous
instance was that of the government colonies in the Sierra Morena
country of northern Andalusia. In 1766 a certain Bavarian adventurer
offered to bring six thousand German and Flemish laborers to settle that
district. Charles III favored the project, and it was at once
undertaken. For a time it was successful; a number of settlements were
made,--there were forty-one in 1775,--and considerable crops were
raised. In the end the project failed, due to bad administration, lack
of funds, the imposition of heavy taxes, the opposition of the clergy to
the predominantly lay spirit of the undertaking, the jealousies arising
between the Spanish and foreign elements (for many of the colonists were
Spaniards), and the failure to provide adequate means of communication
whereby the colonists could export their surplus products. Some of the
towns continued to exist, however, and the project was influential in
causing private individuals to attempt colonizations, several of which
were successful. Among other constructive governmental measures were
the removal of the legal obstacles to the sale or division of waste
lands or lands common, the restriction of the privileges of the _Mesta_,
the betterment of the conditions surrounding leases (favoring the
prolongation of the period of the lease, and aiming to assist the
individual who actually cultivated the soil), and the reduction of
customs duties or a grant of complete freedom of entry in the case of
certain raw materials used in Spanish manufacturing establishments.
Public works were also undertaken, such as the construction of
irrigation canals, though many were not completed or were made so
imperfectly that they soon went to ruin; great highways to open up the
peninsula were planned, and under Charles III much work upon them was
done, though not enough to meet the needs of the country; an efficient
mail service was developed by Floridablanca; shipbuilding was
encouraged; banditry and piracy were to a great extent suppressed;
government support was given to commercial companies; and a national
bank was established by Charles III,--which failed in the reign of
Charles IV. The government also intervened in problems of local
subsistence, with a view to maintaining articles of prime necessity at a
low price and in sufficient quantity, but its action in this particular
did not always produce the desired result. Finally, the government
interested itself in charity. Benevolent institutions were founded, not
only with a view to checking mendicancy and vagabondage, but also to
provide homes for unfortunate women, insane persons, and orphans.
Private individuals gave liberally for these purposes, or founded
charitable organizations, which rendered service of a somewhat
remarkable character in succoring the poor, building hospitals, and
rescuing children. Mutual benefit societies were formed, reaching into
every walk of life, and some of these, termed _montepíos_ or _montes de
piedad_, were made compulsory for the employes of the government; thus
the _montepío_ for soldiers, dating from 1761, served as a pension
system whereby some provision was made for the widows and orphans of the
deceased. All of these reforms encountered the difficulties arising from
ignorance, conservatism, the resistance of vested interests, graft, and
bureaucratic cumbersomeness which have already been discussed. The very
immensity of the reforms projected was against their satisfactory
execution, for more was tried than could be done well. Other obstacles
already mentioned, such as bad administration, insufficiency of funds,
and lack of persistence, contributed to the same result. Nevertheless,
though plans outran accomplishment, a vast amount was done, especially
in the reign of Charles III, when the spirit of the era reached its
culminating point.
[Sidenote: Obstacles to agricultural development and attempts to
overcome them.]
To form a correct idea of the state of agriculture in this period it is
necessary to note how the lands of the peninsula were distributed. At
the beginning of the nineteenth century, after a hundred years of effort
directed to the release of realty, the church possessed 9,093,400
_fanegas_[66] of land, the nobles 28,306,700, and the plebeian class
17,599,000, but the greater part of the estates of both the nobles and
the plebeians was entailed, and therefore impossible of alienation,
closing the door to the growth of a class of small proprietors. The
proportion of proprietors to population was only one in forty. In Ávila,
for example, the church owned 239,591 _fanegas_, 157,092 were entailed,
and only 8160 were cultivated by owners who resided in the neighborhood.
The small proprietor was to be found principally in the north and east,
but he was far outnumbered, even in those regions, by the lessees of
lands, who were also the overwhelmingly strongest element numerically in
Castile. The forms of renting were various, both as to the type of
payment required and as to the length of term. Where the term was
practically hereditary, conditions were much better, approximating those
of the small proprietor. In Andalusia _latifundia_ were the rule,
cultivated in only a portion of the estate by day laborers, who were
employed at certain seasons of the year, living in a state of great
misery at other times. This evil was tempered in Extremadura by the
utilization of lands common. Despite the sincere attempts of the
government to encourage agriculture, that industry was still in an
extremely backward state at the close of the era, with only a little of
the cultivable ground planted, an insufficient development of
irrigation, and a lack of fencing. Valencia and the Basque provinces
were the most nearly prosperous regions; the others were in a wretched
state. In addition to the governmental reforms already referred to, the
following may be mentioned: several laws of Charles III forbade owners
to dispossess tenants arbitrarily, and even went so far as to prohibit
ejectments unless the owner should consent to reside on his lands and
cultivate them; attempts were made to procure reforestation, partly with
a view to conserving the water supply, but the national repugnance to
trees was so great that the laws were not carried out; and the abusive
privileges of the _Mesta_ were attacked by Charles III, and in the next
reign, in 1795, the separate jurisdiction of that organization was taken
away, but as the laws did not clearly authorize the enclosure of
cultivable lands the relief to agriculture was slight. Wheat was the
principal crop, supplying more than enough, in normal years, for the
needs of the peninsula. Grapes were also raised in large quantities, and
were made into excellent wines, many of which were exported. For the
rest there were fruits, vegetables, the silkworm, and other things of
the sort which had always been cultivated in the peninsula. Various
kinds of beans, and especially chickpeas (_garbanzos_), were grown in
large quantities, and furnished an important element in the nation’s
food. An estimate made in 1812 calculated the total value of farm
products as 72,476,189,159 _reales_ (about $4,500,000,000) yielding
annually some 3,600,000,000 _reales_ (about $225,000,000).
[Sidenote: Revival of manufacturing.]
[Sidenote: Mining.]
[Sidenote: Fishing.]
[Sidenote: Unsatisfactory state of the laboring classes.]
In their efforts to revive manufacturing the kings continued during most
of the period to follow the old ideal of state protection and state
initiative in placing industries upon a firm foundation, intervening,
also, to regulate the work on its technical side. In the second half of
the century, especially in the reign of Charles III, the liberal ideas
of the physiocratic school, hostile to all forms of government
regulation, brought about the employment of a new system, leaving
matters to the decision of the individuals concerned. Laws were now
passed removing the prohibitions of earlier years. Joined with the
educative measures already referred to, such as the establishment of
model factories and the importation of foreign workmen, the new methods
brought about a revived intensity of industrial life. Much the same
things as formerly were made; the textile factories of Catalonia and
Andalusia were the most prosperous. The chemical industries and those
having to do with the preparation of foods did not develop equally with
others. The Americas continued to be one of the principal supports of
Spanish manufacturing, as a purchaser of the goods made in the
peninsula. After centuries of scant productivity in mining, Spain began
again to yield more nearly in accord with her natural wealth. A great
variety of mineral products was mined, although very little of precious
metals. On the other hand the formerly prosperous fishing industry was
in a state of decline. In 1803 it was estimated that the total
industrial yield for that year was 1,152,660,707 _reales_ (about
$72,000,000). The revival, however, was of an ephemeral character, for
the social factors affecting labor were too grave a handicap.
Thoroughgoing popular instruction was necessary before there could be
any permanent advance; the Spanish laborer was able enough, but needed
to be rescued from his abysmal ignorance. Wages were low. In 1786 the
ordinary laborer of Seville earned four and a half _reales_ (about $.28)
a day; in Barcelona the average was eight _reales_ ($.50). Agricultural
laborers in Andalusia made from three and a half to five _reales_ ($.22
to $.33) a day; shepherds got two pounds of bread daily and 160 _reales_
($10) a year. To be sure, money was worth more than now. Work was not
always steady, with the result that famine and beggary were frequent.
There was no such thing as organized labor; to go on strike was a crime.
The only remedy of the laborer against his employer was an appeal to the
_corregidor_, but this was so ineffectual that it was rarely tried.
[Sidenote: Obstacles to Spanish commerce and efforts to overcome them.]
Attempts were made to combat the obstacles which hindered Spanish
commerce. Unable to compete with other European countries in the export
trade, except as concerned small quantities of certain raw materials,
Spain was hard pressed to maintain an advantage in her own domestic and
American field. At the beginning of the century many of the laws tended
in fact to discriminate against Spaniards, as witness the heavy export
duties, which were collected according to bulk, thus operating against
the type of products which Spain most frequently sent abroad. Charles
III changed this system, collecting duties according to the nature of
the goods as well as paying regard to weight, and charging a higher rate
against foreign cargoes. Taxes were numerous in kind and heavy in
amount, wherefore smuggling and graft overcame some of the beneficial
effects which might have been expected from this legislation. Protective
tariffs and prohibitions were also employed to encourage Spanish
manufactures and trade, but particular exigencies often caused a
reversal of this policy in the case of certain items of foreign make.
Thus the importation of foreign muslins was forbidden in 1770, but in
1789 the prohibition was removed when it was found that local
manufacture did not suffice for the country’s needs. A series of decrees
by Charles III endeavored also to reduce the coinage to systematic
order, but the multiplicity of coins and the retention of provincial
moneys militated against complete success. The prohibition against the
export of coin was maintained, but licenses to take out certain
quantities were granted on payment of a three per cent duty.
Practically, the prohibition was a dead letter, owing to the prevalence
of smuggling, and it served as a hindrance to commerce. An ineffectual
attempt was made in 1801 to unify the system of weights and measures.
Lack of an adequate merchant marine and an insufficiency of good ports,
despite the efforts to remedy the situation in both cases, were still
further obstacles to Spanish trade, whereas such an excellent port as
Vigo had no suitable highway to connect it with the interior. Bands of
mules continued to be used as the principal carrying agency in land
commerce. Improper methods of keeping books were a handicap, but the
paternalistic nature of the government made itself felt, requiring
business men to employ a good method of accounting, and specifying the
precise way in which they should do it. Finally, trading had usually
been considered incompatible with nobility. The stigma was in a measure
removed, although only in the case of business on a large scale, and
some of the nobles became merchants.
[Sidenote: Mercantile machinery of the era.]
Mercantile machinery found its highest official expression in the _Junta
de Comercio y Moneda_. This was reorganized in 1705, at which time it
was provided that the Councils of Castile, the Indies and Finance
(_Hacienda_) should be represented respectively by three, five, and two
members, the _Casa de Contratación_ by one, and the French nation by
two, besides one of the royal secretaries. The importance of the
American and French trades was clearly manifested in this arrangement.
This body served as a court with jurisdiction in all matters concerning
trade. In 1730 it was succeeded by the _Junta de Moneda_ (_Junta_, or
Council, of Coinage), to which was added jurisdiction in matters
concerning mines (1747), foreigners (1748), and the “five greater guilds
of Madrid” (1767 and 1783). Regional _juntas_ were also created. The
_consulados_, though of private origin, occupied an intermediate
position between the other private and the official bodies, owing to the
intervention of the state and to the reorganization of the _consulados_
in the middle and later eighteenth century. In addition to their
functions as a mercantile court they acquired a vast number of duties of
a public character, such as the care of ports and the creation of
schools of navigation. Certain _consulados_ had special functions,--for
example, the _consulado_ of Cádiz attended to supplying the province
with grain and flour, and had charge of the establishment of tariffs and
lotteries. The _consulados_ were repaid for these services by a grant of
a portion of the customs duties, a right worth 6,000,000 _reales_
($375,000) a year in Cádiz and one third of that amount in Alicante.
They compromised their wealth by making loans to the crown, which
brought about their ruin. At the end of the eighteenth century there
were fourteen _consulados_ in Spain, each differing from the others but
all following rather closely the new ordinances (1737) for the
_consulado_ of Bilbao as a type. In the smaller cities and towns local
officials were wont to appoint two men as _diputados de comercio_
(commercial deputies) to act for that neighborhood in the capacity of a
_consulado_. There were various other mercantile groups of a more
clearly private character, and their associations were encouraged by the
government. The so-called “five greater guilds of Madrid,” including
dealers in jewelry, silks, gold and silver ware, cloths, linens, spices
(and groceries?), and drugs, was the most important of these
organizations. Its business was so enormous that it extended beyond
Madrid to other cities, and put up factories for the manufacture of the
goods it sold. In 1777 there were 375 merchants in this corporation,
with a capital of some 210,000,000 _reales_ ($13,125,000). Other
associations were formed for special objects, such as to buy goods in
great quantities and therefore more cheaply, or to carry merchandise in
their own ships. Many companies were organized specifically for trading
with the Americas. In the fluctuations of commerce one fact stood out
consistently: the balance of trade was heavily against Spain. In 1789
exports were valued at 289,973,980 _reales_ (about $18,000,000) as
against imports of 717,397,388 (nearly $45,000,000). Internal commerce
amounted to an estimated 2,498,429,552 _reales_ (about $156,000,000).
The wars of the reign of Charles IV almost destroyed Spanish commerce.
Cádiz in particular was a heavy loser.
[Sidenote: Important place of foreigners in Spanish commerce.]
The intervention of foreigners in the commerce of Spain, which had given
so much concern in the previous era, was an even greater problem under
the Bourbons. Many factors contributed to make this the case: the
industrial decline of the seventeenth century, which favored the
importation of foreign goods; the eighteenth century efforts for an
economic revival, which led to the seeking out of foreign models and
foreign teachers or workmen; the encouragement given to Frenchmen as a
result of the Bourbon entry into Spain; and defeats in war, which
necessitated Spain’s submission to the exactions of her opponents (many
of whom insisted upon commercial privileges) or the legalization of
trade usurpations which they had indulged in without right. In the
Americas the English were the most prominent element, but in Spain the
French were. The leading French merchants established themselves in
Cádiz, the gateway of the Americas, whence they proceeded to absorb a
great part of Spain’s profits from the new world. In 1772 there were
seventy-nine French wholesale houses in Cádiz, making an estimated
annual profit of 4,600,000 _reales_ (nearly $300,000). In 1791 there
were 2701 Frenchmen in that city out of a total foreign population of
8734. Numerically, the Italians were more in evidence, for there were
5018 of them, mostly Genoese. There were some Englishmen, too, whose
aggregate capital made up for their small number. In general the
legislation of the era was favorable to foreigners. Their knowledge and
labor were so greatly desired that they were even granted special
privileges or exemptions to take up their residence in Spain, and the
religious bar was ameliorated or utterly withdrawn. Popular opinion was
against them, however, and the laws were not wholly free from this
influence. Men complained, as formerly, that the foreigners were making
immense profits and stifling Spanish competition, while the hatreds
engendered by the wars with England and France and by the scant respect
and haughty manners which some foreigners displayed for the laws and
customs of Spain tended to increase the feeling of opposition.
Foreigners were often ill-treated, although the acts were rarely
official. Even the government did not recognize consuls as having any
special rights or immunities differentiating them from others of their
nation. A further accusation against foreigners was that they engaged in
contraband trade. This was true, although as a rule it was done in
complicity with corrupt Spanish officials. Foreigners justified
themselves on the ground that unless they were willing to make gifts to
Spaniards in authority they were obliged to suffer a thousand petty
annoyances. “Money and gifts,” said the French ambassador, Vaulgrenant,
“have always been the most efficacious means of removing the
difficulties which can be raised, on the slightest pretext, against
foreign merchants. That has been the recourse to which the English have
always applied themselves, with good results.” The fact remains,
however, that the French, English, and others had entered the commercial
field in Spain and Spanish America to stay.