Centralized Funding of the Army in Spain 235

Centralized Funding Of The Army In Spain 235

Chapter 11 Centralized Funding of the Army in Spain: The Garrison Factoría in the Seventeenth Century

Carlos Álvarez-Nogal

The role that the king’s bankers played in the military funding of the Spanish Crown outside of the Iberian Peninsula is well known,1 but so far there is very little research centred in Spain.2 This chapter intends to contribute by explain- ing the changes that were introduced in the mid-seventeenth century to improve the funding of the Spanish garrisons. Financing the army, as with the rest of the Spanish Crown’s budget, was a challenge. All fiscal income was collected in two or three periods each year, but the expenditures had to be paid weekly or monthly. These gaps between income and expenditures required credit to cover temporal deficits. The best way for the Spanish Crown to obtain that credit and the financial services it needed, was to contract with private bankers. Bankers were able to borrow on the credit markets much more easily than Spanish royal officials. It is well known that throughout the reign of Philip IV there was a general fiscal and financial deterioration at different levels, making access to credit more difficult. The scarce resources in the Royal Treasury for financing the army occurred at the same time that the Iberian Peninsula became a battlefield. Be- ginning in 1635, a new front with France was opened in the Pyrenees, and, by 1640, there was already fighting in Catalonia and Portugal. The same occurred at sea. At the start of Philip IV’s reign, a fleet was lost off the Cuban coasts (1628), and later (1655) disturbances occurred near Cadiz and off the Canary Islands. The arrival of war in the Iberian Peninsula demanded an improvement in the Spanish army’s funding. In addition to having more money, managing it was also important.

1 A. Esteban Estríngana, ‘Autopsia del despacho financiero. Ejecución y control de pagos en el tesoro militar del ejército de Flandes (siglo XVII)’, Obradoiro de Historia Moderna 12 (2003), 47–78, 48–50. 2 E. Martínez Ruiz, Los soldados del rey. Los ejércitos de la Monarquía Hispánica (1480–1700) (Madrid, 2008), 216; M. d. C. Saavedra Vázquez, ‘La financiación de la actividad militar en Galicia y sus repercusiones fiscales durante la primera mitad del siglo XVII’, in Aranda Pérez and Francisco José (eds.), La declinación de la Monarquía Hispánica. VII Reunión científica de la Fundación Española de Historia Moderna (Madrid, 2004), vol. 1, 433–450.

In the sixteenth century there had been an increase in the Crown’s revenues because the whole economy of Castile was growing, but the seventeenth century was completely different.3 The economic crises that started around 1580 reduced the population of the main Castilian cities and the fiscal income collected in that area. Monetary problems related to the introduction of pure cop- per currency in Castile after 1600 seriously damaged the commercial sector. The revolts of Portugal and Catalonia in 1640 and the movements of troops through the Iberian Peninsula and its different battlefields further debilitated the fiscal system. In this context, coupled with increasing problems with France, the monarchy was obligated to improve the whole defensive system and the financing of the army in Spain, in particular the garrisons protecting the frontiers of Castile.

CUATRO VILLAS San Sebastián y Fuenterrabía GALICIA NAVARRA

CATALUÑA

ARAGÓN

PORTUGAL

Ibiza

Cartagena

Cádiz Gibraltar Orán

Larache La Mámora El Peñón y Melilla

Figure 11.1 Garrisons included in Centurión’s first Factoría

The garrisons were an essential element in the defence of the Iberian Penin- sula during the seventeenth century. This portion of the Spanish army con- sisted of a series of fortresses with garrison troops distributed throughout the

3 C. Álvarez Nogal and L Prados de la Escosura, ‘The decline of Spain (1500–1850): Conjectural estimates’, European Review of Economic History 11 (2007), 319–366; C. Álvarez Nogal and L. Prados de la Escosura, ‘The rise and fall of Spain (1270–1850)’, Economic History Review 66.1 (2013), 1–37.