History Individual Study Essay

How far did the policies of Olivares represent realistic solutions to the problems of
‘The view is rapidly gaining currency that not only did Olivares’ policies for
Spain and its empire not differ markedly from those of earlier Spanish statesmen, but that
by and large the results of his manifold endeavours were both few and modest.’
This understanding of the historiography of Olivares’ effectiveness from Israel,
makes Olivares look unoriginal and ineffectual. However other historians, such as Elliott
have been far more sympathetic.
‘…the first and the last ruler of Hapsburg Spain who had the breadth of vision
to devise plans on a grand scale for the future of a world-wide monarchy: a statesman
whose capacity for conceiving great designs was matched only by his consistent incapacity
for carrying them through to a successful conclusion.’
Were Olivares’ policies a realistic way out of Spain’s difficulties or did they
aggravate the situation? To understand this I am going to look at both Olivares’
foreign policy and domestic policy. Within foreign policy I propose to see how far
Olivares pushed the reputaci?n of the state before domestic crises forced him to seek
peace. Among others the best areas to examine would be Olivares’ policies during the
Thirty Years War from 1622; the Mantuan War 1628-31 and the great revolts of Catalonia and
Portugal in 1640. As for domestic policy I will need to look at Olivares’ initial
reforms of 1623, why they fell through and the effect this had. Furthermore it is
important to look at the areas where domestic policy coincides with foreign policy (in a
defensive sense) in the Great Memorial, including the Union of Arms. I will also have to
find out if Olivares’ policies were consistent, or whether they became more and more
drastic during his term of office. Firstly though, to understand if the policies were
realistic or not, I will have to look into the real problems of Spain. Where exactly did
these problems lie and what areas required alteration to keep Spain afloat? From this
point I will go on to see the policies in action and from this I will gather whether or
not they were realistic.

1. The problems with Spain
On an international scale, Spain between 1580 and 1620 was at the crest of her wealth and
power. Her supremacy was the dread of all other nations, and therefore its destruction was
the cherished object of statesmen for a century. Her galleons ruled the seas and her
armies were feared. Yet due to the internally bad reputation that industry and commerce
had, Spain’s economy was faltering. In comparison with her European neighbours, Spain
was industrially, agriculturally and commercially stagnant and wallowing in her
old-fashioned militarism. With a vast and newly acquired empire, Spain was rapidly
propelled to the front of the world stage, but the costs of maintaining this empire proved
crippling. She manufactured very little that her neighbours required, apart from treasure.

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Yet with the mass influx of gold and silver from the colonies, treasure prices collapsed
and in the long term led to rampant inflation.
Table adapted from a graph in
Years Imports of treasure in millions of pescos Index
numbers of prices in silver (taken from the first year i.e. 1580, 1585, 1590 etc.)
Index numbers of money wages (taken from the first year i.e. 1580,
1585, 1590 etc.)
1580-1584 29.5 98 100
1585-1589 24 105 109
1590-1594 35 108 119
1595-1599 34.5 118 121
1600-1604 24.5 132 131
1605-1609 31 138 160
1610-1614 24 129 165
1615-1619 30.5 128 164
1620-1624 27 129 163
1625-1629 24.5 121 162
1630-1634 17.5 132 170
1635-1639 16 124 175
1640-1644 14 133 179
Yearly Spain had to acquire more and more wealth to maintain equilibrium and so yearly she
spiralled closer and closer to bankruptcy. When silver mines had nothing more to yield or
treasure fleets were lost at sea, Spain was forced to borrow on a tremendous scale with
foreign bankers. Taxes were raised on an already overtaxed private sector. In some years,
all the merchants’ profits were seized in order to pay off debts, which either ruined
the merchants or forced them to leave the country.
Therefore Olivares came to his ministry at a time when there was an
express need for reform. During this time, ideas for reform were mostly forwarded by the
arbitristas; literally proposers of reform. However the bulk of their proposals criticised
what was directly in front of them. To find the real source of Spain’s problems a
more global perspective is required. It was not the corrupt pensions and favours sapping
Castile of its life and blood; it was military expenditure. The protection of such large
and scattered territories was the heart of Castile’s difficulties.

From the above one can identify four areas in which reform was
desperately required. These areas were: internal corruption; finance; trade and the burden
of the empire and military expenditure upon Castile.

2. What were Olivares’ attempts to curb Spain’s problems, and
were they realistic?
Inevitably, under the influence of the arbitristas, Olivares saw the
desperate need for change in order to preserve Spain as a world power. Reform was
generally seen as a means to this end, but if reform threatened to upset the balance of
power within Spain it would probably be dropped. It was very easy for Olivares to come up
with grand-scale plans for reform, but he found it impossible to implement them.

Furthermore attempting to implement reformaci?n, while still trying to win reputaci?n
through war, was impracticable. There were definite limits as to how far one could reform
an early modern government, steeped in imperfection that had become a habitual part of
life. Many historians have illustrated that Olivares’ inability to see this limit,
due greatly to his energy and impatience, was the key reason for his failure both as a
reformer and a maintainer of Spain’s reputacion.
‘…he tried to take shortcuts to objectives which required a more elaborate
approach. His vision of a greater Spain was too ambitious for the period of recession in
which he lived.’
‘(Olivares was) very inclined to novelties, without taking into account where they
may lead him.’
Olivares’ first attempt at reform is a chief example of his over-ambitious nature, as
well as his grandiose plans. The Junta Grande de Reformacion had given various
recommendations; a Junta re-established by Olivares and his uncle, Zuniga, in August 1622.

Its main aim was to eradicate corruption. Some of the recommendations, embodied in a
letter of October 1622, were: the abolition of municipal offices; a national banking
scheme, to be funded by 5% of all wealth; abolition of the milliones and alcabala taxes,
to be replaced by the institution of a single consolidated tax. Lynch believes that
Olivares may have used Juntas to side-step the councils. However Olivares called the
Cortes to seek approval, when the proposals for reform became Twenty-three Articles for
Reformation in February 1623. It was evident by their actions that the proposals hurt too
many vested interests, for example the abolition of offices was naturally opposed since
the members of the Cortes were all officeholders. Furthermore closing all the brothels and
preventing emigration was simply impractical. These areas of reform show that Olivares was
well aware of many domestic problems which needed addressing. However domestic reform was
not Olivares’ first priority.
‘His prime concern was the preservation of Spain as a world power, and this he
conceived as a problem not of internal resources but of foreign and military policy.’
Hence when the need for money became absolute, Olivares simply retreated on many
proposals. A good example of this was the reversion to the Milliones in 1624; the end of
Olivares’ attempts to put the crown finances into a sounder state.

Olivares returned to the idea of reform again in the Great Memorial, given on Christmas
day 1624. Many of his previous ideas were resurrected with a vital new angle; that of
unity. Olivares saw the monarchy as too varied within Spain, and that the other kingdoms
were not pulling their weight. In the Great Memorial, Olivares advised the king to…
‘…reduce these kingdoms…to the style and laws of Castile, with no
differentiation in the form of frontiers, customs posts, the power to convoke the Cortes
of Castile, Aragon and Portugal… if Your Majesty achieves this, you will be the most
powerful prince in the world.’
Taken out of context this may seem like an attempt to get rid of the privileges (jueors)
held by the non-Castilian kingdoms. However it seems Olivares’ intentions in this
case were to have a mutual and integrated partnership with benefits for all the kingdoms.

‘I am not nacional, that is something for children’. However action went in the
opposite direction of intention; for example there was no effort to break the Castilian
monopoly of offices, or to open up trade with the New World. His first step for unity was
in the Union of Arms; a form of collective defence where a large army of 140 000 men would
be supplied through a quota system from the constituent parts of the monarchy.

The quota of men from each kingdom under the Union of Arms
Catalonia 16 000 Naples 16 000
Aragon 10 000 Sicily 6000
Valencia 6000 Milan 8000
Castile and the Indies 44 000 Flanders
12 000
Portugal 16 000 Mediterranean and Atlantic islands
This was a clever response to the dire military crisis that Spain was in; being faced by a
war on many fronts with England, France and the United Provinces. Unfortunately Olivares
displayed minimal tact in his attempts to get the proposal accepted. He devised a tight
schedule where the king would address the Aragonese, Valencian and Catalan Cortes in quick
succession from the beginning of 1626. His proposals were treated with great suspicion and
Olivares’ methods did not endear him to anyone. Not one of the non-Castilian kingdoms
gave unlimited support. Most decided to pay money, for example the Vanlencian Cortes opted
to pay 72 000 ducats. This ran counter to the whole ideology of the Union of Arms, but
nonetheless it was readily accepted. Catalonia however remained intransigent and refused
to pay at all. In the New World the Union of Arms equated to a new tax. Peru raised
350,000 ducats; New Spain and Central America raised 250,000 ducats. Despite the ideology
of the Union of Arms failing, it succeeded, if laboriously, to raise men and money from
the various kingdoms of Spain. In the European provinces, and notably Italy, a huge
quantity of men and money was provided; Naples and Sicily provided around 4 million ducats
and 6000 men alone each year. On the other hand it could be said that the money and men
raised in Italy were more to do with the immediate military emergency rather than a push
for reform prompted by the Union of Arms. Therefore Olivares’ success lay in
achieving the tapping of the monarchy’s resources at a scale previously untried, not
in making any radical innovation facilitating a steadier income for the crown.

Despite many early successes abroad under the new regime, the internal
structure of Spain was facing collapse. Unless Castile could be relieved from the massive
financial strain that was sapping all of its resources, the monarchy faced disaster.

Although treasure fleets were bringing around 1.5 million ducats annually, most of the
crown’s expensive policies were borne by Castile. Between the years of 1627-8 the
crisis accelerated; mass inflation was caused by both poor harvests and the introduction
of 20 million ducats of vellon which were recently minted. A reflex price fix failed, and
the vellon was withdrawn and debased by 50%. Although this deflation brought ruin upon
many individuals it relieved the massive burden on the treasury. Since hostilities with
England had faded; the Hapsburgs were secure in Germany; and Richelieu was busy with the
Huguenot problem in France; now was the time to make lasting fiscal reform. Unfortunately
this final chance to economise and reform was ruined by the Mantuan War.

In December 1627 the Duke of Mantua died and consequently there was a
dispute over who should succeed his position. It seems that the candidate who held the
best claim was the Duke of Nevers; a French Noble. Hence there was a distinct French
threat to the security of Spain’s Italian possessions in the north of Italy, notably
Milan. In response the Milanese governor, C?rdoba, sent his troops to Monteferrat in
March 1628. Olivares did not publicly endorse this move but he probably gave private
encouragement to C?rdoba. In doing so Olivares found he had provoked a French war against
Spain in Italy. Elliott states that the Mantuan war was the biggest blunder in
Olivares’ foreign policy. It had major repercussions throughout Europe stirring up
the old fears of Spanish aggression. Furthermore, having committed Spain to war with
France over Mantua, he failed to keep the French Duke off the throne. Cordoba never
managed to break the siege of Moteferrat, partly due to his tardiness; he did not begin
the siege until five months after the Duke’s death. France made an attack on Savoy in
February, and by March Duke Charles Emmanuel surrendered. Exactly one-year later France
made a second invasion, taking the fortress of Pinerlo. Since Spinola died in September of
the same year, Olivares knew that he had to negotiate with France. The Treaty of Cherasco
in June 1631 recognised Nevers as the Duke of Mantua, and granted France Pinerolo – a
useful foothold in Italy. From this point it was clear that France and Spain would soon be
at war again, and, as a consequence, the chance of any peace in Europe was lost. The war
had cost 10 million ducats and gained nothing; it just put Richelieu in a much stronger
position since one of the gates into France was more secure.

Since Richelieu was planning the emancipation of France from Hapsburg
encirclement, there was heavy expenditure in Italy and further subsidies to the Emperor,
whose territorial gains were being made worthless by the Swedes – a ‘hired’
force acting in France’s interests. The financial crisis mounted in 1628, when there
was a deficit of two million ducats in the year’s provisions. However the most
visible economic downturn came in September when Piet Heyn captured the New Spain treasure
fleet; the first time that a treasure fleet had fallen into foreign hands. With the huge
sum gained from this capture, the Dutch dropped any plans for peace and immediately
embarked on an offensive. Frederick Henry, the Stadholder, whose army outmatched the
Spanish Flanders army by two to one, made successful attacks both on Wesel in August
(1629) and Bois-le-Duc in September. These attacks came at a time when Spain was
concentrating on the Mantuan war, and due to the diversion of her resources, it seems that
making a favourable peace with the Dutch was now out of the question. Therefore a new
force headed by the Cardinal Infante Ferdinand was sent to settle the area and force a
more favourable peace with the Dutch, following the death of the Archduchess Isabella in
December 1633. For Olivares this was diplomacy by more forceful means. The Cortes had
voted 4 million ducats for the campaign and by September 1634 the Swedes were defeated at
Nordlingen. Following this confidence boost, Olivares threw away the great opportunity to
settle a favourable peace with the Dutch, and instead, he proposed to make further
attacks. By doing so, he pushed the French into direct and open conflict in 1635. Olivares
could not afford to push Spain into a war of attrition against France, simply because she
did not have the resources. In 1635 France spent roughly 13-14 million ducats on the war
effort while Olivares could barely raise 7.25 million. Therefore a quick and decisive
defeat of Richelieu’s forces was required. Olivares’ squandered peace with the
Dutch in 1634, was very similar to the failure to make a very favourable peace with the
French in 1637. To relieve the French pressure on Franche-Comt?, Ferdinand, the Cardinal
Infante, made a diversionary attack on France. This attack had much more effectiveness
than originally planned, and a short deterrence attack turned into a full-scale invasion
as France’s resistance deteriorated. By August 15, Corbie was taken and Paris was
within Spain’s grasp. When Richelieu offered a favourable peace settlement, Olivares
was in no mindset to consider it. However the backing from the Empire, under Count Gallas,
did not arrive in time, and Ferdinand simply did not have enough manpower to drive home an
effective defeat. By November Corbie was re-captured.

‘The Count-Duke, on hearing the news, wanted only to lie down and die.’
However all hope of peace was not lost, and in March 1637 Richelieu was willing to discuss
conditions for peace. It is probable that this was not due to any Spanish influence, but
because Richelieu was facing conspiracy and popular unrest. However the great distrust
that emanated from both sides prevented any agreement, if anything they just wanted to
disrupt each other’s alliances. Richelieu wanted a treaty maintaining the status quo,
while Olivares had great ambitions for the following year, making it very difficult to
commit to anything. Again one can witness Olivares’ overconfidence backfiring on him.

Although Spain managed to thwart a French invasion into Catalonia; her military
concentration was elsewhere and Frederick Henry inflicted a severe defeat by taking Breda
in October 1637. Defeat would possibly have been avoidable if Olivares could have attained
peace with at least one of his enemies, thus allowing him to concentrate on one target.

Due to the financial strain of war there was a desperate need to find new and more stable
sources of revenue. Since the councils were becoming more obstructive, Olivares
increasingly relied on the Juntas or sub-committees to aid his policymaking. In 1634 the
Junta de Ejecaci?n effectively replaced the council of state as a policy making body.

Within these Juntas Olivares placed able and loyal men who were responsible for
implementing various new taxes. For example there was a new salt tax in 1631; in 1635 the
juros was attacked. This was the annual interest that was paid off on loans. For all the
juros held by natives, half of the yield was confiscated, while for any foreign juros the
entire yield was taken. This method was continually employed throughout the following
years. In 1637 all legal or official documents had to be written on a stamped paper, which
was taxed. In the same year 487,000 ducats of American silver was seized and in
compensation juros were distributed. There was a great deal of office selling, and a
return to feudal dues, where the nobles were expected to provide men and their arms. Early
on, it seems that Olivares’ schemes worked very well in the short run. In 1634,
Hopton, the British ambassador, stated that the Spanish crown’s revenue had doubled
over the past four years. However the practicality of Olivares’ policies was
beginning to wane, since there was a limit as to how far one could keep draining the
resources of the nobility. Though he was very effective at squeezing money out of Castile,
there was fast coming a time when it would be squeezed dry. Many of his measures, such as
the mass office selling, were only successful in the short-term. Therefore a steadier
source of income was required.
For Olivares, the only conceivable way of doing this was by making a
more concerted effort to make the Union of Arms work. Following various successes in
France and Germany, the war was rapidly degenerating again with the loss of Breda 1637 and
Breisach in December 1638. The loss of Breisach meant that the Spanish road was severed
and the only way to get reinforcements in to the Spanish Netherlands was by sea. In
October 1639, Tromp, the Dutch admiral, defeated the fleet of Don Antonio de Oquendo, at
the Battle of the Downs. This took out Spain’s naval capability in one blow.

Furthermore control of Brazil was lost to the Dutch after a joint Portuguese and Spanish
effort failed in 1638. From all these events Olivares felt that all of his gargantuan
efforts were doomed to failure. His contempt for the nobility was clear. He felt there was
a distinct lack of leadership from any of the nobles, despite his efforts to train men in
the Imperial College of Madrid. It was this lack of leadership that pushed Olivares to
look for peace in 1640. However this was to be difficult since Richelieu was unlikely to
make any reasonable agreement, while France was in a stronger position than Spain. However
the war effort simply could not go on, since Castile was drained of men and resources, as
well as the economic situation being grave. Due to the seizing of silver, the trade
between Seville and America had collapsed, as merchants had lost confidence. This last
source of income was now crushed and the principle foundations of Spain were slipping

To make the Union work, the kingdoms of Portugal and Catalonia would have to pull their
weight a great deal more, due to their increasing reluctance to grant economic and
military assistance to the king. However, Olivares would need to alter the constitutions
of both the kingdoms; this would be especially hard within Catalonia. It seems that
Portugal held the best scope for manoeuvre, and in 1634 Princess Margaret of Savoy became
governess of Portugal. Through Margaret, Olivares hoped both to quench the lamentations of
Royal neglect and achieve greater control over Portugal, by infiltrating the government
with Castilians disguised as advisers. Unfortunately for Olivares, the Portuguese
immediately saw through the ‘advisor’ scheme, leading to constant argument
within the government. The populace had never favoured the union with Castile, and
although the taxes were going towards the defence of her possessions in Brazil, it did
nothing to reconcile the population. In 1637 the aristocracy still felt isolated from the
Crown, and minor riots broke out. Although these came to little, they were an ominous
indication of the potential for revolt. When France declared war upon Spain in 1635,
Catalonia was in a strong bargaining position, since her eastern border was with France,
thus opening the possibility of co-operation with France. Olivares decided to challenge
the Catalans head on by using their boarder in the war against France, bringing Catalonia
in to the war whether she liked it or not. Therefore he hoped to force Catalonia in the
Union by more covert means, because all prior attempts for direct action had failed.

However Olivares’ plan backfired, seemingly because he failed to recognise the deep
hatred of Madrid, the viceroy and all royalty among the Catalan people. Following the
failure of a six-month siege against the French at Salses, Olivares was furious and
ordered the royal ministers of the principality to ignore the Catalan constitution since
defence of the realm outweighed it. This confirmed to many Catalans, the suspicions of
Olivares’ ultimate motives – the Castilianisation of Catalonia. Hence the people
became more and more reluctant to stop the French. The fundamental agitators for revolt
were the Catalan clergy, lead by Pau Claris, who appealed to the peasants to hold fast to
Catalonia’s historic liberties. In February, Olivares planned to meet with the Cortes
of Catalonia to discuss the Union, with the shadow of the army backing him. However the
Cortes never met and between February and March 1640, the Catalonians clashed with the
army. The pace of the revolt increased as prisoners were taken, notably Tamarit, a
colleague of Claris. It was only on learning that Claris had been freed and Barcelona had
been marched on, that Olivares woke up to the fact that he was facing a large-scale
rebellion. From that point he reversed his policies and on the 27th May, he ordered steps
to be taken to re-conciliate the Catalans. However his actions were just too late and a
riot on 7th June, put the diputcio in control following the brutal murder of the Count of
Santa Coloma.
Meanwhile the events within Catalonia had severe repercussions on Portugal leading to a
revolt on 1st December 1640, when the Duke of Braganza was proclaimed King John IV.

Olivares, seeing that total anarchy was a close possibility, looked to make peace with the
Dutch and the Catalans. However the Catalans were not interested since Spain’s troops
were still advancing towards Barcelona. On 23rd January, it was stated that Catalonia was
allied to the King of France. Immediately French forces aided the rebels and the Spanish
army under Los Velez, was thwarted at Montjuich.
This defeat set the seal of the 1640 disasters. Following years of neglect and
exploitation the economy and political system were now in a state of disintegration.

Although the process of disintegration had begun before Olivares, he can be seen to
undermine the Castilian economy and furthermore cause the implosion of the American
economy. Montjuich spelled the end for Olivares, although he made superhuman attempts to
raise more men to form an army. However the opposition to him was too strong. He was hated
as a tyrant in Castile, and even nobles within his family were plotting against him.

Philip IV was very reluctant to part with his valido since he had brought him up from
birth. However Olivares’ worsening of the economy through his meddling with the
vellon currency, and failure to prevent the French from taking Rousillon in September
displayed that he was simply incompetent. The Count of Castrillo was working in Madrid to
undermine the valido’s position, and on Olivares’ return it was made clear that
his time in office was limited. On 17th January 1643 the decision was taken to give
Olivares his leave, and on 23rd January he left for exile following twenty years in Madrid
under his king.

A statesman whose capacity for conceiving great designs was weakened only by his
consistent incapacity in carrying them through to a successful conclusion.


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