Benefits and Drawbacks of Spain's new possessions in New World before 1520
Benefits
Drawbacks
Trade rapidly developed between Spain and New Spain
At first found little that seemed of value
New commodities and a work force on hand helped to promote trade between Spain and New Spain
1501- foreigners i.e non Castilian's were banned from travelling to the West Indies
1503- Casa de la Contratacion set up in Seville to oversee and control the trade
Total imports between 1503-05- almost around 450,000 by 1511-15 almost around 1,500,000
All trade from New World going through Seville meant other cities such as Barcelona and Catalonia previously grown rich on Mediterranean trade suffered
Gold and silver from the New World created opportunities for work, land ownership and wealth
Bullion brought to Spain by annual fleets- important product of Spanish empire
Gold and silver mines leased to individuals with crown taking a portion of their income
Ship building demand increased- improved ship building economy
After spell of prosperity and prestige the empire and treasure shipments slowly induced a state of economic crisis
Few benefits of new world trade were felt by Spanish producers
Most bullion returned in private hands or as gifts to the church
Influx of silver and gold caused inflation across 16th century Europe
Increase in revenue allowed monarchy to borrow heavily and ultimately led to bankrupcy
Creation of convoy system- the annual flota- constrained the commerce into certain periods of the year- distorted economic cycle