European trade

By the beginning of the seventeenth century Europeans had extended their routes of trade and exploration to nearly every part of the world. It was the amazing achievement of the sixteenth century to assimilate into the western economy both the broad stretches of eastern Europe and Russia and the New World across the Atlantic. The old trade networks in which both the Baltic and Mediterranean functioned as nearly autonomous economic entities were now gone forever, replaced by a loosely articulated world economy.

The centerpiece of Europe's outstretched trade routes was Spain, and, within Spain, Seville. The merchants of this city organized in the Casa de Contratación possessed royal monopoly privileges to exploit the trade with Spain's overseas possessions. With the discovery of silver in Bolivia and Mexico, this trade assumed international significance; according to some it became the driving force in the expansion of the European economy. As the tonnage of the fleets sent to the New World rose from 10,000 tons in the 1540s to double, triple, and in the peak year of 1608, more than quadruple that amount, the flow of silver brought back to Seville increased over sevenfold. This silver paid foreigners for the wide range of manufactured goods sent to the New World (for Spanish production was inadequate to the task), and paid for military operations and the government's foreign borrowing (for the crown automatically received a portion of the silver).