of
political economy which then prevailed. The great treasure which flowed
into Spain from her American colonies rather hastened than retarded her
decline. The restrictions and monopolies of her colonial policy gave rise
to an active contraband trade, which reaped the harvest of her commerce.
The over-abundant supply of gold and silver had the effect of increasing
the price of other commodities and discouraging her rising industries, the
result being that she was obliged to purchase abroad the things she ceased
to produce at home and the wealth of America flowed from her coffers into
those of the adjoining nations. Her policy towards the Moriscos banished
the most active agriculturists from the land, and large districts became
desert, population declined, and the resources of the kingdom diminished
yearly. In a century after the death of Philip II. Spain, from being the
arbiter of the destinies of Europe, had grown so weak that the other
nations ceased to regard her otherwise than as a prey for their ambition,
her population had fallen from eight to six millions, her revenue from two
hundred and eighty to thirty millions, her navy had vanished, her army had
weakened, and her able soldiers and statesmen had disappeared.

In addition to the causes of decline named, others of importance were her
treatment of the Jews and the Moriscos, though the banishment of the
former took place at an earlier date. Despite their activity in trade and
finance and the value to the nations of their genius for business, the
Jews of Europe were everywhere persecuted, often exposed to robbery and
massacre, and expelled from some kingdoms. In Spain their expulsion was
conducted with cruel severity.

Many of the unfortunate Jews, seeking to escape persecution, embraced
Christianity. But their conversion was doubted, they were subjected to
constant espionage, and the least suspicion of indulging in their old
worship exposed them to the dangerous charge of heresy, a word of
frightful omen in Spain. It was to punish these delinquent Jews that in
1480 the Inquisition was introduced, and at once began its frightful work,
no less than two thousand "heretics" being burned alive in 1481, while
seventeen thousand were "reconciled," a word of mild meaning elsewhere,
but which in Spain signified torture, confiscation of property, loss of
citizenship, and frequently imprisonment for life in the dungeons of the
Inquisition. Severe as was the treatment of th