Tordesillas: How The Treaty Of 1494 Changed European Economy

Production, exchange and defense
The treaty of Tordesillas in 1494 changed European economy completely. After the pope gave Spain and Portugal complete dominion over the Indies, they became entitle to revenue from American exploration and production. “As exploration and conquest [of the Indies] proceeded, exaggerated accounts of New World wealth circulated in the Old” (Burkholder and Johnson, 174). Front that point on, colonies existed to increase the wealth and political strength of their mother country. The Castilian and Portuguese crown began to heavily depend on revenue derived from New Worlds agricultural production, transatlantic goods, slaves and precious metals trade. For this reason, “revenues from taxes, governmental monopolies, and
For instance, contraband trade offered attractive possibilities for extra profits to colonial producers while it brought serious fiscal problems for Spain because traders avoided taxation. Merchants try avoiding taxation by “bribing custom officials and sailors, mislabeling the content of crates, and shipping more goods than were declared” (Burkholder and Johnson, 170). On top of everything “sometimes governors winked at this, not from a principle of avarice only,.. but also from a sense of the necessity of dispensing with laws so ill executed as to deserve no respect” (Martin and Wasserman, 103). As a result, contraband and failure to reinforce the laws imposed by Spanish and Portuguese crowns by the colonies’ authorities affected the crowns’ economy. In an effort to protect their financial interests, the Spanish and Portuguese crown tried by many means to reinforce the laws and reduce contraband while increasing mining and agricultural production. For example, by the eighteenth century the Spanish government try to encourage production through tax reductions in order to increase legal colonial exports. They also built the Casa the Contratacion in an effort to minimize contraband and control