A Financial Revolution in the Habsburg Netherlands: Renten and Renteniers in the County of Holland, 1515-1565

Virtually since the revolt of the Netherlands began its long and complicated course in the late 1560s, historians of the period have tended to frame their analyses of the Habsburgs' relations with the Netherlanders primarily in adversarial terms. There is an enormous body of evidence and commentary to support this view, beginning with Granvelle's own highly partisan remarks on the subject. Since the Cardinal's advice had a great deal of effect on policy, both in its specifics and the basic manner in which Philip II came to conceive of Netherlands politics, it was in its own time a self-fulfilling interpretation. But beyond Granvelle, most of the advisers to Charles V and Philip II held fundamentally different ideas of provincial rights and privileges from those that were continually defended by city Pensionaries and various assemblies of Estates. Certainly, also, the Habsburgs and their subjects disagreed emphatically and often about money, particularly with regard to how much of it was going to be diverted from ordinary getting and spending to the Great Purposes of state. However much they may differ on other points, virtually every systematic modem interpretation of the period, from Rachfahl to Koenigsberger, from Parker back to Fruin, has seen control of financial administration as a focus of contention in a struggle for ultimate power between the Estates and the ruler all through the sixteenth century. Nevertheless, the last generation has seen several studies which have suggested a far more nuanced functional relationship between ruler and subject, especially in the area of taxation and finance. Ten years ago, a detailed study by Maddens of the beden in Flanders outlined a far more collaborative relationship between central and local institutions than traditional accounts would lead one to expect. Karel Verhofstad's older work on the Netherlands during Philip II's first four years shows a central administration interested in fiscal experimentation and willing to try novel schemes of collaboration with the Estates. My own recent work on Antwerp reveals great willingness there to support large grants in 1558 and 1560-61 in part because of the favourable effect they would have on the local patriciate's investments in government credit. Now comes Prof. Tracy's book, which gives for the first time a clear and systematic view of a major development that took place in this very period, which forever and fundamentally transformed the financial relationships among ruler, subject and public. It was a change which brought the central government, the provincial estates and individual investors together into a collaborative system of credit and taxation; which made possible the extraordinary financial strength of the United provinces in maintaining their independence through the seventeenth century; and which, mirabile dictu, was devised and set up by those very Habsburgs who should, by Granvelle's accounts, have been fighting such schemes most of all. What happened is this: faced with enormous war costs in 1542, Charles V's government hit upon a "novel expedient" for raising large sums from the Netherlands provinces. Instead of using traditional means of assessment, the provincial estates would issue rentes on their own credit; these would be amortized by excise taxes administered on the provincial level rather than by the central government. With additional refinements, the scheme was used again to finance much larger sums in the late 1550s. The fact that the collection of the taxes and the retirement of the rentes was left to the provincial estates meant that government debt became a much more reliable investment than it had been heretofore. The development of a regular trading market in securities backed by the provincial estates, and the good credit that provinces like Holland worked to maintain with their own constituents, made possible a quantum jump in the money-raising power of the various estates. Tracy sees this as a new phenomenon in the history of European taxation and public finance, a financial revolution with explosive implications for the subsequent history of the