ABSTRACT
In 1874, the introduction of note-issue monopoly led to the disappearance of most of the existing banks of issue, which were absorbed by the Bank of Spain. Wars against France, first, and Great Britain, later, were disastrous for Spain, which lost effective control of its mainland colonies in the Americas and all of its naval power. In 1875 Spain’s income per inhabitant was similar to Italy’s, but around 50% lower than that of France and Germany and less than half that of Britain’s. Spain’s economic backwardness has been a recurring theme of Spanish historiography. Ultimately, Spain’s agricultural backwardness and inequality would lead to the “failure of the Industrial Revolution”, while the inadequacy of the tax system made it impossible for the state to take the necessary economic action and posed serious finance problems for the private sector. The chapter also presents an overview of the key concepts discussed in this book.
