The Spanish colonies developed economically by using the Encomienda system. In this system, Spanish lords exploited and manipulated Native Americans and used them to do manual labor on the land. The Spanish looted large amounts of gold, silver, and other valuables from this new land. This tradition continued into the seventeenth century as Spanish ships would come annually to bring gold and other valuables back to Spain.
The Spanish tax burden was very unevenly distributed: it fell more on the poor than the rich, heavily on the agricultural sector, and on Castile far more than Aragon or the Basque country. But the Spanish government's expenditure continued to climb: - in the first twelve years of Philip III's reign, he spent over 40 million ducats on the Low Countries' wars alone. To cover the shortfall, the Spanish government both borrowed money by being interested in bearing state bonds and assigned the revenues from future years to the bankers if they would pay the defense contracts for the present year. By 1607 the government had a debt of almost 23 million ducats and had assigned away all its revenue for four years ahead. By 1644 the crown's income was pledged to 1648; and by 1664 the crown owed more than 21 million ducats.
The English Colonies had abundant natural resources. Their economy prospered in the fur trade, fishing, lumbering, farming and other industries that produced raw materials. This abundance of natural resources stimulated trade into... [continues]
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