Asientos as Sinews of War in the Composite Superpower of the 16th Century

The full analysis of the text of a contract, asiento, between Philip II of Spain and a Genoese merchant-banker details how in this pre-modern composite state, merchant-bankers acted as agents of the Crown who gathered many scattered sources of income to the Crown and transformed them into large and regular cash flows, mesadas, for the army. Because of the uncertain availability of these sources, the contract provided flexibility to both parties and legal assistance to the banker who reported to accountants for audit and, if necessary, the charge of an interest at about 1 percent per month.Chamley gratefully acknowledges funding from Fundación Banco Santander in a Cátedra de Excelencia UC3M-Santander. Financial support was received from the Ministry of Economy and Competitiveness (Spain) Project HAR2015-68672-P (MINECO/FEDER)