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This essay deals with the consequences on the Castilian financial, fiscal and public debts systems of the deflationary programme set up by the Castilian Crown through the laws of 25 June and 17 November 1652.
The reduction in the nominal value of the Castilian copper coin (vellón) was the key point of the 1652 programme and – for the first time in the history of currency manipulations in seventeenth century Castile – the Crown decided to indemnify those most heavily affected by such reductions. Simultaneously, the government allowed the Castilians to pay their taxes with the old copper coins at their pre 25 June and 17 November 1652 nominal value, and it also enabled the tax collectors to do make payments to the Royal Treasury in the same way, so there are good reasons to suggest that the deflationary measures of 1652 were bad for all those sectors involved and, particularly, for the Crown
