4 Escudos – Spain

In 1707, Spain was embroiled in the War of the Spanish Succession (1701-1714), a devastating European-wide conflict over the throne following the death of the childless Charles II. This war was the primary driver of the currency situation, creating a state of profound financial crisis. The Bourbon king, Philip V, controlling most of Castile, and his rival the Habsburg Archduke Charles, holding much of the Crown of Aragon, both engaged in massive military spending. To fund their armies, they resorted to severe currency debasement—reducing the precious metal content in coins like the real and the escudo—and the rampant minting of low-quality vellón (copper) currency. This led to rampant inflation, a collapse in public credit, and a chaotic monetary environment where the intrinsic value of coins was often far below their face value.

The monetary landscape was further fragmented by regional divisions. While Philip V's centralizing decrees, such as the Nueva Planta decrees which began in 1707, aimed to unify the disparate kingdoms of the former Crown of Aragon into a single Spanish state, monetary unity was far from achieved. Different regions still operated with varying coinages and valuations. In territories loyal to Archduke Charles, such as Catalonia and Valencia, separate mints issued currency to fund his war effort, creating competing monetary zones within the peninsula. This fragmentation made commerce difficult and exacerbated the economic turmoil.

Ultimately, the currency situation of 1707 was one of emergency wartime finance, characterized by depreciation and disorder. The policies enacted during this period, however, set the stage for future reform. Following his eventual victory, Philip V would pursue a centralized Bourbon administrative model, which included significant monetary reforms in the later 1710s and 1720s. These aimed to stabilize the coinage, introduce new silver reales based on the French livre, and create a more unified national monetary system, laying the foundation for 18th-century Spanish finance.