Twilight of the Hapsburg Dynasty
In the 1630s and 1640s, New Spain's merchants had formed a coalition with other elites and resisted a series of tax increases imposed by the Spanish government. They objected to paying for a new Caribbean defense squadron after the king declined to grant their requests for reforms. But in 1660 the Spanish Crown did respond in part. It ended all the commercial taxes based on the value of what was being shipped and imposed instead a fixed payment on the merchants of each region in the Indies trade to finance the convoys. Imperial policy makers started to recognize that their fiscal measures hurt trade.

In late- seventeenth-century New Spain, the white and mixed-race population was rising, and even the number of Indians started to increase. Silver production rose to about 55,000,000 pesos in the 1670s. The payment of fines for contraband rose from 505,764 pesos in the 1660s to 742,000 pesos in the 1670s, suggesting a revival in trade, as well. Provincial cities like Guadalajara that had once lacked capital now found cash more available and agricultural production increasing. Despite years of famine and disease in the early 1690s, New Spain's economic position improved in the last third of the century. The structure was in place to continue the path of development that New Spain was already on: an export-oriented economy with modest but resilient regional markets that stretched from Parral to Chiapas. Eighteenth-century historians disagree about when, or even if, these segmented networks of exchange became an all-Mexican market. But we can say that the seventeenth century bequeathed the potential for its emergence to the eighteenth. Carlos II, the last enfeebled Hapsburg ruler who died in 1700, has long been regarded as an apt symbol for the decline of Spain. For New Spain a good symbol is the wealthy merchant, born in the mother country but contributing to the economic recovery of late-seventeenth-centuryMexico.