The Price of Honor and the Hunger of Castile
The Great Flood of 1626 did not merely swallow Valladolid. Salamanca, a city famous for its university and its status as a major hub of the northwestern Meseta, saw its Roman-era bridges—structures that had stood since antiquity—withstand the onslaught of mud and timber. Had the bridges collapsed, the water might have drained away, but instead, they held firm, turning into massive dams that submerged the city. Zamora, the jewel of the Duero River, was left half-destroyed, and the devastation reached as far as the frontier fortress of Badajoz in the south and Seville, the gateway to the New World.
In short, the Kingdom of Castile, the heart of Spain, had been utterly shattered from south to north. Regional powers, convinced that Castile was suffering under the wrath of God, began to openly defy the crown—most notably Catalonia and Portugal, who demanded tax exemptions and increased autonomy. The "Union of Arms" project, which Olivares had ambitiously pushed for the past five years, was on the verge of total collapse.
The truce with the Low Countries, signed five years prior, was set to expire that year. Faced with such a catastrophe, Olivares felt as though he were losing his mind, crushed by a despair that no human effort could overcome.
"The coachman was right... The silver drained by the war in the Holy Roman Empire is already suffocating us. If we had fought in the Low Countries as well, the Empire would have gone bankrupt this year."
Olivares was no fool. Though self-righteous, he was a diligent and sincere administrator, a man who understood the terrifying reality of numbers. By the light of a candle, he read through his reports, shivering as he calculated the costs that would have been incurred had they engaged in the Low Countries.
Thanks to the extended truce with the Dutch, the Empire had saved enough money to minimize the use of the usurious asientos from Genoa. Even though the Castilian economy had wavered over the last five years, by keeping those cursed loans to a minimum, the Empire had managed to scrape together enough silver to pay the overdue wages of the tercios.
Olivares’ grand plan, the Union of Arms, was intended to shift the military burden—which Castile bore alone—onto Portugal and Catalonia. After much deliberation, he had forced the issue, thinking it a "do or die" situation. But he was attempting to implement it after Castile had already been crippled by disaster. The regions responded with consistent rebuffs: "We are busy, too," or "You were the ones who wanted this war; we opposed it."
No matter how hard he tried, the Imperial treasury, which had slowly filled whenever the treasure fleet arrived from the New World, was insufficient to repair the damage of this disaster. Thus, Olivares decided to overcome it by tampering with the seigniorage—the profit from minting currency. His plan to issue low-quality vellon coins with reduced silver content and use the minting profits for flood relief was, in essence, a plan to rebuild state projects by plundering the poorest of the poor.
In 1626 alone, grain prices doubled, and the burden of both flood damage and inflation was shifted onto the Spanish peasantry.
These policies would become the catalysts for the massive rebellions of the 1630s and the wars of independence in Portugal and Catalonia in the 1640s, but Spain had no luxury to look ten years into the future.
Felipe IV was a hedonist, far removed from diligence. To put it kindly, he was a jovial man; to put it harshly, he was irresponsible. Still, since his conversation with Juan five years ago, he had paid at least a little more attention to the administration of the state. However, struck by the "divine punishment" that had occurred only five years into his reign, he had stopped eating and drinking, kneeling alone in the chapel to pray.
Olivares climbed to the royal chapel to meet Felipe, who had refused all audiences.
"My King, news has arrived from Valladolid."
"If it is news regarding that flood, I do not wish to hear any more of it."
Despite the King’s somber voice, Olivares believed this news would be the thing to lift him back to his feet.
"It is not that, Your Majesty. It is news that the bird you cherish is building a nest."
After a moment of silence, the chapel door opened. Felipe’s disheveled face was marked with clear traces of sorrow and tears.
"...Bring it here."
Olivares respectfully presented the report. The document, sent by the secretary dispatched to the royal farm in Valladolid, carried the scent of flowers—a fragrance entirely out of place in these days of catastrophe.
"Does love bloom even in these days of despair? It is laughably amusing. So, who did they say she is?"
"They say she did not reveal her exact identity, but..."
Olivares had used his own intelligence network to gauge who the woman might be. Her arrogance, appearance, and physique matched a woman who had been expelled from high society five years ago.
"I believe it is the youngest daughter of the Enríquez family."
"Is she not a bit old?"
As it was a famous incident, Felipe also knew of her. The story of a woman who had won her honor by dueling a man with a sword was interesting gossip to some, but the defeated man had been unable to bear his disgrace and had taken his own life.
"She is twenty-five this year, Your Majesty."
"Hmm... Enríquez, is it..."
Felipe had assumed that the Enríquez family had given up on her and sent her to a convent after that event.
"Are you not pleased?"
"No. Now is not the time to walk only in the sunlit paths. He is a man who brings the miracles of God into reality through earthly power. If we lose him, this Empire has no future."
Felipe had an intuition. His friend, Juan Manuel, was a freak of nature. Born in a stable, without any formal education, he possessed profound insight into military, social, and political matters. And yet, a man who had never left the stables could produce such miraculous harvests one after another? He was clearly a key sent by God for the sake of this pious Empire.
"Then I shall begin the plan we prepared, Your Majesty."
"If Valladolid were intact, I would have gone myself. It is a pity..."
At Felipe’s words, Olivares tried to soothe his regret.
"He has been settled in Valladolid for the past five years, and droughts and floods have repeated themselves. Having suffered even greater sorrow this time, the city will have no strength to uphold Your Majesty’s dignity. This year is a time to beg God for forgiveness and ask for His mercy."
"Olivares. Send a messenger to the Enríquez family. Tell the Admiral we shall see each other in Madrid."
"I shall obey, my King."
For the survivors of the catastrophe, life was a struggle. Every day was spent eating rotten food, watching the pile of corpses grow, and seeing the people meant to clear them away die in turn. As soon as the weather warmed in March, the Valladolid City Council moved to produce the bare minimum of food. They planted emergency crops like chickpeas and sorghum, but the cold snaps that followed in April and May ruined everything, pushing food security from dangerous to critical. By June, even the beer made from recycled flood-damaged wheat had run out, and the city fell into a state of extreme famine.
Yet, a strange rumor began to circulate. It was said that at a royal farm a day’s journey southwest of Valladolid, they had protected a fifty-fanega field of rye and achieved an unbelievable bumper crop of over a thousand fanegas. The City Council, sending a messenger in a desperate "grasping at straws" state of mind, could only stare in astonishment at the groups of refugees singing harvest songs while drying vast quantities of grain.
A week later, after a debate involving all the high-class citizens of Valladolid, the Mayor himself mounted a horse and headed for the farm.
"A pleasure to meet you, Sir Juan. Have you been well?"
The Mayor, the Corregidor 'Don Juan de Castro y Castilla,' was a bureaucrat crushed by the weight of his responsibilities. From above, he was ordered to restore order quickly; from below, the starving citizens were either on the verge of rioting or already doing so.
"I am not of a status to be called 'Sir,' Mr. Chairman."
As I answered coldly, Bartolomé, the obese livestock merchant who was sitting with us, fidgeted and spoke to me.
"Come now, Sir Juan. This is a meeting arranged by Bartolomé, so why be so stiff? Between us, eh? Don't be like that, let's keep it... warm..."
"You know well enough, sir, that I am not of a status to be addressed as 'Sir'."
I saw those who had come as soon as the harvest was in as nothing more than looters. I couldn't bring myself to speak kindly.
"Hehe. Come now, have a glass of wine! Just! Isn't it better to be good to each other, sir?"
"Enough. Let’s get to the point. Let’s lay our cards on the table. How much do you want?"
At my words, the Mayor spoke firmly.
"Everything. As much as is possible."
"The harvest this time wasn't quite a thousand fanegas. It's 800 fanegas of rye and 100 fanegas of wheat. There seems to be some room in that granary, and as an official of His Majesty the King, I wish to exercise my right of local requisition."
I struggled to grasp the hidden meaning behind his words as I replied. There had to be a reason for such an unreasonable demand.
"I must remind you that this is royal special farmland and is subject to military privilege."
"I know that. But if you do not open the warehouse, I have no choice but to let the starving citizens open it themselves."
I had heard there were roughly 20,000 refugees in Valladolid. About 10,000 of them had no food to eat immediately. He was telling me that if I didn't cooperate, he would throw this place to those 10,000 starving people as food.
"Are you threatening me?"
"I am making a proposal."
The Mayor and I locked eyes. In his hollow gaze, I saw a broken machine, worn down by despair but driven by a sense of duty.
"Interesting. Very well. Then what have you brought in exchange for the grain?"
I leaned back, feigning ease.
His answer came without a moment’s hesitation.
"Everything."
Silence weighed heavily upon us all.
"Whatever it is you desire. I, 'Don Juan de Castro y Castilla,' swear before God that I will pay it, staking the honor of my family."
A blank check presented by the Mayor. But to me, that blank check looked like a hollow void.
"A blank check is not something to be presented at any time, Mr. Mayor. And I don't particularly desire anything, do I?"
"I can give you what you need."
The Mayor replied calmly to my words.
"What I need? Not what Valladolid needs?"
The Mayor answered briefly.
"Honor."
The Mayor stood up and continued.
"They say you are in love with the Wild Horse of the Enríquez, are you not? A love between a commoner and a high-born noblewoman—it sounds like the songs of troubadours that have lasted for centuries."
His words sliced and diced my weaknesses.
"I will make you a Juan Manuel who is a man worthy of standing beside a woman of a great noble house, not the miserable expósito Juan Manuel."
And he spoke of a future as sweet as one could imagine.
"I promise you, all the citizens of Valladolid will be witnesses to your wedding. No matter how much the Enríquez try, they will not be able to stop it."
He shattered my cynicism with trust and belief.
"I promise you once more. The honorable citizens of Valladolid swear by God, His Majesty the King, and the soil of their homeland that they will be on your side forever."
He threw out an offer that a man in love could never refuse.
"I already know of your deeds over the past few years. Open the warehouse, 'Righteous Man' Juan Manuel, sent by the royal court. Hero of Valladolid."
He approached me, pulling me up from my chair as he spoke.
"You may have been a hero only among those poor people until now. But if you just nod your head, from today, you will officially be the hero of Valladolid."
He took off his hat—the symbol of a nobleman’s dignity—and bowed his head before me.
"So, I beg of you. Please save Valladolid."
***
Author's Note: In actual history, Spain declared default starting at the end of January 1627. It wasn't just the money wasted on war; the Great Flood that ravaged all of Castile from south to north in '26 was a major factor. Beyond the property damage, the sharp decline in population meant Spain lost the physical capacity to maintain its hegemony any longer.
Of course, it wasn't a "true" bankruptcy, but perhaps more like a 21st-century "Trump-sensei" style move? They forced a conversion of short-term high-interest debt into long-term low-interest debt... they bullied their way through it.
If I were to take Spain's side, it was a bit excessive for Genoa to take upfront interest, service fees, and risk premiums, resulting in interest rates of 30-40 percent.