Problems of poverty are exacerbated by uncertainty.1 This uncertainty means that one role of an income-assistance system is insurance, which in the modern world has often taken the form of government welfare or unemployment insurance. However, various private methods have also been important. The episode known as the Lancashire cotton famine reveals this institutional diversity in a region with a dominant geographically concentrated industry. A cyclical downturn in the cotton textile industry coincided with the Union blockade of Southern ports during the American Civil War, bringing four years of distress to the towns in the cotton manufacturing district concentrated in Lancashire. The unanticipated and unprecedented depth and duration of this shock unveiled both the responses of preexisting income assistance institutions and the institutional change that occurred to spread income losses after the cotton famine struck.

Some historians of Kansas City claim, with an arresting simplicity, that the principal reason for that city's growth and prosperity is to be found in the enterprise of its citizens. And, although enterprise is by no means a self-explanatory notion, it seems a compellingly obvious way to account for the circumstances of the city's formative years. Much of that history can be written around a series of crises of decision, urgent moments when poor judgment, or the faulty execution of policy, might have plunged the city into obscurity or downright decadence. Yet such was the city's good fortune, we are told, that at precisely these times brilliant leadership seems always to have been forthcoming, and enterprising men—usually businessmen—can be discerned standing in the storm center pointing the way to safety and success.

Napoleon's successful campaigns against Austria in 1805 and 1809 led to the signing of the treaties of Pressburg and Schonbrunn which placed interalia the eastern shores of the Adriatic in French hands. The entire coastline from Trieste to Cattaro became part of the Illyrian Provinces designed to act as a barrier against British trade, to provide a land route between Turkey and the French empire, and to weaken Austria.

This article deals with the interrelations between the economyand the government of the expanding Spanish empire in the era of overseas expansion during the fifteenth and sixteenth centuries. Specifically, it attempts to show how the government reacted to the phenomenon of the growing empire. In a full treatment it would be necessary to show how the various Spanish territories of the Peninsula were unified by the process of the “reconquista” and by the marriage policy of the Catholic Icings; how during the sixteenth century Navarre and Portugal were joined; how the overseas expansion of Spanish power, beginning in the late Middle Ages, continued during the sixteenth century; and how Spain, as a consequence of Hapsburg marriage policy, built an important bridge of possessions from the Netherlands to Italy. Obviously, these questions cannot be dealt with in detail in one article, but they form the background for the following discussion.