Conversos
The history of the Jews henceforth in Spain is that of the conversos, whose numbers, as has been shown, had been increased by no less than 50,000 during the period of expulsion. As Spain took possession of the New World, in Mexico, the American Southwest (formerly New Spain), the conversos attempted to find a refuge from the Inquisition in both the East and the West Indies, where they often came in contact with relatives who had remained true to their faith, or had become reconverted in Holland or elsewhere. These formed business alliances with their relatives remaining in Spain, so that a large portion of the shipping and importing industry of that country fell into the hands of the conversos and their Jewish relatives elsewhere. The wealth thus acquired was often sequestrated into the coffers of the Inquisition; but this treatment led to reprisals on the part of their relatives abroad, and there can be no doubt that the decline of Spanish commerce in the seventeenth century was due in large measure to the activities of the non-conversos of Holland, Italy, and England, who diverted trade from Spain to those countries. When Spain was at war with any of these countries Jewish intermediation was utilized to obtain knowledge of Spanish naval activity. Jews could, however, often escape their Jewish heritage. If enough respected non-Jews stood up for them, they could obtain the status of Christians. While persecuted, if the Jews stayed under the radar and did not flaunt their faith, they could remain in Spain with little problems. Life for Jews was difficult, but if they were willing to compromise, it was bearable.
In this indirect way the non-conversos, who had been the occasion of the expulsion, became a nemesis to the Spanish kingdom. It is, however, incorrect to suppose, as is usually done, that the immediate results of the expulsion of the Jews from Spain were disastrous either to the commerce or to the power of the Iberian kingdom. So far from this being the case, Spain rose to its greatest height immediately after the expulsion of the Jews, the century succeeding that event culminating in the world-power of Philip II, who in 1580 was ruler of the New World, of the Spanish Netherlands, and of Portugal, as well as of Spain.
The intellectual loss was perhaps more direct. A large number of Spanish poets and other Jewish writers and thinkers who traced their origin from the exile were lost to Spain, including men like Michel de Montaigne, Spinoza, Uriel da Costa, Samuel da Silva, Menasseh ben Israel, the Disraelis, but not, as is often claimed, the Montefiores, who were of Italian descent — although in London they did belong to the Congregation of Spanish and Portuguese Jews.
Read more about this topic: History Of The Jews In Spain