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The first impulse of Ferdinand and Isabella was to throw open the commerce with the newly discovered lands to all their subjects; and this was done in 1495, with the proviso that trading voyages should start from Cadiz and return thither. Columbus, however, although his right to load an eighth part of every cargo was reserved, protested; and the privilege was revoked in 1497.1 When the Casa de Contratacion was established in 1503 the trade with the Indies was to be confined to Seville, the commercial and political capital of Castile. In 1505 King Philip I extended the privilege of trading with the Indies to resident foreigners in Spain provided that they employed native Spaniards as their agents.2
The confinement of the trade to Seville was early felt to be detrimental to the colonists, and the representatives of the towns in Española vainly petitioned in 1508 that the trade might be thrown open to the other Spanish ports.3 In 1525, in the p283 expectation that the Spice Islands might be reached by a northern route, a Casa de Contratacion was established in Coruña and from that port Estevan Gomez sailed on his exploring expedition.4
Four years later, in 1529, Charles V authorized ships to sail to the Indies from Coruña, Bayonne, Aviles, Laredo, Bilbao, San Sebastian, Cartagena, Cadiz, and Malaga, provided that on their return they reported at Seville.5 This last condition was unfavorable to any considerable export trade of agricultural products from the islands, and in 1532 the audiencia of Española petitioned that the colonists be allowed to carry sugar, cassia, hides, and other products of the island, not only to Flanders, but to other European ports, asserting that it was the restriction of their trade to Seville which was most ruinous to the island.6 Any relaxation, however, of the monopoly of Seville was strenuously opposed by her merchants and by the other towns in Castile, and there is a doubt whether the decree of 1529 was ever actually put into operation;7 certainly the arrangement was of short duration. Again in 1540 the authorities of Española complained that prices were depressed by restriction to Seville ships, which were inadequate to carry off their sugar, hides, and cassia.8 In 1558 ships from p284 Española and Porto Rico were permitted to unload their cargo, including specie and pearls, at Cadiz, provided the latter were in proper packages and legally reported to the Casa de Contratacion.9
In the earlier days, before the gold and silver of Mexico and Peru constituted so important a part of the return cargo, commerce was carried on in independent vessels; but the development of piracy gradually compelled the Spanish ships to and from the Indies to go in fleets.10 When the Italian Benzoni went to America in 1541 he found ships constantly going to the Indies from the Canaries; when he returned in 1556 it was with a fleet of fourteen vessels.11 In 1555 Robert Tomson waited in the Canaries for the Seville fleet, which that year consisted of eight vessels.12 But apparently the Indian commerce was not yet wholly confined to these fleets, for Badoero, the Venetian ambassador, reported on his return in 1557 that perhaps a hundred ships went yearly from Seville to the Indies.13 Tiepolo, who made his report in 1563, places the number at sixty or seventy.14
In 1561, however, the system of fleets was legally established and lasted nearly two hundred years. p285 The ordinance of that year required, for the protection of the Indian trade, that every year there should be equipped in the river by Seville and in the ports of Cadiz and San Lucar de Barrameda two fleets and a naval escort for the Indies — one for New Spain, the other for Terra Firma.15 In the sixteenth century on the outward voyage the fleets ordinarily put in at the Canaries, whence they sailed to the West Indies. At the island of Dominica the vessels for the islands and for Mexico would separate.16 On the return voyage the two fleets and the ships from the islands, from Honduras and Yucatan would rendezvous at Havana and sail for Spain together, making a stop at the Azores to learn if the coast of Spain was free from corsairs.17 If, however, there were as many as six ships from Española they might secure a license to come one together without waiting for the fleet.18
The safe arrival of the fleets was announced and official orders transmitted to the viceroys by packet-boats of not more than sixty tons burden, which were not to carry any freight or passengers. This despatch service consisted of two trips each year to Terra Firma and two to New Spain.19 During the p286 latter part of the sixteenth century the regularity of the voyages of the fleets to New Spain was disturbed by the war with the Netherlands and England, so that only eleven fleets arrived at Vera Cruz in the last twenty years of the century.20
It would appear, however, that the limitation of commerce to the fleets was evaded, although at the risk of confiscation of vessel and cargo. Shipmasters and traders, under the pretence of having been driven out of their course by storms, would put into West Indian ports.21 Ships in the Canaries, ostensibly loaded for France or England, would cross the Atlantic westward. Ships, too, owned in the Canaries would load with wines, linens, or other contraband goods bought of foreigners and then slip over to the West Indies.22 Such may have been the case with the ship in which John Chilton, an English Seville merchant, went to Mexico in 1568, as there is no reference to a fleet in his account.23
The Venetian ambassador Donato, who gives a fuller account of the Indies in 1573 than is to be found in the other Venetian relations, says that the two fleets to New Spain and Peru consisted of thirty vessels each.24 After 1578 the naval escort normally consisted of nine galleons and eight frigates, with p287 one hundred five hundred persons, of whom nine hundred and fifty were marines, the rest officers and crews.25 When Miles Philips returned in 1582 there were thirty-seven ships, "and in every one of them there was as good as thirty pipes of silver one with another, besides great store of gold, cochinilla, sugars, hides, and Cana Fistula with other apothecary drugs."26
The Indian fleet of 1625 on which Thomas Gage sailed for Vera Cruz, intending to go to the Philippines, consisted of thirty-three ships and eight galleons as escort. Gage reports the destination of the vessels as follows: "To Puerto Rico went that year two ships; to Santo Domingo three; to Jamaica two; to Margarita one; to the Havana two; to Cartagena three; to Campeche two; to Honduras and Truxillo two; and to St. John Dilua, or Vera Cruz, sixteen; all laden with Wines, Figs, Raisins, Olives, Oyle, Cloth, Carsies, Linnen, Iron, and Quicksilver for the mines."27 Among the passengers were a new viceroy for Mexico, a new president for Manila, with a mission of twenty-seven friars for the Philippines, and twenty-four Mercenarian friars for Mexico — their escort was to protect them from the Turks and Hollanders.
The fleet that came in 1637 to Porto Bello consisted p288 of eight galleons and ten merchant ships.28 Alvarez Osorio, writing about the year 1686, gives the make‑up of the Porto Bello fleet as eight galleons, one galleon for the silver, the tender from Margarita, and ten ships of different burden, with a total capacity of fifteen thousand tons for the whole fleet. The fleet from New Spain was composed of two galleons, a tender, and twenty ships, with a total capacity for the whole fleet of twelve thousand five hundred tons.29
The average length of the voyage from Spain to Mexico was two months and a half and the estimated distance about six thousand five hundred miles.30 Experience showed that the most favorable seasons for setting out for New Spain was from April 1 to the end of May; and for the isthmus, August or September. Later, however, it was ordained that the Terra Firma fleet should start between March 15 and March 31.31 On the Pacific the voyage from Panama to Lima, owing to head winds and adverse currents, usually took two months, although the distance was not over one thousand five hundred miles. If the voyage was continued to Chili another two months was consumed; but the return could be accomplished in less than half the time.32
p289 A curious phase of the commercial regulations of the Spanish colonial system grew out of the trade with the Philippine Islands, where the foundations of Spanish rule were laid by Legaspi (1564‑1565) in an expedition equipped in Mexico. The Portuguese monopoly of the Eastern seas and the difficulty and danger of navigating the Straits of Magellan made these islands, lying on the outmost verge of the Spanish Empire, a dependency of New Spain. In the early years of the conquest of the islands their commerce was unrestricted; but soon the fear of the competition of Chinese silks with those of Spain in the Lima market led to a series of protective measures which seem highly unwise to‑day. First came the prohibition of the importation of Chinese fabrics into Peru; then a prohibition of all direct trade between South America and the Philippines or China; and then a law limiting the shipments from the Philippines to Mexico to two hundred and fifty thousand pesos annually, and from Mexico to the Philippines to five hundred thousand. The trade between China and the islands was restricted to the Chinese.33
Notwithstanding these restrictions Chinese goods were smuggled into Lima, and in consequence all trade between New Spain and Peru was interdicted in 1636.34 So complete an embargo could not be enforced, and Ulloa reports that it was systematically p290 evaded at Guayaquil with the collusion of the officials.35 In the cargo of the annual ship from Manila to Acapulco every Spaniard in the Philippines could share in proportion to his means or standing, and these chances were bought and sold.36 The passenger service was, of course, limited mainly to officials and missionaries. The fare from Manila to Acapulco at the end of eighteenth century was $1000, and $500 for the return.37 When the Italian traveller Gemelli went from Manila to Acapulco he was two hundred and four days on the sea. He described it as a voyage "which is enough to destroy a man or make him unfit for anything as long as he lives." Ordinarily the voyage to Manila required ninety days.38
Another strange example of the vagaries of Spanish protective policy is presented by the severe restrictions on trade between Spain and Buenos Ayres, now the commercial metropolis of Spanish America. From 1535 to 1579 direct trade between Buenos Ayres and Spain was prohibited. Thereafter the policy vacillated between absolute prohibition and the permission of a few vessels especially licensed. In 1580 Buenos Ayres was refounded, but its interests were wholly subordinated to those of Peru. The effective reasons for not opening that p291 port to direct trade with Spain were: that the region did not produce gold and silver; that its trade would attract capital from Peru; that merchandise would enter Buenos Ayres for Peru and Chili cheaper than via Panama, which would be detrimental to the fleet, and would bring upon the Porto Bello fair losses which would more than counterbalance the gains to Buenos Ayres; and lastly, that the La Plata region was a healthy country and could be self-sufficient.39
Total prohibitions and stifling restrictions on trade alike proved incapable of complete execution. The authorization of the slave-trade to the extent of importing six hundred negroes a year (1595‑1596) opened the door for smuggling.40 In 1623 the evil was so great as to call for heavy penalties by an ordinance which recorded the fact that many passengers enter the port of Buenos Ayres for Peru, and that ships load in Portugal with all kinds of goods and then go to Buenos Ayres.41
The fleet system has been compared to the mediaeval caravan system of transportation, and, like its prototype, it involved the fair as the agency of exchange and distribution. The Peru fleet in the eighteenth century first made the port of Cartagena the distributing centre for what is now Colombia and Ecuador. At one time the overland trade from Quito was extended to Peru, to the detriment p292 of the Lima merchants who attended the Porto Bello fair; and consequently, in response to their protest, all trade in European commodities between Quito and Lima was prohibited after the arrival of the fleet to Cartagena was announced. During the presence of the fleet there was bustling activity at Cartagena; then came the long "dead time," broken only by the occasional arrival of a small coasting vessel from the islands or from Central America.42
Of much greater importance was the fair at Porto Bello on the isthmus, which was the emporium of the Peruvian trade. As the town was extremely unhealthy the fleet usually remained at Cartagena until word was received of the arrival of the fleet from Peru at Panama. During the fair, which, for sanitary features, was limited to forty days, the town was so crowded that a single shop would rent for $1000 and large houses for $5000. While the ships were unloading, long droves of mules loaded with boxes of gold and silver, each drove numbering over a hundred, were threading their way across the isthmus. Bulkier goods like cacao, quinine, Vicuna wool, would come down the Chagres River by boats. Streets, squares, and houses were filled with bales and boxes, and an enormous business was transacted in the six weeks at the disposal of the merchants.43
Thomas Gage, the English friar, saw this fair in 1637, when the fleet was small and the sale lasted only a fortnight. For a room which "was but as a p293 mouse-hole" he was charged $120. All prices of food rose; fowls ordinarily selling for a rial (twelve and one-half cents) now brought $1.50, "and a pound of beef then was worthy two Rialls, whereas I had had in other places thirteen pound for half a Riall." What he "most wondered at was to see the requas (droves) of mules which came thither from Panama, laden with wedges of silver; in one day I told two hundred mules laden with nothing else, which were laden in the publicke market place, so that there the heapes of silver wedges lay like heaps of stones in the street without any fear or suspition of being lost."
Gage calls Porto Bello an "open grave ready to swallow in part of that numerous people, which at that time resort unto it, as was seen the year that I was there when about five hundred of the souldiers, merchants, and mariners, what with Feavers, what with the Flux caused by too much eating of fruit and drinking of water, what with other disorders lost their lives, finding it to be to them not Porto Bello, but Porto malo."44 The same dark cloud hung over Vera Cruz during its fairs. In 1556 four out of the eight members of the family of the merchant John Field died in ten days,45 and Cubero Sebastian says that while he was there "it was a rare day in which he did not bury three or four cachupins"46 (Spaniards).a
The system of fleets and fairs was perhaps the inevitable p294 solution of the problem how to handle a commerce of relatively high value in small bulk with a region whose sea-approaches were in sickly tropical lowlands, at a time when corsairs and pirates swept the ocean.47 With the development of more international respect for property on the sea, the improvement in ship-building, and the increase of colonial population, the fleet system became painfully inadequate; yet the vested interests were so strongly intrenched that changes were slow and reforms came only in response to outside pressure.
The gradual establishment of colonies by the other European states in the West Indies made an irreparable breach in the Spanish system. The English and Dutch islands in particular became the centres of wholesale smuggling.48 From this illicit trade Venezuela, hitherto neglected in the Spanish system, profited greatly. Of momentous importance in breaking down the tight wall of commercial monopoly was the war of the Spanish Succession waged by Holland and England to prevent the establishment upon the throne of Spain of Louis XIV's grandson and the possible personal union of the two states at some subsequent time. Such a union, or even the close family alliance of the two powers, would give France a paramount interest in the Spanish-American p295 world. Soon after the war broke out Louis XIV authorized the merchants of St. Malo to trade with Lima, which gave rise to a flourishing commerce through the Straits of Magellan. The early comers were reported to have made eight hundred per cent, but their privilege was cut off upon the restoration of peace.49
The result of the contest secured to England by the peace of Utrecht in 1713 the asiento or the monopoly of the African slave-trade with the Spanish possessions, with the right of importing four thousand eight hundred negroes per annum, and also the right to send one registered ship of five hundred tons burden to Porto Bello. This breach was widened by the factors of the English South Sea Company, who secretly increased the capacity of the single ship and accompanied her with transports which kept out of sight by day and from which she was reloaded in the night.50
After such a concession the monopoly of Seville could hardly be maintained. First came the transfer of the monopoly to Cadiz in 1717 to relieve ships of the inconvenient voyage up the Guadalquivir, which was growing shallow. In 1728 the commercial company of Guipuzcoa was chartered with the privilege of despatching registered ships from San Sebastian to Caracas. Six years later the company of Galicia p296 was accorded the right to send two registered ships to Campeche and to sell any surplus at Vera Cruz.51 The competition of smugglers and of the illegally swollen importations of the English through the authorized single ship sapped the commerce of the fleets, until hardly anything was left for them to carry except the king's royalty of one-fifth of the product of the silver-mines.52
To recover this loss of trade, the Spanish government authorized the merchants of Cadiz and Seville to send registered ships at more frequent intervals and to any ports where there might be a special demand; but in 1748 the fleets were finally discontinued. The Barcelona Company in 1755 undertook the revival of Spanish trade with the islands,53 but it was a perilous time, for Spain was ultimately drawn into the Seven Years' War.
It was from one of the apparent misfortunes of this struggle that Spain received a powerful object-lesson in the value of free commerce to colonies. When the English captured Havana in 1762 they opened the port to all English ships. The possibilities of Cuban commerce were immediately revealed, for in the short period they held the city — less than a year — seven hundred and twenty-seven merchant vessels entered the harbor.54 The enlightened Charles III of Spain, profiting by this example, opened the p297 trade of the islands in 1765 and of Louisiana in 176855 to eight Spanish ports besides Cadiz, and relaxed many of the regulations that had hampered the merchants.56 The prosperity of Cuba dates from the English capture of Havana.
In 1774 the prohibition of intercolonial commerce on the Pacific between Peru, New Spain, Guatemala, and New Granada was removed.57 Four years later Buenos Ayres, Peru, and Chili were opened to direct trade from the Spanish ports that were allowed to trade with the islands, and Palma, in Majorca, and Tenerife, in the Canaries, were added to the list. On the American side twenty-three ports were opened in the Atlantic and Pacific, the only important exceptions being those of Venezuela, which were reserved for the Guipuzcoa Company.58 In 1782 New Orleans and Pensacola were allowed to trade with French ports where there were Spanish consuls.59 It may be questioned whether in any other country such radical and extensive relaxations of the restrictions on colonial commerce were ever made in so short a time as those in Spain under Charles III. It is one of many illustrations that whatever the drawbacks of despotic government it possesses a distinct advantage over more popular systems in the rapidity with which political, commercial, and social reforms may be brought about.
p298 The subject of Spanish colonial commerce has been treated in some detail because of its international bearings during the seventeenth and eighteenth centuries and its rather close relation to the colonial interests of England, and because comprehensive surveys of its various aspects from the historical point of view are not easily accessible. The internal economic life of Spanish America will now be reviewed much more briefly.
The principal pursuits in Spanish America were farming, grazing, and mining. The romance of the conquest and of the silver fleets has done much to give disproportionate prominence to the production of gold and silver in popular accounts of Spanish colonization. But in those days of small ships and costly land transportation it is obvious that the bulkier agricultural products could not profitably be raised for exportation.
Yet the vast majority of the population of Spanish America lived by farming and grazing, and the annual value of the products of the soil in New Spain at the beginning of the nineteenth century is estimated to have been $30,000,000,60 or about one-third greater than the yield of the mines.61 Of the distinctively farm products, corn or maize was the most important in New Spain, although it played p299 no part in the export trade. Next came maguey, the American agave. The more distinctly colonial products of sugar, cacao, vanilla, cochineal, cassia formed a large proportion of the cargo of the fleets.
The climate and soil of America proved favorable for European domestic animals — horses, horned cattle, sheep, and swine all multiplied with great rapidity, and stock-raising became one of the most profitable industries of the soil. It is a familiar fact that the cattle were slaughtered for their hides and hoofs and that beef was incredibly cheap; but the great wealth acquired by stock-raising even under such unfavorable circumstances is less familiar and presents a glaring contrast to the humble circumstances of the farmer in the English colonies.
The English friar Thomas Gage was amazed at the abundance in rural Mexico. Two days' journey south of the city there were "many rich townes of Spaniards and Indians." "Here live yeomen upon nothing but their farms, who are judged to be worth some twenty thousand, some thirty thousand, some forty thousand duckats." He found Indians living in this region "who traffique to Mexico and about the country witthº twenty or thirty mules of their own, chopping and changing, buying and selling commodities, and some of them thought to have been worth ten or twelve or fifteen thousand duckats."62 In Guatemala, a great grazing district, he notes the price of beef as thirteen pounds and a half for threepence.
p300 Gage mentions one farmer who owned forty thousand head of cattle and a public purveyor of meat who bought six thousand head from one man at one time for about $2.25 a head. In the city of Guatemala he knew, besides, many merchants worth from twenty thousand to one hundred thousand ducats — "five were judged of equal wealth and generally reported to be worth each of them five hundred thousand duckats."63 Citations like these might be multiplied. Making all necessary allowances for travellers' exaggerations or for Gage's special desire to magnify in English eyes the wealth of New Spain, there still remains enough to prove it to have been a country of private fortunes not equalled in English America until after the application of steam to industry.
Of manufacturing beyond the native arts64 there was naturally not very much. Yet Gage reports that the cloth made in La Puebla de Los Angeles was thought to be as good as that of Segovia, that it was sent far and near, and that its production had much diminished the importation of Spanish cloths. Felt of high quality was also manufactured at Los Angeles, and glass, "was a rarity," for it was not made elsewhere in New Spain.65
The mines were the source of vast private wealth p301 and, as has been shown in another place, of the principal revenue of the crown derived from America.66 Their number and productiveness steadily increased with the advance in methods and the additions to the number of mines worked. Humboldt estimated the average annual production from the discovery of America as follows:
The total yield from 1493 to 1803 he put at five billion seven hundred and six million seven hundred thousand pesos.68 At the beginning of the nineteenth century the total annual production he calculated to be forty-three million five hundred thousand, or about ten times the known production of the rest of the world.69
1 Navarrete, Viages, II, 165 ff., 201; Memorials of Columbus, 89 ff., 96.
2 Col. de Docs. Ined. de Ultramar, V, 78, 79.
3 Fabié, Ensayo Historico, 78.
4 Herrera, Historia General, dec. III, lib. VIII, chap. VIII.
5 Fabié, 227; Col. de Docs. Ined. de Ultramar, IX, 401.
6 Saco, Historia de la Esclavitud, 158.
7 Ibid., 150; Armstrong, Charles V, II, 47.
8 Saco, Historia de la Esclavitud, 182.
9 Recopilacion de Leyes, lib. IX, tit. XLII, ley 27.
10 Cf. Häbler, Die Wirthschaftliche Blüte Spaniens, 54, n., for the dates of earlier fleets.
11 Benzoni, History of the New World, I, 258.
12 Hakluyt, Voyages, XIV, 139‑141.
13 Albéri, Relazioni Venete, 1st series, III, 261.
14 Ibid., I, 35.
15 Recopilacion de Leyes, lib. IX, tit. XXX, ley 1. Terra Firma was the usual Spanish name for the northern coast region of South America.
16 Velasco, Descripcion de las Indias, 64.
17 Ibid., Recopilacion de Leyes, lib. IX, tit. XLII, ley 24.
18 Ibid., ley 26.
19 Ibid., tit. XXXVII, ley 5, and note after ley 22.
21 Recopilacion de Leyes, lib IX, tit. XXXVIII, ley 6.
22 Ibid., tit. XLII, ley 15.
23 Hakluyt, Voyages, XIV, 156.
24 Albéri, Relazioni Venete, VI, 453, 454.
25 Velasco, Descripcion de las Indias, 88.
26 Hakluyt, Voyages, XIV, 223.
27 Gage, New Survey of the West Indies, 15.
28 Gage, New Survey of the West Indies, 196.
29 Colmeiro, Historia de la Economia Politica de España, II, 404.
30 Velasco, Descripcion de las Indias, 64.
31 Recopilacion de Leyes, lib. IX, tit. XXXVI, ley 13 (1619).
32 Velasco, Descripcion de las Indias, 83.
Thayer's Note: The discovery was made by Juan Fernández; for details, see Galdames, History of Chile, p74.
33 Tit. XLV of lib. IX of the Recopilacion de Leyes is devoted to the trade with the Philippines.
34 Ibid., ley 78.
35 Juan and Ulloa, Noticias Secretas, 201, 202.
36 For details, see E. G. Bourne, "Historical Introduction" to The Philippine Islands, ed. by Blair and Robertson, I, 62‑70.
37 Zuñiga, Estadismo de las Islas Filipinas, I, 268.
38 Churchill, Voyages, IV, 491, 499.
39 Mitré, Historia de Belgrano, I, 29.
40 Ibid., 30.
41 Recopilacion de Leyes, lib. VIII, tit. XIV, ley 13.
42 Ulloa, Voyage, I, 79‑84.
43 Ibid., 103 ff.
44 Gage, New Survey of the West Indies, 196‑198.
45 Hakluyt, Voyages, XIV, 145.
46 Cubero Sebastian, Peregrinacion del Mundo (ed. 1688), 282.
47 The fleet system was used by the Portuguese, the Dutch, and the English in their trade with the East Indies.
48 Roscher, Spanish Colonial System, 37; Depons, Voyage, II, 268‑270.
49 Robertson, America (ed. 1831), 267; Colmeiro, Hist. de la Econ. Pol., II, 421.
50 Ulloa, Voyage, I, 105, 106; Robertson, America, 267, 268.
51 Saco, Historia de la Esclavitud, 324.
52 Robertson, America, 268.
53 Saco, Historia de la Esclavitud, 324.
54 Ibid., 325, on the authority of English periodicals.
55 Roscher, Spanish Colonial System, 39.
56 Saco, Historia de la Esclavitud.
57 Ibid., 329.
58 Ibid., 337.
59 Ibid., 339.
60 Alaman, Mejico, I, 103.
62 Gage, New Survey of the West Indies, 85.
63 Gage, New Survey of the West Indies, 125, 126.
65 Gage, New Survey of the West Indies, 37. On the cloth factories in Peru and the abuses arising from forced labor in them, see Ulloa, Noticias Secretas, 275.
67 Humboldt, Ensayo Politico, III, 316.
68 Ibid., 304.
69 Ibid., 286, 288.
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