While the Spanish Crown was aiming to concentrate and monopolize its colonial commerce, the prosperity of Spain itself was slowly sapped by reason of these mistaken economic theories. Owing to the lack of workmen, the increase of imposts, and the prejudice against the mechanic arts, industry was being ruined; while the increased depopulation of the realm, the mainmort of ecclesiastical lands, the majorats of the nobility and the privileges of the Mesta, brought agriculture rapidly into decay. The Spaniards, consequently, could not export the products of their manufacture to the colonies, when they did not have enough to supply their own needs. To make up for this deficiency their merchants were driven to have recourse to foreigners, to whom they lent their names in order to elude a law which forbade commerce between the colonies and traders of other nations. In return for the manufactured articles of the English, Dutch and French, and of the great commercial cities like Genoa and Hamburg, they were obliged to give their own raw materials and the products of the Indies—wool, silks, wines and dried fruits, cochineal, dye-woods, indigo and leather, and finally, indeed, ingots of gold and silver. The trade in Spain thus in time became a mere passive machine. Already in 1545 it had been found impossible to furnish in less than six years the goods demanded by the merchants of Spanish America. At the end of the seventeenth century, foreigners were supplying five-sixths of the manufactures consumed in Spain itself, and engrossed nine-tenths of that American trade which the Spaniards had sought so carefully to monopolize.[5]
In the colonies the most striking feature of Spanish economic policy was its wastefulness. After the conquest of the New World, it was to the interest of the Spaniards to gradually wean the native Indians from barbarism by teaching them the arts and sciences of Europe, to encourage such industries as were favoured by the soil, and to furnish the growing colonies with those articles which they could not produce themselves, and of which they stood in need. Only thus could they justify their monopoly of the markets of Spanish America. The same test, indeed, may be applied to every other nation which adopted the exclusivist system. Queen Isabella wished to carry out this policy, introduced into the newly-discovered islands wheat, the olive and the vine, and acclimatized many of the European domestic animals.[6] Her efforts, unfortunately, were not seconded by her successors, nor by the Spaniards who went to the Indies. In time the government itself, as well as the colonist, came to be concerned, not so much with the agricultural products of the Indies, but with the return of the precious metals. Natives were made to work the mines, while many regions adapted to agriculture, Guiana, Caracas and Buenos Ayres, were neglected, and the peopling of the colonies by Europeans was slow. The emperor, Charles V., did little to stem this tendency, but drifted along with the tide. Immigration was restricted to keep the colonies free from the contamination of heresy and of foreigners. The Spanish population was concentrated in cities, and the country divided into great estates granted by the crown to the families of the conquistadores or to favourites at court. The immense areas of Peru, Buenos Ayres and Mexico were submitted to the most unjust and arbitrary regulations, with no object but to stifle growing industry and put them in absolute dependence upon the metropolis. It was forbidden to exercise the trades of dyer, fuller, weaver, shoemaker or hatter, and the natives were compelled to buy of the Spaniards even the stuffs they wore on their backs. Another ordinance prohibited the cultivation of the vine and the olive except in Peru and Chili, and even these provinces might not send their oil and wine to Panama, Gautemala or any other place which could be supplied from Spain.[7] To maintain the commercial monopoly, legitimate ports of entry in Spanish America were made few and far apart—for Mexico, Vera Cruz, for New Granada, the town of Cartagena. The islands and most of the other provinces were supplied by uncertain "vaisseaux de registre," while Peru and Chili, finding all direct commerce by the Pacific or South Sea interdicted, were obliged to resort to the fever-ridden town of Porto Bello, where the mortality was enormous and the prices increased tenfold.
In Spain, likewise, the colonial commerce was restricted to one port—Seville. For in the estimation of the crown it was much more important to avoid being defrauded of its dues on import and export, than to permit the natural development of trade by those towns best fitted to acquire it. Another reason, prior in point of time perhaps, why Seville was chosen as the port for American trade, was that the Indies were regarded as the exclusive appanage of the crown of Castile, and of that realm Seville was then the chief mercantile city. It was not a suitable port, however, to be distinguished by so high a privilege. Only ships of less than 200 tons were able to cross the bar of San Lucar, and goods therefore had to be transhipped—a disability which was soon felt when traffic and vessels became heavier.[8] The fact, nevertheless, that the official organization called the Casa dé Contratacion was seated in Seville, together with the influence of the vested interests of the merchants whose prosperity depended upon the retention of that city as the one port for Indian commerce, were sufficient to bear down all opposition. The maritime towns of Galicia and Asturia, inhabited by better seamen and stronger races, often protested, and sometimes succeeded in obtaining a small share of the lucrative trade.[9] But Seville retained its primacy until 1717, in which year the Contratacion was transferred to Cadiz.
The administration of the complex rules governing the commerce between Spain and her colonies was entrusted to two institutions located at Seville,—the Casa de Contratacion, mentioned above, and the Consulado. The Casa de Contratacion, founded by royal decree as early as 1503, was both a judicial tribunal and a house of commerce. Nothing might be sent to the Indies without its consent; nothing might be brought back and landed, either on the account of merchants or of the King himself, without its authorization. It received all the revenues accruing from the Indies, not only the imposts on commerce, but also all the taxes remitted by colonial officers. As a consultative body it had the right to propose directly to the King anything which it deemed necessary to the development and organization of American commerce; and as a tribunal it possessed an absolute competence over all crimes under the common law, and over all infractions of the ordinances governing the trade of the Indies, to the exclusion of every ordinary court. Its jurisdiction began at the moment the passengers and crews embarked and the goods were put on board, and ended only when the return voyage and disembarkation had been completed.[10] The civil jurisdiction of the Casa was much more restricted and disputes purely commercial in character between the merchants were reserved to the Consulado, which was a tribunal of commerce chosen entirely by the merchants themselves. Appeals in certain cases might be carried to the Council of the Indies.[11]
The first means adopted by the northern maritime nations to appropriate to themselves a share of the riches of the New World was open, semi-piratical attack upon the Spanish argosies returning from those distant El Dorados. The success of the Norman and Breton corsairs, for it was the French, not the English, who started the game, gradually forced upon the Spaniards, as a means of protection, the establishment of great merchant fleets sailing periodically at long intervals and accompanied by powerful convoys. During the first half of the sixteenth century any ship which had fulfilled the conditions required for engaging in American commerce was allowed to depart alone and at any time of the year. From about 1526, however, merchant vessels were ordered to sail together, and by a cedula of July 1561, the system of fleets was made permanent and obligatory. This decree prohibited any ship from sailing alone to America from Cadiz or San Lucar on pain of forfeiture of ship and cargo.[12] Two fleets were organized each year, one for Terra Firma going to Cartagena and Porto Bello, the other designed for the port of San Juan d'Ulloa (Vera Cruz) in New Spain. The latter, called the Flota, was commanded by an "almirante," and sailed for Mexico in the early summer so as to avoid the hurricane season and the "northers" of the Mexican Gulf. The former was usually called the galeones (anglice "galleons"), was commanded by a "general," and sailed from Spain earlier in the year, between January and March. If it departed in March, it usually wintered at Havana and returned with the Flota in the following spring. Sometimes the two fleets sailed together and separated at Guadaloupe, Deseada or another of the Leeward Islands.[13]
The galleons generally consisted of from five to eight war-vessels carrying from forty to fifty guns, together with several smaller, faster boats called "pataches," and a fleet of merchantmen varying in number in different years. In the time of Philip II. often as many as forty ships supplied Cartagena and Porto Bello, but in succeeding reigns, although the population of the Indies was rapidly increasing, American commerce fell off so sadly that eight or ten were sufficient for all the trade of South and Central America. The general of the galleons, on his departure, received from the Council of the Indies three sealed packets. The first, opened at the Canaries, contained the name of the island in the West Indies at which the fleet was first to call. The second was unsealed after the galleons arrived at Cartagena, and contained instructions for the fleet to return in the same year or to winter in America. In the third, left unopened until the fleet had emerged from the Bahama Channel on the homeward voyage, were orders for the route to the Azores and the islands they should touch in passing, usually Corvo and Flores or Santa Maria.[14]
The course of the galleons from San Lucar was south-west to Teneriffe on the African coast, and thence to the Grand Canary to call for provisions—considered in all a run of eight days. From the Canaries one of the pataches sailed on alone to Cartagena and Porto Bello, carrying letters and packets from the Court and announcing the coming of the fleet. If the two fleets sailed together, they steered south-west from the Canaries to about the latitude of Deseada, 15' 30", and then catching the Trade winds continued due west, rarely changing a sail until Deseada or one of the other West Indian islands was sighted. From Deseada the galleons steered an easy course to Cape de la Vela, and thence to Cartagena. When the galleons sailed from Spain alone, however, they entered the Caribbean Sea by the channel between Tobago and Trinidad, afterwards named the Galleons' Passage. Opposite Margarita a second patache left the fleet to visit the island and collect the royal revenues, although after the exhaustion of the pearl fisheries the island lost most of its importance. As the fleet advanced into regions where more security was felt, merchant ships too, which were intended to unload and trade on the coasts they were passing, detached themselves during the night and made for Caracas, Santa Marta or Maracaibo to get silver, cochineal, leather and cocoa. The Margarita patache, meanwhile, had sailed on to Cumana and Caracas to receive there the king's treasure, mostly paid in cocoa, the real currency of the country, and thence proceeded to Cartagena to rejoin the galleons.[15]
The fleet reached Cartagena ordinarily about two months after its departure from Cadiz. On its arrival, the general forwarded the news to Porto Bello, together with the packets destined for the viceroy at Lima. From Porto Bello a courier hastened across the isthmus to the President of Panama, who spread the advice amongst the merchants in his jurisdiction, and, at the same time, sent a dispatch boat to Payta, in Peru. The general of the galleons, meanwhile, was also sending a courier overland to Lima, and another to Santa Fe, the capital of the interior province of New Granada, whence runners carried to Popagan, Antioquia, Mariguita, and adjacent provinces, the news of his arrival.[16] The galleons were instructed to remain at Cartagena only a month, but bribes from the merchants generally made it their interest to linger for fifty or sixty days. To Cartagena came the gold and emeralds of New Granada, the pearls of Margarita and Rancherias, and the indigo, tobacco, cocoa and other products of the Venezuelan coast. The merchants of Gautemala, likewise, shipped their commodities to Cartagena by way of Lake Nicaragua and the San Juan river, for they feared to send goods across the Gulf of Honduras to Havana, because of the French and English buccaneers hanging about Cape San Antonio.[17]