Meanwhile the viceroy at Lima, on receipt of his letters, ordered the Armada of the South Sea to prepare to sail, and sent word south to Chili and throughout the province of Peru from Las Charcas to Quito, to forward the King's revenues for shipment to Panama. Within less than a fortnight all was in readiness. The Armada, carrying a considerable treasure, sailed from Callao and, touching at Payta, was joined by the Navio del Oro (golden ship), which carried the gold from the province of Quito and adjacent districts. While the galleons were approaching Porto Bello the South Sea fleet arrived before Panama, and the merchants of Chili and Peru began to transfer their merchandise on mules across the high back of the isthmus.[18]

Then began the famous fair of Porto Bello.[19] The town, whose permanent population was very small and composed mostly of negroes and mulattos, was suddenly called upon to accommodate an enormous crowd of merchants, soldiers and seamen. Food and shelter were to be had only at extraordinary prices. When Thomas Gage was in Porto Bello in 1637 he was compelled to pay 120 crowns for a very small, meanly-furnished room for a fortnight. Merchants gave as much as 1000 crowns for a moderate-sized shop in which to sell their commodities. Owing to overcrowding, bad sanitation, and an extremely unhealthy climate, the place became an open grave, ready to swallow all who resorted there. In 1637, during the fifteen days that the galleons remained at Porto Bello, 500 men died of sickness. Meanwhile, day by day, the mule-trains from Panama were winding their way into the town. Gage in one day counted 200 mules laden with wedges of silver, which were unloaded in the market-place and permitted to lie about like heaps of stones in the streets, without causing any fear or suspicion of being lost.[20] While the treasure of the King of Spain was being transferred to the galleons in the harbour, the merchants were making their trade. There was little liberty, however, in commercial transactions, for the prices were fixed and published beforehand, and when negotiations began exchange was purely mechanical. The fair, which was supposed to be open for forty days, was, in later times, generally completed in ten or twelve. At the beginning of the eighteenth century the volume of business transacted was estimated to amount to thirty or forty million pounds sterling.[21]

In view of the prevailing east wind in these regions, and the maze of reefs, cays and shoals extending far out to sea from the Mosquito Coast, the galleons, in making their course from Porto Bello to Havana, first sailed back to Cartagena upon the eastward coast eddy, so as to get well to windward of Nicaragua before attempting the passage through the Yucatan Channel.[22] The fleet anchored at Cartagena a second time for ten or twelve days, where it was rejoined by the patache of Margarita[23] and by the merchant ships which had been sent to trade in Terra-Firma. From Cartagena, too, the general sent dispatches to Spain and to Havana, giving the condition of the vessels, the state of trade, the day when he expected to sail, and the probable time of arrival.[24] For when the galleons were in the Indies all ports were closed by the Spaniards, for fear that precious information of the whereabouts of the fleet and of the value of its cargo might inconveniently leak out to their rivals. From Cartagena the course was north-west past Jamaica and the Caymans to the Isle of Pines, and thence round Capes Corrientes and San Antonio to Havana. The fleet generally required about eight days for the journey, and arrived at Havana late in the summer. Here the galleons refitted and revictualled, received tobacco, sugar, and other Cuban exports, and if not ordered to return with the Flota, sailed for Spain no later than the middle of September. The course for Spain was from Cuba through the Bahama Channel, north-east between the Virginian Capes and the Bermudas to about 38°, in order to recover the strong northerly winds, and then east to the Azores. In winter the galleons sometimes ran south of the Bermudas, and then slowly worked up to the higher latitude; but in this case they often either lost some ships on the Bermuda shoals, or to avoid these slipped too far south, were forced back into the West Indies and missed their voyage altogether.[25] At the Azores the general, falling in with his first intelligence from Spain, learned where on the coast of Europe or Africa he was to sight land; and finally, in the latter part of October or the beginning of November, he dropped anchor at San Lucar or in Cadiz harbour.

The Flota or Mexican fleet, consisting in the seventeenth century of two galleons of 800 or 900 tons and from fifteen to twenty merchantmen, usually left Cadiz between June and July and wintered in America; but if it was to return with the galleons from Havana in September it sailed for the Indies as early as April. The course from Spain to the Indies was the same as for the fleet of Terra-Firma. From Deseada or Guadeloupe, however, the Flota steered north-west, passing Santa Cruz and Porto Rico on the north, and sighting the little isles of Mona and Saona, as far as the Bay of Neyba in Hispaniola, where the ships took on fresh wood and water.[26] Putting to sea again, and circling round Beata and Alta Vela, the fleet sighted in turn Cape Tiburon, Cape de Cruz, the Isle of Pines, and Capes Corrientes and San Antonio at the west end of Cuba. Meanwhile merchant ships had dropped away one by one, sailing to San Juan de Porto Rico, San Domingo, St. Jago de Cuba and even to Truxillo and Cavallos in Honduras, to carry orders from Spain to the governors, receive cargoes of leather, cocoa, etc., and rejoin the Flota at Havana. From Cape San Antonio to Vera Cruz there was an outside or winter route and an inside or summer route. The former lay north-west between the Alacranes and the Negrillos to the Mexican coast about sixteen leagues north of Vera Cruz, and then down before the wind into the desired haven. The summer track was much closer to the shore of Campeache, the fleet threading its way among the cays and shoals, and approaching Vera Cruz by a channel on the south-east.

If the Flota sailed from Spain in July it generally arrived at Vera Cruz in the first fifteen days of September, and the ships were at once laid up until March, when the crews reassembled to careen and refit them. If the fleet was to return in the same year, however, the exports of New Spain and adjacent provinces, the goods from China and the Philippines carried across Mexico from the Pacific port of Acapulco, and the ten or twelve millions of treasure for the king, were at once put on board and the ships departed to join the galleons at Havana. Otherwise the fleet sailed from Vera Cruz in April, and as it lay dead to the leeward of Cuba, used the northerly winds to about 25°, then steered south-east and reached Havana in eighteen or twenty days. By the beginning of June it was ready to sail for Spain, where it arrived at the end of July, by the same course as that followed by the galleons.[27]

We are accustomed to think of Spanish commerce with the Indies as being made solely by great fleets which sailed yearly from Seville or Cadiz to Mexico and the Isthmus of Darien. There were, however, always exceptions to this rule. When, as sometimes happened, the Flota did not sail, two ships of 600 or 700 tons were sent by the King of Spain to Vera Cruz to carry the quicksilver necessary for the mines. The metal was divided between New Spain and Peru by the viceroy at Mexico, who sent via Gautemala the portion intended for the south. These ships, called "azogues," carried from 2000 to 2500 quintals[28] of silver, and sometimes convoyed six or seven merchant vessels. From time to time an isolated ship was also allowed to sail from Spain to Caracas with licence from the Council of the Indies and the Contratacion, paying the king a duty of five ducats on the ton. It was called the "register of Caracas," took the same route as the galleons, and returned with one of the fleets from Havana. Similar vessels traded at Maracaibo, in Porto Rico and at San Domingo, at Havana and Matanzas in Cuba and at Truxillo and Campeache.[29] There was always, moreover, a special traffic with Buenos Ayres. This port was opened to a limited trade in negroes in 1595. In 1602 permission was given to the inhabitants of La Plata to export for six years the products of their lands to other Spanish possessions, in exchange for goods of which they had need; and when in 1616 the colonists demanded an indefinite renewal of this privilege, the sop thrown to them was the bare right of trade to the amount of 100 tons every three years. Later in the century the Council of the Indies extended the period to five years, so as not to prejudice the trade of the galleons.[30]

It was this commerce, which we have noticed at such length, that the buccaneers of the West Indies in the seventeenth century came to regard as their legitimate prey. These "corsarios Luteranos," as the Spaniards sometimes called them, scouring the coast of the Main from Venezuela to Cartagena, hovering about the broad channel between Cuba and Yucatan, or prowling in the Florida Straits, became the nightmare of Spanish seamen. Like a pack of terriers they hung upon the skirts of the great unwieldy fleets, ready to snap up any unfortunate vessel which a tempest or other accident had separated from its fellows. When Thomas Gage was sailing in the galleons from Porto Bello to Cartagena in 1637, four buccaneers hovering near them carried away two merchant-ships under cover of darkness. As the same fleet was departing from Havana, just outside the harbour two strange vessels appeared in their midst, and getting to the windward of them singled out a Spanish ship which had strayed a short distance from the rest, suddenly gave her a broadside and made her yield. The vessel was laden with sugar and other goods to the value of 80,000 crowns. The Spanish vice-admiral and two other galleons gave chase, but without success, for the wind was against them. The whole action lasted only half an hour.[31]

The Spanish ships of the sixteenth and seventeenth centuries were notoriously clumsy and unseaworthy. With short keel and towering poop and forecastle they were an easy prey for the long, low, close-sailing sloops and barques of the buccaneers. But this was not their only weakness. Although the king expressly prohibited the loading of merchandise on the galleons except on the king's account, this rule was often broken for the private profit of the captain, the sailors, and even of the general. The men-of-war, indeed, were sometimes so embarrassed with goods and passengers that it was scarcely possible to defend them when attacked. The galleon which bore the general's flag had often as many as 700 souls, crew, marines and passengers, on board, and the same number were crowded upon those carrying the vice-admiral and the pilot. Ship-masters frequently hired guns, anchors, cables, and stores to make up the required equipment, and men to fill up the muster-rolls, against the time when the "visitadors" came on board to make their official inspection, getting rid of the stores and men immediately afterward. Merchant ships were armed with such feeble crews, owing to the excessive crowding, that it was all they could do to withstand the least spell of bad weather, let alone outmanœuvre a swift-sailing buccaneer.[32]

By Spanish law strangers were forbidden to resort to, or reside in, the Indies without express permission of the king. By law, moreover, they might not trade with the Indies from Spain, either on their own account or through the intermediary of a Spaniard, and they were forbidden even to associate with those engaged in such a trade. Colonists were stringently enjoined from having anything to do with them. In 1569 an order was issued for the seizure of all goods sent to the colonies on the account of foreigners, and a royal cedula of 1614 decreed the penalty of death and confiscation upon any who connived at the participation of foreigners in Spanish colonial commerce.[33] It was impossible, however, to maintain so complete an exclusion when the products of Spain fell far short of supplying the needs of the colonists. Foreign merchants were bound to have a hand in this traffic, and the Spanish government tried to recompense itself by imposing on the out-going cargoes tyrannical exactions called "indults." The results were fatal. Foreigners often eluded these impositions by interloping in the West Indies and in the South Sea.[34] And as the Contratacion, by fixing each year the nature and quantity of the goods to be shipped to the colonies, raised the price of merchandise at will and reaped enormous profits, the colonists welcomed this contraband trade as an opportunity of enriching themselves and adding to the comforts and luxuries of living.

From the beginning of the seventeenth century as many as 200 ships sailed each year from Portugal with rich cargoes of silks, cloths and woollens intended for Spanish America.[35] The Portuguese bought these articles of the Flemish, English, and French, loaded them at Lisbon and Oporto, ran their vessels to Brazil and up the La Plata as far as navigation permitted, and then transported the goods overland through Paraguay and Tucuman to Potosi and even to Lima. The Spanish merchants of Peru kept factors in Brazil as well as in Spain, and as Portuguese imposts were not so excessive as those levied at Cadiz and Seville, the Portuguese could undersell their Spanish rivals. The frequent possession of Assientos by the Portuguese and Dutch in the first half of the seventeenth century also facilitated this contraband, for when carrying negroes from Africa to Hispaniola, Cuba and the towns on the Main, they profited by their opportunities to sell merchandise also, and generally without the least obstacle.