A history of commerce

by Clive Day

209. Wares of the colonial trade.—Of the products which Spanish America furnished to commerce silver continued the most important during the colonial period; the list of a ship’s cargo begins always with an enumeration of the “plate,” in bullion and coin, of which but a small part was gold. A fleet which left America in 1582 comprised 37 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 (arrow-root?) with other apothecary drugs.” Descriptions of cargoes in the eighteenth century are substantially similar; among additional wares enumerated we find indigo, cocoa, vanilla, sarsaparilla, “Jesuit’s bark,” (quinine) “Paraguay tea” (maté), etc. The chief export from the La Plata region was hides, of which two ships brought nearly 40,000 in 1723. Most agricultural products were too bulky to pay for transportation.

The Spanish exported to the colonies assorted cargoes; one of 1625 included “Wines, Figs, Raisins, Olives, Oyle, Cloth, Cursies (kerseys, light woolens named from an English town), Linnen, Iron and Quicksilver for the mines.”

210. Reform of the colonial system about 1750.—In the eighteenth century the old Spanish colonial system went to pieces. The government recognized at last that it could not execute the laws which it had made, and that the system which was meant to form the basis of a great empire resulted only in stifling Spanish commerce and in encouraging foreigners to great illegal gains. Foreigners were still excluded in theory; the importance of the change lay in the opening of the trade to the Spanish who had before been excluded by restrictions and taxes. Spanish merchants were allowed first to send out ships independent of the fleets, and then in 1748 the fleets were given up altogether. The prohibition on commerce between the colonies was removed, and many new ports in America were opened to the European trade. An indication of the results that might follow such a change in policy had been furnished by the experience of Havana. When this city was captured by the English in 1762 and thrown open to English trade, 727 merchant vessels entered the harbor in less than a year. Even though the prohibition of trade with foreigners was still retained, the effect of the reform in policy was nothing less than magical. In ten years the trade and the customs duties increased about eightfold.

The reform came too late to benefit the Spanish industrial system. The colonies were destined to exercise their new strength in breaking their old bonds; while the home industries had decayed so far that a revival was impossible in competition with industries of more progressive nations. We leave Spain in the eighteenth century as we found her in the fifteenth century, serving the other countries of Europe by the production of raw materials, and dependent on them for her manufactured goods. Running through the list of the principal Spanish exports in the eighteenth century we find among them some that had undergone the first stage of manufacture, like wine, oil, soap, soda, and iron; but most were simple raw materials such as wool, salt, fruits, and nuts.

211. Portugal; promise of commercial greatness in the sixteenth century.—The little country of Portugal, numbering perhaps a million inhabitants, built up in the sixteenth century a commercial empire worthy to rank with that of Spain, and exceeding in importance that which any of the more northern states in Europe had yet established. I have already recounted the achievements of the Portuguese in maritime explorations. The part which they played in these expeditions prepared them for the oceanic commerce which developed after the discovery of America and of the sea route to India. While other nations stronger than Portugal in resources and industrial development were still unready to put forth their strength in distant commerce, Portugal shared with Spain the extra-European world, and gained for herself the richest part, the East. Da Gama returned to Lisbon in 1499 with a cargo which repaid sixty times the cost of the expedition. This was the beginning of a series of voyages devoted especially to the importation of pepper and other spices, which could be bought so cheaply in the East that they returned immense profits in Europe. Even the gold and diamonds which came later from Brazil were less valuable to Portugal than the monopoly she now possessed in the spices, drugs, dyes, and manufactures, which formerly had been obtained only by the expensive land route.

212. Failure of Portugal to maintain her position.—Portugal was favored not only by conditions in Europe, which gave her the start on other states, but also by conditions in Asia which enabled her able agents to build up, through naval power, a commercial overlordship which brooked no competitors, either Asiatic or European.

Portugal was, however, destined to play a great part in European commerce for only one century. We cannot, as in the case of Spain, say that a mistaken policy was the cause of her decline, for although the Portuguese commercial policy was very similar to the Spanish and would have shown the same weaknesses if it had been allowed to develop, more important forces were at work to drive Portugal from the rank which fortune had conferred upon her.

213. Weakness in resources; bad effects of Spanish rule, 1580-1640.—Portugal was not only small but industrially undeveloped, and from the very first depended on other countries for the wares which she exported to the East. Her explorations and her distant commerce were due to the energy of the dynasty rather than that of the people, and it was the misfortune of the country, in the critical period 1580 to 1640, to fall under the rule of Spanish kings whose influence on her commercial interests was entirely for the bad. Of the 806 vessels which Portugal sent to India, 1497-1612, only 186 sailed after 1580, and not only the number but the quality declined in a period which should have been marked by growth. Countries like England and Holland, which were far stronger economically than Portugal, refused longer to allow her the profits of trade while they did the work of production, and the English broke the power of the Portuguese in India, while the Dutch drove them from the eastern islands.

214. Failure of Portugal to recover her position by commerce with Brazil.—After the recovery of her independence in 1640, Portugal could look only to her American possession, Brazil, for the means of developing her commerce. The Dutch were expelled from that possession, and the discovery of gold there stimulated the growth of trade. Comparing the latter part of the eighteenth century with the earlier part of the seventeenth, the commerce between Portugal and Brazil is said to have increased twenty-fold. In place of a dozen ships a hundred sailed every year for America, returning with sugar, tobacco, hides, brazil-wood, gold, and diamonds.

The profits of this commerce, however, went for the most part to foreigners. Conditions at home had gone from bad to worse. The slight advance which the country had achieved in agriculture and manufactures before the discoveries had been lost by the attraction of all energetic spirits into commerce and navigation. African slaves took the place of free men in the fields. Portugal staked everything in the sixteenth century on the chance of commercial greatness, and when she lost, lost all.