Upon the arrival of the galleons, the treasurer, contador, or factor, was ordered by the governor to proceed there, taking with him the deputies of the other two officials.[XXVII‑10] When the gold and silver had been put on board the galleons, and other commodities on board the merchant ships, all were visited by the royal officers to see that the king was not cheated—except for valuable consideration. The coming and going of the annual fleets was a matter of the utmost solicitude to the crown, to shippers, and to consignees. Many a treasure-laden craft either foundered at sea or fell a prey to buccaneers, and the safe arrival of a convoy was heralded with every manifestation of joy, even royalty itself not deeming it out of place to announce such an event. Thus on October 15, 1605, the king in a despatch to the president and audiencia informs them of the arrival of General Don Luis de Córdoba in January of that year.
After the departure of the galleons, Portobello was almost abandoned by the Spaniards, and left mainly to negroes and mulattoes, the inhabitants living chiefly by renting their dwellings and stores at exorbitant rates.[XXVII‑11] The town was built in the shape of a crescent; its harbor was one of the most secure in the Indies,[XXVII‑12] and ship-building and the preparation of cedar lumber were its leading industries. The climate of Portobello, like that of other towns on the Isthmus, was unhealthy, as I have elsewhere stated, though less so than that of Nombre de Dios or even Panamá. The hospital was crowded with invalid soldiers, laborers, and slaves, and in 1608 an annual grant of two thousand ducats was assigned by the crown for its support.
In 1610 the city of Panamá had not more than one third of the population which it possessed in 1585,[XXVII‑13] although from the time of its establishment to the latter date it had grown steadily in wealth and population. The best indication of its decline as a commercial centre is the fact that the revenues of the casa de Cruces,[XXVII‑14] which at one time were farmed out for ten thousand pesos a year, were rented in 1610 for only two thousand pesos. There were mines, but they were not worked;[XXVII‑15] pearl-fisheries, but they lay idle; a measure of trade, but it was in the hands of monopolists, who shared their profits with the king.[XXVII‑16]
The expenses of the general government of Panamá were met by annual appropriations allowed by the council of the Indies, and if we take into consideration the sparseness of the population and the comparative cheapness of the necessaries of life, the officials were exceedingly well paid for their services.[XXVII‑17] But good pay does not seem to have secured faithful service, for on the 28th of March 1605 his Majesty informs the president that he has learned that married officials, while going their official rounds, were accustomed to take with them their wives, who were always provided for at the towns they visited; he enjoins him to forbid them thus to take advantage of their position and to insist that the retinue of bailiffs and servants be reduced to the smallest possible number. Governor Valverde in his report of June 6th following, says that many of the interior towns of Tierra Firme had not been visited by an oidor for many years, and that the province of Veragua had never been visited at all. To remedy such neglect the governor orders the oidores to visit all properly designated places in rotation.
INTEROCEANIC COMMUNICATION.
The question of interoceanic communication, to which allusion has already been made, was discussed at intervals during the latter half of the sixteenth century, and further surveys were made early in the seventeenth. "It is true," writes Gomara in 1554, "that mountains obstruct these passages, but if there be mountains there be also hands; let but the resolve be formed to make the passage and it can be made." On the 31st of December 1616 the king informed Diego Fernandez de Velasco, who at that date was appointed governor of Castilla del Oro, that the court of Spain endorsed the opinion of the commercial world on this project. They believed that communication might be easily established between the oceans by constructing a canal connecting the rivers Dacil and Damaquiel, about thirty leagues from Cartagena, and that such a work would enable the king to provide better for the defence of the provinces.[XXVII‑18]
The governor was directed to report on the feasibility of the project, and to despatch a few small vessels for the purpose of making a similar investigation at the gulf of San Miguel and the Rio Darien. The conclusions arrived at by the officers employed on these surveys is not recorded in the chronicles of the age, but we learn that his Majesty was very explicit in his directions that all such explorations and surveys should be made at the expense of those who were interested, and not charged to the royal treasury.[XXVII‑19]
When Felipe IV. ascended the throne of Spain he assured his subjects in the New World that no forced loans should be required during his reign. He even reimbursed, with interest, the money seized by his predecessor, who a year before his death appropriated to his own use an eighth of the treasure on board the fleet from the Isthmus.[XXVII‑20] Nevertheless the fourth Philip was often in sore need of funds. About this time Rodrigo de Vivero was governor of Castilla del Oro, having been appointed the successor of Velasco,[XXVII‑21] and those in charge of the bullion fleet had made a practice of tarrying long at the port of Perico under pretence of taking in merchandise from Spain. Claiming to be under the jurisdiction of the viceroy of Peru they refused obedience to the audiencia of Panamá. In order to prevent delay in the arrival of the treasure-ships it was ordered that all the officers and men of the fleets calling at Tierra Firme should be placed under the immediate jurisdiction of the audiencia.
SMUGGLING.
The king was constantly defrauded of his revenues by contraband trading which prevailed throughout the provinces, but nowhere to such an extent as in Panamá. In the year 1624 the amount of merchandise registered as passing through the casa de Cruces was 1,446,346 pesos, while goods to the amount of 7,597,559 pesos were reported by the factor Cristóbal de Balba to have been smuggled through. No punishment was inflicted for these frauds, though his Majesty thus suffered a loss of 1,370,656 pesos, and the matter was compounded by the payment of 200,000 pesos into the treasury, the factor having received a bribe of 6,000 pesos. Smuggling was practised to such an extent that it threatened the very existence of legitimate commerce. For this condition of affairs Spain had but herself to blame. The merchants of Seville, who still enjoyed a monopoly of the trade with the provinces, despatched only a small squadron twice a year to supply the wants of the colonists. They regulated no less the supply of European goods in America than of American goods in Europe, and took care that both should be shipped in quantities so small as to ensure enormous profits. All kinds of devices were resorted to by contraband traders, both Spaniards and foreigners,[XXVII‑22] to secure a portion of the rich traffic of the Isthmus, and the government finding its revenues constantly decreasing, finally declared smuggling to be a mortal sin, and made those who engaged in it liable to be tried by the inquisition.