By the end of the sixteenth century the Spaniards had obtained undisputed possession of that lovely strip of mountainous country which extends from Cape Codera west between two parallel coast ranges to Barquisimeto and thence west-south-west nearly to the head of Lake Maracaibo—a belt some four hundred miles long and fifty or seventy-five wide. They also held the great peninsula east of Maracaibo Gulf, and had established outlying settlements in the llanos south of the mountains, besides the two isolated ports—Cumaná on the eastern coast and Maracaibo on the western. Notwithstanding the sack of Caracas in 1595 by the daring British buccaneer, Amyas Preston, the colony prospered. Unlike the Pacific coast, it had easy and direct communication with the Antilles and Europe; the altitude was great enough to ensure a healthful climate, while its fertile valleys could be reached from the sea in a few hours over easy passes, far different from those formidable gorges which are the only ways of reaching the table-lands of Colombia, Ecuador, Peru, and Bolivia. The interior, instead of being a heavily forested plain like that of the Amazon, practically inaccessible behind tremendous rain-soaked declivities, was an open prairie into which the mountains sank gently, and whose grassy expanses afforded pasture for innumerable herds. These geographical and topographical features have been determinative of Venezuela's development and history, political as well as industrial.
In the early years of the seventeenth century the long-neglected Cumaná district on the eastern coast began to be developed. The city of Barcelona was founded in 1617 near a magnificent body of grazing land and in the best tobacco country in Venezuela, where the Indians had grown the plant for untold generations. Barcelona soon became an important centre of population, and the starting-point for missionaries to the interior tribes. The gold placers which had attracted the first adventurers to the mountains west of Caracas became exhausted within a few decades. Nevertheless, the fertile lands, distributed among the Spaniards in encomiendas, continued to be cultivated by Indian and negro labour, but, although maize, bananas, potatoes, and in the higher valleys even wheat, as well as the vine and olive, with the cattle introduced by Europeans, furnished an abundant supply of food, to say nothing of tobacco and sugar, Spain's blind colonial policy virtually prevented export of agricultural products. The Spanish authorities wanted nothing from their American dominions but gold and silver, and when Venezuela's placers were exhausted the colony was neglected. It was in spite of the prohibition of the Spanish government that cacao trees were introduced, and the exportation which soon grew up—the first of any importance from Venezuela—was mostly clandestine. Practically all the goods legally imported had to be procured from the Cadiz monopoly, and were sent to the Isthmus and there transhipped into coasting vessels, paying enormous freight charges, profits, and duties. Tobacco and salt were monopolised by government concessionaires, and not a chicken could be sold in the markets without paying an exorbitant tax.
Education was completely neglected. It was not until 1696 that a priests' school was established in Caracas, and when the city of Merida asked a similar boon, it was denied because "His Catholic Majesty did not deem it wise that education should become general in America." So the Creoles grew up nearly as ignorant as the Indians around them, although retaining all the fierce pride of their Spanish descent, acknowledging no man as superior, and retaining very dim sentiments of loyalty to the mother country. Nevertheless, the ancient municipal forms, traditional among peoples of Spanish descent, survived, furnishing the framework of civil government, while the priesthood constituted a moral and intellectual tie binding the Creoles to their Castilian ancestors.
The repressive regulations against commerce could not be perfectly enforced. Although the arrival of a ship from Spain was a real event, British, Dutch, and French traders frequented the coast, opening markets with their swords, and often turning buccaneers and sacking a town when not satisfied with their reception. But the burning of a few coast hamlets was more than compensated by the advantages of practical free-trade, and Venezuela owed much of the prosperity she enjoyed during the seventeenth century to these semi-pirates. The settlements crept along the Andean valleys to the Colombian frontier; the Creoles ventured farther and farther into the wide plains of the Orinoco and their cattle were soon roaming half-wild in the immense and luxuriant pastures stretching south of the agricultural strip. From the mixture of the Indians of the llanos with Europeans sprang a new race of men, the semi-nomadic llaneros, whose hardiness, courage, horsemanship, and prowess as hunters of big game have given them equal celebrity with the gauchos of the Argentine, the cossacks of the Russian steppes, or the Texas cowboys. The buccaneers and smuggling traders were especially active in the latter part of the seventeenth century. In 1654 Frenchmen were repelled in an attack on Cumaná, but in 1669 the Britisher, Morgan, sacked Maracaibo, and in 1679 the French pillaged Caracas itself. The paralysis suffered by Spain during the war of the Spanish Succession nearly destroyed Venezuelan commerce, and it did not recover with the peace of Utrecht. Only five ships arrived in the first thirty years of the eighteenth century, and from 1706 to 1721 not a single vessel sailed for Spain.
The Spanish government determined to try if another system would not bring a larger revenue into the royal treasury. The Guipuzcoa Company was granted an exclusive franchise to buy and sell in the colony, and the operations of this powerful corporation galvanised commerce into a certain activity. In order to stimulate the receipt of hides, and prevent the incursions of wild plains Indians, trading posts were established in the llanos, and soon the prairies south of Valencia and Caracas rivalled the Barcelona country in cattle, and the ranches extended up the Apuré, the great western tributary of the Orinoco, to the foot of the Colombian Andes. Meanwhile expeditions penetrated up the Orinoco from its mouth, and in 1764 the city of Angostura was established four hundred miles from the sea. The operations of the Guipuzcoa Company did not aid in establishing a more friendly understanding between the home government and the Venezuelan Creoles. The independent merchants constantly quarrelled with the company's agents; the low prices for which they were compelled to sell their stock outraged the ranch owners; the farmers resented the monopolisation of tobacco and the restrictions on sugar-culture; exorbitant prices were demanded for imported goods. Protests became so loud that special commissioners were sent from Spain to investigate, but they gave no satisfactory relief. Shortly after the foundation of the Guipuzcoa Company, Venezuela had been raised to the dignity of a captaincy-general. The increased efficiency of the administration assisted the monopoly in suppressing clandestine trading, and the feeling grew to such a height that in 1749 a Creole leader, named Leon, menaced Caracas itself at the head of six thousand armed men, demanding the suppression of the company and the expulsion of its factors. The captain-general was forced to yield and the revolutionists dispersed, but his promise was never redeemed. The active measures of the company effectually shut off foreign trading-ships, and the ports were so fortified that the British expeditions retired defeated from the attacks they made in 1739 and 1743 on La Guaira and Puerto Cabello, although in 1797 they captured the island of Trinidad and menaced the entrance to the Orinoco. It was not until 1778, when the Spanish government finally abandoned the monopolistic colonial system and opened all the ports of South America to free commerce with each other and with Spain, that the Guipuzcoa Company retired from business. Six years before this the provinces of Maracaibo, Cumaná, and Guiana—as the lower Orinoco region was called,—all of which had heretofore been directly dependent upon the viceroy of Bogotá, were placed under the jurisdiction of the captain-general of Caracas, fixing the modern boundaries of Venezuela.
