One of the first of the notable Spanish victims in the course of these wars was Valdivia himself. Attacked by furious hordes of Araucanians and overwhelmed, the intrepid European and his army perished to a man; while the Araucanians in triumph swept northwards, to be hurled to the south again by the next wave of battle which chanced to turn in favour of the Spaniards.
CHAPTER VIII
THE GOVERNMENT OF THE SOUTH AMERICAN COLONIES
Having now definitely obtained possession of the enormous territories of South America, it was equally the policy of both Spain and Portugal to retain the enjoyment of the new lands and of their produce for themselves alone. In order to effect this, stringent laws were laid down from the very inception of the colonization of the Continent. In a nutshell, they amounted to this: none but Spaniards might trade with the Spanish possessions of South America, and none but Portuguese with the Colony of Brazil. In the case of the latter country the regulations were by no means so strictly carried out as in the former. One of the chief reasons for this, no doubt, was the old-standing and traditional friendship existing between Portugal and England. With so many interests in common, and such strong sentimental bonds uniting the pair in Europe, it was difficult to shut out the English commerce altogether from Brazil.
In the Spanish colonies the enactments of the Court of Spain were far more rigorously carried out. Here, since the laws were so strict, the rewards for their breaking were naturally all the greater. Tempted by the magnitude of these latter, a great number of the officials made a lucrative profession of giving clandestine assistance to foreign commerce in direct contravention of the regulations laid down.
It is rather curious to remark that at the very height of her colonial commerce, when the riches of South America were pouring at the greatest rate into her coffers, how little actual wealth was accumulated by the Mother Country. Indeed, a monumental proof of the inefficiency of her organization is that, although she bled the filial nations with an almost incredible enthusiasm, Spain remained in debt. The influx of gold from her colonies demoralized and ruined such industries as she had possessed, and such goods as she sent out to South America and elsewhere were now almost devoid of any proportion of her own manufactures. The merchandise which she sent to the New World she purchased from other countries, principally from Great Britain, and the English merchants saw to it that their profit was no small one. Thus Spain at this period, from a mercantile point of view, was very reluctantly serving as a general benefactor to Europe.
All this, of course, was in spite of most extraordinary efforts to effect the contrary. As early as 1503 the Casa de Contratacion de las Indias had been established in Spain. This institution was practically the governing body of the colonies. It possessed numerous commercial privileges, since it held the monopoly of the colonial trade. These privileges were continued until as late as 1790.
The Casa de Contratacion, although in many respects a purely mercantile body, was endowed with special powers. So wide was its authority that to be associated with this body was wont to prove of enormous financial benefit. Thus, it was entitled to make its own laws, and it was specially enacted by Royal Decree that these were to be obeyed by all Spanish subjects as implicitly as any others of the nation.