South America

by W. H. Koebel

So far as the commercial world was concerned, the powers of the Casa de Contratacion were sheerly autocratic. The institution, in fact, held the fortunes of all the colonials in its hand. It possessed, in the first place, the privilege of naming the price which the inhabitants of the New World should pay for the manufactured goods of the Old. In addition to this, it lay within its domain to arrange the rates at which the produce sent from the colonies was to be sold in the Spanish markets. From this it will be evident that, commercially speaking, its powers were feudal.

It was inevitable that frequent evils should have sprung from the inauguration of a system such as this. It became almost a religion to every Spanish official and trader to batten upon the unfortunate colonial, quite regardless of the fact that the pioneer settler was being strangled during the process. Since the hapless dweller in South America was not allowed to bargain or haggle, and was forced to take whatever was graciously sent out to him at a rate condescendingly fixed, it frequently happened that this latter was five or ten times the legitimate price.

The disadvantages endured by the humble oversea strugglers, however, did not end here, for their own produce received the coldest of financial greetings in Europe, and the prices realized from these frequently left the agriculturalists in despairing wonder as to whether it was worth while to continue with their various industries. Added to all these were further regulations which proved both irksome and costly to the men of the south. Twice a year the Casa de Contratacion sent out a formidable fleet from Cadiz, escorted by men-of-war. It was this fleet which carried the articles of which the colonials were in urgent need. Now, the main settlements of the Spanish merchants and officials, as distinguished from the colonial, were in Panama and the north, and it was largely in order to benefit these privileged beings that the ridiculous regulations were brought into force which made the fleet of galleons touch at the Isthmus of Panama alone. By this means it was insured that these goods should pass through the commercial head-quarters, and leave a purely artificial profit to the Spaniards concerned, instead of being sent direct to the various ports with which the coasts of the Continent were now provided.

In these circumstances it was necessary for colonial merchants and traders from all parts of South America to journey to this far northern corner in order to carry out their negotiations, and to attend to the fresh transport of the wares. The hardships and the added cost brought about by regulations such as these may be imagined, and, as was only to be expected, a system such as this recoiled upon the heads of those who were responsible for its adoption.

Occasionally circumstances arose in connection with these official fleets which bore with almost equal hardship upon Spaniard and colonial alike. Thus, when the English, Dutch, and French buccaneers took to harassing the South American coast in earnest, there were periods when the galleons of the Indies were kept within their harbour for a year and more. Then the Spaniards went perforce without the South American gold, and the colonial's life was shorn of the few comforts which the wildly expensive imported articles had been wont to bring.

The home authorities invariably appeared loth to take into account the possibility of human enterprise. It was not likely that the colonials would submit tamely to such tremendous deprivations as those intended by Spain. Foreign traders, moreover, notwithstanding the ban and actual danger under which they worked, were keenly alive to the situation, and to the chances of effecting transactions in a Continent where so handsome a profit was attached to all commerce. The result was the inception of smuggling on a scale which soon grew vast, and which ended in involving officials of almost all ranks. The Governors of the various districts themselves were usually found perfectly willing to stand sponsors for all efforts of the kind, and, viewing the matter from the modern point of view, they are scarcely to be blamed for their complaisant attitude.

Here is a narration written in 1758 of the manner in which these transactions were carried on. The author, referring to it in an account of the European settlements in America, asserts that the state of affairs was one likely to prove extremely difficult to end—

"While it is so profitable to the British merchant, and while the Spanish officers from the highest to the lowest show so great a respect to presents properly made. The trade is carried on in this manner: The ship from Jamaica, having taken in negroes and a proper sortement of goods there, proceeds in time to the place of a harbour called the Groute within the Monkey-key, about four miles from Porto-Bello, and a person who understands Spanish is directly sent ashore to give the merchants of the town notice of the arrival of the vessel. The same news is carried likewise with great speed to Panama, from whence the merchants set out disguised like peasants, with their silver in jars covered with meal to deceive the officers of the revenue.... There is no trade more profitable than this, for their payments are made in ready money, and the goods sell higher than they would at any other market. It is not on this coast alone, but everywhere upon the Spanish Main, that this trade is carried on; nor is it by the English alone, but by the French from Hispaniola, and the Dutch from Curassoo, and even the Danes have some share in it. When the Spanish Guardacostas seize upon one of these vessels, they make no scruple of confiscating the cargo and of treating the crew in a manner little better than pirates."