by Henry Kamen
The immense changes made by the Catholic faith to the eco-systems of the New World could be seen also in the extensive series of landed estates that the Jesuits owned along the coast of the viceroyalty of Peru.112 By around 1700 the Jesuits, who had arrived barely thirty years before, were among the richest landowners of the Andean valleys. At first the Jesuit haciendas produced sugar, then they took to cultivating vines; both were directed to financing the eleven Jesuit colleges in Peru. Winemaking soon became the most profitable industry on the coast, though in theory no wine was to be sold to Indians, ‘because they leave their farms and get drunk’.113 It is possible to imagine the irony of entire estates and valleys being dedicated to growing produce that the indigenous population was forbidden to consume. When there was a shortage of local native labour, as happened by the end of the sixteenth century, the Jesuits made use of imported black slaves, brought in principally through Buenos Aires and Brazil. By the mid-eighteenth century the Jesuits were reckoned to be the biggest slaveholders in South America. They also figured as among the most successful property owners, since they did not pay taxes and even avoided the famous sales tax, the alcabala, on the excuse that their estates produced for subsistence and not for trade.
This rapid journey to select points of the Spanish frontier in the New World leads us to some unconventional conclusions. It was obvious throughout the colonial period that Spaniards did not possess the means, the men or the money to establish a secure presence outside a handful of big cities and the hinterland associated with them. The unending forests, the interminable grasslands and plains, the expanses of un-patrolled coastline, escaped their authority completely. Nor was there any way in which they could impose adequate control over those who wished to trade outside the officially approved system. We have often been presented with a picture of a continent that was in substance firmly Spanish, with only its outer fringes vulnerable to the marauding of pirates and the raids of untamed Indians. When we look at the picture more closely, the distinction between what was and was not Spanish, what was the empire and what was merely its frontier, becomes blurred and often vanishes completely.
The incapacity of Spain was the basic situation. Beyond that, the different elements of the vast American landscape were in fact held together by those who have too often been looked upon as its destroyers. The marauders and the untamed were also an integral part of the whole, the informal participants in empire were no less crucial than the formal. The indigenous peoples who never ceased to be hostile to the Spaniards were also those who worked with and alongside the Spanish system, because it was also in their interest to ensure the survival (on their own terms) of the empire rather than its ruin. The Dutch and English bringing blacks and material goods to Central America were backing up Spain just as much as the Guaraní warriors who sailed down the Paraná, singing and armed to the teeth on their way to defend Buenos Aires. There was, in brief, no clear division between an occupied Spanish America and the untamed frontier beyond it. Both internally and externally, all parts of the enterprise in the New World formed a complex frontier, in which both friends and enemies collaborated in order to survive.
7
The Business of World Power
This monarchy of Spain, which embraces all nations and encircles the world, is that of the Messiah, and thus shows itself to be the heir of the universe.
Tommaso Campanella, Discourses (1607) 1
‘During this year [1530]’, recorded a native Cakchiquel chronicler of Guatemala, ‘heavy tribute was imposed. Four hundred men and four hundred women were delivered to be sent to wash gold. All the people extracted the gold. All this, all, we ourselves saw, oh my sons!’2 The great prize attained by Spain's empire, guarded jealously and coveted by every nation in Europe and in Asia, was the gold and silver of the New World. In the early decades the search had been exclusively for gold, whether in the form of ornaments (as with the Inca treasure) or panned from mountain streams. During the first decades of settlement, both in the Caribbean and in Central America, the Spaniards organized tens of thousands of slave labour gangs to help pan gold. From the middle of the sixteenth century, however, the discovery of rich deposits of silver far south in the American continent at Potosí (Bolivia) in 1545 and at Zacatecas (Mexico) in 1548 opened the way to the preponderance of silver in the economy of the empire. Gold was worth about ten times more than silver, and continued to be mined for centuries. But silver reigned.
Silver output remained low until the development of the use of mercury. The mercury amalgam process involved the isolation of silver from waste by combining it with mercury. The process was developed in 1555 from German ideas,3 by the Sevillan Bartolomé de Medina, and first extensively used in Mexico, then in Peru from the 1570s. In Peru the Spaniards enjoyed the advantage after 1568 of rich mercury mines at Huancavelica. Mexico, by contrast, had to rely throughout the colonial period on the importation of mercury, with great difficulty and much cost, from the royal mines in Spain at Almadén, in the province of Ciudad Real. When there were difficulties in supply, the crown resorted to purchasing mercury from the mines at Idria in central Europe. The amalgam process boosted output phenomenally. At Potosi production was seven times higher in 1585 than in 1572, and during the period 1580–1650 output never fell below 7.6 million pesos annually.4 ‘Potosi is more prosperous than it has ever been’,5 a satisfied settler reported in 1577. ‘There is so much silver that we want for nothing’, wrote another. Thirteen thousand feet up in the cold and barren mountains of central Peru, Potosi with a population in 1547 of fourteen thousand grew to have one of nearly one hundred and sixty thousand in 1650, the largest town in the entire empire, producing four-fifths of the silver of the viceroyalty. A friar in 1630 saw the mine as the hope of Spain's imperial policies: ‘Potosi lives in order to serve the imposing aspirations of Spain: it serves to chastise the Turk, humble the Moor, make Flanders tremble and terrify England.’6
It would be a truism to say that the men who created this wealth were the indigenous natives. How did they labour to produce it? The familiar image of Spaniards exploiting a vast fund of ‘forced paid labour’ equivalent to slavery is only partly true. In fact, at Potosí the way the natives served with their labour went through different stages. Until the early 1570s, the conditions of work and marketing were defined largely by the Indians themselves.7 They produced the silver according to their own rules and conditions, and then made arrangements for handing the requisite quantities over to the Spaniards. From 1573, in the period of Viceroy Toledo, the system of drafting peasant labour, the mita, was used to recruit Indians to work for a small wage in the mines. The consequences were dramatic: output increased fourfold. In the early decades around thirteen thousand Indians a year were recruited, though the figures declined as epidemics and disease took their toll.
From this period, the American mines poured out their riches. Between 1550 and 1800, Mexico and South America produced over eighty per cent of the world's silver and seventy per cent of the world's gold. Between 1540 and 1700 the New World produced around fifty thousand tons of silver, a quantity that doubled the existing stock of silver in Europe, with profound consequences for its economy.8 Over seventy per cent of this production came from the famous site at Potos’. There are no reliable figures for the amounts of metal transported across the Atlantic, but the official imports registered at Seville indicate that between 1500 and 1650 over a hundred and eighty tons of gold and sixteen thousand tons of silver were sent from the New World to Spain.
The rapid wealth in its turn stimulated the economy throughout the empire. ‘There are many men I know who three years ago possessed not a penny and were three or four thousand pesos in debt, now with the new invention of mercury some of them have forty and fifty thousand pesos.’9 ‘God has given me silver, and in quantity’, a satisfied settler wrote from Huamanga in Peru in 1590, ‘I now live rich and honoured in this land, who would make me go back to Spain and be poor?’10 Spaniards of all ranks and conditions saw
their lives transformed in America by the riches that poured out: artisans set up businesses, traders purchased ships, merchants opened shops, butchers, tailors and shoemakers found new opportunities in a land where there was effectively no competition for their services. ‘This land’, it was reported from Lima, ‘is silver-mad.’11
The crown of Spain was foremost among those who profited, receiving by law one fifth (quinto) of wealth produced. To demonstrate their loyalty to the crown, conquistadors from the time of Cortés and Pizarro always took great care to set aside the royal fifth before dividing the spoils. With time the government also began to levy taxes on everything else connected with the bullion trade. The New World, as we have seen from the situation during the emperor's reign, was transformed into the treasure chest not only of the Spanish state but of all those - settlers, traders and bankers – whose investment in the enterprise was beginning to pay dividends.
The precious metals, rather than conquest, were the key to the development of the monarchy. Though military forces were important for the survival of Spanish power, they played little part in its creation. The empire, in reality, was brought into existence by the collaboration of powerful provincial élites and enterprising traders who operated across nations rather than within one nation alone. It was the first globalized economy. The Romans, a sixteenth-century writer pointed out, had become great by conquest; the Spaniards, by dynastic inheritance that united many lands. Writing a year before the death of Philip II, Gregorio ▓López Madera commented that ‘all past empires have come to birth through violence and armed force, only that of Spain has been just in its origins and increase, for the greater part came together through succession, and the rest was conquered through rightful claims’.12 While not denying Spain's imperial primacy, he saw its empire as the product of collaboration rather than conquest.
It is a point of view that is easy to overlook. Unlike the Portuguese empire, which was a widely dispersed but territorially small venture closely monopolized by the Portuguese themselves, the Spanish monarchy from its inception was a vast entity in which non-Spaniards always had a crucial role. Like any great enterprise, it was highly expensive to run. In times of peace, basic operations such as communications, trade and transport of supplies between the territories of the monarchy required a degree of efficiency that the central government could never guarantee, since it had no personnel who could carry out the task. Virtually all the important operations were therefore contracted out. Even the collection of the crown's own taxes was contracted, since there were no internal revenue officials. As in any large business, it was the ability to arrange transactions and move money that ensured success. To achieve this, the crown resorted to international bankers.
Castile already had a small but active commercial economy, based principally on the wool trade and the merchant community of Burgos.13 As the principal export of the region, wool was the basis on which a small number of northern Castilian merchants traded and became financiers, both in the peninsula and in the ports of Western Europe.14 These interests refused to accept the intrusion of outside financiers, and formed a vocal opposition that took part in 1520 in the rebellion of the Comuneros. Castilian manufacturers and traders were always quick to denounce the ‘foreign’ predators, and yearned for a lost age when the economy had been local, closed and self-sufficient. It was, however, the logic of the imperial system that it brought into being a network of interests in which non-Spaniards had an essential part to play.
After the defeat of the Comuneros, Charles returned to Castile and took in hand the organization of his new territories. In all respects, the methods followed were those pioneered by the Portuguese, whose ships had been the first to penetrate the African coast, the Atlantic and Asia. The Portuguese had tended to draw up agreements with private contractors who were accountable to a specialized government body, the ‘Casa’ in Lisbon. From 1506 the Casa had imposed a state monopoly on trade in certain items, principally bullion and spices. Charles now set up a similar controlling body in Seville, the Casa de la Contratación (or House of Trade), and formalized the details of the state monopoly. Government supervision was made firmer by the establishment in 1524 of a new council of the Indies, which from that time began to control all aspects of imperial policy and trade.
One of the chief tasks of the Casa was to impose the new trading monopoly based on Seville. Its first administrator (‘factor’) was a Genoese.15 At the same time the merchants of Seville were organized together into a trading-guild or Consulado (1525), based on medieval guilds that had traded from the northern coasts of Spain. Both Casa and Consulado operated a system that excluded outsiders, but this was not their primary intention. The government hoped to use their resources to operate profitably an enterprise for which it had little capital of its own. Money was found from the various commercial enterprises that had been active in Castile since the fifteenth century. Among them was the important firm of the Espinosa, a family that originated in Burgos, had representatives in Antwerp, Seville and Nantes, and helped to finance the ships that sailed in 1525 from La Coruña to Maluku under the command of Garcia de Loaysa.16 But it soon became apparent that Castilian traders were unable by themselves to exploit the available opportunities. They lacked the money, the ships and the expertise. Charles wasted no time in searching for additional help elsewhere. He found it, as we have seen, largely in the Genoese trading community.
Within two generations, the American trade revolutionized sections of the Spanish economy. ‘In the last sixty years’, reported Tomás de Mercado in 1569, Seville had acquired ‘great riches’ and become a ‘centre for all the merchants of the world’. But the trade was never in reality a monopoly of Seville. It was so international, Mercado pointed out, that the insurances on traded goods had necessarily to be international. ‘To insure what is transported they need to insure in Lisbon, in Burgos, in Lyon and in Flanders, for the quantity of goods carried is so great that neither Seville nor even twenty Sevilles would suffice to do it.’17 Any big merchant now effectively traded ‘in all parts of the world’. ‘Everybody depends on everybody else.’18 Seville had become a centre of the commercial world, but only because the world market dictated its proceedings. A complex international network came into existence, uniting the trading élite of all countries and attracting the investment of a broad range of social classes.19
The attention of this business activity focused exclusively on the shipping lanes between the New World and Europe. In 1561 a royal decree set new rules for the way in which shipping should cross the Atlantic. Vessels were to sail only in official trade fleets that left a single point of departure, Seville, twice a year in January and in August. In the Caribbean the fleet was to split into two squadrons, one bound for Tierra Firme (Cartagena and Panama), the other for New Spain. The system, and the Seville monopoly that went with it, was meant to ensure greater security at sea and to regulate the goods carried and the taxes paid. The rules were modified in 1564, when separate fleets for New Spain (in April) and Tierra Firme (in August) were permitted. On the return journey, fleets from both areas were to rendezvous in Havana and set out together to Seville in March. The system was not always adhered to, but remained in force until the end of the seventeenth century, when Cadiz replaced Seville as the actual port of departure. From the later decades of the eighteenth century the monopoly was modified and then discontinued.
The Atlantic route was the principal lifeline of the empire, but necessarily linked up with other smaller routes. The most important of these was the route to Buenos Aires, which from the end of the sixteenth century was allowed to trade with two annual ships to the peninsula. In the same way, every year the Manila galleon focused the hopes and anxieties of those who traded to Asia. Among those who owned and sailed the ships, provided pilots and managed the cargoes, a clearly dominant place was occupied by the Basques. They had during the sixteenth century an almost exclusive control over the vessels taking part in the sea-going trade of Seville.20 The mer
chants who invested in the Atlantic trade were, during the first half of the sixteenth century, logically and principally Spaniards (mainly from Burgos and the Basque country). Their loans to traders in that period exceeded in quantity the loans made by the Genoese.21
Spaniards resident in Seville felt that theirs was the most substantial trade in the world. This was not wholly true. In terms of shipping, there were other more substantial trades in Europe than that of Seville. The volume of Spanish tonnage in the Atlantic around the year 1600 was, for example, only a small proportion of the tonnage employed by the Dutch to trade to the Baltic. And even the Atlantic trade cannot be measured simply in terms of Spanish ships. The vessels of other European seafaring nations on the Atlantic in the years after 1600 exceeded in volume the tonnage controlled by Spain. The same perspective can be applied to the goods traded across the Atlantic. They were always the least significant part of the items taken to or brought from the New World. The most important section of the Atlantic trade was always the silver, which completely overshadowed the value of any other merchandise carried. By the seventeenth century, as we shall see, even the silver was no longer in Spanish hands.
In order to cope with problems created by the different trades within the empire, the Madrid government attempted to impose a system of controls, sometimes in the form of a monopoly, sometimes simply in the form of prohibition. The type of problem provoked by transcontinental trade can be seen through the example of the Manila galleon. As its critics in Spain pointed out, the galleon served as a convenient outlet for Chinese silks, which made their way to the peninsula and put silk producers there out of work. There was a similar problem in Peru, where the Manila imports competed with local produce. Moreover, large amounts of silver were sent directly from Peru to Mexico in order to pay for Asian goods.