Empires of the Atlantic World: Britain and Spain in America 1492-1830

by John H. Elliott

  In the regions settled by the Spaniards, with the exception of the Caribbean islands, where all attempts to cultivate wheat proved abortive,14 large areas of land were brought under the plough for the purpose of wheat production. Since the Indians persisted in their diet of maize, the wheat-fields which began to transform the landscapes of Mexico and Peru were exclusively devoted to production for the conquerors and settlers. With land becoming abundant as the indigenous population declined, viceroys were prepared to make land grants (mercedes de sierra) to interested parties," and the growing towns and cities provided a ready market for the produce from the new landed estates.

  Simultaneously, the land was transformed even more dramatically by the introduction and proliferation of European livestock - cattle, sheep, horses and goats. The appearance of this livestock, immensely damaging to Indian agriculture as the animals trampled the maize plots and ate the vegetation, provided another set of opportunities for entrepreneurially minded settlers as they took to stock raising, again with the growing domestic market in mind. A pastoral economy was developed in the viceroyalty of New Spain, where the Spanish institution of the Mesta was taken as a model for the organization of the sheep-owners.16 Horse breeding and cattle ranching provided a further stimulus to the formation of great estates - known as haciendas or estancias - especially in northern Mexico and the Peruvian sierra.17 By means of a modest system of land grants to poorer settlers, the viceregal authorities in Peru seem to have hoped to encourage the rise in the coastal regions of a class of small farmers, comparable to that which would later develop in New England and the Middle Colonies. But all too often their farmsteads or chacras proved not to be economically viable, as a result of lack of capital and limited market outlets. By the end of the sixteenth century many of them were being swallowed up by the larger landowners."

  The development of commercial agriculture, cattle farming and sheep raising, together with viticulture in Chile and Peru, soon began to reduce the initially overwhelming dependence of the settlers on the home country for essential food stuffs. Until as late as 1570-80, however, Spanish agrarian products - corn, wine and oil - remained the preponderant element in transatlantic shipments from Seville.19 Somehow the settlers had to find ways of paying for these essential commodities, as well as for the luxury items - high-quality textiles and articles of clothing, metal objects, furnishings and books - for which they craved. This required the identification and development of suitable commodities to sustain an export trade.

  English settlers in North America would be faced with a similar desperate search for `commodities' - for items in short supply at home that would justify the investment of capital and resources in overseas enterprise. William Wood's New England's Prospect (1634) told its own story. Where fertility was concerned, `for the natural soil, I prefer it before the country of Surrey or Middlesex, which if they were not enriched with continual manurings would be less fertile than the meanest ground in New England. Wherefore it is not impossible, nor much improbable, that upon improvements the soil may be as good in time as England.' Turning to prospects for the subsoil, Wood wrote: `For such commodities as lie underground, I cannot out of my own experience or knowledge say much ... but it is certainly reported that there is ironstone ... And though nobody dare confidently conclude, yet dare they not utterly deny, but that the Spaniards' bliss [i.e. gold] may yet lie hid in the barren mountains.' As for other possible resources, `the next commodity the land affords is good store of woods ... '20 In terms of the mother country's requirements, New Englanders were to discover that the region they had settled did not offer the most promising of prospects.

  In the initial stages of their colonization of the mainland the Spaniards would fare considerably better. Their first instinct, having looted what they could, was to go for commodities which required the minimum of processing or development: placer gold, in the first instance, but also pearls, first found by Columbus off the Cumana coast of Venezuela, and acquired by barter from the natives until pearl fisheries based on the island of Cubagua began to be systematically devel- oped.21 Dyestuffs, too, were in much demand at home. In 1526 the first shipment from Mexico of cochineal, the source of a red dye greatly superior to the traditional `Venetian scarlet', marked the beginnings of what was to become a highly profitable transatlantic trade.22 This was followed later in the century by the development in central America of indigo as an export crop, although indigo production, unlike that of cochineal, required mechanical processing.23 Other indigenous crops, too, began to find a European market, and most notably cacao. Early settlers in New Spain acquired from the indigenous population a taste for chocolate, and it was to meet the needs of the growing Mexican market that settlers in the Izalcos region of northern central America, desperate to find some rapid source of wealth, began producing cacao in the middle decades of the century.24 Boom was followed by collapse, but by the end of the sixteenth century New Spain in turn was exporting cacao to metropolitan Spain, where Mexican chocolate became an addiction among the elite and a cause for grave moral concern among those of tender conscience.25

  There were profits to be made, too, from exports based on Old World transplants to the Indies - hides and skins from the livestock now roaming Spain's Caribbean islands and the mainland colonies, and sugar, originally brought by Columbus to Hispaniola on his second voyage. Hides and sugar, indeed, were to become the mainstay of Hispaniola's economy as the tide of colonization moved on to the mainland, leaving the island half-abandoned and desolate, with its indigenous population dying out. In the 1520s wealthy encomenderos with a stake in Hispaniola's future began to invest in sugar mills, with the help and encouragement of royal officials. This marked the modest beginnings of a plantation economy in the Spanish Antilles which in 1558, at its peak, produced 60,000 arrobas of sugar for export to Seville, before it was outpriced on the Iberian markets by sugar produced more cheaply in other parts of the Americas .21 Within a few years of the conquest of Mexico sugar production moved to the mainland when Hernan Cortes established sugar mills at Tuxtla and Cuernavaca. Most of this sugar was for export, and the Cortes plantations survived, with fluctuating fortunes, throughout the colonial period.27

  Throughout the Spanish American world, therefore, plunder began to give way to development as easy booty became a diminishing asset, and it began to dawn on the conquerors and early immigrants that they were unlikely in the immediate future to be returning to their homeland laden with American riches. Their outlook was no doubt different from that of those early settlers of New England who had come in search of an alternative home, and, in William Wood's words, `look not so much at abundance as at competency'.21 Many of these were content with a step-by-step development of arable farming and animal husbandry on their modest farmsteads, although from the earliest days New England had its entrepreneurs like John Pynchon, who threw himself into commercial and industrial enterprises and dominated the economic and political life of his native town of Springfield, Massachusetts, founded in 1636 by his father, William.29 In both instances, however, the sheer pressure to survive forced the immigrants to think in terms of the best ways to develop local resources and exploit the opportunities provided by the growth of the settler communities.

  A continent that to European eyes appeared unimproved, or undeveloped, offered immense possibilities to the resourceful, and to those willing to take risks. But conditions tended to favour those who already had resources at their disposal, in the form of capital or labour, or both. Their privileged position made it possible for them to advance credit, or to engage personally in new ventures, like the textile workshops (obrajes) that began to be established in the viceroyalties of New Spain and Peru.30 After the initial investment of Spanish and European capital in the colonization of the Spanish Caribbean, further development in the Spanish American world had to depend largely on local capital and resources. A substantial, if erratic, supply of gold, and the flow of Indian tribute and labour that followed the defeat of the pre-Columb
ian empires, made the first stages of capital formation easier in Spanish than in British America. Merchants, encomenderos and royal officials with access to these sources of wealth were especially well placed to take advantage of the new opportunities presented by the need to refashion the New World to meet Old World requirements.

  It was, however, the discovery in the 1540s of the great silver deposits of northern Mexico and the Andes that dramatically altered the prospects of Spain's American possessions, and transformed them into far more than mere appendages to Europe's trading networks. Although the first silver strikes in New Spain were made within a decade of the conquest, the decisive event was the finding in 1546 of silver ores on the northern plateau at Zacatecas, to be followed by discoveries of further deposits in the same region in the following decades.31 Already in the previous year Spaniards in Peru had come across the extraordinary silver mountain of Potosi in the eastern range of the Andes. As a result of these spectacular discoveries, silver took the place of the dwindling supply of looted gold as the most valuable mineral resource of Spain's empire in America.32

  Although subsoil rights in Spain and its overseas territories belonged to the crown,33 the imposition of a state monopoly on the development of mining in the New World was out of the question. The crown needed silver urgently, and if new deposits were to be found and effectively exploited, this could only be achieved through private enterprise. The crown was therefore ready to grant prospecting and mining rights, in the form of what came to be a permanent concession, to those who came forward to request them. Those who received the concession were obligated in return to hand over to treasury officials a proportion - commonly a diezmo, or tenth - of all the silver they mined.34 It was this waiving by the crown of its subsoil rights that made possible the rapid development of the mining economies of New Spain and Peru, although at a high price in terms of deception and fraud.

  The beginnings of large-scale silver production in the two American viceroyalties had a galvanizing impact on their economies and societies, and one that would spread outwards in a ripple effect to other parts of Spanish America where precious metals were sought but not often found. There was an immediate stimulus to mining technology and production techniques, first of all in New Spain, where, as against the Andes, there was little by way of a native metallurgical tradition to which the Spaniards could resort. The most important technical advance came in New Spain in the 1550s when the process of drawing silver from the ore by the use of an amalgam of mercury was pioneered. There was a delay of some twenty years before the amalgamation process was transferred to the Andes, probably because Spanish entrepreneurs in Potosi were happy to cut costs and win quick profits by leaving it to Indian miners to follow their old and well-tried techniques.35 When the new refining procedure was eventually introduced, it made possible spectacular increases in silver production - increases facilitated by the fortunate discovery in 1563 at Huancavelica, in the mountains south-east of Lima, of mercury deposits that would provide a partial alternative to the mercury that had to be shipped across the Atlantic from the Spanish mines at Almaden."

  The introduction of large-scale mining operations required a concentration of capital and technical expertise, bringing to the mining areas speculators and merchants from Spain and other parts of the Indies who would advance goods and credit to the miners, and receive raw silver in return. The rush to find new reserves of silver was the principal dynamic behind the creation of new settlements and towns in northern Mexico, while Potosi, located 13,000 feet above sea level in the rarefied air of the Andes, grew into one of the largest cities of the western world, with a combined indigenous and Spanish population exceeding 100,000 by the start of the seventeenth century (fig. 12).37 The development of large centres of population acted in turn as a stimulus to agriculture and livestock farming, with food and supplies being drawn from an ever wider radius as the population grew Potosi was eventually drawing on a catchment area that extended from the Pacific coast of Chile - a source of fish, grapes and sugar - to Paraguay and the province of Buenos Aires, from which it obtained the cattle and sheep needed to keep it provisioned with meat.38

  The production and minting of silver introduced at least a partial monetary economy to expanding areas of Spanish America. The conquerors and settlers of Mexico needed a means of exchange in a land where cacao beans, bales of cloth and various other artefacts had served as currency before they appeared on the scene. The coin supply from Spain was fitful and inadequate, and, after growing agitation, a mint was established in Mexico City in 1536. This was authorized to strike silver and copper coins, although minting of the latter ceased in 1565 when it was found that the Indians were misusing them.39 A second mint in the Americas was founded in Lima in 1565, and then transferred to Potosi, where in 1574 the Casa de Moneda, situated on the south side of the Plaza Mayor, began striking the silver coins that would soon be circling the globe.41

  Very soon after its introduction, Indians began to use specie in Mexican markets alongside their cacao beans.41 The growing familiarity of the indigenous population with coins and complex financial transactions played an important part in the inexorable process by which the Spaniards would realize their aim of drawing it into a monetary economy. `Giving them their own lands and money in payment for their work,' wrote a Spanish judge in Peru in 1567, `so that they can purchase for themselves locally produced sheep, and cattle from Spain and other items for themselves, they will become interested in working, and by this means civility will begin to get into them.'42 The chink of coins would herald the coming of `civilization' to the Andes.

  The absence of silver mines in the areas of English settlement left the British colonies at an obvious disadvantage in providing settlers with specie as a circulating medium. From the 1620s tobacco became the common currency of the Chesapeake, even if accounts were kept in pounds, shillings and pence.43 A mint was set up in Massachusetts in 1652 but was closed some thirty years later, following the imposition of the Dominion of New England.44 Thereafter, colonial English America would have no mints. The gold and silver coins that circulated in the colonies were Spanish and Portuguese, with the Spanish silver piece of eight (the dollar) considered the most reliable coin because of its milled edges.45 These silver pieces filtered in to the American mainland through contraband trade and exchanges with the Spanish Caribbean islands, and there were never enough to meet the demand. As a result, local shortages of gold and silver coins remained a persistent problem throughout the colonial period, with individual colonies seeking to attract the coins in circulation by giving them a higher value than their neighbours. With specie draining away to England to pay for British imports, barter and commodities continued to be used for many local transactions, although by the end of the seventeenth century paper money, in the form of bills of credit, was becoming increasingly common as a medium of exchange, and would do much to limit the consequences of a money-short economy.46

  Thanks to its mines, Spanish America naturally developed a more monetized colonial market. Yet, for all the abundance of silver, it too tended to suffer from serious currency deficits as pieces of eight became a global currency. A royal order of 1556 that half of all the silver minted in Mexico City should be retained for use in New Spain inevitably failed to prevent the clandestine export of silver coins. Where these were insufficient for local transactions, traders would often have recourse to unminted bullion, in spite of the crown's efforts to put an end to a practice which defrauded it of revenue.47 There were great opportunities for personal enrichment, both open and clandestine, in these silver-rich societies, and leading merchants in Mexico City and Lima, after accumulating large stocks of silver, found it expedient and profitable to deploy their reserves to finance local enterprise. Throughout the colonial period credit played a central part in the financial and commercial life of Spanish America. In the absence of formal banking institutions the gap was filled by merchants, who, together with the church, became the principal source of loans.48<
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  Since sixteenth-century Europe possessed an insatiable thirst for silver, which it needed both for its own transactions and to balance its chronic trade deficit with Asia, its outflow from the Indies was a foregone conclusion. Even if anything from a quarter to a half would remain in the viceroyalties'49 whether in the form of coins, unminted silver or artefacts - altar frontals and candlesticks in the churches, caskets and tableware in the houses of the wealthy - Mexican and Peruvian silver propelled the Spanish Indies inexorably towards integration into the developing economies of Europe. From the mid-sixteenth century, Spanish America became pre-eminently a silver-based empire, furnishing successive Spanish rulers with a significant proportion - 20 to 25 per cent - of their revenues, while providing a stream of bullion which helped to lubricate Europe's economic activities and enabled the colonial societies to acquire from Europe the commodities they were unwilling or unable to produce locally.5o

  Spain's empire of the Indies therefore became heavily dependent for its export trade to Europe on a single staple which accounted for 80 to 90 per cent of the value of its annual exports to Seville in the final decades of the sixteenth century and the opening decades of the seventeenths' A similar dependence on a single staple export trade would be characteristic of the economies of other colonial societies in the Americas in the early stages of development, although New Spain and Peru would be unique in their development of an extractive economy until gold was struck in large quantities in eighteenth-century Brazil. Outside the silver-producing regions, it was a question of finding and developing a suitable crop for large-scale export. While New England and the Middle Colonies failed to achieve this, the story would be very different in the Caribbean islands and the Chesapeake colonies. Both regions were to provide fertile soil for one or other of the two crops that were to prove most in demand in overseas markets - sugar and tobacco. To these would be added rice and indigo as the Lower South (the Carolinas and Georgia) was developed in the eighteenth century In Spanish American cacao would become an increasingly strong export staple over the course of the seventeenth century, to the particular benefit of the planters of Caracas in what had until then been a relatively marginalized Venezuela .12