COMMERCE, SMUGGLING, AND PIRACY 91
Commerce, Smuggling, and Piracy
THE COLONIAL COMMERCIAL SYSTEM
Spain’s colonial commercial system was restric-
tive, exclusive, and regimented in character, in
conformity with the mercantilist standards of
that day. Control over all colonial trade, under
the Royal Council of the Indies, was vested in the
Casa de Contratación (House of Trade), which was
established in 1503 in Seville. This agency licensed
and supervised all ships, passengers, crews, and
goods passing to and from the Indies. It also col-
lected import and export duties and the royal share
of all precious metals and stones brought from the
Indies, licensed all pilots, and maintained a padrón
real (standard chart) to which all charts issued to
ships in the Indies trade had to conform. It even op-
erated a school of navigation that trained the pilots
and offi cers needed to sail the ships in the transat-
lantic trade.
Until the eighteenth century, commerce with
the colonies was restricted to the wealthier mer-
chants of Seville and Cádiz, who were organized in
a guild that exercised great infl uence in all matters
relating to colonial trade. With the aim of prevent-
ing contraband trade and safeguarding the Seville
monopoly, trade was concentrated in three Ameri-
can ports: Veracruz in New Spain, Cartagena in
New Granada, and Nombre de Dios on the Isthmus
of Panama. The Seville merchant oligarchy and
corresponding merchant groups in the Indies, par-
ticularly the merchant guilds in Mexico City and
Lima, deliberately kept the colonial markets under-
stocked. In general, they played into each other’s
hands at the expense of the colonists, who were
forced to pay exorbitant prices for all European
goods acquired through legal channels. Inevita-
bly, the system generated colonial discontent and
stimulated the growth of contraband trade.
With the object of enforcing the closed-port
policy and protecting merchant vessels against for-
eign attack, a fl eet system was developed and made
obligatory in the sixteenth century. As perfected
about the middle of the century, it called for the
annual sailing under armed convoy of two fl eets,
each numbering fi fty or more ships, one sailing in
the spring for Veracruz and taking with it ships
bound for Honduras and the West Indies, and the
other sailing in August for Panama and convoying
ships for Cartagena and other ports on the north-
ern coast of South America. Veracruz supplied
Mexico and most of Central America; from Por-
tobelo goods were carried across the isthmus and
shipped to Lima, the distribution point for Span-
ish goods to places as distant as Chile and Buenos
Aires. Having loaded their returns of silver and
colonial produce, the fl eets were to rendezvous at
Havana and sail for Spain in the spring, before the
onset of the hurricane season. In the seventeenth
century, as a result of Spain’s economic decadence
and the growing volume of contraband trade, fl eet
sailings became increasingly irregular.
In the 1570s, Mexican merchants pioneered
an immensely lucrative trade between Acapulco
and Manila. The annual voyage of the Manila gal-
leon exchanged Mexican silver, which was in great
demand in China, for silks, porcelains, and spices.
A foreign observer estimated that the Mexican
merchants who dominated the trade doubled the
money they spent on it every year. From Acapulco
to Manila, the ship ran with the trade wind for a
space of eight to ten weeks. The return passage,
however, in a region of light and variable winds
and frequent typhoons, could take from four to
seven months, and on the longer voyages, the rav-
ages of “hunger, thirst, and scurvy could reduce a
ship to a fl oating cemetery.” Spanish offi cials dis-
liked the trade because it drained off bullion, most
of which came from Peru, and because it fl ooded
Peru with Chinese silks that reduced the demand
for Spanish textiles. But the demand for silk was
so insatiable and the supply so inadequate that
considerable quantities went by pack train across
Mexico to Veracruz and from there were shipped
again to Spain. As with the transatlantic trade,
Spain sought to regulate and limit trade with Asia,
limiting the size of ships in 1593 to 300 tons and
allowing only two ships to sail in any one year. The
Manila galleon made its last voyage in 1811.
Danger and diffi culty attended the long voy-
age to the Indies from the time a ship left Seville
to thread its careful way down the shoal-ridden
Guadalquivir to the Mediterranean. Hunger and