REFORM AND RECOVERY 137
to trade more freely with the non-Spanish world.
On the contrary, the Bourbons centralized colonial
administration still further, with a view to mak-
ing it more effi cient. In addition, their commercial
reforms were designed to diminish smuggling and
strengthen the exclusive commercial ties between
Spain and its colonies, to “reconquer” the colonies
economically for Spain.
REVIVAL OF COLONIAL COMMERCE AND
BREAKDOWN OF TRADING MONOPOLY
The fi rst Bourbon, Philip V, concentrated his ef-
forts on an attempt to reduce smuggling and to re-
vive the fl eet system, which had fallen into decay
in the late seventeenth century. With the Treaty
of Utrecht, the English merchant class had scored
an impressive victory in the shape of the asiento.
The South Sea Company was granted the exclusive
right to supply slaves to Spanish America, with the
additional right of sending a shipload of merchan-
dise to Portobelo every year. It was well known
that the slaveships carried contraband merchan-
dise, as did the provision ships that accompanied
the annual ship and reloaded it with goods. Buenos
Aires, where the South Sea Company maintained
a trading post, was another funnel through which
English traders poured large quantities of contra-
band goods that penetrated as far as Peru.
The Spanish government sought to check
smuggling in the Caribbean by commissioning
guardacostas (private warships), which prowled the
main lanes of trade in search of ships loaded with
contraband. It also tried to end the monopoly of the
Cádizconsulado(merchant guild), whose mem-
bers alone could load Spanish merchant vessels.
The fi rst breach in the wall of this monopoly came
in the 1720s, with the organization of the Cara-
cas Company, which was founded with the aid of
capitalists in the Biscay region. In return for the
privilege of trade with Venezuela, this company
undertook to police the coast against smugglers
and develop the resources of the region. Despite
the company’s claims of success in achieving these
objectives, it failed to stop a lively contraband trade
with the nearby Dutch colony of Curaçao or to
overcome the bitter hostility of Venezuelan plant-
ers and merchants, who accused the company of
paying too little for cocoa, taking too little tobacco
and other products, and charging excessive prices
for Spanish goods.
Biscayan and Catalan capital organized similar
companies for trade with Havana, Hispaniola, and
other places that the old system of colonial trade
had left undeveloped. These enterprises, however,
were fi nancial failures, partly due to inadequate
capital and partly because of poor management.
These breaches of the Cádiz monopoly brought no
benefi ts to creole merchants, who continued to be
almost completely excluded from the legal trade
between Spain and its colonies.
The fi rst Bourbons made few changes in the
administrative structure of colonial government,
contenting themselves with efforts to improve the
quality of administration by more careful selection
of offi ceholders. One major reorganization was the
separation of the northern Andean region (present-
day Ecuador, Colombia, and Venezuela) from the
viceroyalty of Peru. In 1739 it became a viceroy-
alty, named New Granada, with its capital at Santa
Fe (modern Bogotá). This change had strategic
signifi cance, refl ecting a desire to provide better
protection for the Caribbean coast, especially the
fortress of Cartagena. It also refl ected the rapid
growth of population in the central highlands of
Colombia. Within the new viceroyalty, Venezuela
was named a captaincy general, with its capital
at Caracas, and became virtually independent of
Santa Fe.
The movement for colonial reform, like the
program of domestic reform, reached a climax
in the reign of Charles III. Part of this reform had
been foreshadowed in the writings of a remarkable
Spanish economist and minister of fi nance and
war under Ferdinand VI, José Campillo. Shortly be-
fore his death in 1743, Campillo wrote a memorial
on colonial affairs that advocated the abolition of
the Cádiz monopoly, a reduction of duties on goods
bound for America, the organization of a frequent
mail service to America, the encouragement of
trade between the colonies, and the development of
colonial agriculture and other economic activities
that did not compete with Spanish manufacturers.
Most of these recommendations were incorporated