Notes Ch. 4: The Economic Foundations of Colonial Life
Pgs. 75-94
I. Introduction.
i. Indigenous people will either die out or revolt.
ii. Feared a rise of a class of feudal lords independent of royal
authority.
iii. The name of the church would suffer if the indigenous people died.
iv. Scholasticism was a philosophical method and an instrument used
for solving public and private problems.
II. Tribute and Labor in the Spanish Colonies.
a. The Encomienda and Slavery.
i. Natives brought tributes to keep the Spanish happy.
ii. Arawaks became slaves after revolting.
iii. Rebellious settlers demanded slaves.
iv. Governor Nicolás do Ovando’s agreement became the
encomienda.
1. Warriors had leading jurisdiction.
2. Slaves gave tribute and received protection.
v. 1511: Father Antón Montesinos preached against offending slaves.
vi. 1512-1513: the Laws of Burgos sanctioned and regulated slavery.
vii. The Requerimiento, written by Dr. Juan López de Palacios Rubios,
legalized Spain’s claim over the Indies.
1. Can only go to war with natives if they reject the
supremacy of the church and papacy.
viii. Bartolomé de Las Casas said the requerimiento gave no temporal
power or possession in the Indies.
1. Suppressed all encomiendas and liberation of slaves.
b. The New Laws of the Indies and the Encomienda.
i. The crown renewed its efforts to bring indigenous tribute and labor
under royal control.
ii. 1531-1532: the second audiencia (high court) of New Spain was
established.
1. The first audiencia despoiled Cortés and oppressed natives.
2. Started by regulating of tribute and labor.
a. Moderated tribute.
b. Forbade native carriers without their consent.
iii. 1542: the New Laws of the Indies doomed the encomienda.
1. Prohibited enslavement of native peoples.
2. Ordered the release of slaves whom legal title could not be
proved.
3. Barred compulsory personal service by indígenas.
4. Regulated tribute.
5. Declared that existing encomiendas died with the deaths of
their holders.
iv. The New Laws were reaffirmed and slavery and forced labor were
allowed after many revolts.
v. 1560: the tribute and labor situations were stabilized.
vi. The visita is the inspection of an indigenous town that yielded
information concerning its resources or capacity to pay.
vii. The cuenta (count) gave the number of tribute payers.
viii. Encomenderos and others still abused the indigenous people.
ix. When Philip II came to thrown tributes dramatically increased.
x. 1549: colonists lost the right to demand labor from their tributaries.
xi. The native population was dramatically decreasing.
xii. 1535-1550: Peru was in a civil war.
xiii. 1570s: the encomienda lost its original character of an institution
based on the use of native labor without payment.
xiv. The Guaraní society had no hereditary chiefly classes and was
based on personal qualities.
xv. The encomienda original continued to the end of the colonial
period.
xvi. The encomienda mitaya (second encomienda) was also established.
c. The Peparimiento, Yanaconaje, and Free Labor.
i. The repartimiento all adult male indígenas had to give a certain
amount of their time in rotation throughout the year to work in:
1. Spanish mines and workshops.
2. Farms and ranches.
3. Public works.
ii. The indígenas received token wage for their work under the
repartimiento.
iii. Peru’s repartimiento:
1. Were required to work 6-month periods.
2. Many workplaces were deathtraps.
iv. Yanaconas separated indígenas from their community and forced
them to serve Spaniards as personal servants.
1. Resembled serfdom.
v. 1630: repartimientos were gradually being abolished by the crown.
vi. Yanaconaje provided cheap workers for high-cost silver mines.
vii. The repartimiento de mercancías allowed the purchase by
indigenous villages of goods from district governors.
viii. The hacienda offered escape from intolerable conditions and
aggravated situations.
ix. Debt peonage was more of an inducement than a bond.
1. Natives worked to repay debts.
x. Convict labor was assigned by Spanish judges helped supplement
free labor.
d. Black Slavery.
i. Spaniards believed blacks were better able to handle the hardships
of plantation labor.
ii. The high cost of slaves limited the use of black slaves to profitable
plantation cultures or to domestic service.
iii. All colonial labor systems rested in varying degrees on servitude
and coercion.
iv. Mestizos were free blacks whose population gradually expanded.
III. The Colonial Economy.
a. Introduction.
i. War and disease:
1. Took heavy toll on lives.
2. Detriment of production.
3. Irrigation networks destroyed.
ii. Tribute was destined for consumption and display, not trading.
b. Cortés as a Businessman.
i. 1528: Cortés was worth 500,000 gold pesos.
ii. Encomienda was the main source of income.
1. Received large amounts of gold dust, textiles, maize,
poultry, and other products.
iii. His agents sold tribute cloth and other products to traders in
Mexico City.
iv. Owned extensive real estate holdings.
1. Some used for trading interests.
v. Thousands of his slaves panned gold.
1. Some worked at silver mines.
vi. After encomienda tribute agriculture and stock raising were his
largest sources of incomes.
1. Grew massive amounts of maize on his land.
2. Cattle and hogs were butchered in his slaughterhouses.
vii. Produced thousands of pounds of sugar.
viii. Experimented with silk raising.
c. The Growth of the Haciendas.
i. Large-scale enterprises were rare.
1. Most had small land grants and drew tribute from natives.
ii. Food shortages created economic opportunities for Spanish
farmers and ranchers.
iii. The hacienda was responsible for the bulk of agricultural
commercial production and greatly pressured native economy.
iv. The crown legalized the defective title of the usurper through
payment of a fee to the king.
v. Mayorazgo (entailed estate) assured the perpetuation of the
consolidated property in the hands of the owner’s descendants.
vi. Consolidation and preservation of holdings was accentuated by
marriage within extended family (cousins).
1. Turned out to be unstable, open, and in constant flux.
vii. The Valley of Mexico was held by haciendas.
viii. Oaxaco was retained by native commoners and chiefs.
ix. In Mexico, small farmers (mestizos) became known as rancheros.
d. Spanish Agriculture in the New World.
i. Was extensive and predominantly commercial.
1. Cultivated large tracts.
2. Commodities were produced and sold.
ii. Produced wheat on a large scale for sale in urban centers.
iii. Maize was grown for the sizable native consumers’ markets.
iv. Sugar mills processed cane into sugar which was shipped to Spain.
v. Wine, olives, and silk were unsuccessful and discouraged.
vi. Tobacco, cacao, indigo, and cochineal (blood-red dye) were
cultivated on large plantations.
vii. Introduced various domestic animals.
1. Chickens, mules, horses, cattle, pigs, and sheep.
2. Leather, hides, and tallow were introduced to the large
market.
3. Meat became indispensable to the mining industry.
4. Wool became useful in the textile workshops.
viii. Haciendas produced pulque (a fermented drink) and wheat.
ix. La Plata, Argentina illegally traded with the Dutch and others.
x. The West Indies became the center of cattle industry.
e. Colonial Mining and Industry.
i. Silver was the principal product of the American mines.
1. Used the patio or amalgamation process, which used
mercury to separate the silver from the ore.
2. Replaced smelting which was labor-intensive and needed
lots of fuel.
ii. Important gold placers were founded.
iii. Mexico productions fluctuated and the output declined.
iv. After 1650 many mine owners abandoned the amalgamation
process because of the rarity and cost of mercury.
v. The commercial and agricultural networks were disrupted by the
transformation of the silver mining industry.
vi. Haciendas had their own work forces, churches, jails, workshops,
storehouses, and private armies.
vii. 17th century: Mexico, Peru, and Chile became self-sufficient in
grains and partly in wine.
viii. The Spaniards had found a flourishing handicrafts industry in the
advanced culture areas of Mexico, Central America, and Peru.
ix. Indigenous natives, black, and metizo artisians were allowed into
guilds, but couldn’t become masters to reduce competition.
IV. Commerce, Smuggling, and Piracy.
a. The Colonial Commercial System.
i. Was restrictive, exclusive, and regimented in character, in
conformity with the mercantilist standards.
ii. 1503: the Casa de Contratación (House of Trade) licensed and
supervised all ships, passengers, crews, and goods that went to and
from the Indies.
1. Collected import and export duties.
2. Collected the royal share of precious metals and stones.
3. Licensed all pilots.
4. Maintained a padrón real (standard chart).
5. Operated a school of navigation.
iii. Trade was concentrated at the ports in Veracruz in New Spain,
Cartagena in New Granada, and Nombre de Dios on the Isthmus of
Panama.
iv. The merchant guilds of Mexico City and Lima played into each
other’s hands at the expense of the colonists.
v. A fleet system was developed to protect ships.
1. Annual sailing under armed convoy of two fleets, each with
fifty or more ships.
a. One for Veracruz, Honduras, and the West Indies in
the spring.
b. Another for Panama and Cartagena in August.
vi. The annual voyage of Manila galleon exchanged Mexican silver
with Chinese silks, porcelains, and spices.
vii. Spain sought to regulate and limit trade with Asia.
viii. Gluts of goods in the colonial markets from the competition from
foreign smugglers reduced profits to the vanishing point.
ix. Prices were raised with taxes:
1. Avería (convoy tax).
2. Almojarifazgo (import duty).
3. Alcabala.
b. Sir Francis Drake, Piracy, and Foreign Plunder.
i. England emerged as the principal threat to Spain’s empire in
America.
ii. 1562: the voyage of John Hawkins to the West Indies opened
England’s drive to break into the Spanish-American markets.
1. 1568: Spain’s naval force almost destroyed Hawkins’ fleet.
iii. 1572: Francis Drake plundered Nombre de Dios and escaped.
1. Captured the pack train that carried Peruvian silver.
2. Seized treasure ships and ravaged colonial towns.
3. 1577: his voyage explored the Pacific coast and took
possession of the regions beyond Spain’s empire.
iv. The Treaty of Madrid in 1670 agreed that the British government
aided in the suppression of corsairs in return for Spanish
recognition of its sovereignty over the British West Indian islands.
v. In the Treaty of Ryswick in 1697 Spain recognized French
possession of St. Domingue.
c. The Framework of the Colonial Economy.
i. Spain tried to preserve and protect the ancient corporate
landowning system.
1. Gave the crown direct control over native labor and tribute.
ii. The feudal or semifeudal elements in the colonial economy:
1. Labor systems based in varying degrees on servitude and
coercion.
2. The nonmonetary character of many economic transactions.
3. The technical backwardness of industry and agriculture.
iii. The wealth that flowed from the Indies to Spain was used to:
1. Pay for costly wars and diplomacy.
2. Support a parasitic nobility.
3. Import goods from northern Europe.
iv. The nobility were also compensated when they lost their workers
who invested in a mayorazgo (an entailed estate).
v. Capitalist elements in the colonial economy.
1. Gold and silver mines.
2. Haciendas, ranches, and plantations.
a. Produced sugar, hides, cochineal, indigo, and other
commodities for external markets.
3. Mining centers, sugar mills, and workshops.