New Spain

The term New Spain refers to both a geographic space and a specific historical era. Spatially, it denotes substantial territories in North and Central America that include the modern nations of Mexico, Guatemala, Belize, El Salvador, Honduras, Nicaragua, and Costa Rica, as well as much of the modern United States west of the Mississippi River. Temporally, it defines that territory only during the Spanish colonial era, which in New Spain lasted from 1521, when Hernán Cortes (1485–1547) defeated the Aztecs, until 1821, when Agustín de Iturbide (1783–1824) declared Mexico independent from Spain. In economic terms, New Spain was one of the most valuable possessions of Spanish monarchs, for a number of reasons that include the kinds of commodities it produced, the trade links that it facilitated, and the revenue that it generated for the Spanish rulers. Moreover, despite the Crown's tendency toward mercantilism in New Spain, the colony also exerted significant influence on the creation of a permanent, global trading network.

COMMODITIES IN NEW SPAIN: EXPORTS AND IMPORTS

During the three centuries of Spanish rule the diverse territory of New Spain served as an important source of commodities for global markets. Spanish colonists sought to exploit the region's rich resources for their own personal benefit; the result in terms of economic production was often an adaptation of the pre-existing economy. For instance, some of the earliest forms of exploitation in the sixteenth century involved merely extracting, as tribute payments, agricultural and manufactured goods that were already being produced by indigenous laborers. In the sixteenth century these goods included such items as cotton and cotton textiles, maize, cochineal and other dyestuffs, tobacco, and cacao. Of these, cochi-neal (a red dyestuff) rose to prominence as the second-most valuable export from New Spain.

The most valuable export to come from the colony, however, came from New Spain's abundant deposits of silver ore. Silver quickly rose to prominence from the first northern strikes in Zacatecas by 1546, and Spanish miners and merchants spread out across the arid northern half of New Spain in the sixteenth and seventeenth centuries to exploit the great quantity of silver ore that they found there. This activity, in turn, drove a great deal of commercial livestock and agriculture to feed and equip miners, which transformed the trade routes and population patterns within New Spain. Moreover, from the 1565 addition of Manila and the Philippines to the jurisdiction of New Spain, a Pacific Ocean trade link between New Spain and East Asia arose that connected Mexican silver to Chinese exports, particularly silk. Silver, in fact, was the most important export from New Spain throughout the colonial era, and during the eighteenth century the colony was the most valuable property of the Spanish Crown due to the mining boom underway there.

Thus, New Spain produced many commodities for export, including such goods as silver and cochineal. Meanwhile, Spain exported primarily agricultural goods (including wine and olive oil) to its colony in North America. Many manufactured goods from other parts of Europe and Asia also came to New Spain, primarily in exchange for the valuable silver. New Spain's commodities therefore provided a substantial stimulus to world trade.

MECHANISMS OF NEW SPAIN'S COMMERCE: POLITICS AND TRADE IN NEW SPAIN

All of this trade took place in the context of Spanish imperial rule, which for the entire three centuries of New Spain's existence meant that trade policies were built on the theory of mercantilism. This economic theory assumed that colonial production, commodity consumption, and trade should benefit primarily the metropolis (Spain). To achieve this goal, the Spanish Crown instituted a number of practices intended to restrict trade (and particularly bullion) flows between Spain and its colony.

For instance, to assure that the royal government could protect its trade routes into and out of New Spain, the Crown established a system of regular annual fleets (flotas). To better control trade, for almost the entire colonial period the Crown required that legal trade between Spain and New Spain connect a single port in Spain (Seville until 1717, and Cádiz thereafter) to a single port in New Spain (Veracruz). Only in the late eighteenth century did this structure of trade change. On the Pacific coast of New Spain, too, commercial connections were restricted to a single port, Acapulco. Annual ships (the "Manila Galleon") linked that port to Manila, in the Spanish Philippines.

Goods arriving in New Spain's two commercial ports were offered for sale in large trade fairs. Of course, because of the nature of this annual cycle of trade, whereby all of the goods for an entire year would arrive at once, this feature of Spanish mercantilism artificially depressed prices for newly arrived commodities. Moreover, the flota had a limited time in port before it had to return to Spain.

As a result, a network of powerful and well-connected import-export merchants emerged as an important feature of both the world trade and the commodity production in New Spain. Senior partners resided in the main Spanish port. Meanwhile, their junior partners lived in New Spain's capital, Mexico City, storing and reselling the European imports throughout the year and accumulating silver and other commodities to send back to Spain on the next year's flota. Consequently, within the Spanish mercantilist system a small group of wealthy merchants gained considerable influence over commercial policy and the export economy in New Spain.

Spanish merchants, though, were not the only persons who influenced New Spain's global trade. In addition, despite the mercantilist policy of the Spanish Crown, the economy of New Spain did not benefit only the Spanish rulers. Indeed, increasingly over time other trade connections between the colony and foreign merchants in Europe arose. One such link was via smuggling, which is difficult to measure, but certainly increased as other European trading ports arose in the Caribbean Sea. A second foreign commercial connection occurred when foreign merchants gained legal access to New Spain's wealth in commodities such as silver and cochineal. They did so by obtaining licenses from the Spanish government to become "naturalized" and thereafter trade in Seville as if they were Spanish subjects. A third foreign entry into New Spain's trade came with non-Spanish ships supplying the colony with African slaves. In all of these cases, the restrictions that the Spanish Crown hoped to impose on trade with New Spain failed to prevent the valuable commerce of the colony from establishing connections beyond Spain alone.

New Spain thus contributed not only thousands of tons of silver to the world economy between 1521 and 1821, but also served as a node linking trade between Europe, the Americas, and East Asia.

SEE ALSO Barcelona; Bullion (Specie); CÁdiz; Cartagena; Coffee; Colombia; Columbus, Christopher; Conquistadors; Cuba; Empire, Spanish; Encomienda and Repartimiento; Ethnic Groups, Africans; Gold and Silver; Haiti; Imperialism;Laborers, Aztec and Inca;Laborers, Coerced;Lisbon;Magellan, Ferdinand;Mercantilism;Mexico;New Orleans;Piracy, Privateers;Seville;Slavery and the African Slave Trade;Smuggling;Sugar, Molasses, and Rum;Tobacco;Venezuela;West India Company, Dutch.

BIBLIOGRAPHY

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Brading, D. A. Miners and Merchants in Bourbon Mexico, 1763–1810. Cambridge, U.K.: Cambridge University Press, 1971.

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Flynn, Dennis O., and Giráldez, Arturo. "Cycles of Silver: Global Economic Unity through the Mid-Eighteenth Century." Journal of World History 13, no. 2 (Fall 2002): 391–427.

MacLeod, Murdo J. Spanish Central America: A Socioeconomic History, 1570–1720. Berkeley: University of California Press, 1973.

Schell, William. "Silver Symbiosis: ReOrienting Mexican Economic History." Hispanic American Historical Review 81, no. 1 (February 2001): 89–133.

Schurz, William Lytle. The Manila Galleon. New York: Dutton, 1939.

Walker, Geoffrey J. Spanish Politics and Imperial Trade, 1700–1789. Bloomington: Indiana University Press, 1979.

Jason L. Ward