Spanish American Empire: Administration and Impact
Administration and Distribution. Crown involvement rarely participated in the enterprises of discovery and conquest; the high cost it entailed meant that, at most, it contributed in some special instances (the first voyage of Columbus or Magellan and Elcano’s expedition). However, private initiative participation was subject to strict regulation through capitulaciones, complemented by instructions (whose effect consisted in a king and conquistadors covenant by which these committed to conquer and occupy territories for the Crown, in exchange for obtaining the fifth of the obtained wealth and the right to exercise administrative and judicial functions in the new lands). Of medieval origin, governance capitulations included the territory in which the conquistador had the right to make appointments, found cities, distribute land, assign Indian labor, and administer justice. However, the governors were accompanied by officials who ensured that the Crown received its due. In the conquest period, the governor-conquistador was replaced by a governor-official. A typical institution of the conquest period was the overtaking (which enjoyed the same attributions as a conquistador-governor but also had a military character. Usually, the charge of Adelantado was for life and heritable).
Territorial organization, with defined and more permanent institutions, occurred when the Crown assumed direct governance (in the sixteenth century):
- The division into viceroyalties was established, and its head (the king’s personal representative) was the highest authority in the land, with almost unlimited powers, standing out as a defender of the Indians, promoter of culture and public works, military defense, and the administration of justice (as president of the audiencia).
- Two viceroyalties existed: New Spain (Mexico), founded in 1529, and Peru, in 1542. The viceroy’s term was temporary, and he was accountable for his management.
- The audiencia was a collegiate body. Territorially, it corresponded to a province or captaincy general; in the latter case, it had military powers. Its functions were judicial, but it also served to control the viceroy and governors.
- Minor governorships or provinces maintained the same functions as those of the conquistador-governors but were appointed by, and were subordinate to, the viceroy, with shorter terms. They were controlled by the superior audiencia.
- Further down the institutional scale were the corregimientos (in Peru) and the cabildos (in New Spain). They were related to urban centers, and their jurisdiction arose from municipal terms.
- Additionally, new mechanisms were created to remedy the abuses of the encomenderos with the Indians. This was a link between the Crown and the Indians, although its functions were not always well fulfilled. In exchange, it allowed the Indians to keep their land.
- Finally, the cabildo, of a municipal character, had attributions such as drafting municipal ordinances, supply policies, public works, and the distribution of land. The council was not representative of the people but rather of the land, while the Indians kept their land.
To defend the interests of the Crown in America from the Iberian Peninsula, the Council of the Indies emerged in 1523. It had full jurisdiction over Indians in civil and criminal matters, although in the early stages, administrative and legal work predominated. Under its control was the House of Trade, whose main purpose was economic and commercial. Founded in 1503, it was based in Seville and later in Cádiz (1680).
Impact of America on Spain: In the early sixteenth century, Castile’s most difficult task was adapting its essentially medieval social, economic, and political organization to the needs created by governing a vast empire. It largely succeeded in addressing these needs at the institutional level, drawing on the experience acquired by the Aragonese in dealing with similar problems. The economic question was somewhat different. The New World could be a source of benefits for Castile as a supplier of commodities that were rare or unknown in the metropolis and as a market for Castilian products. The Casa de Contratación was responsible for storing goods before transport to the Indies. Spanish and foreign goods (Castilian and Catalan cloth, wine, oil, and wheat) were loaded, and the galleons returning from the New World carried products (dyes, pearls, sugar, gold, and silver). With the increasing amount of precious metals, convoys were essential, and records of shipments were kept to assess the gold and collect the import tax (a 7.5% tax on goods imported from America). These convoys traveled regularly (fleets) from Seville to one of the three main ports in the New World: Veracruz, Cartagena, and Nombre de Dios. The impact of this trade on the Castilian economy varied across regions:
- The Andalusian region was the first to react strongly to the conquest and colonization of the New World.
- Seville, although it lost population to emigration to America during the early conquest, experienced considerable growth after 1530 due to the considerable trade with the colonies. Foreign merchants and inhabitants from the central and northern peninsula flocked to it as the gateway to the riches of the New World.
- The central and northern cities of Castile were closely linked to the Andalusian economy, needing the shipbuilding skills and sailors of the Basque Country and Cantabria, as well as the international credit system established in the Castilian fairs (Medina del Campo). Castilian industry also benefited from the increased demand, especially textiles.
Similarly, Spanish agriculture, traditionally focused on wool production, increased the production of wine, oil, and cereals for export to America. However, neither industry nor agriculture were sufficient, due to low rural productivity and the inability of Spanish industry to supply this huge market, leading to the import of European products. The biggest problem in Castile was the unfair increase in the price of goods (inflation) due to increased demand and the abundance of precious metals and coins in circulation, which stifled economic development and household economies, generating a deep economic crisis during the seventeenth century. On the other hand, Charles V’s need to finance his imperial policies, especially the wars against France, the Lutherans, and the Turks, forced him to seek loans from European bankers (German and Genoese), who demanded precious metals as collateral and taxes collected on products from America. Despite this, the Spanish crown suffered several bankruptcies in the sixteenth and seventeenth centuries, leaving the wealth in the hands of foreign bankers. The discovery of new lands not only introduced a large amount of precious metals into Spain but also new products (tomato, corn, potato) that were incorporated into Spanish and European agricultural production.