Foreign trade with the new territories was developed according to the Capitulations of Santa Fe, but the existence of numerous affected parties, including the Crown, modified the conditions of exchanges with overseas. In 1493 a customs office was installed in Cádiz to centralize business with the Indies, and two years later the subjects of the Catholic Monarchs – Castilians and Aragonese – were authorized to trade with the colonies. In 1503, the Casa de Contratación was established on the banks of the Guadalquivir to control trade relations with America, and Seville became the center of the Atlantic economy. In 1522 the Casa de Contratación de la Coruña was created, whose objective was to organize expeditions to the Moluccas, the Spice Islands. Despite lasting seven years, the experiment threatened Seville's supremacy over colonial trade, although Seville's monopoly was confirmed in 1573.
Encounters with Corsairs
As of 1520, the continuous attacks against the Castilian merchant ships and the increase in the flows made it necessary to protect the ships coming from the Indies. The capture in 1523 of part of the Cortés treasure by the French corsair Jean Fleur was a wake-up call.
Since then, the flows of the Indies sailed protected by armed vessels. The system of fleets and galleons, within the framework of the "Race of the Indies", was an iron circuit established around the Castilian monopoly and Sevillian domination. The fleets emerged in 1543 and their organization was completed from 1564, when silver remittances increased and security had to be redoubled. While the New Spain Navy headed for Mexico, the Los Galleones Fleet guaranteed communications with Tierra Firme and Peru. As compensation for the exports of precious metals and certain raw materials, especially dyestuffs, the colonies benefited from the return of European manufactures (quality textiles and paper), iron, mercury, spices and some foodstuffs of peninsular origin (wheat, oil , came). The defense of the merchant ships was financed with the breakdown tax, which was levied on the merchandise transported in the fleets. Defensive needs delayed the trip to Veracruz or Portobelo, which could last from two to three months, while the loose boats made it in only three weeks.
Defense system for foreign trade
The system of fleets and galleons protected the flows transferred to the metropolis and kept the interoceanic communication routes operational, threatened by pirates, corsairs and some fleets of rival powers. The Crown and individuals were at stake a lot and although expensive, the effort was worth it. Proof of the effectiveness of the system is that during the century and a half in which it was active, the fleets were only attacked on three occasions:in 1628, the Dutch admiral Piet Heyn captured it in Matanzas Bay, Cuba, and in 1656 and 1657, Admiral Blake attacked her in Spanish waters, near the Canary Islands. The fleets sought to maintain the monopoly, which remained more or less unchanged until the mid-eighteenth century and whose existence meant a double restriction. On the one hand, it limited Spanish subjects the possibility of trading with the colonies and residing in them, since foreigners were prohibited from using such rights. The other aspect required that colonial foreign trade be centralized in Seville, in order to better control exchanges and collect taxes with a minimum of fraud and evasion.
Seville:Main Commercial Port
The Sevillian monopoly excluded the remaining peninsular ports from colonial foreign trade, which was modified between 1765 and 1778 with the approval of the Free Trade Regulations. The mining wealth had transformed Seville, which between the end of the 15th century and the beginning of the 17th went from being a small Andalusian capital of 45,000 inhabitants to a great European city of almost 130,000. In order to concentrate commercial flows and make military protection and fiscal control more effective, the system of fleets and galleons was structured around a few heads. Seville was the only European and its supremacy was consolidated to the detriment of Cádiz, its eternal rival. The Canary Islands and Cuba (Havana) were other nerve centers of the system, since their ports and defenses made control easier, allowed the supply of food and water and, if necessary, carry out the necessary repairs. In 1525, the crown authorized Gran Canaria, Tenerife and La Palma to negotiate with America. Once the system of fleets and galleons was consolidated, the flotillas had to converge in Havana to return together to the metropolis. In 1717, with the transfer of the Casa de Contratación to Cádiz, the people of Cadiz saw their dream of being the head of the “Carrera de Indias” come true.
Inconveniences and advantages of Seville
Seville had drawbacks and advantages. Among the first, the more than 100 kilometers that separate it from Cádiz, up the Guadalquivir, crossing several sandbars, including that of Sanlúcar, where numerous boats stranded, stood out. The dredging of the river was permanent to guarantee its navigability. However, Seville was better protected than Cadiz and any other port in its vast bay, both from Atlantic storms and from English and Berber attacks. Seville was also an important and richer market and had a hinterland more extensive, which facilitated the provisioning of the fleets. In the city there were powerful national and foreign commercial houses and a Consulate, created in 1543, capable of tipping the balance in its favor.
Main route of the Fleets and Galleons for Foreign Trade
The main destination of the fleets was Veracruz, in New Spain, while the galleons arrived in Tierra Firme to connect the viceroyalty of Peru with the metropolis. Its capital, initially in Nombre de Dios, moved to Portobelo, on the Isthmus of Panama, from where the merchandise passed to the Pacific, half on the back of a mule, half along the navigable course of the Chagre River, until reaching Panama to continue later to El Callao, the port of Lima, in the Armada del Mar del Sur. Nombre de Dios and Portobelo only had activity when the fleet arrived or the Peruvian riches had to be dispatched. The difficult sanitary conditions on the isthmus prevented establishing a stable population, which reinforced the defensive role of Cartagena de Indias and its status as a commercial port in the region. Theoretically, the periodicity of both fleets was annual. The fleets were to sail from Spain in April and the galleons in August, although it was difficult to meet these dates. Over time, the periods between fleet and fleet were spaced out and the effectiveness of the system was questioned. In the second half of the seventeenth century, 25 fleets were dispatched to New Spain and 16 to Tierra Firme, one fleet every two years to Veracruz and every three to South America. In the first forty years of the 18th century, the terms between fleet and fleet increased to three years in Mexico and almost six in Tierra Firme.
The Contraband
The fraud of the merchants of the "Race of the Indies" was so great that one can speak of contraband. In New Spain only a third of the foreign trade was legal, and the rest was contraband. In the mid-17th century, in order to pay less taxes, at least 25% of the silver shipped in the South Sea Navy was not recorded. Numerous merchandise, especially silver, landed clandestinely in the ports of the Bay of Cadiz to be surreptitiously introduced by the "metedores" in this city or in Seville. The declarations were false and the amount of silver officially declared at the arrival of the fleets was lower than the news published in the foreign press or the information handled by the merchants and the authorities. For this reason, the Royal Treasury charged merchants a "pardon" that balanced what was declared with what was supposedly defrauded, without protests from the merchants.