Along with "smuggling" there are other definitions for violations of the Laws of the Indies in commercial and financial matters:illegal interloper and direct trade. The term smuggling must be specified , which gives the colonial trade an illegal or clandestine nuance and, however, it was frequent that an activity considered to be contraband was not illegal, as there was a decree or some other particular regulation that legalized it. Although the trade of foreigners was prohibited in the Empire, the same was not true in their countries of origin. This fact facilitates knowledge of exchanges, despite the cliché about the impossibility of studying “smuggling”.
The Sevillian monopoly imposed serious restrictions on European merchants to negotiate with America. Initially, an attempt was made to overcome them from Seville and Cádiz, where there were large colonies of foreign merchants who, with Spanish figureheads or some stratagems such as marrying Spaniards, broke the legal barrier to trade with the colonies. In 1686, according to the figures of M. Morineau, French merchants dominated the exports of manufactures from the Race of the Indies , with 39% of the products exported, followed by Genoese (16.7%), English (14.5%), Dutch (12%), Flemish (6.5%), Hamburgers (6%) and Spanish, with only 5.5%. To evaluate Spain's role, only exports of products of agricultural origin (grains and flour, wine, oil, nuts, etc.) and metallurgical products (iron products plus mercury) should be considered. Between 1720 and 1751 agricultural products accounted for almost 46% of the value of exports and iron, steel and their derivatives another 5%.
Causes of Contraband
Foreign merchants found it more profitable and safer to ship their goods via the 'Race of the Indies', resorting to direct trade only when circumstances demanded it. As the fleets were well protected and piloted, their regularity made it possible to better calculate the progress of the American market. Insurance was also lower. The demand for manufactures did not usually distinguish between products legally brought into America from those that did not pay the taxes. Not only foreign merchants were involved in smuggling, but also merchants established in the colonies and American authorities at all levels. But in the mid-seventeenth century there were certain transformations that affected the performance of European merchants. The periods between fleet and fleet began to lengthen, increasing uncertainty and limiting the possibilities of doing business in a situation of scarce silver. As some enclaves of the Caribbean were occupied by non-Iberian powers, the American markets moved closer to the products of Western Europe. From the Antillean islands held by the Netherlands, Great Britain and France, a "clandestine" trade began with the Hispanic colonies, especially the closest ones:New Spain, Venezuela and the Caribbean, especially Cuba. In those same islands, an important export activity was developed linked to plantation crops:sugar, tobacco or coffee.
Settle new lands for trade
The renewed interest in American markets, parallel to the decline in colonial trade, led to plans for settlement and colonization of territories close to the Spanish colonies. In the last decades of the 17th century, the French, wishing to increase trade with Chile and Peru, tried it on some Pacific islands, such as Juan Fernández, the refuge of Robinson Crusoe, or on the uninhabited coasts of Chile and the Strait of Magellan. These projects show the European interest in trading with the Spanish colonies outside the system of fleets and galleons. Although direct trade was associated with smuggling, there was no antagonism between the legal trade through Andalusia, with its high rate of tax fraud and illegality, and the direct trade of merchants from some European powers, generally illegal, although in certain occasions had the legal blessing of the Spanish Crown. Numerous European merchants with interests in colonial trade assiduously switched from legal to illegal forms. Through their factors and representatives, they participated in the system of fleets and galleons, but they also engaged in direct trade when the situation required it.
Major Foreign Traders
The French had their main commercial centers in the Caribbean:in Martinique and the Gallic part of Santo Domingo. Since the end of the 17th century, they tried to sell their products directly on the Peruvian coast to exchange them for Potosina Silver. The rise of the Bourbons to the throne of Spain and the signing of the black seat in their favor in 1701 made things easier. The Dutch focused their activity on Curaçao, from where they traded with the Venezuelan ports of Río del Hacha, Maracaibo and La Guaira. They imported cloth and slaves in exchange for cash, emeralds, and pearls. Their activity was so intense that they monopolized the cocoa and tobacco trade until the founding of the Compañía Guipuzcoana. For their part, the British operated from Jamaica and Barbados to penetrate Venezuela and the rest of Spanish America. The signing of the black seat with England on March 26, 1713 and the authorization of the "permit ship" to the South Sea Company, granted greater facilities for British merchants associated with the company to enter some American ports, such as Veracruz, Cartagena de Indias, Buenos Aires, Valparaíso or El Callao.