Commercial Monopoly, Santo Domingo and Seville

Detalle Iglesia altagracia

Until the mid 16th century, Spanish ships loaded their goods in the ports of Santo Domingo, La Yaguana and Puerto Plata, paying low prices to resell in Seville, and importing European articles for which the islanders would pay exorbitant prices. The anti-cimarron military campaigns were in part financed from the new tariffs on articles of basic goods like meat, flour, corn, casabe, making life in Santo Domingo extremely expensive.

From the very beginning, the Spanish Crown imposed an absolute monopoly over all mercantile activity in their colonies and homeland. This monopoly favored the great Sevilian trading houses , whose representatives in Santo Domingo stocked up in sugar, cañafistola, precious woods, hides and lard at very low prices.

The regulating organism of all commerce in the Indies and Spain was the Casa de Contratacion de Sevilla, with it's analogous organization in Santo Domingo, instituted since the times of Ovando. Here all transactions were registered, import duties were paid, with a rate of 7 1/2 percent duties on goods exported to Spain, and a sales tax that affected all purchase and sale operations. The Casa de Contrataciones also controlled the routes, the purchase of ships and the recruitment of emigrants and colonists.

Absolutely everything had to be verified by this organism, provoking complaints and suits by local groups that demanded the Crown had other commercial options that permitted the acceleration of merchant flow in favor of their own particular interests. But the Crown maintained firm in its politics that, as of 1503 established that all commerce in the Indies could only be authorized by ships from Spanish the ports of Seville, Sanlucar and Cadiz, and that foreigners that passed the Indies to trade would be punished with great fines.

The great commercial difficulty derived from this strict regulations worsened since Spain, in spite of all the riches that it was getting from the new world, never achieved an industry capable of satisfying the demands of its ever growing colonies in America. A large part of the manufactured products that were sold in Hispaniola were purchased from other industrialized European nations, and introduced in Spain paying all the duties insurance and shipping. For this reason, when these arrived in Santo Domingo, these articles cost 5 and sometimes 6 times more than the original price. Similarly, the goods imported from the Indies were sold to other European nations, making Spain reliant on foreign capital, until, even the King began falling into debt to the point that there were years that all of the gold from Mexico and other parts were mortgaged before being shipped to Spain."10

Little by little America's riches were taken advantage of by foreign capitalists, mainly Dutch, Italian, English and Jewish, expanding their nations' resources and stimulating their economic development, converting them in centers of the incipient capitalism.

At the same time, the religious schism of the Protestant Religion signified a big blow to the Spanish-German monarchy that aspired to rebuild Europe under religious unity, found itself in the middle of new way of life: the Gospel which considered loans with interest legitimate and that established the basic doctrine for capitalist consolidation. The unification of Europe in a Catholic empire was impossible to achieve by Charles I and his descendants; in spite of counting on the greatest empire of the moment, Spain found itself isolated from a solid development of the world economy, and began a slow but sure decline, dragging her colonies with it, specially, the Caribbean, which only produced agricultural products, instead of metal and precious stones, which would have provided a rapid and direct benefit to the Crown.