Notes on Economy of New Spain (Spanish American Colonies)

These assorted notes are courtesy of Taras, our local rant expert.

• The first silver strikes came around 1530 at Zumpango and Sultepec.
• The Potosi mines provided the highest output of silver in Mexico.
• The Andean region held large gold deposits.
• The largest gold deposit was at New Grenada.
• Spaniards were so impressed by Native mining skills that until 1570, they rented mines to Native managers.
• Silver refining in the Central Andes was done in wind-powered furnaces of Native design called guayras.
• In New Spain, the German miner Gaspar Lohmann helped develop the refining process of amalgamation in the 1550’s, which mixed mercury with silver so as to get the silver out of low-grade ores.
• Private individuals were allowed to own mines so long as they paid a quinto real, or a fifth of all metal produced, to the Crown’s Treasury.
• Gold held less profit because its output did not grow as quickly as silver’s in the 1550-1620 period, and it was worth less than silver.
• Most of the mercury used in amalgamation was mined in Almadén, Spain.
• The Spanish also introduced sheep wool to the Americas; until then, the Natives used llama fur or cotton.
• Hernando Cortés also helped created a silk industry spearheaded by Viceroy Mendoza in the 1530’s; it foundered due to Oriental silk imports.
• Cloth was produced in workshops called obrajes.
• The cloth industry encountered some opposition from Spanish cloth producers, who thought they would lose profits.
• The leading textile region of South America was Quito, Peru.
• Textiles were not exploited until 1560, when local gold production declined and settlers saw cloth as a way to get rich.
• While the Spanish looked mainly for profits in the textile trade, the Native leaders looked for salaries from the obrajes so as to pay some of their subjects’ tributes, for which they were held responsible.
• Spanish sugar production was centered on the Atlantic islands settled by the Spanish and Portuguese, such as Hispaniola.
• The Spanish also exported dyes from New Spain; they mainly exported indigo cochineal dyes.
• Dyes were the most valuable export of Spanish America after silver.
• Spanish American shipbuilding started in 1522, when Cortés organized some shipyards alongside the Pacific coast.
• The Spanish craftsmen made mostly products for local use, such as muskets during the Peruvian Civil War of 1540.
• The introduction of cattle proved a problem to the Natives, as the cattle destroyed several maize plots.
• As well as importing foreign animals, the Spanish imported foreign plants such as citrus fruits and grapes.
• The Spanish farmers made good fortunes by selling crops native to the Americas- such as chocolate and chili peppers- in Europe.
• Over time, land titles were merged to form hacienda de campo, country estates with vast swaths of land, and greater outputs.
• A key goal of the merging of land titles was to more effectively control the Native labour pool.
• The first solution to be tried was the economienda, which was a master-servant relationship where the master took care of his workers and “enlightened” them in return for tribute paid to him.
• In 1549, the economienda was replaced by a state-directed system of draft labor, in which native communities were asked to supply a portion of their men for work.
• This system helped stave off a grain shortage in 1550, when Viceroy Mendoza drafted Natives to work on wheat farms around the capital.
• An advantage of the draft was that it spread the burden of work amongst the Native population more evenly than the individually-owned economiendos did.
• However, a major disadvantage, from the Spaniards’ point of view, was that since the Native population shrunk because of diseases, there were fewer Natives left to do the work.
• Eventually, the state-run system was abolished and the wage labour system was implemented.
• Spain had a mercantilist system, so trade was mostly between the colonies and Spain.