Spanish Colonies in South America

The final century and a half of Spanish colonial rule brought additional changes to the Andean political, social, and economic systems that had emerged during the age of Viceroy Toledo. From 1650 to 1750, the South American empire experienced declining mining production and tax revenues, which, from the perspective of the government in Spain, resulted in a century of depression and decline. At the same time, because the weaker imperial government intruded less on the lives of Andeans, the same century brought prosperity to local elites, who retained more resources to maintain a gracious lifestyle. Less exploitation also brought relief to indigenous populations, whose numbers finally began to recover in the 1700s. Only during the last decades of the eighteenth century did a new royal dynasty, the Bourbons, attempt to redress the empire’s loss of authority and revenue. By creating a more modern, activist state, the Bourbon monarchs, especially Charles III, hoped to reform Spain’s administrative, economic, and social policies toward the colonies and restore Spain’s grandeur.

The arrival of these ideas about a more authoritarian and secular state created serious stress fractures as the Bourbon revival challenged Andean customs. While the reforms did accomplish some of the Bourbon objectives, they also enraged various groups throughout the region, leading to a series of rebellions that challenged the establishment. The violent course of these rebellions, at least in Peru and Bolivia, in some ways was a recapitulation of Pizarro’s march through the Andes in the sixteenth century, when large numbers of poorly armed indigenous people were outmatched by Spanish military might. The late-eighteenth-century Andean rebellions have been interpreted in many ways: as a precursor movement to the criollo (Spaniards born in the New World) independence movement of the 1820s; as an instance of Inka revivalism to create a new pachacuti; or as an attempt to negotiate and soften the excesses of the Bourbon reforms. Although early historians focused on the Tupac Amaru II rebellion that threatened Cuzco and its surrounding areas, more recent work has provided balance by analyzing the revolts that occurred throughout the Andean region in the 1780s. A consideration of these and other events will provide readers with a sense of the state of the colonial Andean world in the years just prior to the wars of independence. In addition, these Bourbon ideas and values laid the groundwork for the fractious political debates that would occur during the nineteenth century.

Changes in the Empire: 1650–1750

Colonial life during the years between 1650 and 1750 looked remarkably different from the earlier golden age of consolidation begun under Viceroy Toledo’s administrative leadership. From the Spanish imperial perspective, as the flow of treasure from Potosí diminished, so did the value of the Andean region as a whole. A number of factors signaled the decline of the imperial state. Observers at the Spanish court saw the descendants of Philip II, the latter Hapsburg kings, for what they were, Emperors of the Emerald City, all glitter and no substance, making change nearly impossible to implement. The final Hapsburg, Charles II, was a pathetic individual: illiterate, ill tempered, allegedly bewitched, and, fortunately, impotent. The limited abilities of the latter Hapsburgs had important ramifications for the empire as it drifted through the seventeenth century, unable to cope with crises. Charles II’s death led to a lengthy European war that resulted in a member of the French Bourbon family taking the Spanish throne in 1713, although until the arrival of Charles III (1759–1788), the third Bourbon king, the monarchs were too preoccupied with domestic matters and European conflicts to concern themselves much with their Andean possessions.

Even the dullest of the Hapsburg Spanish monarchs had noticed the diminution of Andean tax revenues in the decades after 1660. Although the silver of Potosí still aroused the cupidity of European rivals, the rich veins of the Cerro Rico had played out, leaving miners to work the tailings, the leftover ore once considered too low-grade to bother to refine. Labor supplies diminished as well, as the Indian population continued to decline numerically until 1720. Many mita draftees took advantage of the law that allowed them to make cash payments rather than fulfill their labor obligations, a system that proved profitable for the mine owners as well. Whereas in 1600 over 50 percent of the taxes collected in the Andes flowed back to Spain, a century later that figure was a mere 5 percent. As a consequence of the mining recession, more of the economy diversified into agriculture and local industries; both were more difficult to tax than silver produced at a mine. Although the government occasionally attempted to introduce new taxes, the colonial elite and their allies in the local bureaucracy successfully lobbied against them. Hence, the Andean elite probably lived as well or better in 1700 than they had a century earlier, even though Spain’s treasury experienced a decline in income during that time. The new dynasty could not immediately reverse the economic slide. In fact, some of their policies loosening trade restrictions made matters worse for areas like Quito, whose textiles could not compete in Lima either in price or in quality with imported European manufactured fabrics.

In addition, gross receipts from the Peruvian viceroyalty fell because of the corruption of the imperial system, particularly of local officials. One way to compensate for declining mining revenues—the Crown had decided after 1650—was to sell public offices, a practice that escalated until the ascension to the throne of King Charles III in 1759. At first, such sales seemed innocuous, confined to relatively honorific positions such as membership in the cabildo. But by the 1680s, the government sold treasury offices, judicial posts, and even seats on audiencias. Even worse, the Crown sold these offices to local criollos in their home districts, which angered rival members of the elite, who correctly recognized that their family and friends would be disadvantaged. Those who purchased offices naturally viewed them as investments and cashed in on them.

Equally detrimental to the system, seventeenth- and early-eighteenth-century bureaucrats routinely flouted the rules designed to keep government honest. For example, Antonio de Morga, president of the audiencia in Quito from 1615 to 1636, ignored regulations that required officials to refrain from engaging in commerce or establishing personal relationships with community members. Not only did he sell smuggled Asian silks and operate a casino in the government palace, he also married both of his daughters to local aristocrats, slept with several local women, and became the compadre (godfather) to innumerable children from Quito—hardly setting the proper moral tone for the royal bureaucracy. Such violations should have been caught during the routine inspections (residencias and visitas) that Crown officials made, but in Morga’s case, and presumably many others, punishments were mild. Low salaries encouraged corruption, particularly among those at the bottom of the administrative hierarchy, as even the best-intentioned bureaucrat found it impossible to support a family or maintain a respectable social position on the paltry wages offered. Corregidores who had borrowed money to purchase these offices simply could not live on five hundred pesos a year, and so engaged in practices like the repartimiento de mercancías (also called the reparto) to supplement their incomes. Designed originally to introduce native Andeans to the miracles of capitalism, the repartimiento de mercancías evolved into an exploitative practice that most despised. Corregidores bought goods like textiles and mules at modest prices and then sold them to the Indians at a profit, using their authority to compel reluctant consumers to buy. Sometimes Indians ended up with completely useless products such as razors, quill pens, and writing paper. In addition, indigenous peoples fell victim to greedy friars, who charged steep fees for religious services like marriages, baptisms, and funerals.

Finally, foreign interlopers of two varieties challenged Spanish hegemony during the colonial period. Even during Viceroy Toledo’s time, pirates and privateers like Sir Francis Drake raided coastal Peru and captured vessels laden with silver and other wealth, exposing the weakness of the Pacific coastal defenses. Dutch pirates, who hated the Spanish for both political (the Netherlands had once been a Spanish possession) and religious reasons (the Dutch were mainly Protestants), blockaded Callao, Peru, and burned Guayaquil, Ecuador, early in the seventeenth century. During the 1680s, English buccaneers on several occasions plundered Guayaquil, an unfortified city, holding leading citizens for ransom and beheading them if relatives or the government failed to pay. Likewise, Cartagena, Colombia, the so-called Pearl of the Indies, proved an inviting target as late as the eighteenth century because the Spanish silver fleet gathered there to convoy back to Spain. Although the pirates’ random attacks netted them only modest amounts of wealth compared to the riches flowing back to Spain, their exploits terrorized coastal dwellers, diminished coastal trade, and diverted resources from the Spanish treasury to fortify important cities like Callao and Cartagena and staff them with militia and coast guard.

Far more detrimental to Spain’s interests, however, were the smugglers who profited from illegal trade with the Andeans. Miners bribed treasury officials to avoid minting silver and paying the quinto, instead trading it with French merchants poised off the coast of Peru who offered in exchange cheap, high-quality textiles. More seepage occurred at Buenos Aires, where silver from Potosí illicitly flowed to British and Portuguese merchants. Consumers living in the fringe areas of the viceroyalty naturally turned to smugglers, given the costs and irregular supply of goods associated with legitimate commerce. Theoretically, the cumbersome legal route required all goods destined for South America to be shipped through Cartagena, sold at the Portobello trade fair in Panama where sales taxes could be levied, and then transported by merchants to distant markets. Even in Colombia, close to the center of legitimate trade, the legal commercial system broke down in the seventeenth century. Both merchants and consumers found the temptation of lower-priced contraband (smuggled goods) too tempting to resist. As a result, smugglers carried away a huge percentage, perhaps as much as 75 percent, of Colombia’s emeralds and gold without paying taxes. Spain’s concession of an asiento, or trading privilege, to the British to bring slaves into Cartagena in 1713 only exacerbated the problem. With the connivance of local officials, British merchants sold vast quantities of manufactured goods as well as slaves. The new Bourbon kings correctly suspected that great cracks had emerged in the Andean economic system. As a result, King Philip V (1700–1746) sent two young engineers, Jorge Juan and Antonio de Ulloa, to accompany a group of French scientists on a decade-long expedition to the Andes in 1735. In addition to their famed travel narrative, which opened European eyes to the secretive Spanish colonial world, they also compiled a report for His Majesty cataloguing corruption and contraband. This report and other eyewitness accounts encouraged a more active monarch to reform the system.

The Bourbon Reforms of Charles III (1759–1788)

The first two Bourbon kings, despite their European preoccupations, did not entirely ignore their Andean possessions. Seeking to strengthen Spain’s control over its portion of South America, these monarchs recognized that the enormity of the viceroyalty of Peru made it ungovernable by a single individual. Hence, in 1739 Philip V divided it in half in the belief that administration would now become more efficient, creating the new viceroyalty of New Granada, which included Colombia, Ecuador, Panama, and Venezuela. The first Bourbon kings also introduced economic reforms designed to increase the tax revenues coming back to Spain. As a result, they reduced the tax on mining production (the quinto) from 20 percent to 10 percent and abolished some elements of the Hapsburgs’ highly regulated commercial system as partial solutions for the ills that had emerged in the seventeenth century.

Charles III viewed the Americas as subservient colonies (they had previously been designated as “kingdoms” like the regions of Spain) that would provide the resources to restore Spain to its former glory. Embarrassed by the temporary loss of Havana during the Seven Years’ War and the fact that at midcentury little Haiti generated more revenue for the French Crown than the vast expanse of the Americas did for Spain, Charles determined to reform the moribund Hapsburg system in three ways. First, he intended to extract greater revenues from the Americas by stimulating commerce and by collecting taxes more efficiently and in greater quantities. Second, he determined to eliminate corruption and waste through administrative reforms, which would also enable him to protect the Andean region from foreign interlopers by improving its military defenses. Finally, as one of the new “enlightened” monarchs, Charles intended to strengthen the state by intervening in social matters that were previously the exclusive purview of the Catholic Church. Although in many respects it is difficult to separate these three programs, this section will attempt to do so by first examining the economic reforms, because revenue enhancement lay at the heart of Spain’s interest in the colonies.

Charles III and his reformist ministers identified the excessively regulatory nature of the Hapsburg economic system as one of its major drawbacks. Cumbersome rules required goods to leave Spain from a particular port, arrive in Cartagena, thence transfer to a fair in Panama, and travel by coastal schooner or mule for destinations throughout the Andes. With middlemen taking profits at each step along the way, Spanish imports were not competitively priced, which explained the success of the smugglers. As a result, Charles III’s advisers attempted to more sensibly regulate the economy in order to competitively price Spanish goods to consumers. Thus, King Charles in 1778 declared comercio libre (free trade) within the empire, thereby eliminating some of the cumbersome regulations that had hindered the free flow of commerce yet essentially retaining the mercantilist philosophy. Ships could now leave at any time from any place in Spain and discharge their goods at any South American port.

Spain lowered the rate of both the import duties (tariffs) consumers paid and export taxes merchants paid, while foreign competitors were taxed at a higher rate. Because lower taxes on Spanish products would increase the volume of sales by whetting consumers’ appetite for cheaper goods, total tax revenues would actually increase and the subjects would be happier because of their increased material wealth, or so the theory went. As a result of these lower taxes, the Andean region did experience some modest economic growth during the late colonial period. While the Crown lowered tariffs, it increased the rate of the alcabala, or sales tax, that retail customers paid, first from 2 percent to 4 percent in 1774, and then to 6 percent in 1779, and made basic necessities like corn, coca, potato seeds, soap, and clothing subject to this tax. The government also opened new aduanas, or customhouses, in interior cities like Cuzco and at smaller ports to collect taxes. In addition, new sin taxes burdened consumers. Beginning with Charles III, the state created monopolies for the sale of tobacco and aguardiente, the cheap sugarcane liquor so popular among the poor because its alcoholic content is significantly greater than that of chicha, and increased taxes on brandy. In Peru, Colombia, and Ecuador, both producers and consumers of these products grumbled mightily about these new burdens.

As in the seventeenth century, Andean economies tended to be regional and agricultural rather than the more integrated silver exporting economy of the post-Toledo years. For example, southern Ecuador developed a regional trade in cascarilla, a tree bark from which quinine is derived, while coastal Ecuador exported cacao, the source of chocolate. In Colombia, cattle ranching and sugar production prevailed in different regions, as did brandy production in southern Peru. As the economy shifted from mineral to agricultural commodity production, Charles and his administrators astutely deemphasized the quinto in favor of export duties and sales taxes that captured revenue from agricultural products. Colonial revenues further increased because as the indigenous people gained immunities to European diseases, their numbers began to rise steadily throughout the eighteenth century, thereby providing more tribute payers. Tribute collection improved, as indigenous people who had slipped from the tax rolls under lax and corrupt bureaucrats were caught by more diligent peninsular (Spaniards born in Spain and preferred by Charles III because of their supposed greater loyalty) administrators taking new censuses in the 1770s. Not only were more laborers available, but because of the reduction of the quinto tax rate, mining entrepreneurs invested in Potosí, where production nearly doubled over the course of the century, and in the newer mining center of Oruro, Peru, where production grew more slowly. Hence, Spain significantly increased colonial revenues as a result of the economic reforms.

Charles III’s philosophy of government envisioned an enlightened, wise king presiding over a rational, efficient, and authoritarian government spreading happiness among his subjects, who would benefit from increased material wealth. To realize this ideal, Charles opined, the colonies needed a less corrupt administration that would also better defend the coast against pirates and smugglers. Thus, the Bourbon administrative reforms favored a near monopoly of trustworthy peninsular officeholders. In the name of efficiency, Charles further dismantled the viceroyalty of Peru; in 1776 he severed Upper Peru (Bolivia) and hence Potosí from Peru and attached the former to the new viceroyalty of La Plata at Buenos Aires. The diversion of Upper Peru’s silver treasure to Buenos Aires and the opening of comercio libre greatly lessened the importance of Lima’s officials and merchants. In addition, Charles and his chief adviser, José de Gálvez, designed a comprehensive plan of governance and assigned special agents called visitadores to all regions of the Andes to implement these changes. The government hoped that their administrative reforms would bring greater efficiency and eliminate government corruption. No longer would untrustworthy and corrupt criollos be able to purchase offices, even in local government. Naturally, criollos resented their loss of political influence.

Reform-minded visitadores like Juan Francisco Gutiérrez de Piñeres (New Granada) and Antonio de Areche (Peru) were charged to introduce a new rank of official called an intendant, a midlevel bureaucrat, to serve a territorial subdivision of the audiencias called intendancies, resulting in the elimination of the often venal corregidores. With no ties to the local community and a decent salary, the intendants, so Gálvez hoped, would not be tempted to violate regulations, abuse Indians, or skim taxes into their own pockets, as many corregidores had done. The visitadores immediately took a new census in each colony, uncovering the names of Indians who had previously avoided the tribute rolls. As a result, when the intendants began collecting tribute in the 1780s, Crown revenues nearly quadrupled from this source, especially after the intendants hired additional tax collectors. With more indigenous people identified, the number of mita Indians available for public service increased as well. No wonder the indigenous people in Otavalo, Ecuador, rioted in 1777, beating the official in charge of the census and then disemboweling him. By the late 1780s, however, the Crown understood that an intendancy also included too much territory for a single person to administer efficiently; hence they divided each intendancy into partidos governed by subdelegates who earned small salaries. Essentially, the subdelegates were the old corregidores with a new title. Given the low salaries paid to subdelegates, the Crown had to permit corruption, specifically a restoration of the repartimiento de mercancías, to fill these positions. All in all, the Bourbon administrative reforms only added a new, expensive layer of bureaucracy without resolving the long-standing problems of corruption and abuse of the indigenous people.

The Bourbon administrative reforms also sought to tighten the leaks in the empire, which meant improving the defenses of vulnerable ports like Cartagena and Callao. The Seven Years’ War (1755–1763), in which Great Britain decisively defeated France and Spain, underscored the need for Spain to protect its colonies. Viceroys spent some of the new tax revenues rebuilding coastal forts and paying for professional soldiers called “regulars” from Spain to stand watch. In addition, in the 1770s, colonial administrators created a volunteer militia, most prominently along the coast, to supplement the numbers of the “regular” troops. Militia regiments in larger cities like Cartagena were segregated by race, but usually even pardo (black or mulatto) regiments had white officers. In smaller cities in Colombia, however, pardos became officers and, because of this prestigious role, improved their status in the colonial world. Historians have questioned whether the development of local militias in the eighteenth century contributed to Latin America’s militaristic tradition after independence. But because of the small size of the militia in South America (in contrast to Mexico, where the case is stronger), no relationship between the militia and postindependence militarism seems to exist. The militia did manage to contain the various crises that emerged in the late 1770s and early 1780s when the entire Andean region responded negatively to the Bourbon reforms. By the 1790s, however, the viceroys had reduced the size of the militia to save money.

Like the Bourbons’ economic and administrative reforms, royal intrusions into social policy, once the purview of the Church and the family, seemed at times contradictory. Most prominently, Charles III diminished the temporal power of the Church as he attempted to make the clergy subject to the state instead of the Vatican. To accomplish this objective, in 1767 Charles expelled the Jesuits, who answered directly to the pope, from his colonies despite the negative effect on education and the abandonment of the frontier missions along the Amazon River in Colombia, Peru, and Ecuador. When the state took over the Jesuit schools, it professed an ideal not yet realized in the colonial period: to broaden access to education so that citizens from all classes could participate. Next, the government tried to replace friars acting as parish priests with secular clergy—the latter easier to subject to administrative control—but with less success.

The state also took over the Church’s traditional work with the socially downtrodden. For example, state poorhouses replaced Church-run charitable organizations in many cities. Initially, the Bourbons provided assistance to the “socially poor,” downwardly mobile whites who lacked the financial resources to maintain social respectability. By the end of the colonial period, however, the “economically poor” from all social classes filled the rooms in the poorhouses, blurring distinctions of race and class. These circumstances made it impossible for the socially poor to reside in poorhouses because of the challenge to their honor. Charles’s Royal Pragmatic of 1776 intruded into the domestic sphere by granting fathers the legal right to veto their daughters’ “unsuitable” marital choices, often a racial determination, a privilege once limited to Church courts. The king also enjoyed the power of curing the “defect” of race, granting certificates of gracias al sacar (permission to change status) to worthy mestizos and mulattos who applied. Race mattered to the well-to-do in late Bourbon society because only whites could be lawyers, serve as military officers, staff the church, or enter the university. By the end of the colonial period, however, the Crown had become extremely wary of petitions for gracias al sacar, granting fewer and fewer of them in order to avoid upsetting the colonial system of castas. Race mattered, too, for mestizos, who also applied for recognition of their racial status so that they could avoid classification as Indians subject to tribute and mita. The Bourbon social reforms exemplified another attempt of the Crown to strengthen itself at the expense of the Church and local traditions.