FLEETS, TRADE CONTROL AND MERCHANTS' CONSULATE - HISTORY - 2025

The fleets, the control of trade and the merchants' consulate were the means used by the Spanish Crown to guarantee the commercial monopoly with its colonies in the New World. This monopoly covered both the flow of goods and precious metals.

In this way, the exclusive enjoyment of the economic benefits of the commercial flow of their American possessions was assured. Thanks to this control, the Spanish Crown could quickly take over the American territory. One of the most productive trade routes was established with the viceroyalty of New Spain.

Mexican silver and gold allowed Spain to establish commercial ties with Asia. Thus, the fleet system, the control of trade and the merchants' consulate made it possible to import goods such as silk, ivory, precious stones, porcelain, fine woods, spices, and others.

From the 16th to the 18th centuries, Spanish mines in Mexico and South America produced 80% of the world's silver and 70% of the gold. The wealth generated by trade spread throughout Europe; that shaped the economy of the Old World kingdoms and strengthened the European settlement in the Americas.

General context

The colonization of the Americas was motivated mainly by the desire to find gold and silver. These metals were used to make coins. On the other hand, Spain did not have enough of its own industry to satisfy its internal demand.

For this reason he had to buy many manufactured products from other European empires. Thus, the colonies of Spain in the New World were key in sustaining its economy.

Commercial control

So, the Spanish Crown established trade controls to avoid competition in the business. Under these controls, settlers in the Americas could only trade with Spanish merchant ships.

Additionally, it implemented merchant consulates. The first of these was based in the capital of New Spain. As a result, the commercial monopoly of the Crown became very profitable.

However, the flow of gold and silver between America and Spain aroused the greed of pirates, corsairs and buccaneers. Spanish ships began to be attacked and some cargoes were lost. This resulted in Spain beginning to use fleets protected by warships.

The fleets made one or two trips a year. This practice, like commercial control and consuls, was maintained for much of America's colonial period.

Functioning of the consulate of merchants, commerce and fleets

Fleets

To protect its freighters, Spain sent several royal warships to the Caribbean; the ships escorted the treasure ships home. The convoy of merchant ships and warships was called the treasure fleet, which made shipments periodically a year.

Also, ships began to evolve: the galleon was perfected as a standard ship in the treasure fleet. This was a large-capacity ship carrying large amounts of cargo and weapons.

In addition, smaller ships used for communication between the ships of the fleet were incorporated. Supply ships accompanying the fleet to transport food were also common.

The treasure fleet system was in operation on a regular basis as early as the 1560s. They had two fleets: Tierra Firme and New Spain. The first made the route to South America and the second to Mexico.

In the mid-1560s, a third fleet called the Manila Galleons began sailing between the Spanish colony of the Philippines and Acapulco, on the west coast of New Spain.

Trade control

During the 16th century, Spain and its colonies had a "commercial culture" in the extraction of silver. Throughout the colonial period it was the main export to Europe.

Within the Viceroyalty, silver was a stimulant of interprovincial trade. Mining centers such as Zacatecas, Taxco, and Guanajuato flourished during this period.

To maintain strict control over the export of silver, only Veracruz, Cartagena and Portobello could trade directly with Spain. And, in Spain, only Seville had a monopoly on commerce.

This caused an influential trading class to flourish with connections in the commercial ports of the colonies.

Consulate of merchants

With this name, the merchants' guild, initially founded in Seville in 1543, was known. The consulate enjoyed monopoly rights over goods sent to America. It had a regular fleet, called the West Indies Fleet, which handled much of the silver generated by this trade.

Similarly, a merchant consulate was founded in Mexico City in 1594. It was controlled by peninsular wholesale merchants who traded long distance. They got involved in local retail and also invested in urban real estate.

In the 18th century, as the economy of New Spain grew, consulates were established in the port of Veracruz and in Guadalajara. These merchant consulates were also empowered as courts to hear disputes over contracts, bankruptcy, shipping, insurance, and other commercial matters.

Consequences

Risk and uncertainty were the dominant characteristics of the transatlantic trade between Spain and New Spain. Traders exposed their valuable cargo to the threat of hurricanes and other adverse weather conditions. In addition, pirates and corsairs attacked vulnerable ships.

Perhaps one of the greatest risks was the poor communication and long delays that characterized transatlantic trade. Competition and changes in the tastes of its buyers were also a threat.

The fleet system, trade control, and the merchants' consulate regulated the commercial flow. This benefited the richest and most powerful merchants, especially those in Seville and Mexico City, who artificially created a shortage of luxury goods.

With this they achieved an increase in the prices of goods. By manipulating the supply, merchants in Spain and Mexico were able to make monopoly profits in their trading ventures.

Transition to free trade

The system of fleets, the control of commerce and the merchants' consulate reached its maximum splendor in New Spain in the last decade of the 16th century.

Then the system began to decline due to the wars of Spain against England, Holland and France for much of the seventeenth century. Treasure fleets were an important target for their enemies.

Various circumstances made it difficult to maintain the commercial flow. On the one hand, the wars had caused enormous financial strain. On the other, there was a shortage of goods.

Then, the Crown began to borrow more and more. At the same time, the yield of the colonial mines declined and the attack on ships increased.

In the Spanish nation both its industry and its shipbuilding began to decline. In the middle of the seventeenth century only a third of its ships were built within its territories. Also, the average number of ships in a fleet fell to 25.

Cheaper foreign products

After 1700, foreign merchants offered products with better prices. Thus, there was a decrease in the demand for goods from the Spanish Empire, and Spain's commercial monopoly weakened. The treasury fleet system ceased operations in 1778.

That year the Spanish Empire declared free trade in all its American colonies. With this, the chapter on the fleet system, the control of commerce and the merchants' consulate was closed.

Articles of interest

Silver Remittances from New Spain in the International Exchange.

Corporations and Jurisdictions in New Spain.

The Philippines and Trade with China.

The Development of Internal Commercial Networks in New Spain.

References

1. NPS. (s / f). The Spanish Treasure Fleet System. Taken from nps.gov.
2. Gettysburg College. (s / f). The Economy of Colonial Mexico. Taken from gettysburg.edu.
3. Encyclopedia of Latin American History and Culture. (s / f). Consulate. Taken from encyclopedia.com.
4. Baskes, J. (2005). Risky Ventures: Reconsidering Mexico's Colonial Trade System, Colonial Latin American Review, Vol. 14, No. 1, pp. 27-54.
5. Delgado de Cantú, Gloria M. (2002). Mexico history. Mexico: PEARSON Education.