Note (return) — Chapter I

This Spanish commercial system was based upon two distinct principles. One was the principle of colonial exclusivism, according to which all the trade of the colonies was to be reserved to the mother country. Spain on her side undertook to furnish the colonies with all they required, shipped upon Spanish vessels; the colonies in return were to produce nothing but raw materials and articles which did not compete with the home products with which they were to be exchanged. The second principle was the mercantile doctrine which, considering as wealth itself the precious metals which are but its symbol, laid down that money ought, by every means possible, to be imported and hoarded, never exported.4 This latter theory, the fallacy of which has long been established, resulted in the endeavour of the Spanish Hapsburgs to conserve the wealth of the country, not by the encouragement of industry, but by the increase and complexity of imposts. The former doctrine, adopted by a non-producing country which was in no position to fulfil its part in the colonial compact, led to the most disastrous consequences.