Note 66 — Chapter XX

“So closely did the government guard against possible independence of the colonists in trade that ships’ companies were prohibited from purchasing goods of the country, and factors and traders on the fleets were not allowed to remain longer than three years in America. No foreigner could trade with the colonies, nor was one permitted to enter a port without special license. In fact the prices of both imports and exports of New Spain, with the exception of the precious metals, were under the arbitrary control of the merchants of Seville, and later of Cádiz. What further increased the drainage of wealth from America was the decadence of manufacturing industries in Spain, owing to the immense influx into the Peninsula of precious metals. The riches poured into the mother country made labor almost unnecessary; hence a general decline in all kinds of industry, and Spain had to resort to foreign markets, not only to supply home consumption but also the demands of her colonies. Merchandise thus procured could only be exported to the American settlements at rates increased by additional duties and merchants’ profits.” Besides the commercial restrictions imposed on the colonies by the home government, other influences depressed trade—forced loans to the king, debased coinage, interference by the church, arbitrary action by civil authorities, contraband trade, the ravages of war, and the depredations of corsairs. “In time of war commerce with the mother country was reduced to the lowest ebb; European goods were poured into the Spanish colonies by neutrals, and the contraband trade was almost openly carried on.” (Bancroft’s Mexico, iii, pp. 628–630.)