Panama THE SPANISH COLONY
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Figure 2. The Isthmus and Surrounding Areas in the Fifteenth and
Sixteenth Centuries
Church of Natá, built in 1522; believed to be the oldest
church still in use on the mainland of the American
Courtesy National Archives
The period of free, though licensed, exploration gave way to a
period in which the king exercised royal control by appointing
governors and their staffs. All were to be paid from crown revenues
expected from the royal profits on the colony. The king's
representative was responsible for ensuring such returns; he
tracked all gold, pearls, and income from trade and conquest; he
weighed out and safeguarded the king's share.
Governors had some summary powers of justice, but
audiencias (courts) were also established. The first such
audiencia, in Santo Domingo, Hispaniola, had jurisdiction
over the whole area of conquest. As settlement spread, other
audiencias were set up. By a decree of 1538, all Spanish
territory from Nicaragua to Cape Horn was to be administered from
an audiencia in Panama. This audiencia lasted only
until 1543 because of the impossibility of exercising jurisdiction
over so vast an area. A new Panamanian audiencia, with
jurisdiction over an area more nearly coinciding with the territory
of present-day Panama, was established in 1563. The viceroy's
position was revived for the rich empires of Mexico and Peru. After
1567 Panama was attached to the Viceroyalty of Peru but retained
its own audiencia.
Beginning early in the sixteenth century, Nombre de Dios in
Panama, Vera Cruz in Mexico, and Cartagena in Colombia were the
only three ports in Spanish America authorized by the crown to
trade with the homeland. By the mid-1560s, the system became
regularized, and two fleets sailed annually from Spain, one to
Mexico, and the other to southern ports. These fleets would then
rendezvous at Havana and return together to Cádiz, Spain. In
principle, this rigid system remained in effect until the
eighteenth century. From the middle of the seventeenth century,
however, as the strength and prosperity of Spain declined, annual
visits became the exception.
Shipments of bullion and goods were to be delivered to Panama
on the Pacific side for transport over the isthmus and return to
Spain. Panama's own contribution to the loading of the fleet was
relatively small. Gold production was never great, and little
exportable surplus of agricultural and forest products was
available. Nothing was manufactured; in fact, Spain discouraged the
production of finished goods. The colony's prosperity, therefore,
fluctuated with the volume of trade, made up largely of Peruvian
shipments. When the Inca gold was exhausted, great quantities of
silver mined in Peru replaced gold in trade for 150 years,
supplemented eventually by sugar, cotton, wine, indigo, cinchona,
vanilla, and cacao.
Except for traffic in African slaves, foreign trade was
forbidden unless the goods passed through Spain. Africans were
brought to the colonies on contract (asiento) by Portuguese,
English, Dutch, and French slavers, who were forbidden to trade in
any other commodities. Spanish efforts to retain their monopoly on
the rich profits from trade with their colonies provided a
challenge to the rising maritime nations of Europe. Intermittent
maritime warfare resulted in the Caribbean and later in the
Pacific. The first serious interference with trade came from the
English.
From 1572 to 1597, Francis Drake was associated with most of
the assaults on Panama. Drake's activities demonstrated the
indefensibility of the open roadstead of Nombre de Dios. In 1597
the Atlantic terminus of the trans-isthmian route was moved to
Portobelo, one of the best natural harbors anywhere on the Spanish
Main (the mainland of Spanish America).
Despite raids on shipments and ports, the registered legal
import of precious metals increased threefold between 1550 and
1600. Panama's prosperity was at its peak during the first part of
the seventeenth century. This was the time of the famous
ferias (fairs, or exchange markets) of Portobelo, where
European merchandise could be purchased to supply the commerce of
the whole west coast south of Nicaragua. When a feria ended,
Portobelo would revert to its quiet existence as a small seaport
and garrison town.
Panama City also flourished on the profits of trade. Following
reconstruction after a serious fire in 1644, contemporary accounts
credit Panama City with 1,400 residences "of all types" (probably
including slave huts); most business places, religious houses, and
substantial residences were rebuilt of stone. Panama City was
considered, after Mexico City and Lima, the most beautiful and
opulent settlement in the West Indies.
Interest in a canal project was revived early in the
seventeenth century by Philip III of Spain (1598-1621). The Council
of the Indies dissuaded the king, arguing that a canal would draw
attack from other European nations--an indication of the decline of
Spanish sea power.
During the first quarter of the seventeenth century, trade
between Spain and the isthmus remained undisturbed. At the same
time, England, France, and the Netherlands, one or all almost
constantly at war with Spain, began seizing colonies in the
Caribbean. Such footholds in the West Indies encouraged the
development of the buccaneers--English, French, Dutch, and
Portuguese adventurers who preyed on Spanish shipping and ports
with the tacit or open support of their governments. Because of
their numbers and the closeness of their bases, the buccaneers were
more effective against Spanish trade than the English had been
during the previous century.
The volume of registered precious metal arriving in Spain fell
from its peak in 1600; by 1660 volume was less than the amount
registered a century before. Depletion of Peruvian mines, an
increase in smuggling, and the buccaneers were causes of the
decline.
Henry Morgan, a buccaneer who had held Portobelo for ransom in
1668, returned to Panama with a stronger force at the end of 1670.
On January 29, 1671, Morgan appeared at Panama City. With 1,400 men
he defeated the garrison of 2,600 in pitched battle outside the
city, which he then looted. The officials and citizens fled, some
to the country and others to Peru, having loaded their ships with
the most important church and government funds and treasure. Panama
City was destroyed by fire, probably from blown up powder stores,
although the looters were blamed. After 4 weeks, Morgan left with
175 mule loads of loot and 600 prisoners. Two years later, a new
city was founded at the location of the present-day capital and was
heavily fortified.
The buccaneer scourge rapidly declined after 1688 mainly
because of changing European alliances. By this time Spain was
chronically bankrupt; its population had fallen; and it suffered
internal government mismanagement and corruption.
Influenced by buccaneer reports about the ease with which the
isthmus could be crossed--which suggested the possibility of
digging a canal--William Paterson, founder and ex-governor of the
Bank of England, organized a Scottish company to establish a colony
in the San Blas area. Paterson landed on the Caribbean coast of the
Darién late in 1698 with about 1,200 persons. Although well
received by the Indians (as was anyone not Spanish), the colonists
were poorly prepared for life in the tropics with its attendant
diseases. Their notion of trade goods--European clothing, wigs, and
English Bibles--was of little interest to the Indians. These
colonists gave up after six months, unknowingly passing at sea
reinforcements totaling another 1,600 people. The Spanish reacted
to these new arrivals by establishing a blockade from the sea. The
English capitulated and left in April 1700, having lost many lives,
mostly from malnutrition and disease.
In Spain Bourbon kings replaced the Hapsburgs in 1700, and some
liberalization of trade was introduced. These measures were too
late for Panama, however. Spain's desperate efforts to maintain its
colonial trade monopoly had been self-defeating. Cheaper goods
supplied by England, France, and the Netherlands were welcomed by
colonial officials and private traders alike. Dealing in contraband
increased to the detriment of official trade. Fewer merchants came
to the Portobelo feria to pay Spain's inflated prices
because the foreign suppliers furnished cheaper goods at any port
at which they could slip by or bribe the coastal guards. The
situation worsened; only five of the previously annual fleets were
dispatched to Latin America between 1715 and 1736, a circumstance
that increased contraband operations.
Panama's temporary loss of its independent audiencia,
from 1718 to 1722, and the country's attachment to the Viceroyalty
of Peru were probably engineered by powerful Peruvian merchants.
They resented the venality of Panamanian officials and their
ineffectiveness in suppressing the pirates (outlaws of no flag, as
distinct from the buccaneers of the seventeenth century). Panama's
weakness was further shown by its inability to protect itself
against an invasion by the Miskito Indians of Nicaragua, who
attacked from Laguna de Chiriquí. Another Indian uprising in the
valley of the Río Tuira caused the whites to abandon the Darién.
The final blow to Panama's shrinking control of the transit
trade between Latin America and Spain came before the mid-
eighteenth century. As a provision of the Treaty of Utrecht at the
end of the War of the Spanish Succession in 1713, Britain secured
the right to supply African slaves to the Spanish colonies (4,800
a year for 30 years) and also to send 1 ship a year to Portobelo.
The slave trade provision evidently satisfied both countries, but
the trade in goods did not. Smuggling by British ships continued,
and a highly organized contraband trade based in Jamaica--with the
collusion of Panamanian merchants--nearly wiped out the legal
trade. By 1739 the importance of the isthmus to Spain had seriously
declined; Spain again suppressed Panama's autonomy by making the
region part of the Viceroyalty of New Granada (encompassing
present-day Colombia, Venezula, Ecuador, and Panama).
In the same year, war broke out between Britain and Spain. A
British military force took Portobelo and destroyed it. Panamanian
historians maintain that this attack diverted Spanish trade from
the trans-isthmian route. The Seville-Cádiz monopoly of colonial
trade had been breached by royal decrees earlier in the century,
and precedent was thus furnished for the merchants of the Latin
American colonies to agitate for direct trade with Spain and for
intercolonial trade. After 1740 the Pacific coast ports were
permitted to trade directly via ships rounding Cape Horn, and the
Portobelo feria was never held again.
Relaxing the trading laws benefited both Spanish America and
Spain, but Panama's economic decline was serious. Transit trade had
for so long furnished the profits on which Panama had flourished
that there had been no incentive to develop any other economic
base. After the suppression of its audiencia in 1751, Panama
became a quiet backwater, a geographically isolated appendage of
New Granada, scarcely self-supporting even in food and producing
little for export.
In 1793, near the close of the colonial period, the first
recorded attempt at a comprehensive census of the area that had
comprised the Panamanian audiencia was made. Incomplete and
doubtless omitting most of the Indian and cimarrón populat-
ion, specifically excluding soldiers and priests, the census
recorded 71,888 inhabitants, 7,857 of whom lived in Panama City.
Other principal towns had populations ranging from 2,000 to a
little over 5,000.
Social hierarchy in the colony was rigid. The most prestigious
and rewarding positions were reserved for the peninsulares,
those actually born in Spain. Criollos, those of Spanish ancestry
but born in the colonies, occupied secondary posts in government
and trade. Mestizos, usually offspring of Hispanic fathers and
Indian mothers, engaged in farming, retail trade, and the provision
of services. African and Indian slaves constituted an underclass.
To the extent possible, Indians who escaped enslavement avoided
Hispanic society altogether.
The church held a special place in society. Priests accompanied
every expedition and were always counselors to the temporal
leaders. The first bishop on the mainland came with Pedrarias. The
bishop's authority, received from the king, made him in effect a
vice governor. The bishopric was moved from Darién to Panama City
in 1521. The relationship between church and government in the
colony was closer than in Spain. Both the Roman Catholic Church and
the monastic orders gained great wealth through tithes and land
acquisition.
Data as of December 1987
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