The main agency of the Spanish government that oversaw trade and commerce with the empire’s American colonies.
The Casa de Contratacion was one of the earliest colonial institutions established by the Spanish Crown. The discovery of GOLD on the island of HiSPANlOLA in 1500 sparked a trading boom between Spain and the colonies, and the Crown became concerned that it would be unable to regulate the commerce or to collect all the taxes owed to it. The Crown also wanted to ensure that it received its share of profits from the mines; by law it was entitled to one-fifth of all precious metals discovered in the New World. With these concerns in mind, the Crown established the Casa de Contratacion at Seville in 1503. As originally conceived, the Casa functioned solely to monitor and regulate maritime trade. By law, every ship departing to or arriving from the New World had to meet with officials of the Casa, register its cargo, submit to inspections, and pay any taxes or duties owed to the Crown. The Casa consisted of three important officials—a contador (comptroller), treasurer, and a factor—all of whom were royal appointees. In addition, there was a small number of clerks, notaries, and lawyers who assisted the main officers. To consolidate the Casa’s control over shipping, the Crown decreed that all trade with the New World had to pass through the port of Seville under the Casa’s watchful eye. As a result of this policy, Seville became the most important port in the Spanish Empire, a position it maintained throughout the 16th century.
As Spain’s American trade boomed, the Casa took on more responsibilities. It moved from registering cargo and collecting taxes to trying maritime civil suits, supervising ship construction, and training navigators. By the 1520s it began to advise the Crown on all matters related to the economy of the New World, becoming in effect a ministry of commerce. The Casa gained new powers and responsibilities in 1522, when the Crown instituted the flotilla system. Over the years pirates and foreign enemies had begun preying on Spanish ships. To protect and further control its commerce, the Crown decreed that there would be a single large fleet that would leave Spain, and another that would return from the New World. In both cases a group of heavily armed warships accompanied the fleet. On the one hand, this new regulation made it easier for the Casa to monitor cargos and eliminate contraband. On the other hand, it created a heavy burden for the Casa, which had the responsibility of outfitting, arming, and stocking the warships used to protect the treasure fleets.
Realizing that the Casa was too small to handle its new responsibilities, Philip II reorganized it several times between 1540 and 1590. First, he greatly increased the support staff and selected a president to oversee its operations. In 1543 Philip tried to streamline its operations by removing its judicial powers to try civil suits. In 1580 he made the Casa responsible for trying maritime criminal cases. That year he also removed the burden of having the Casa provision warships to protect the treasure fleets, and by 1607 the Crown decreed that the Casa no longer had to arm the fleets, either. In an attempt to alleviate the pressures of sending out only one fleet, Philip also chose to send out two fleets to the New World, leaving at different times. While this strategy did not diminish the Casa’s workload, it did spread it out over the course of a year.
The greatest period of the Casa lasted until the 1590s, and thereafter it began a long, slow decline. Philip’s attempts to aid the Casa by assigning it more staff had the unfortunate side effect of creating massive bureaucratic delays. Often officials worked at cross purposes to one another. Also, there were not always clear lines of authority, causing bickering that delayed work for months at a time. Worse still, in an effort to raise money the Crown sold the positions at the Casa to the highest bidder, which meant that many of the officials were wealthy but not necessarily competent.
A cumbersome bureaucracy was not the Casa’s only problem. Spain’s commercial policies also hampered the Casa’s ability to function effectively. Following the bullionist ideas of the time, Spain imported massive amounts of SILVER, to the exclusion of other products. This practice caused rampant inflation in Spain and priced Spanish goods out of the market. Spanish industries, such as the manufacture of textiles, collapsed. Increasingly, the Spanish colonists turned to smuggling to supply their basic needs, which devastated the official trading channels passing through the Casa. With fewer goods passing through the Casa, it could collect fewer and fewer taxes for the Crown.
Ultimately, the highly regulated commercial system controlled by the Casa was not flexible enough to meet the needs of the growing colonies. Goods arrived infrequently, and any attempt to ship merchandise across the Atlantic was needlessly expensive and required ridiculous amounts of paperwork. Nevertheless, the Casa continued to control maritime trade until the 1700s.
Further reading: C. H. Haring, The Spanish Empire in America (Oxford: Oxford University Press, 1947); Lyle N. McAlister, Spain and Portugal in the New World, 14951700 (Minneapolis: University of Minnesota Press, 1984).
—Scott Chamberlain
World History
