The beginning of intercolonial trade in the Pacific was, as we have seen (above, Ch. 3), the export of armed men on entrada, and their supplies. The first recorded direct voyage from New Spain to Peru was Grijalva's in 1536, ostensibly sent by Cortes to help Pizarro cope with the Inca revolt of that year, but actually planned as a trading venture (the contract was signed in Acapulco two months before the Indian attack on Lima), and possibly with the ulterior motive of intra- or trans-Pacific discovery. In fact most early ships on the Mar del Sur were owned by encomenderos or officials and intended in the first place for exploration and conquest, with trading ventures merely as side-lines to keep this capital-intensive equipment at work; they tended to be too large for profitable working in cabotage, which had to rely on snapping up small opportunities. Except for cacao, which was handled by smaller ships on narrow margins, there- 214 -was no such solid coasting trade as developed in Peru, and it was not until the 1550s that merchants and masters or pilots took over as owners: according to Chaunu, as late as 1547 the Pacific trade was basically a support for emigration to Peru. But after the mid-seventies the opening of the Manila trade (with its big entrepôt potential) and the burst in Peruvian silver output transformed trading conditions, and the wealthy merchants of Mexico City joined in.^[35]

Although it is said that in exceedingly exceptional circumstances a ship might reach Paita from Panama in under a fortnight,^[36] as a rule the set of currents and winds made the southbound journey at least two or three months, and this if started in the most favourable season, January-February (above, Ch. Chapter 5, Eastern Shores and Southern Lands and Fig. Figure 13, “NEW SPAIN TO CHILE: SAILING ROUTES. ”); generally speaking a ship made only one round voyage a year, if that, and passengers for Peru often disembarked in the far north and went on overland from Piura. Getting out of the Bay of Panama was particularly difficult. Nevertheless, after the 1550s sailings on the routes north of Callao were reasonably regular, and on occasion news passed between Spain and Peru more rapidly via New Spain than via Panama.^[37]

Callao, which had contacts with some two dozen ports from Acapulco to Concepcion, was the unrivalled focus for the shipping of the whole Pacific seaboard. Lying on an open bay, only 10 or 12km from Lima, its harbour was not first class, but the long Isla San Lorenzo gave it shelter and the advantage of a double entry, from both south and north, the latter of especial value given the winds and currents; it was in Frezier's view ‘the greatest, the finest, and the safest in all the South Seas’, far better than the open roadsteads which were the rule along the Peruvian coast.^[38] It lay halfway between Panama and Chile, and was an almost compulsory stop on the southwards run; until Juan Fernandez cut the Callao-Chile time to three or four weeks, a typical voyage might be three months Panama-Callao, three at Callao (careening, making up cargo, or waiting on a wind), and three more to Chile. There were usually long delays at Panama also. Hence a single round trip a year was normally the best that could be done, and probably even that needed some luck; the official silver convoys set up after Drake's raid maintained an annual service, but their individual ships had a two-year rotation. There were usually not more than three to five treasure ships a year to Panama: a modest tonnage sufficed for this high-value low-bulk cargo, while other Peruvian commodities were not valuable enough to warrant export across the Isthmus; they were handled almost exclusively by the small vessels of the local cabotage.^[39] For the treasure, in effect a double fleet was needed to maintain yearly service, and with the recession of the seventeenth century it deteriorated: say three to five silver ships would sail one year, only one or two the next. However, the convoy system was never so rigid as in the Atlantic, since the risks were more sporadic, and much traffic was carried on by unescorted navios sueltos or ‘free ships’. A stop at Callao was not so indispensable on the much quicker northbound run, but on the other hand there was probably no call for direct traffic Chile-Panama, even had it been officially favoured, while- 215 -there were always good commercial reasons for putting in to Callao. There was indeed only one, and that a partial, exception to the hegemony of Callao: there was some direct shipping from Panama to Arica, but this was a duty-dodging device, since Arica had customs exemptions to serve the Andean mining.^[40]

As for the scale of the traffic, there seem to have been between fifty and sixty ships on the Mar del Sur in 1562, of which perhaps only half a dozen were regularly engaged on the full New Spain-Peru voyage; this figure was probably doubled by the end of the century, when Callao had always about forty vessels at anchor, with a total of 250 or 300 entrances and clearances. In 1615–18, seventy-five units used the ports, fifty-two of them navios, the rest barcos, generally smaller craft which were officially supposed to keep within sixty leagues north or south of Callao. The biggest vessels were the King's galleons of the silver convoy, 200 to 400 or 500 tons; most private ships were from 60 to 135 tons, and the little coastal fregatas and lanchas ranged down to twelve or fifteen. Ships’ companies, numbering anything from seven to thirty-odd all told, became far more professionalised than in the early days on the Mar del Sur of Cortes's time; but except for masters, pilots, and the notary carried on every ship, they were a rough mixed lot, with many Basques and Portuguese, not to mention Greeks, Flemings, mestizos, and Negroes. They were correspondingly despised by good Castilians, of whom exactly one is recorded amongst hundreds of known seamen. Already in 1572 it was necessary to use foreign masters and pilots for lack of Spaniards; they were heavily bonded and had to have a special licence to return to Europe, lest they should sell their knowledge and themselves to northern corsairs.^[41] One difficulty confronting the maritime historian is that of nomenclature: about half the ships of 1562 were either Santiago or La Concepcion. To overcome this, resort was had to nicknames: the officially styled Nuestra Señora de la Concepcion taken by Drake was more earthily known as Cacafuego; she failed signally to live up to her sobriquet, of which the standard translation ‘Spitfire’ is out by one consonant.

As for the commodities handled in this lively traffic, their general nature stems from the general economic development of the Pacific Indies. Passenger trade was mainly, though of course far from entirely, inwards to Peru; it ranged from great parties bringing new Viceroys down to the trader with a handful of Negro slaves. Basically the Peruvian cabotage looked after provisioning and the exchange of primary products and obraje wares, all the way from the timber, cacao, and cotton of Guayaquil to the copper, hides, tallow, and fish (later the wheat and wine) of Chile. Callao itself was the entrepôt redistributing the merchandise brought on the long-distance truly intercolonial—or intercontinental—trade. Northwards it sent government silver for Seville, private silver for Seville or the Puerto Bello fairs or New Spain (and so much ultimately to China); sometimes, in the seventeenth century, mercury for the mines of New Spain; wine for central America and New Spain. Other exports were few and exotic: perhaps most important were drugs, especially Peruvian or Jesuits' bark,- 216 -

- 217 -the source of cinchona or quinine, brought to Europe in 1640 by a grateful Vicereine, the Marquesa de Chinchon, whose fever it had cured. The merchants coming to Callao from the Isthmus fairs carried a wide range of goods to spread their risks;^[42] Borah gives a full and fascinating list from which one may extract: textiles, European or Mexican, including cheap hats for Indians; dyestuffs; furniture, including even beds and writing desks; small metal wares, clocks, crockery, lacquered gourds and cups for chocolate drinking, luxury toilet utensils and cosmetics, jewellery; artisans' tools, leather goods, harness and saddlery; ointments (including salves for piles, ‘a complement of the riding equipment’); ecclesiastical and devotional gear of all sorts; toys, guitars; stationery, books—a surviving list comprises mainly works of the Fathers, breviaries and so on, but also Virgil, Ovid, and Quintilian. And once the Galleon trade was opened, the wealthy of Peru increasingly used their abundance of silver to buy Asian luxuries.

This traffic, as Chaunu remarks, was not part of the world of Seville; its Asian component was indeed incongruous to the Sevillean scheme of things, even menacing to it. The conflicts and confluences of interests between Mexico, Lima, Manila, Macao, and both the public and the private sectors in Seville and Lisbon are curious and complex. It goes without saying that the Crown made every effort, counterproductive for the most part, to control and to tax intercolonial and Pacific trade: for one thing, Peruvian silver going to Acapulco meant a direct loss to the Treasury, since it avoided the ‘averia both in this sea and in the Mar del Norte’ that it would have paid going to Spain by the Isthmus. The bureaucracy was naturally enough obsessed by the possibilities of fraud, and yet many of its members of necessity owed much of their living, at least their good living, to fraud; at the least and best, dependency on fees meant that they had an interest in keeping things moving despite irregularities and hence in winking at infringements, while so complicated were the rules that with the utmost good faith a merchant could hardly help breaking them. Money was the best lubricant of ‘passive administration’, and this institutionalised rather than personal corruption was left as a legacy to the successor Republics. There was a burdensome mass of taxes, fees, licences, evaluations, backed by heavy bonds which meant that only bigger capitalists could cope. Initiative was paralysed, and ‘As the [Crown's] necessities grew, the fiscal jungle grew more and more tangled’ and proliferated more regulations which were mostly ‘de observación momentánea’.^[43]

Relative to Peru, New Spain was short of specie—the Crown's fiscal agencies seem to have been more efficient there, the Philippines had to be subsidised, and private fortunes were perhaps more readily returned to Old Spain; on the other hand Peru was industrially more backward and offered a good market- 218 -for Mexican production. It was the merchants of Mexico City who took the initiative in the intercolonial trade, and since they also monopolised the Manila trade, Mexico rivalled Seville as an economic metropolis of the Empire. The Philippine domination was at first entirely in order from the Castilian point of view, since it was New Spain which found the heavy situados which alone maintained those islands for the prestige of the Faith and the Crown. This picture, from the Sevillean viewpoint, was to change drastically when remittances to Spain declined pari passu with the increase of those to Manila, and when not only did cheap Mexican products cut into Seville's sales at Puerto Bello, but Peru's increasing demand for the luxuries of Acapulco began to drain off her silver as well.^[44] But when the question of direct Peruvian-Asian trade arose, the interests of Mexico and Seville were one. Governor Ronquillo sent two ships from Manila for Peru in 1581 and 1582; the first was lost, the second reached Callao with a cargo of silks, porcelain, spices (mainly cinnamon), and iron, the last two items on government account. The ships were sent on the authority of a royal cédula, ostensibly to help supply a rearmament program, in fact as a cover for trade; but as soon as the news reached Spain, any further voyages were forbidden. In 1590 Viceroy Cañete tried again, on the grounds that Peru was short of iron and copper for the mines and that goods were not coming through from Seville; but although he and other high officials had invested heavily in the venture, the ship was condemned by the officials of Asia. Again in 1618 another Viceroy of Peru pleaded for opening a silk trade with China, for fiscal reasons, but was again turned down.^[45]

The merchants of Lima were themselves, of course, quite willing to fight their own battles. In 1609–10 Peruleros came to Seville itself, with their own or their Lima principals' money, and bought direct, even from foreign suppliers, thus breaching the monopolistic hold of the Seville Consulado.^[46] But the Limeños, like most men of the market, and certainly like Spain's rivals Dutch or English, had no abstract or a priori prejudice against monopoly, provided it were their own. There were, it is true, more rational arguments than are generally allowed for virtually sealing off Upper Peru's alternative outlet or supply line by La Plata: carrying the Potosi trade via Buenos Aires would have greatly lengthened the Atlantic leg of the total route, giving it a greater exposure to piratical attacks and demanding more shipping, and it would have meant diversion of naval resources from the Carrera—altogether a dangerous diffusion of energies. It is true again that the Portuguese and others made a very good thing out of illicit trade by this route, which became one of the major leaks in a leaky system; but this was due to no inherent advantage of the route itself, but to the insatiable demand of Potosi and the high added costs imposed by the Spanish protective system, which made smuggling profitable in almost any circumstances; as Jara puts it, this route ‘created such problems of fiscal control (or better, of uncontrol) that it was thought most dangerous to the interests of the Crown.’^[47] But the point is that any suggested relaxation of the ban was bitterly opposed by Lima: ‘the trade of Buenos Aires was- 219 -frozen, on the demand of the Peruvians, who thus closed a continental port which would have taken from them the monopoly of Chile, Charcas, and Upper Peru.’^[48]

There was doubtless quite as much rationale, if not more, in the decision to prohibit direct Peruvian intervention in the Asian trade; after all, it had been empirically ascertained that New Spain's relation to the circulation of winds and currents in the North Pacific approximated that of Seville in the North Atlantic, and there was now a known route which, with all its limitations, was speedier and safer than trying to develop new courses right across the wind-belts and the equatorial calms. Moreover, direct Peruvian trade meant not only a direct drain of silver, but also a competitive buying at Manila, which might well force prices up and so add to the drain. Already the activities of Peruleros in New Spain seemed to threaten the system of supply to Tierra Firme, since their heavy silver backing gave Lima something of a monopsony position. The first official reaction was to prohibit the import or sale in Peru of all goods from the Philippines; this was a dead letter until in 1587 the Court, Seville, and the Cabildo of Mexico City together put pressure on the Viceroys to enforce the ban.^[49] Typically, the prohibition had to be reissued thrice by 1600. There were vacillations of policy in response to local and temporary dearths and gluts; the main result of restriction was probably merely an increase in the overheads for bribery. In 1604 trade between New Spain and Peru was limited to three ships a year, each of 300 tons, to carry only regional products for exchange: no specie. Penalties for infringement were severe, but naturally evasion was still the order of the day, for instance by slight re-working of Chinese goods into a New Spain product and similar tricks of the trade. In 1609 the number of ‘permission ships’ was cut to two of 200 tons, in 1620 to one, which could carry specie to the amount of about 300,000 pesos; it was to ply between Callao and Acapulco only, with no intermediate calls, and to bring back produce of New Spain only: and there were seventy merchants interested in the ship of 1629, with an investment of over 1,000,000 pesos! In short, it proved impossible to stop Chinese goods reaching Peru without likewise stopping all shipping between the two Viceroyalties—or even with such a ban. In 1631 a total suspension for five years was promulgated, and this was repeated in 1634. The Procurator-General for Manila at the Council of the Indies, Juan Grau y Monfalcon, put up a lengthy and strong case for re-opening—the ban was ‘so menacing to the Filipinas, that it alone may prove sufficient to ruin them.’ In response to his protests, in 1640 an ‘Informatory decree’ was issued to Bishop Palafox of Puebla, directing him

how small, how exceedingly slowly, ground the mills of Madrid!^[50] Four years later the Council once again debated the matter: Manila, Peru, and even Mexico were now for re-opening the trade, Seville was opposed. So important a point- 220 -‘necessita de resolucion’, but, typically, nothing was resolved. Occasionally, when New Spain was in urgent need, a mercury ship might be sent, licensed to take a limited amount of merchandise from Callao to Acapulco; and less licit Peruvian ships continued to tap the trade from minor ports, Guatulco or even the Puerto del Marques, under 10km from Acapulco, eventually from that very harbour: in 1685 Townley and Dampier tried, unsuccessfully, to cut the ‘Lima ship’ out from Acapulco itself.^[51] Guatemalan and Nicaraguan ports seized the opportunity provided by the ban; indeed in the 1570s a disregarded appeal had been made to have Realejo appointed as the American terminal of the Galleon trade, supplanting Acapulco itself. After the official closure of trade between New Spain and Peru, the re-export of Chinese goods from Mexico by land remained legal, and the customs of Acapulco and Guatulco were evaded by this route, to the profit of Realejo and Acajutla. However, contraband had its own channels, so well established that the share of these ports was never more than marginal.^[52] Both the illegal trade and its indefinite legal suspension lasted on into the eighteenth century—there was a reissue of the ban in 1706—to become yet another item on the agenda of Bourbon reform. The suspension was not formally rescinded—or rather itself suspended!—until 1779.

Paradoxically, the intercolonial trade had invited its official death-sentence by its success—that is, by its success in buying, however indirectly, into the intercontinental trade of the Manila Galleon.