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History, Spanish Rule

subsistence crops, situado, military outpost, mercantilism, chief concern

In the early 16th century Spanish settlers focused on mining gold in Puerto Rico, but the sources quickly became exhausted. With a scarce population and a meager economy, Puerto Rico became little more than a military outpost, guarding trade routes and Spanish armies traveling to the American mainland. Ships carrying gold and silver from the Americas to Spain passed by Puerto Rico as well. For three centuries the Spanish governor, whose chief concern was the strategic military role of the island, governed the small population of Puerto Rico with strict authority. The wealthier settlements in New Spain (the Spanish colony in Mexico) paid an annual subsidy known as the situado, which supported Puerto Rico’s administrative and military expenses.

Many people in Puerto Rico supported themselves through farming. Most of Puerto Rico’s farmers were landowners with small farms. They grew subsistence crops such as cassava, corn, vegetables, fruit, and rice. Whenever possible, they sold any surplus produce in town markets to Puerto Rico’s military personnel, stationed especially in San Juan, and to ships that stopped at Puerto Rican ports. The island began to produce sugarcane in the early 16th century.

None of this farming made the colony a rich one, and it continued to depend on the subsidy from New Spain. Nevertheless, a merchant class evolved to carry out the trade with the ships and between the towns. A wide variety of businesses sprang up. Merchants of many kinds—grocers, artisans, wholesale import-export merchants, and distributors—became important to the economy. By the end of the 18th century Puerto Rico supported several cities with populations of more than 5,000 inhabitants, including the capital, San Juan.

For the first 250 years after European settlement, the Spanish authorities ran the Puerto Rican economy under a policy known as mercantilism. Under this system, the Spanish government permitted its colonists to trade only with Spain, prohibiting trade with other Spanish colonies and with foreign nations. This restrictive system favored Spanish merchants much more than it did Puerto Rican farmers and merchants. Spain purchased agricultural products from Puerto Rican farmers and merchants at low prices, but sold items imported from Spain to the colonists at high prices.

Throughout this period, Puerto Rico had a thriving illegal trade with other Spanish and foreign colonies. The center for smuggling was the southern port of Ponce. Colonists, and often the governing authorities on the island, bypassed government restrictions to conduct this illegal trade.

After 1765 Spain introduced new fiscal and administrative policies to make Puerto Rico a more profitable colony capable of supplying greater tax revenue to the Spanish treasury. The government encouraged immigration and redistributed unused land to individuals willing to cultivate the soil. It worked to improve the island’s defenses and its infrastructure, such as roads and bridges. Spain also ended trade restrictions between Puerto Rico and other Spanish colonies.

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