Cattle activity predominated during the first hundred years of the colony, with fat (tallow) and leather as the main products. While the first constitutes raw material in the manufacturing of candles, the latter was exported to Peru, where it was transformed into diverse objects, like shoe soles, badanas or cordobanes.
During the XVIII, agriculture was the most important economic activity. External factors (a devastating plague destroyed with almost all Peruvian crops) sped up the demand for our products, especially wheat. Chile was considered Peru’s granary, decreasing cattle work and implementing a system of roads to ease the export of farming products.
Among the crops most frequently developed in ranches were wheat, barley, corn, fruit trees, orchards and vineyards.
Commercial exchange
The commerce of all Spanish colonies was under the rulings of the crown. With the objective of taking the most advantage of the new source of high quality raw material, Spain set up a commercial monopoly with America. In order to do so, the fleet and galleons system was implemented, which consisted of the circulation of merchant ships from Europe to America and vice versa, which transported the raw material and manufactured products to be traded. They were also closely watched by war ships (galleons), which ensured the integrity of the merchandise and the crew.
Thanks to this method, the exchange was continuous. Our country’s merchants, through their agents, arrived to the city of Portobello (Panama) to acquire manufactured products from Europe, among which were weapons, jewelry, oil, whine and fabrics. Their transportation considerably increased the selling price, which at the same time encouraged the contraband of merchandise to get it at a lower cost. The commercial monopoly was so strict that even the exchange among the colonies themselves was strictly watched. This fact gradually changed as of the XVII century, when the crown eased commercial obstacles. One of them had direct repercussions in our country because it allowed the opening of two important ports, Valparaiso and Talcahuano.
Indian working conditions
During the Colony, governors assigned a certain number of Indians to each conqueror for them to be in their care. They had to work under Spanish orders and pay tribute (in money or goods), receiving protection, food and shelter in exchange. This system was known with the name of encomienda (trusteeship), and each Spaniard in charge of a group of Indians received the name of encomendero.
However, the situation was not so ideal because ultimately, the life conditions of the aborigines under the encomienda system were terrible (destitute).
Due to this, during the XVII century a series of measures were promoted that would try to regulate and improve Indian working conditions. However, despite counting with the support of important authorities, few of them were implemented and most only received the scorn of the encomenderos.
In 1609 an attempt was made to put an end to the encomienda service, but it only managed to exclude women and children under 18. Twelve years later the Esquilache Rate was promulgated, which would be modified to the Royal rate in 1622. This measure would fail just like its predecessor. The Laso de la Vega Rate was drafted as soon as 1633, which set the tax (tribute) to ten pesos. Thanks to Ambrosio O’Higgins’ initiative, the encomienda system was officially put to an end in 1789. The Spanish crown would determine its definite abolition in 1791.
Colonial taxes
The direct vigilance and administration the Spanish crown exercised over commerce in our country let out no detail, benefiting from each economic activity that took place within our territory.
The tithe was a tax charged to agropecuary production and it sustained religious work, while the king’s fifth taxed the gold extracted from the mines and sands corresponding to one fifth of the total. There was also almojarifazgo (customs tax of merchandise that circulated between Spain and America), the alcabala (related to the buying and selling of goods and real-estate) and the anata or half anata (corresponding to the payment of a year or half a year’s salary).
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