The Marketing of Indigo

Getting indigo out to the market was not an easy task. Indigo cultivation took place on the coast of the Pacific while most trade took place across the Atlantic. In the absence of decent roads it had to be transported on mule trains all the way to the Gulf of Honduras. In normal times most indigo would be exported via the Bodegas del Golfo Dulce although the ports of Omoa and Trujillo were also used (for legal trade as well as for contraband).^[89] If the British threat was deemed too great indigo would be sent to Veracruz. The turn of the century was dismal in this respect. For four years, between 1798 and 1801, indigo had to be sent to Veracruz where it was stored until it could finally be exported in 1802.^[90] Again in 1806 almost 93 percent of the crop was exported via Veracruz.^[91] Every year two or three ships visited the Pacific port of Acajutla bringing wine, oil, olives, raisins, almonds, and silver bullion from Valparaíso, Callao, or Guayaquil and returning to their ports loaded with indigo. Overall the Pacific trade never amounted to more than 15 percent of the crop.^[92]

Getting the indigo to the coast and through customs was not an easy task. The litany of requirements, taxes, contributions, and transportation problems tried the patience of planters and merchants even more than the patience of those who read about it. After the fairs indigo was brought to Guatemala, taken out of the leather seroons, dried, weighed, marked with a hot iron, wrapped in a straw mat, and packed in a new seroon. Taxes had to be paid: 4 pesos per seroon as a contribution to the Montepío, 4 percent tithe, 4 percent alcabala, 1 percent avería , 1/2 real

for every 25 pounds for entering customs, and 1 peso for storage. If shipped via Veracruz a 9-percent alcabala and other minor taxes had to be added. Once in Cádiz it was necessary to pay for customs, give a contribution to the Consulado, pay a fee for protection, and another fee to cross the Guadalquivir canal. All in all, fees, taxes, and contributions added about 25 percent to the initial price. On top of that one has to add transportation costs and interests. This last item was significant since money was tied up for a long time before the merchant could see his return. Mule trains were slow and expensive. Each mule carried two seroons and charged about one real per day. It took at least forty days from San Salvador to Golfo Dulce and at least two months from Golfo Dulce to Europe. If the mule train did not arrive at Golfo Dulce before the end of June, it had to wait until October to be shipped since no ships were available in the interim. In wartime indigo might be stored for years before it could be shipped.

Overall, the economy suffered more from the uncertainties of the world markets, the generalized warfare in Europe, and the predatory activities of British pirates than from the actions of the colonial authorities. The last years of Spanish rule magnified all these problems. The decline of indigo production began at the end of the eighteenth century. When trade was interrupted in 1798 and the crop had to be sent to Veracruz expenses began to rise. Four entire crops had to be stored before shipments were resumed in 1802. There was no relief; at the same time that indigo was finally leaving for Europe locusts were destroying the harvest and competition from Venezuelan and Indian indigo was being felt.

The Napoleonic wars had a negative impact on the Spanish economy and disrupted trade with the colonies. Demand for indigo fell to a fraction of what it had been in the past. José Cecilio del Valle, a Central American statesman, mentions the activity of pirates and privateers as one of the major reasons for the decrease in trade.^[93] To make matters worse England raised tariffs to protect her empire. Since 1819 non-Bengali indigo had to pay more than two times the 1798 tariff.^[94] The average production between 1791 and 1800 for all Central America was 875,256 pounds, and between 1809 and 1818, 459,407 pounds.^[95] After independence the new authorities, worried about this situation, appointed a commission to study the economic conditions of Central America. The commission found that

in the five years that preceded independence, our trade was the saddest.... The [indigo] crop once was eight thousand and five hundred seroons; but in the five years that preceded independence the estimate is quite different; it was reduced to only four thousand seroons; or 600,000 pounds.^[96]

Although these figures do not coincide with those of table 3, the impression of a general decay is common to both sets of data. Despite its decline, indigo was not abandoned, it was the only product that the province could export in large amounts. The local elite had already acquired a taste for foreign goods and was not about to forget them. The economy was beginning to open to foreign markets, and the change was permanent. Although the province of San Salvador had a largely subsistence economy and the majority of the population was not directly affected by the indigo market, the elite did feel the full impact of the crisis. Their livelihood was seriously threatened. Salvadoran farmers lost their mortgaged property to Guatemalan merchants.^[97] It is undeniable that indigo was important for the economy, but the significance of this crop lay more in the fact that it was the main source of income of the ruling class and its link to the world economy. The indigo market was their measuring rod for the performance of the economy. Import merchants, bureaucrats, peasants who worked in the production of the dye, muleteers, peddlers, craftsmen, builders, and all others whose economic well-being was linked to the market economy had their future tied to indigo. The most articulate groups in Salvadoran society, the better educated and organized, those who could influence decisions, saw indigo as the main source of economic prosperity. Moreover, even though this elite lived mainly in the larger towns, its influence spread all over the province.

Indigo was produced everywhere and indigo producers ruled the municipalities throughout the colony. The economic well-being of the kingdom was identified with the economic well-being of its elite. Even if the food crops had an exceptional season and the lot of the impoverished peasant improved dramatically, a bad harvest of indigo was enough to convince the elite that the year had been bad for the colony as a whole. For the local authorities the fate of the elite was the same as the fate of the province.

The market and subsistence economies were not isolated from each other. Theirs was not a very close marriage, but they were not divorced. Indian communities that produced subsistence goods on their communal lands also rented part of their holdings for commercial crops or produced them by themselves. Peasants who tilled the fields of the ejidos and communal lands were recruited by the indigo haciendas during harvest time. It is quite possible that depressions in the indigo market benefited peasants since a smaller indigo harvest meant less demand for their services and therefore more time to spend on their own crops. The smallness of the province and the spread of indigo production made it virtually impossible for any community to remain insulated from changes in the international markets. Indigo production shaped perceptions and helped to define social groups and their motivations.

The trade crisis affected the functioning of government. During the last years of colonial life the Captaincy-General's average annual deficit was 92,743 pesos and the Real Hacienda had liabilities of over 2 million pesos.^[98] (The average annual revenue for the period 1816–1820 was 251,855 pesos.) By 1821 the system of public finance "was labouring under a perfect state of paralysis."^[99] Marcial Zebadua, minister in the first federal cabinet, wrote that by the time of independence public revenues were in a state of "absolute ruin."^[100] Miles Wortman, in a careful analysis of government revenue as an indicator of the Central American economy during the colonial period, concludes that "the trend in declining revenue is fairly constant throughout the region."^[101]