The Company and Cacao Commerce

For many years the business of shipping Caracas cacao to Mexico was a simple affair. Anyone with beans could sell them at the current local price to a merchant or directly to a ship's captain or supercargo. An alternative method, preferred by those who could forgo cash payments for their cacao in Caracas, was a practice of shipping by way of what was known as the tercio buque (one-third of the ship's hold). By custom, one-third of the cargo space in every vessel that departed the colony was reserved for the produce of hacienda owners, cosecheros as they are referred to in eighteenth-century documents. A second third was allocated to Caracas merchants for the cacao that they had acquired, and a final component or tercio was reserved for the ship's captain in the name of the owners of the vessel. Once the third part of the hold reserved for them had been filled with cosechero cacao, hacienda owners who still had cacao to ship could sell their beans at current market prices to local merchants or the ship's captain or supercargo. Sales in Caracas provided immediate cash or credit and freed the seller from the risk of losses that could take place on the high seas. But such sales, while more secure, were not nearly as profitable as those made by way of the tercio buque. Caracas cosecheros and merchants shipping by tercio buque had to pay freight charges to the ship's owner or captain and they renounced the right to collect for damages or losses that might occur in transit, but they retained ownership of their cacao until it was sold in Mexico, and this, despite the risks, often meant substantial income.

Within twenty-four hours of the ship's arrival in Veracruz the captain of the vessel was obliged to transfer Caracas-owned cacao to an agent in that port named by the cosechero or merchant. Those who shipped cacao in this fashion had to depend on the reliability of this associate, and often they had to wait for extended periods before the profits from the sale of their beans were returned to them. Frequently, such profits took the form of credits to be drawn on merchants in Mexico or Spain, which meant that many of the elite Caracas cosecheros who utilized the tercio-buque provision functioned much like merchants in that their assets were not always liquid and they were often located outside Caracas. But

the great advantage of shipping cacao in the tercio buque was, of course, that Caraqueños who sold in New Spain could profit from the much higher prices paid for cacao there.^[3]

Until 1721, those who had cacao for export or sale could do business with the agent of any ship that happened to be taking on cargo at La Guaira. In that tumultuous year, to the great disgust of the Caracas citizenry, Antonio José Alvarez y Abreu was named governor pro tem in Caracas by the viceroy of New Granada.^[4] During his short tenure Alvarez y Abreu introduced the alternativa to La Guaira shipping, a system which required that the first ship entering port had to be loaded to capacity before any subsequent vessel could open its hold for cargo. Influential Caraqueños resisted the alternativa, and Andrés de Urbina, owner of more than 50,000 cacao trees and recognized as the mayor cosechero in Caracas, went to Spain to obtain the repeal of the plan. He won his case, and the real cédula issued in favor of his appeal, dated 25 May 1722, would be known to a generation of Caraqueños as the cédula de Urbina .^[5]

The alternativa was intended to attract ships to the carrera de Veracruz by guaranteeing a full cacao cargo for every vessel that might arrive at La Guaira. Although it is not entirely clear what was troublesome about this policy, it could be that it had the effect of retarding rather than expediting shipping. If, for example, Caracas cosecheros wanted to choose their carrier, favoring for instance the Caracas-owned ships of their associates or kinsmen, the alternativa would have obliged them to wait to load their cacao until all ships in line at the La Guaira wharf ahead of the one they preferred had been filled and had cleared port. In any event, thanks to Urbina's efforts, the alternativa was inoperative from 1722 until 1731, when it was reinstated as the rule—but this time it was to serve as a tool in the hands of the powerful Guipuzcoana Company, which was then striving to dominate the colony's cacao trade.

In 1728 a royal license was given to a group of Basque merchants which granted them exclusive rights to bring Caracas cacao to Spain. The Real Compañía Guipuzcoana de Caracas , Spain's first royally chartered commercial monopoly company, was created only to provide Spanish markets with cacao, which was to be done by stimulating production and stopping illegal commerce with foreign merchants. In no way whatsoever was the Company to inferfere or

compete with the traditional trade between Caracas and New Spain. This trade therefore remained open as before to anyone who could secure a ship and a cargo. Until 1731 Caracas cosecheros, independent merchants, and shipowners who were not associated with the Guipuzcoana Company continued to ship their own cacao to Veracruz on the basis of direct sales and the traditional tercio buque in vessels that did not belong to the Company. In addition, shortly after the Company's creation, Caraqueños sought to limit its monopoly by arguing that their traditional rights to a third part of the hold of any ship departing La Guaira also included those belonging to the Company. No royal cédula could be found to provide a legal basis for the tercio buque practice, however, and the Company was exempted from granting the customary tercio buque. Caracas residents continued to protest the exception to their traditional right, but as long as there was no infringement on their customary trade with New Spain, most planters and merchants were evidently not much harmed by their exclusion from the transatlantic cacao commerce with Spain.

A serious problem did arise, however, after the alternativa policy was reinstated in 1731. In Caracas the alternativa meant that once a Guipuzcoana Company ship had reached the head of the queue and had opened its hold to take on cargo, cosecheros with beans for market had to either sell their cacao to the monopoly at current prices or wait until others had sold their harvests to the Basques and the Company ship had loaded and departed. Hacienda owners who had traditionally exercised their tercio buque right to transport their harvests to the lucrative New Spain market had no interest in selling to the Company, for by doing so they would forfeit the considerable profit they stood to gain if they sold their beans on their own account in Mexico. As the flow of cacao to New Spain slowed and the resulting shortages in that colony caused Mexican buyers to offer more for Caracas beans,^[6] cosecheros became even less willing to do business with the Guipuzcoana Company. While Company ships stood at the La Guaira wharf taking on but little cargo, with other ships waiting empty behind them, Caracas mantuanos vented their frustration and discontent by making formal objection to royal officials in Madrid. The Caracas cabildo wrote to the crown in 1745 that the time spent waiting to load in La Guaira so slowed the cacao trade to New

Spain that it had become common for a year and a half to pass before a ship could complete the cycle of loading, sailing to Veracruz and back, and passing to the head of the line at La Guaira to be ready to load again. This was true even though the process of loading and unloading could be done in a matter of days and the sailing time from La Guaira to Veracruz was typically less than a month. While the quantity of cacao grown on their haciendas steadily increased, the alternativa very effectively kept the Veracruz trade bottled up in the colony.

A further aggravation came as a result of a policy initiated in 1744 by the Basque governor Zuloaga. In that year a survey was made of all the cacao haciendas in the Caracas province. From this census a checklist was prepared in which each estate was recorded by the name of its owner and by the number of fruit-bearing trees it contained. Zuloaga then determined that each cosechero's portion of all the cacao grown in the province would also be the maximum portion of any (non-Company) ship's tercio buque that the cosechero could fill with cacao. In other words, for example, the Panaquire hacienda of Juan Francisco de León consisted of 15,000 cacao trees in 1744. León thus owned about three-tenths of one percent of the more than 5 million trees counted that year. By Zuloaga's decree León could not load more cacao than three-tenths of one percent of the tercio buque capacity of any ship bound for New Spain. Similarly, the Marqués de Toro, whose 90,000 trees on seven haciendas made him the province's foremost cacao hacendado in 1744, could send a maximum of one and a quarter percent of the tercio buque of any ship carrying cacao to New Spain.^[7]

This policy of allocation, known as the repartimiento por padrón , probably appeared fair on paper, since its ostensible objectives were to give all cosecheros a chance to ship in the tercio buque and to make it impossible for mantuano planters or merchants to buy up all the cacao available, in direct competition with the Guipuzcoana Company, and transport it as their own to New Spain. Yet since in practice the policy made it virtually certain that planters would not be able to ship all of their own cacao in the tercio buque, it was most likely designed to force them to sell some of their beans to interested buyers, in particular to the factors of the Guipuzcoana Company. Since the portions allocated by the repartimiento applied exclusively to the cargo space of each individual vessel, a

cosechero who enjoyed a bountiful harvest might have beans on hand for shipment in La Guaira which exceeded his predetermined share of the tercio buque of any given ship bound for Veracruz. Similarly, if a ship had substantial cargo capacity it could happen that there would be available space remaining in its hold after all interested cosecheros had loaded their portions, but the hacienda owner with beans in excess of his allotment would not be allowed to put them in that vessel's still unfilled tercio buque, and the ship would have to sail only partially loaded. In addition, since the assigned portions could not be accumulated or carried over from one vessel to the next, if a cosechero had too little cacao on hand in La Guaira to fill his portion of the tercio buque on one occasion, he could not expect to make up the difference by receiving an expanded share in a future sailing.

Caraqueños claimed that the repartimiento benefited only the Guipuzcoana Company, and that it was in fact a strategem designed for that purpose by the Basque governor Zuloaga. In 1750 Juan Francisco de León, then in the midst of the full-scale popular movement that had succeeded in temporarily driving the Company from the colony, included the repartimiento in the list of injurious practices that had forced him and his followers to take up arms in protest:

The repartimiento por Padrón , although at first glance it seems to treat all the cosecheros equally, distributing to each one of them a diminutive proportion according to the number of trees that he owns, is actually unfair, because it is certain that there are many [cosecheros] in the province who miss the opportunity to ship cacao [in the tercio buque], either because they are unaware of the opportunity or because they cannot quickly cover the great distance [from their haciendas to La Guaira]. And even those who do ship are not treated fairly by this Padrón , for not everyone is able to send a shipment every time [a vessel is available], and if an opportunity is missed it is impossible to compensate with the next vessel, because on each occasion no one is allowed to load more cacao than his allotted share.^[8]

In the late 1730s and 1740s, the principal opponents of the Guipuzcoana Company and advocates of the customary privileges of the cosecheros were three Caracas noblemen, the Marqués del Toro until his death in 1742, the Conde de San Javier (Juan Jacinto Pacheco y Mijares), and don Francisco de Ponte y Mijares, cousin

to the Conde. These men took their case to Spain, residing at court for several years at a time while they carried on a paper war of major importance for Caracas. Dismissed by attorneys for the Guipuzcoana Company as the self-interested managers of the traditional trade, they nevertheless presented dispassionate arguments that demonstrated for the Council of the Indies the damage done to commerce and cacao agriculture by the Company and the Basque governors who, as its allies, established and enforced the alternativa and the repartimiento por padrón.

The published remonstrances of these mantuanos contain criticisms of the alternativa, the repartimiento, and a third policy that they believed was also designed to redirect the cacao trade away from New Spain and into the hands of the Guipuzcoana Company. They criticized a system of quotas begun in 1734 by governor Martín de Lardizábal in what the governor claimed was an effort to eliminate conflict while retaining the alternativa. Based on an estimated 60,000 fanegas annual cacao production in the province, Lardizábal had determined that 10,000 fanegas should be discounted for local consumption, 20,000 fanegas were then allocated for New Spain and 30,000 fanegas for Spain proper. Once the quota for one destination had been reached, exports were to be directed exclusively to the other market until its quota was achieved. The representatives of the Caracas planters claimed that the quota system was illegal since it in effect deprived them of their right to trade freely with New Spain. Since the Guipuzcoana Company's exclusive right to trade with Spain was always in effect, in practice the quota system meant that once 20,000 fanegas were sent to Mexico, no more cacao could be shipped there until the Company had purchased 30,000 fanegas for shipment to Spain, at whatever price the Company chose to pay. As a further benefit for the Basque monopolists, once both quotas had been filled Lardizábal's system gave the Company permission to sell in the lucrative New Spain market—a direct violation of the Company's charter.

The Conde de San Javier and Francisco de Ponte made their objections to the quota policy in a memorial presented to the Council in January 1746. Rather than accept the quotas and relinquish the benefits of their traditional trade to New Spain, cosecheros simply refused to sell their beans to anyone, preferring to keep them in their warehouses. Far from advancing the productivity and

commerce of the colony, the Company and the Basque governors who favored it had in fact forced stagnation upon the colony. As evidence of this, San Javier and Ponte argued that it was widely accepted in Caracas that annual production had been underestimated at 60,000 fanegas in 1734, and that by 1740 a more accurate figure would have been 90,000 fanegas. Since Lardizábal made his allotments, many new cacao haciendas had been brought to harvest. The entire valleys of Curiepe, Panaquire, and Araguita had begun to produce in the interim, and there had been great expansion in other Tuy valleys such as Capaya, Mamporal, and Caucagua. Yet not once since 1740 had the quota of 20,000 fanegas been sent to New Spain; about 9000 fanegas were sent in 1741, and not even 7000 fanegas went in 1743. Nor had the Atlantic trade to Spain benefited from the system. San Javier and Ponte pointed out that in the decade that had passed since the quotas were established, the Company had been able to fill its allotment only once, in 1740, when 40,000 fanegas were sent to Spain.

According to San Javier and Ponte, the reason why the quotas were not filled, even when there was more cacao in the colony than Lardizábal had estimated, was due directly to the low prices offered by the Guipuzcoana monopoly. San Javier and Ponte offered the council an argument that placed blame entirely on the Company for creating the surfeit of cacao that had accumulated in Caracas, an oversupply of beans that in turn drove prices to record low levels.^[9] Since many cosecheros were unwilling to sell their beans to the Company, the Company ships were filled only very slowly, other ships stood empty at the wharf waiting to load, and the legal export of cacao from the provice came to a virtual standstill. The bottleneck created by the quotas and the alternative caused a dramatic increase in cacao beans planters had stored in their Caracas and La Guaira warehouses, as cosecheros waited for the chance to ship to New Spain. With such an abundance of beans available for sale the local price paid for cacao fell to unprecedented low levels.

There was so much cacao available that many planters had no choice but to sell to the Guipuzcoana Company at ruinous prices. Desperate planters who needed immediate cash for their crop "found themselves obliged to sell their cacao while it was still in flower"^[10] at whatever price they could get for it, which was often as little as seven or eight pesos. This was made all the more disturbing

because in Veracruz, where the demand for beans had come to far exceed the restricted supply coming from Caracas, would-be buyers were offering fifty pesos and more per fanega. In the graphic metaphor of the frustrated cabildo, these constrictive policies had made the legal cacao trade "a throat too small for the vomit of the great stomach that is this province."^[11]

In what was perhaps their most serious criticism, surely designed to attract royal attention to their complaints, San Javier and Ponte hinted that for many colonists in the Caracas province smuggling had become the only viable alternative to this situation. They suggested that it was an ironic, but very disturbing, circumstance that by its avarice the Company had in fact come to foment the illegal trade that it had been created to eliminate. How else except by smuggling, they asked rhetorically, could the great discrepancy between production and exports be explained?

The reduced flow of cacao to New Spain brought other serious problems in its train. New Spain had always been Venezuela's principal source of circulating specie, but with fewer ships arriving with cacao at Veracruz, very little silver coin came back across the Caribbean on their return voyages. Mexican merchants, who had traditionally advanced cash for the purchase of Caracas cacao,^[12] were now reluctant to tie up their investments for as long as two years in a market brought to stagnation. Together the abundance of cacao for sale and the shortage of coin caused prices to come crashing down. San Javier and Ponte pointed out that low prices were ruinous to many other people in addition to cacao planters, especially in Caracas, where the lack of cash made business of all kinds difficult. Even artisans were forced to leave their crafts and take up subsistence agriculture in the countryside. On the haciendas, slaves who ran away or died could not be replaced, and there was no cash to pay wage labor as a substitute. The best that could be done, under the circumstances of torpid trade and low prices, was to "keep the slaves busy, without expecting to get any benefit from them or from one's árboles de cacao ."^[13]

The Guipuzcoana Company made no great effort to counter the specific criticisms directed at it by Toro, San Javier, Ponte, and others. Some resistance to its establishment in Venezuela no doubt had been expected, and perhaps the Company's directors were secure that their royal license guaranteed support. Rather than

answer the colonists' charges directly, Company spokesmen and influential friends of the Company tried to discredit Toro and the other Caraqueño critics by claiming that they argued only on the basis of self-interest. In 1739, an attorney for the Company claimed that the Marqués de Toro and the Conde de San Javier were "the only, or at least the principal merchants, who for themselves, and for their commission agents in Vera Cruz, resist the Company." It was said that these men had dominated the cacao trade for many years and that they denounced the Company for no motive other than the desire to return to a condition in which they had no competitors. In February 1745, the Basque governor Zuloaga questioned the disinterestedness of the Caracas cabildo, which a month earlier had described commerce under the Company and the alternativa as a "throat too small" for the great productivity of the province. Most of the officers elected to the town council in 1745, Zuloaga claimed, were members "of the family Solórzano, which is the family of the Conde [de San Javier]."^[14]

In fact, however, opposition was widespread. Caraqueños of diverse social standing expressed their objections to the alternativa and low prices. The Company's policies and the results of those policies created immediate hardships for many hacienda owners and others whose livelihoods depended on the exchange of cacao for silver coin. These immediate difficulties were all the more intolerable for certain of the colony's oldest and most prestigious families because they threatened to dislodge them from their accustomed positions of privilege in Caracas society.