Imperial Policy: Trade Monopoly, Slavery and the Missionaries
From Adventure to Administration
By 1503 Spain had been in the Caribbean for a decade. La Navidad had failed, Santo Domingo had been founded, Columbus had been arrested in chains, and gold was beginning to flow back to Seville — not enough to make anyone rich, but enough to convince Ferdinand and Isabella that the Indies needed a system. The next twenty years saw Spain build that system: a trade monopoly to keep the wealth in Castilian hands, a labour regime to control Indigenous workers, an early licensed slave trade in enslaved Africans to replace the workers who were dying, and a Catholic mission to give the whole project a moral framework. None of these was an accident; they were imperial policy, decided by the Crown in Castile and run out of Seville, then exported across the Atlantic. The pieces locked together. Pull one out and the others stop working.
The Casa de Contratacion (1503)
In 1503, with Columbus barely back in chains, the Crown founded the Casa de Contratacion (House of Trade) in Seville. Every ship sailing for the Indies, every sailor on board, every cargo carried, every passenger licensed, and every ounce of bullion returned had to pass through this single office. It was the world’s first imperial bureaucracy, and Spain ran the Atlantic through it for two centuries. Why such tight control? Because the Crown was determined to capture the royal fifth (the quinto real) of all gold and silver returning from the Indies, and because keeping out Portuguese, French and English ships required licensing every voyage on the Spanish side.
The Casa de Contratacion was founded in Seville in 1503. It licensed every Spanish ship, sailor, cargo and passenger crossing the Atlantic, taxed all bullion returning, and made Seville the only legal port for trade with the Indies for the next two centuries.
The Trade Monopoly
The monopoly had three layers. First, only the kingdom of Castile could trade with the Indies — not Aragon, even though Ferdinand of Aragon had co-sponsored Columbus, and certainly not other European states. Second, only the port of Seville (and later, briefly, Cadiz) could send or receive ships from the Americas. Third, only licensed Spanish ships and Spanish-born crews could sail. By the 1560s the monopoly had become the famous twice-yearly flota system, with armed convoys protecting bullion shipments. The intention was simple: keep foreign rivals out, keep royal taxes in. The unintended consequence was that smuggling and piracy became enormously profitable, and Spain’s domestic economy became dangerously dependent on a single trade route.
The Encomienda System (formalised 1503)
Also in 1503, the Crown formalised a labour system that would shape colonial society for centuries. Under the encomienda, a settler — an encomendero — was ‘entrusted’ with a specified group of Indigenous people who owed him tribute and forced labour, in exchange for his protection and instruction in the Catholic faith. On paper, this was not slavery: the Indigenous workers were Crown subjects, free in law, and entitled to wages. In practice, encomenderos took whatever labour they could extract, fed the workers as little as they could get away with, and were in no hurry to provide Christian instruction.
Encomienda’s effect on Hispaniola was catastrophic. The same Tainos who had welcomed Columbus in 1492 were ‘entrusted’ in batches to settlers, marched into gold-panning gangs, and worked until they died. By 1514 only around 30,000 Tainos remained on the island that had once held hundreds of thousands. The system was carried into Cuba and Puerto Rico and would later be exported to Mexico and Peru.
In practice, on Hispaniola, the encomienda was almost indistinguishable from slavery. But in Spanish law it was different in one crucial way: Indigenous workers were the Crown’s free vassals, not the encomendero’s personal property, and could not legally be bought, sold or willed. That distinction mattered politically. It allowed the Crown to argue that Indigenous peoples were converts and subjects entitled to royal protection — the legal foothold that would later let the New Laws of 1542 ban new encomiendas. It also allowed encomenderos to argue that they were performing a Christian service, which is why the Dominican Antonio de Montesinos’s 1511 sermon (‘Are these not men?’) was such a shock: he was attacking the moral story Spain told about itself.
The Beginning of the Transatlantic Slave Trade
As the Indigenous workforce of the Caribbean collapsed under encomienda and disease, Spanish settlers turned to a different source of forced labour. The Crown licensed the first shipment of enslaved Africans direct from Africa to the Spanish Indies in 1518. The numbers in this period were small, but the principle was set. Through the asiento system — royal contracts granting a monopoly on slave shipments — the trade was formalised and would supply the silver mines of the Andes and the sugar plantations of the Caribbean for the next three centuries. The transatlantic trade in enslaved Africans, which would carry an estimated 12 million people across the Atlantic in chains by its abolition, began as a Spanish solution to the demographic catastrophe Spain itself was inflicting on the Tainos.
The Crown licensed the first shipment of enslaved Africans direct to the Spanish Indies in 1518. Spain turned to African labour because the Indigenous workforce of Hispaniola was collapsing under the combined impact of forced labour, disease and dispossession.
The Catholic Missionaries
The fourth pillar of imperial policy was religion. From 1510 onwards, Dominican and Franciscan friars sailed to the Indies to convert Indigenous peoples to Catholicism. They believed they were saving souls; many were also appalled by what the encomenderos were doing. On the morning of the fourth Sunday of Advent, 21 December 1511, the Dominican Antonio de Montesinos climbed into the pulpit of the church at Santo Domingo and asked the Spanish congregation:
‘Are these not men? Have they not rational souls?’
It was the first public Spanish protest against the treatment of Indigenous peoples in the Americas. Montesinos’s sermon outraged the colonists but reached the Crown. It set in motion the long argument over Indigenous rights that would eventually produce the New Laws of 1542. Bartolome de las Casas, who had been a young encomendero on Hispaniola, heard the Dominicans out and renounced his own encomienda in 1514.
The Requerimiento (1513)
If the missionaries were the moral pillar of empire, the Requerimiento was its legal trapdoor. Drafted in 1513 by the jurist Juan Lopez de Palacios Rubios, it was a long document in Castilian Spanish that conquistadors had to read aloud to Indigenous communities before attacking them. It told the listeners that God had created the world, that the Pope had granted Spain the Americas, and that they must therefore accept the Pope and the Spanish king as their lords. If they accepted, they would be welcomed; if they refused, war could be waged on them as a ‘just war’, and they could be enslaved.
Conquistadors often read the Requerimiento at dawn, in Spanish, to people who could not understand a word, sometimes from the deck of a ship offshore — sometimes after the attack had already started. The historian Bartolome de las Casas, who watched the practice, said he did not know whether to laugh at it or weep. But it gave Spanish violence a legal veneer for the rest of the conquest era.
Imperial policy was not a list of separate facts. The trade monopoly captured the wealth, the encomienda extracted the labour, the asiento brought enslaved Africans to replace the workers who were dying, and the Catholic mission gave the whole machinery a moral story — while the Requerimiento gave it a legal one. Each part needed the others. Without the monopoly, there was no point capturing wealth; without the encomienda or African labour, no one would dig for gold; without the Church, the project had no moral defence. The same Crown signed off on missionaries who saved souls AND encomenderos who worked Indigenous Christians to death — a tension that would explode in the Las Casas–Sepulveda debate of 1550–51.
Why It Mattered
By the time Cortes left Cuba for Mexico in 1519, Spain had built the four-pillared imperial system that would govern the Americas for three centuries. The pillars were forged on Hispaniola, but they would be applied to peoples vastly larger and more powerful than the Tainos — the Mexica, the Inca, and the Indigenous nations of New Spain and Peru. The system also produced the people who would resist it most fiercely from inside Spain itself: Montesinos in 1511, Las Casas in the 1540s, the friars who refused to give absolution to encomenderos.