Trade and Trust in the Eighteenth-Century Atlantic World: Spanish Merchants and Their Overseas Networks

Abstract

Trade and Trust in the Eighteenth-Century Atlantic World: Spanish Merchants and Their Overseas Networks is divided into different topics whose common thread is trust. In the introduction Xabier Lamikiz reviews different works that deal with commercial activities connected with trust and reveals his approach to the subject. The first two chapters analyze the Bilbao merchants; the third and fourth colonial trade and traders between Cádiz and Peru, and chapters 5, 6, and 7 the relation between merchants, confidentiality, trust, distrust, and networks. The main and highly unusual source of this work is the private and confidential mail from Peru that was carried in the frigate La Perla seized by the British in 1779 when travelling from El Callao to Cádiz.It is traditionally maintained that around 1,700 Bilbao merchants had pushed aside foreign rivals in Bilbao commerce. The author argues that there are other reasons for this. These include the special fiscal system of Vizcaya, the update of commercial ordinances in 1737, the use of foreign merchants as correspondents in Northern Europe when they returned to their countries, the establishment in London of some merchants from Bilbao, and the use of captains of Basque ships as overseas agents. He sustains that the presence of merchants from Bilbao in foreign countries “was intimately connected to issues of trust.” The traditional interpretation stresses the importance of the modification of the institutional framework, but it is not related to the 1737 Ordinances, which were very much inspired by the French “Ordonnance pour le commerce” (1673) and the “Ordonnance pour la marine” (1681) (see works by Manuel Torres López and Carlos Petit). They are associated with the modification of the town ordinances (1679, 1684 – 85, and 1699). These modifications obstructed the commercial activities of foreigners. And there is also an economic reason. The Bilbao merchants succeeded in controlling the credit offered to iron makers and to the migrating sheep breeders. Before the flocks returned in spring to the northern mountains and before they were sheared the breeders had to pay for winter herbage. Without money, they had to sell the wool in advance to a merchant at a reduced price. A similar system was used to control iron production (Rafael Uriarte Ayo, Estructura, desarrollo y crisis de la siderurgia vizcaina, 1700 – 1840, Bilbao, 1988, pp. 168 – 81). At the beginning of the eighteenth century (1727 – 28) the native Bilbao merchants controlled 58 percent of the wool exported via this port (Luis María Bilbao, “Exportación y comercialización de lanas de Castilla durante el siglo XVII, 1610 – 1720”, in El pasado histórico de Castilla y León, vol. 2, Edad moderna, Burgos, 1983, table 4, p. 242).Credit control, rather than trust, seems to explain the partial success of traders from Bilbao. It is also worth noting that, at least during the first three-quarters of the century, the Bourbon monarchy had excellent relations with its Basque subjects. In 1728 the king authorized the creation of the Caracas Company, a chartered company with a commercial monopoly in Venezuela that was established in San Sebastián (Roland Dennis Hussey). During the Spanish Succession War (1701 – 14) the Basques and Navarrese were clear supporters of the Bourbons.The colonial trade between Cádiz and Peru seems much more complex. As happened in Bilbao, the legal framework as well as the communications improved, as can be seen in the mail transported by La Perla, or in the “register ships”; therefore the Spanish merchants were better informed. In contrast, the expulsion of many foreign merchants from the Spanish colonies deprived foreign commercial houses from trading in Cádiz thanks to agents and trustworthy correspondents. These positive changes for the Spanish merchants also increased competition. As occurred in Bilbao, the proportion of foreign traders in Cádiz reduced throughout the century, and the Spanish partly ceased to be mere intermediaries and began to trade on their own account.The book finishes with an analysis of trust and distrust. The author is aware that law played an important role but that it was insufficient. “Trust” was not enough to generate commercial success (p. 181). Laws, with more or less effectiveness, protected traders against dishonesty, crimes, and illegalities, but not against risks, economic trends, and political situations. Generally merchants did not reimburse debts because they were incapable of doing so, not because they were dishonest. Trust could involve honesty, integrity, technical skills, competence, and good or reliable information but also, and probably more importantly, the possibility of retaliating against those that breached the contract, which the author ignores. Merchants could take reasonable risks if they knew their correspondents, where they lived, their relatives, and their properties. In some cases family, friends, and neighbors offered this information. Merchants used these people as agents because of their capacity to exert pressure. The author provides significant examples, but does not make the most of them. The British merchants preferred “to have a debtor in Cádiz than a debtor in the Spanish colonies” because “the assets of the former could be seized” (pp. 131 – 33). Juan de Eguino, who got into heavy debt with a French company, travelled to Peru where he had an important business, but he left his family in Cádiz (pp. 154 – 55) perhaps as a sort of hostage. Ignacio Torres was aware that if he took his family to America he might not obtain more credit in Spain (p. 130). The family acted as a kind of warranty that he was going to fulfill his obligations.The author could have supported and nuanced his argument with two important works on American trade and on information available to merchants trading with Span-ish colonies: the fourth and fifth volumes of Huguette and Pierre Chaunu, Séville et l’Atlantique, 1504 – 1650 (Paris, 1956), and especially Michel Morineau’s book Incroyables gazettes et fabuleux métaux: Les retours des trésors américains d’après les gazettes hollandaises (XVI – XVIII siècles) (Cambridge University Press and Editions de la Maison des Sciences de l’Homme, 1985).

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