The Spanish Colony of Panama

Henry Morgan, a buccaneer who had held Portobelo for ransom in 1668, returned to Panama with a stronger force at the end of 1670. On January 29, 1671, Morgan appeared at Panama City. With 1,400 men he defeated the garrison of 2,600 in pitched battle outside the city, which he then looted. The officials and citizens fled, some to the country and others to Peru, having loaded their ships with the most important church and government funds and treasure. Panama City was destroyed by fire, probably from blown up powder stores, although the looters were blamed. After 4 weeks, Morgan left with 175 mule loads of loot and 600 prisoners. Two years later, a new city was founded at the location of the present-day capital and was heavily fortified.

The buccaneer scourge rapidly declined after 1688 mainly because of changing European alliances. By this time Spain was chronically bankrupt; its population had fallen; and it suffered internal government mismanagement and corruption.

Influenced by buccaneer reports about the ease with which the isthmus could be crossed--which suggested the possibility of digging a canal--William Paterson, founder and ex-governor of the Bank of England, organized a Scottish company to establish a colony in the San Blas area. Paterson landed on the Caribbean coast of the Darién late in 1698 with about 1,200 persons. Although well received by the Indians (as was anyone not Spanish), the colonists were poorly prepared for life in the tropics with its attendant diseases. Their notion of trade goods--European clothing, wigs, and English Bibles--was of little interest to the Indians. These colonists gave up after six months, unknowingly passing at sea reinforcements totaling another 1,600 people. The Spanish reacted to these new arrivals by establishing a blockade from the sea. The English capitulated and left in April 1700, having lost many lives, mostly from malnutrition and disease.

In Spain Bourbon kings replaced the Hapsburgs in 1700, and some liberalization of trade was introduced. These measures were too late for Panama, however. Spain's desperate efforts to maintain its colonial trade monopoly had been self-defeating. Cheaper goods supplied by England, France, and the Netherlands were welcomed by colonial officials and private traders alike. Dealing in contraband increased to the detriment of official trade. Fewer merchants came to the Portobelo feria to pay Spain's inflated prices because the foreign suppliers furnished cheaper goods at any port at which they could slip by or bribe the coastal guards. The situation worsened; only five of the previously annual fleets were dispatched to Latin America between 1715 and 1736, a circumstance that increased contraband operations.

Panama's temporary loss of its independent audiencia, from 1718 to 1722, and the country's attachment to the Viceroyalty of Peru were probably engineered by powerful Peruvian merchants. They resented the venality of Panamanian officials and their ineffectiveness in suppressing the pirates (outlaws of no flag, as distinct from the buccaneers of the seventeenth century). Panama's weakness was further shown by its inability to protect itself against an invasion by the Miskito Indians of Nicaragua, who attacked from Laguna de Chiriquí. Another Indian uprising in the valley of the Río Tuira caused the whites to abandon the Darién.

The final blow to Panama's shrinking control of the transit trade between Latin America and Spain came before the mid- eighteenth century. As a provision of the Treaty of Utrecht at the end of the War of the Spanish Succession in 1713, Britain secured the right to supply African slaves to the Spanish colonies (4,800 a year for 30 years) and also to send 1 ship a year to Portobelo. The slave trade provision evidently satisfied both countries, but the trade in goods did not. Smuggling by British ships continued, and a highly organized contraband trade based in Jamaica--with the collusion of Panamanian merchants--nearly wiped out the legal trade. By 1739 the importance of the isthmus to Spain had seriously declined; Spain again suppressed Panama's autonomy by making the region part of the Viceroyalty of New Granada (encompassing present-day Colombia, Venezuela, Ecuador, and Panama).

In the same year, war broke out between Britain and Spain. A British military force took Portobelo and destroyed it. Panamanian historians maintain that this attack diverted Spanish trade from the trans-isthmian route. The Seville-Cádiz monopoly of colonial trade had been breached by royal decrees earlier in the century, and precedent was thus furnished for the merchants of the Latin American colonies to agitate for direct trade with Spain and for inter-colonial trade. After 1740 the Pacific coast ports were permitted to trade directly via ships rounding Cape Horn, and the Portobelo feria was never held again.

Relaxing the trading laws benefited both Spanish America and Spain, but Panama's economic decline was serious. Transit trade had for so long furnished the profits on which Panama had flourished that there had been no incentive to develop any other economic base. After the suppression of its audiencia in 1751, Panama became a quiet backwater, a geographically isolated appendage of New Granada, scarcely self-supporting even in food and producing little for export.

In 1793, near the close of the colonial period, the first recorded attempt at a comprehensive census of the area that had comprised the Panamanian audiencia was made. Incomplete and doubtless omitting most of the Indian and cimarrón populat- ion, specifically excluding soldiers and priests, the census recorded 71,888 inhabitants, 7,857 of whom lived in Panama City. Other principal towns had populations ranging from 2,000 to a little over 5,000.

Social hierarchy in the colony was rigid. The most prestigious and rewarding positions were reserved for the peninsulares, those actually born in Spain. Criollos, those of Spanish ancestry but born in the colonies, occupied secondary posts in government and trade. Mestizos, usually offspring of Hispanic fathers and Indian mothers, engaged in farming, retail trade, and the provision of services. African and Indian slaves constituted an underclass. To the extent possible, Indians who escaped enslavement avoided Hispanic society altogether.

The church held a special place in society. Priests accompanied every expedition and were always counselors to the temporal leaders. The first bishop on the mainland came with Pedrarias. The bishop's authority, received from the king, made him in effect a vice governor. The bishopric was moved from Darién to Panama City in 1521. The relationship between church and government in the colony was closer than in Spain. Both the Roman Catholic Church and the monastic orders gained great wealth through tithes and land acquisition.