As is well known, no foreign State was allowed to trade with Spanish America, nor was any foreigner even allowed to enter it without special permission. Various manufactures were forbidden, and even the cultivation of the vine and olive was placed under restrictions, as it was feared that their produce might compete with the produce of Spain. In fact, the ideal of the home-staying Spaniard was that the colonies should be mere mining-camps. Gold and silver were regarded as the whole of wealth, and it was considered the height of commercial wisdom to drain the whole produce of the mines of America into Spanish ports without allowing a fraction to be diverted elsewhere.
Thus legitimate trade was made extremely difficult, for the Spaniards even discouraged colonial exports from the fear that precious metals might be concealed among them. Accordingly, in 1599, the Governor of Buenos Aires was commanded to forbid exportation and importation alike under penalty of death. But the stringency of the various laws and regulations defeated their own objects, a gigantic contraband trade grew up, and all the officials, from the Governor downward, were implicated in it. Bribes accompanied almost every business transaction.[39] The manufactures of Europe were surreptitiously landed at Buenos Aires, and of course ruined the sale of the goods that had come over oceans, Isthmus, and mountains. This contraband trade was chiefly carried on by the English and the Dutch, and, as Professor Seeley has frequently pointed out, the power to trade with the New World formed for some two hundred years the chief bone of contention in the foreign politics of European countries. The practice of smuggling has had two marked and very pernicious effects upon Spanish-American character; it has fostered contempt of law and the preference of Government service to profitable industry. As the Argentines despised the laws of contraband, so they came to despise all laws, and during their independent history the shackles of the law have been cobwebs light as air to restrain individuals or communities from disturbing the public peace. In a word, out of the contraband trade sprang one of the worst features of South America--lawlessness and turbulence. It is obvious that it also fostered an almost equally injurious spirit--the craving of office. It was easier and more profitable to take bribes from the smugglers than to engage actively in smuggling, and so the tradition has descended to prefer the certain emoluments (direct and indirect) of office to the uncertain gains of trade. In Spanish America it is better to be the nephew of a President than of a successful trader. Of course, it would be absurd to attribute these two evils solely to the contraband trade, but the first has been undoubtedly encouraged, and the second, to a considerable extent, caused by the practice which was forced upon the Spanish colonies by an absurd fiscal system. The economic condition, therefore, of these countries appears to us very sombre. It must, however, be remembered that such treatment of "plantations" was the accepted policy of the age, and probably the reason why Spain was more unfortunate with her foreign possessions than other nations is rather to be found in the indolent character of her sons and her foreign embarrassments than in any particular set of restrictions.