Government, Colonial, in Spanish America.

In the Capitulations of Santa Fe (1492), the Spanish

monarchs named Christopher Columbus (1451–1506) as viceroy of the "discovered lands" and granted
him extensive powers to govern in the new lands and to benefit from the wealth they created.

Encomienda
SPANISH POLICY
Encomienda, in Spain’s American and Philippine colonies, legal system by which the Spanish crown
attempted to define the status of the indigenous population. It was based upon the practice of exacting
tribute from Muslims and Jews during the Reconquista (“Reconquest”) of Muslim Spain. Although the
original intent of the encomienda was to reduce the abuses of forced labour (repartimiento) employed
shortly after Europeans’ 15th-century discovery of the New World, in practice it became a form of
enslavement.
As legally defined in 1503, an encomienda (from Spanish encomendar, “to entrust”) consisted of a
grant by the crown to a conquistador, a soldier, an official, or others of a specified number of “Indios”
(Native Americans and, later, Filipinos) living in a particular area. The receiver of the grant, the
encomendero, could exact tribute from the “Indios” in gold, in kind, or in labour and was required to
protect them and instruct them in the Christian faith. The encomienda did not include a grant of land,
but in practice the encomenderos gained control of lands inhabited by “Indios” and failed to fulfill
their obligations to the indigenous population. The crown’s attempts to end the severe abuses of the
system with the Laws of Burgos (1512–13) and the New Law of the Indies (1542) failed in the face of
colonial opposition. In fact, a revised form of the repartimiento system was revived after 1550.

The encomienda was designed to meet the needs of the American colonies’ early mining economy.
With the catastrophic decline in the Indian population and the replacement of mining activities by
agriculture in Spanish America, the system lost its effectiveness and was gradually replaced by the
hacienda system of landed estates. Although the encomienda was not officially abolished until the late
18th century, in September 1721 the conferment of new encomiendas in Spain’s colonies was
prohibited.

The Manila Galleon Trade (1565–1815)

When the Spaniards came to the Philippines, our ancestors were already trading A Spanish
Galleonwith China, Japan, Siam, India, Cambodia, Borneo and the Moluccas. The Spanish
government continued trade relations with these countries, and the Manila became the center of
commerce in the East. The Spaniards closed the ports of Manila to all countries except Mexico. Thus,
the Manila–Acapulco Trade, better known as the "Galleon Trade" was born. The Galleon Trade was a
government monopoly. Only two galleons were used: One sailed from Acapulco to Manila with some
500,000 pesos worth of goods, spending 120 days at sea; the other sailed from Manila to Acapulco
with some 250,000 pesos worth of goods spending 90 days at sea.
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It also allowed modern, liberal ideas to enter the country, eventually inspiring the movement for
independence from Spain. And because the Spaniards were so engrossed in making profits from the
Galleon Trade, they hardly had any time to further exploit our natural resources.

Basco’s Reforms
Filipino farmers and traders finally had a taste of prosperity when Governor General Jose Basco y
Vargas instituted reforms intended to free the economy from its dependence on Chinese and Mexican
trade. Basco implemented a “general economic plan” aimed at making the Philippines self sufficient.
He established the “Economic Society of Friends of the Country”, which gave incentives to farmers
for planting cotton, spices, and sugarcane; encouraged miners to extract gold, silver, tin, and copper;
and rewarded investors for scientific discoveries they made.

Tobacco Monopoly
The tobacco industry was placed under government control during the administration of Governor
General Basco. In 1781, a tobacco monopoly was implemented in the Cagayan Valley, Ilocos Norte,
Ilocos Sur, La Union, Isabela, Abra, Nueva Ecija, and Marinduque. Each of these provinces planted
nothing but tobacco and sold their harvest only to the government at a pre-designated price, leaving
little for the farmers. No other province was allowed to plant tobacco. The government exported the
tobacco to other countries and also part of it to the cigarette factories in Manila.
The tobacco monopoly successfully raised revenues for the colonial government and made Philippine
tobacco famous all over Asia