The Royal Guipuzcoan Company of Caracas (

Spanish Spanish might refer to: * Items from or related to Spain: **Spaniards are a nation and ethnic group indigenous to Spain **Spanish language, spoken in Spain and many countries in the Americas **Spanish cuisine **Spanish history **Spanish culture ...

: ''Real Compañía Guipuzcoana de Caracas'') was a Spanish

chartered company A chartered company is an association with investors or shareholders that is Incorporation (business), incorporated and granted rights (often Monopoly, exclusive rights) by royal charter (or similar instrument of government) for the purpose of ...

which existed from 1728 to 1785. It conducted trade with Spain's overseas colonies and maintained its own fleet of warships to defend the company's merchantmen. In 1785, after having several of its ships captured by the

Royal Navy The Royal Navy (RN) is the naval warfare force of the United Kingdom. It is a component of His Majesty's Naval Service, and its officers hold their commissions from the King of the United Kingdom, King. Although warships were used by Kingdom ...

during the

American Revolutionary War The American Revolutionary War (April 19, 1775 – September 3, 1783), also known as the Revolutionary War or American War of Independence, was the armed conflict that comprised the final eight years of the broader American Revolution, in which Am ...

, the company was merged with the Barcelona Trading Company to form the Royal Company of the Philippines.

History

Foundation

Since 1503, under the Habsburg kings, all Spanish trade with America had been conducted through the port of

Seville Seville ( ; , ) is the capital and largest city of the Spain, Spanish autonomous communities of Spain, autonomous community of Andalusia and the province of Seville. It is situated on the lower reaches of the Guadalquivir, River Guadalquivir, ...

(and after 1717,

Cádiz Cádiz ( , , ) is a city in Spain and the capital of the Province of Cádiz in the Autonomous communities of Spain, autonomous community of Andalusia. It is located in the southwest of the Iberian Peninsula off the Atlantic Ocean separated fr ...

) under a monopoly that prevented other cities, including

Barcelona Barcelona ( ; ; ) is a city on the northeastern coast of Spain. It is the capital and largest city of the autonomous community of Catalonia, as well as the second-most populous municipality of Spain. With a population of 1.6 million within c ...

or San Sebastian, from trade with the Americas, or the Indies as they were known. Tentatively by the late 17th century Basques goods had reached the Indies via the Spanish coastal trade to Cádiz and this grew slowly until the Guipuzcoan company was founded by a group of wealthy Basques from the province of

Gipuzkoa Gipuzkoa ( , ; ; ) is a province of Spain and a historical territory of the autonomous community of the Basque Country. Its capital city is Donostia-San Sebastián. Gipuzkoa shares borders with the French department of Pyrénées-Atlantiqu ...

in 1728. The specific aim of the Basque company, acting almost autonomously with tasks of military nature at their own command and expense, was to break the ''de facto'' Dutch monopoly on the cocoa trade in the

Captaincy General of Venezuela The Captaincy General of Venezuela (), was an administrative district of colonial Spain, created on September 8, 1777, through the Royal Decree of Graces of 1777, to provide more autonomy for the provinces of Venezuela, previously under the ju ...

. It was initially based in

San Sebastián San Sebastián, officially known by the bilingual name Donostia / San Sebastián (, ), is a city and municipality located in the Basque Autonomous Community, Spain. It lies on the coast of the Bay of Biscay, from the France–Spain border ...

and received its

royal decree A decree is a legal proclamation, usually issued by a head of state, judge, royal figure, or other relevant authorities, according to certain procedures. These procedures are usually defined by the constitution, Legislative laws, or customary l ...

on September 25, 1728, by

Philip V of Spain Philip V (; 19 December 1683 – 9 July 1746) was List of Spanish monarchs, King of Spain from 1 November 1700 to 14 January 1724 and again from 6 September 1724 to his death in 1746. His total reign (45 years and 16 days) is the longest in the ...

.Kurlansky, M. ''A Basque History of the World''. Vintage, London, 2000. Its creation was part of the larger Bourbon Reforms to control unlicensed trading, especially in

tobacco Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...

, which existed along the

Orinoco River The Orinoco () is one of the longest rivers in South America at . Its drainage basin, sometimes known as the Orinoquia, covers approximately 1 million km2, with 65% of it in Venezuela and 35% in Colombia. It is the List of rivers by discharge, f ...

between Spanish colonists and Dutch, British and French merchants, who were preferred by the landholders of Canary Islander descent as trade partners. The Venezuelan possessions and their managerial wealthy Creole class thus operated detached from the

metropole A metropole () is the homeland, central territory or the state exercising power over a colonial empire. From the 19th century, the English term ''metropole'' was mainly used in the scope of the British, Spanish, French, Dutch, Portugu ...

. The Venezuelan colonial system turned into an embarrassment and hardly productive for the Spanish Crown in terms of revenue. Between 1700 and 1728 only five vessels set sail from Spain to Venezuela.Douglass, William A. Bilbao, J. 2005, p.87 The establishment of the company resulted from negotiations engaged with the Basque governments in the aftermath of the bloody military campaign ordered by

over the western Basque districts. The government of

in particular came up with a proposal for the re-establishment of commerce with Venezuela that would suit the Basque interests and those of the Spanish king alike. The plan was approved, with the

Basques The Basques ( or ; ; ; ) are a Southwestern European ethnic group, characterised by the Basque language, a Basque culture, common culture and shared genetic ancestry to the ancient Vascones and Aquitanians. Basques are indigenous peoples, ...

getting total exclusivity on that commerce. The Guipuzcoana Company was the only body entitled to sell European goods in Venezuela (or Caracas) Province and to

export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is a ...

Venezuelan agricultural products to Spain. Goods imported on to other Spanish territories would incur no custom duties on the Ebro river according to the treaty signed with the Spanish king Philip V, and the company was able to trade freely throughout Europe. The company would in turn export iron commodities to Venezuela. The Guipuzcoana Company became the first shares based company in Spain, participated by

Basque Basque may refer to: * Basques, an ethnic group of Spain and France * Basque language, their language Places * Basque Country (greater region), the homeland of the Basque people with parts in both Spain and France * Basque Country (autonomous co ...

shareholders and the king of Spain. Since 1743, the company received permission to charter vessels under the French flag, which could trade directly with Venezuela. The main beneficiaries of that decision were no doubt the coast of the Basque province of

Labourd Labourd (; ; ; ) is a former French province and part of the present-day Pyrénées Atlantiques '' département'' of Nouvelle-Aquitaine region. It is one of the traditional Basque provinces, and identified as one of the territorial component pa ...

, and

Bayonne Bayonne () is a city in southwestern France near the France–Spain border, Spanish border. It is a communes of France, commune and one of two subprefectures in France, subprefectures in the Pyrénées-Atlantiques departments of France, departm ...

Operations and effects in Venezuela

The company began operating in 1730—four ships departed from

(Donostia) taking on board a crew of 561 and 40–50 cannons. The vessels were hailed with frontal hostility by the Venezuelan Creoles, a refusal to sell cocoa to the company, and an uprising against the newcomers and the local Spanish garrison, until control was re-established. The Company's ships used to travel overloaded, in order to increase the profits coming from the cocoa monopoly. The very high profitability of the business and the overexploitation of the ship's cargo capacity allowed the crews to smuggle. The Company needed to recover the investment with the greatest possible profit margin, and the Crown required this to be a tool of war. In June 1733, the San Ignatius de Loyola was preparing for his return to Passages from La Guaira. He returned with a cocoa overload 5.5 percent higher than his actual capacity, not counting the space occupied by other effects, such as food, water, ammunition, etc. He made his journey in 76 days, almost 10 days longer than the average of the Company's ships. In the last trip to La Guaira at the sight on the reefs of the island of La Anegada the captain couldn't stop San Ignatius de Loyola from falling on starboard. About 300 people died in this tragedy. Thus the San Ignatius shipwrecked. The Basques started to settle down in Venezuelan territory on wealthy ''haciendas'' that boosted plantations and agricultural production. However, the move was resented by other established Creoles based on the fact that it brought down prices to be sold to the company. The Basques established settlements, built dock facilities, and fortifications. The term ''un gran cacao'' became a nickname for a member of the new powerful class (and to this day the term is used jocularly in Venezuela for a VIP). It did not help smaller farmers who continued to participate in illegal trading. The company was instrumental in the development of large-scale cocoa production along the valleys of the coast and encouraged the production of such crops as tobacco, indigo, cotton and coffee. In addition, the company promoted the exploration and settlement of frontier areas, most famously under the border expedition of 1750-1761 headed by a company agent, José de Iturriaga y Aguirre, which resulted in new settlements in the

Guayana region The Guayana Region is an administrative region of eastern Venezuela. Historically called Spanish Guiana or simply Guayana, the region is made up of the states of Amazonas, Bolívar, and the south of Delta Amacuro. History In the 1970s, ...

. The company's control of the major ports of

La Guaira La Guaira () is the capital city of the Venezuelan Vargas (state), state of the same name (formerly named Vargas) and the country's main port, founded in 1577 as an outlet for nearby Caracas. The city hosts its own professional baseball team i ...

and

Puerto Cabello Puerto Cabello () is a city on the north coast of Venezuela. It is located in Carabobo State, about 210 km west of Caracas. As of 2011, the city had a population of around 182,400. The city is home to the largest and busiest port in the count ...

meant that it effectively monopolized the legal trade of the other Venezuelan provinces. In addition, the company's strict control of much needed manufactured imports naturally created a lot of resentment in a region which depended on these. Several rebellions took place against the company and the Basques in which ethnic confrontation came to a head in 1749, which saw local ''criollos'' supported by the Dutch and British confront the powerful Basques supported by the Spanish Crown. The rebellion was led by Juan Francisco de León, a Canary Islander just replaced as Corporal of War (1749), but the Spanish Crown could not shrink from protecting its own interests by supporting the company, and quelling the uprising that very year.

Effects in Gipuzkoa

Apart from breaking the Dutch monopoly and creating significant wealth in the Basque port cities, the company provided a fast track to job positions for many Basques. The company's activity kept active Basque forges which were gradually declining in the face of growing competition from their British counterparts, and fed indirectly the arms factories of Soraluze (Placencia de las Armas) and Tolosa. Another outcome was the foundation in

Bergara Bergara (; ) is a town and municipality located in the province of Gipuzkoa, in the autonomous community of Basque Country, in the north of Spain. An Enlightened center of education operated by the '' Real Sociedad Bascongada de Amigos del P ...

of the Royal Basque Society of Friends of the Country by a group under the leadership of Xavier María de Munibe e Idiáquez, Count of Peñaflorida, in 1765. Its model expanded to the Spanish heartland prompting the establishment of the " Sociedad Económica de los Amigos del País"—a type of

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think tank A think tank, or public policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governme ...

Later years

While Basque involvement increased after 1749, the Spanish Crown dealt a critical blow to the Basques when it diffused the Basque grip over the company by transferring its headquarters to Madrid, a move contested by Gipuzkoa, and imposing the requirement to include a Spaniard in a board of directors of three (1751). On October 1778,

Charles III of Spain Charles III (; 20 January 1716 – 14 December 1788) was King of Spain in the years 1759 to 1788. He was also Duke of Parma and Piacenza, as Charles I (1731–1735); King of Naples, as Charles VII; and King of Sicily, as Charles III (or V) (1735� ...

signed the Free Trade Regulations culminating the free trade process that had begun in 1765. The regulations were composed of 55 articles, expanded freedom of trade and enabled 13 metropolitan ports including Margarita Island and Trinidad Island. The ports of Venezuela mainland (La Guaira, Puerto Cabello, Cumaná, Maracaibo, and Angostura) were excluded to protect the interests of the Royal Gipuzkoan Company along with the ports of New Spain, for fear that the prosperity of this territory would lead to a lack of concern for other less active areas, which went against the guiding idea of the project. During the

, numerous ships of the company were captured by the

, including in the actions of 8 January 1780 and 15 January 1782. On 8 January 1780, 7 warships and 15 merchantmen of the company were captured, and on 15 January 1782 2 of the company's merchant ships were captured. Combined this facts with the liberalization of commerce with Venezuela in 1778, the weakening company's monopoly came to an end. The Spanish Crown no longer saw the need for a monopolizing company to control and grow the economy, since by that time the Venezuelan economy had matured and been tightly linked with the markets of Spain and

New Spain New Spain, officially the Viceroyalty of New Spain ( ; Nahuatl: ''Yankwik Kaxtillan Birreiyotl''), originally the Kingdom of New Spain, was an integral territorial entity of the Spanish Empire, established by Habsburg Spain. It was one of several ...

, which consumed most of its cocoa. The Spanish crown terminated the company's charter in 1784. A key effect of the Caracas Company, despite its eventual commercial failure, was that it guaranteed the place of Caracas in the captaincy-general. When the Crown established a high court (''Real Audiencia'') in the

in 1786, it was sited in Caracas.Inés Quintero, "Audiencia of Caracas" in ''Encyclopedia of Latin American History and Culture'', 1996, vol. 1, p. 547. The owners of the Guipuzcoana Company merged it with the Barcelona Trading Company to form the Royal Company of the Philippines in 1785. In Caracas a '' consulado de mercaderes'' (a merchants'

guild A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular territory. The earliest types of guild formed as organizations of tradespeople belonging to a professional association. They so ...

) replaced the company in 1793. One of the most active proponents of the move was François Cabarrus, 1st Count of Cabarrús, a prominent company stockholder hailing from a merchant family in

, who was increasingly involved in Spanish finances and politics.

References

External links

{{DEFAULTSORT:Compania Guipuzcoana De Caracas Trading companies established in the 18th century Companies established in 1728 Spanish colonization of the Americas 18th century in Venezuela Basque diaspora in South America Defunct companies of Venezuela 1728 establishments in Spain Trade monopolies Chartered companies Trading companies of Spain