page_title: Economic history of Mexico
section_title: Cities, trade and transportation routes
hierarchical_section_title: Economic history of Mexico / Economy of New Spain, 1521–1821 / Cities, trade and transportation routes
caption_attribution_description: English: Arrieros, costume group. Hand-colored lithograph highlighted with gum arabic. Original size (neat lines): 42×31&#160;cm.
context_page_description: Mexico's economic history has been characterized since the colonial era by resource extraction, agriculture, and a relatively underdeveloped industrial sector. Economic elites in the colonial period were predominantly Spanish born, active as transatlantic merchants and silver mine owners and diversifying their investments with the landed estates. The largest sector of the population was indigenous subsistence farmers, who lived mainly in the center and south.
  New Spain was envisioned by the Spanish crown as a supplier of wealth to Iberia, which huge silver mines accomplished. A colonial economy to supply foodstuffs and products from ranching as well as a domestic textile industry meant that the economy supplied much of its own needs. Crown economic policy rattled American-born elites’ loyalty to Spain when in 1804 it instituted a policy to make mortgage holders pay immediately the principal on their loans, threatening the economic position of cash-strapped land owners. Independence in Mexico in 1821 was economically difficult for the country, with the loss of its supply of mercury from Spain in silver mines.
context_section_description: Cities had concentrations of crown officials, high ecclesiastical officials, merchants, and artisans, with the viceregal capital of Mexico City, having the largest. Mexico City was founded on the ruins of the Aztec capital of Tenochtitlan and has never given up its primacy in Mexico. The history of Mexico City is deeply entwined in the development of the Mexican economy. Two main ports, Veracruz on the Caribbean coast the served the transatlantic trade and Acapulco on the Pacific coast, the terminus for the Asian trade via the Manila Galleon, allowed the crown to regulate trade. In Spain the House of Trade (Casa de Contratación) in Seville registered and regulated exports and imports as well as issuing licenses for Spaniards emigrating to the New World. Exports were silver and dyestuffs and imported were luxury goods from Europe, while a local economy of high bulk, low value products were produced in Mexico. Artisans and workers of various types provided goods and services to urban dwellers. In Mexico City and other Spanish settlements, the lack of a system of potable water meant that the services of water carriers supplied individual households.
  A network of cities and towns developed, some were founded on previous indigenous city-states, (such as Mexico City) while secondary cities were established as]] provincial areas gained population because of economic activity. The main axis was from Veracruz, via the well-situated city of Puebla to Mexico City. Another axis connected Mexico City and Puebla to the mining areas of the north, centered on Guanajuato and Zacatecas. There was a road further north to New Mexico, but Mexico's far north, except for a few mining centers such as Parral, were of little economic interest. California's rich deposits of gold were unknown in the colonial era and had they been discovered that whole region's history would not be one of marginal importance. To the south, trunk lines connected Mexico's center to Oaxaca and the port of Acapulco, the terminus of the Manila galleon. Yucatán was more easily accessed from Cuba than Mexico City, but it had a dense Maya population so there was a potential labor force to produce products such as sugar, cacao, and later henequen (sisal).
  Bad transportation was a major stumbling block to the movement of goods and people within Mexico, which had generally difficult topography. There were few paved roads and dirt tracks turned impassible during the rainy season. Rather than hauling goods by carts drawn by oxen or mules, the most common mode of transporting goods was via pack mules. Poor infrastructure was coupled with poor security, so that banditry was an impediment to the safe transport of people and goods. In the Northern area, the índios bárbaros or uncivilized Indians presented a threat to settlement and travel.
  The eighteenth century saw New Spain increase the size and complexity of its economy. Silver remained the motor of the economy, and in fact production increased even though few new mines came into production. The key to the increased production was the lowering of the price of mercury, an essential element in refining silver. The larger the amount of mercury used in refining, the greater pure silver was extracted from ore. Another important element for the eighteenth-century economic boom was the number of wealthy Mexicans who were involved in multiple enterprises as owners, investors, or creditors. Mining is an expensive and uncertain extractive enterprise needed large capital investments for digging and shoring up shafts as well as draining water as mines got deeper.
  Elites invested their fortunes in real estate, mainly in rural enterprises and to a lesser extent urban properties, but often lived in nearby cities or the capital. The Roman Catholic Church functioned as a mortgage bank for elites. The Church itself accrued tremendous wealth, aided by the fact that as a corporation, its holdings were not broken up to distribute to heirs.
caption: Arrieros in Mexico. Mules were the main way cargo was moved overland, engraving by Carl Nebel
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