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Cuba: Administration and Economy
Country Study > Chapter 1 > Historical Setting > The Colonial Period, 1520-1898 > Administration and Economy


As soon as the conquest was completed and the Indians subjugated, the crown began introducing to the island the institutional apparatus necessary to govern the colony. The governor, the highest representative of the crown on the island, ruled Cuba with almost complete authority over administrative, political, and judicial affairs. The governor was technically subject to the audiencia (see Glossary) in Santo Domingo and to a viceroy in New Spain, the highest royal official in the New World. In practice, however, he exercised great autonomy, particularly after the wealth of Mexico was discovered, diverting the crown's interests away from Cuba and its lack of resources.

Nominally responsible for the collection and expenditures of revenues and all financial affairs, the governor delegated these functions to several royal officials appointed directly by the crown. At first the seat of government remained in Baracoa, the first village founded by Velazquez. In 1515 it was transferred to Santiago, and finally in 1538 to Havana because of Havana's geographic location and excellent port. In 1607 Havana was formally established as the capital of Cuba, and the island was divided into two provinces with capitals at Santiago and Havana. The governor-captain general at Havana ruled in military matters over the entire island, but the governor at Santiago was able to exercise considerable political independence.

Although the governor-captain was nominally subject to the viceroy of New Spain, the viceroy exerted little control over the affairs of the island. Of more direct influence, and a powerful check on the governor, was the audiencia of Santo Domingo. This tribunal heard criminal and civil cases appealed over the decisions of the governor. But it soon, as in Spain, became more than a court of law; it was also an advisory council to the governor and always exercised its right to supervise and investigate his administration.

At the local level, the most important institution was the cabildo (see Glossary), a town council, usually composed of the most prominent citizens. The alcaldes Uudges) acted as judges offirst instance, and, in the absence of the governor or his lieutenant, presided at meetings of the cabildo. They also visited the territories under their jurisdiction and dispensed justice in rural areas.

As royal government became better organized and more entrenched in Cuba, the powers and prerogatives of the cabildo were progressively curtailed. By the end of the colonial period, few responsible citizens wanted to become involved in local government. Those who did were more interested in their personal well-being than in the affairs of the colony. Peninsular Spaniards, or peninsulares (see Glossary; hereafter, Peninsulars), who bought their offices sought rewards for their investments and enriched themselves at the expense of public funds. Creoles (criollos) , Spaniards born in the New World, also joined the Spanish bureaucracy in order to gain wealth and participate in other opportunities controlled by Peninsulars. They looked to local government as one of the few potential areas of employment in which they could succeed. Very few Creoles ever attained a position of importance in the political hierarchy of the island. As the bureaucracy grew in the colonial period, a latent hostility developed between Peninsulars and Creoles-a hostility that erupted into hatred and violence during the wars for independence in the nineteenth century.

In the early years, cabildo members were content to eke out an existence until such time as new opportunities might arise for them to migrate to better lands or until mineral wealth that would bring them instant wealth might be discovered in Cuba. Those who expected to enrich themselves from Cuba's mineral resources were greatly disappointed. The island did not enjoy the large deposits of gold and other minerals that were later found in Mexico and South America. Gold found in the river banks did not represent any great wealth, although washing the gold did require a large labor supply as well as costly equipment. A handful of Spanish entrepreneurs controlled the business and used Indians as a labor supply. The crown was also involved from the earliest times in controlling mining operations. The Spanish monarchs took one-fifth of all production as a tax for the right of mining, especially when Indians in an encomienda arrangement did the mining.

Foodstuffs also were an important part of the economy. The Indian agricultural practices were taken over by the Spaniards, who continued to grow some of the native foodstuffs, particularly yuca. New crops and new grains from the Old World were also brought to the island. Sugarcane, which had been grown by the Spaniards in the Canary Islands, was also a part of the island's economy. As early as 1523, the crown instructed the Contracting House (Casa de Contratacion-see Glossary) to lend money to settlers in Cuba to help finance the construction of a sugar mill. Other similar loans were made in later years, but it was not until the eighteenth century and particularly the nineteenth century that sugar assumed any importance. Lacking large amounts of capital, an adequate labor supply, and official encouragement, the sugar industry remained overshadowed in importance by the more lucrative and important business connected with the cattle industry and its derivative products.

Cattle-raising became one of the most prosperous businesses, especially in the seventeenth century. Although the activity called for daring horsemanship, it required no sustained effort, for Cuba's abundant pasture lands facilitated breeding. The cattle were let loose on Cuba's savannas, where they multiplied rapidly. They were used as a means of transportation as well as for feeding purposes. Salted meat became an important item sold to the Spanish ships that called at Cuba's ports. Perhaps the chief value of cattle lay in the hides. In the seventeenth and eighteenth centuries, as demand for leather grew in Europe, cattle hides became Cuba's chief export, yielding considerable profit.

Tobacco also made some modest gains, particularly in the seventeenth century. Because it was not too bulky and commanded high prices in Europe, tobacco was a favorite item for smuggling. By the eighteenth century, it became an important export item to the French. Throughout this period, the tobacco business remained in private hands. But under the administration of Charles III (1759-88), it was converted into a government monopoly. The crown advanced money to the growers, who sold their crops to the government at a fixed price. In the early nineteenth century, the value of tobacco as an export began to decline. By then the price of land had increased tremendously, partly as a result of the growth of sugar estates. Tobacco growers found themselves either squeezed out of their lands or selling them to the sugar capitalists. The crown's emphasis on coffee and sugar growing was also detrimental to the tobacco industry. In desperate need of capital, the Spanish monarchs encouraged the more lucrative sugar business as a source of revenue.

The economy was oriented toward importing the bare necessities, with little or no provision for domestic manufacturing. Spain followed a thoroughly mercantilist economic policy, encouraging Cuba's dependence on outside sources of supply for its needs and looking at the island as a producer of raw materials to satisfy the needs of the mother country.

Last Updated: April 2001

Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for Cuba was first published in 2001. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on

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