The first royal judicial body established in New Spain in 1527 was the audiencia of Mexico City. The audiencia consisted of four judges, who also held executive and legislative powers. The crown, however, was aware of the need to create a post that would carry the weight of royal authority beyond local allegiances. In 1535 control of the bureaucracy was handed over to Antonio de Mendoza, who was named the first viceroy of New Spain (1535-50). His duties were extensive but excluded judicial matters entrusted to the audiencia .
Viceregal power was characterized by a certain amount of independence from royal control, mainly because of distance and difficult communications with the mother country. Viceroys were notorious for applying orders with discretion, using the maxim "I obey but do not comply." In addition, viceroys and audiencias were in conflict most of the time, with the latter not responsible to the viceroy but reporting directly to the crown.
By the end of the seventeenth century, the Viceroyalty of New Spain reached from New Mexico to Panama and included the Caribbean islands and the Philippines. In the most distant areas, local audiencias enjoyed greater autonomy, and viceregal authority was merely nominal. After the sixteenth-century expansion of power, the seventeenth century was marked by a decline in central authority, even though the administrative structure transplanted to the New World remained intact.
The philosophy of mercantilism was the force behind all overseas ventures by European colonial powers. This set of ideas emphasized that the most important function of colonial possessions was to enrich the mother country. This accumulation of wealth was largely accomplished by the levy of the quinto (royal fifth) on all colonial production. Trade duties protected manufacturers and merchants in Spain from competition in the colonies and placed strict restrictions on the colonial economies. Mexico was required to supply raw materials to Spain, which would then produce finished goods to be sold at a profit to the colonies.
From the mid-sixteenth century on, some land grants were provided to Europeans willing to farm the land and raise livestock in underpopulated areas. The European acquisition of land often encroached upon native villages. Displacement and fear of forced labor in the early seventeenth century led entire villages to flee to larger towns, mining camps, or haciendas, where the displaced persons hired themselves out as artisans, servants, peons, or laborers. Although originally kept apart in separate "republics," close contact of all sorts with the Spaniards was responsible for the indigenous peoples' acculturation. The mestizos, who would later play the dominant role in Mexican society and history, could trace their origins to this period of intense assimilation of the two cultures (see Ethnicity and Language, ch. 2).
Agricultural production was directed to internal markets, while exports consisted mainly of precious metals and animal hides. During the initial phase of the colonial period, gold had been collected from the Aztec treasures and from some mining operations. However, silver soon became the dominant colonial product, followed by the red dye cochineal, and by the late sixteenth century, silver accounted for 80 percent of all exports from New Spain. Exploration and the search for mines led the Spaniards to the north, far beyond the Aztec empire. The rich mines of Zacatecas, Real del Monte, Pachuca, and Guanajuato in north-central Mexico were discovered between 1546 and 1552. Silver production continued into the seventeenth century, and it employed most available labor.
During the sixteenth century, a dual economy developed in New Spain: the hacienda economy in the Valley of Mexico and the south and the frontier economy of the silver mines to the north. By the mid-seventeenth century, however, silver production collapsed when mercury, necessary to the refining process, was diverted to the silver mines of Potosí (in present-day Bolivia). The seventeenth-century mining crisis led to widespread bankruptcy among miners and hacendados (hacienda owners) and also had a negative effect on transatlantic trade. However, the financial crisis did promote the production of crude manufactures and food for domestic consumption by the growing population of New Spain.
Colonial society was stratified by race and wealth although these were not hard and fast distinctions. The three main groups were whites (European- and American-born), castas (mestizos), and native peoples; each had specific rights or privileges (fueros ) and obligations in colonial society. The major fuero was the right of an individual to be tried by his or her peers. The church, the military, the bureaucracy, and the merchants enjoyed their set of fueros . Membership in the upper classes was open to whites only, particularly peninsulares , whites who were born in Spain and moved to the colonies. Criollos (American-born whites, also known as creoles) tended to marry peninsulares for reasons of upward social mobility. Nevertheless, many examples exist of race changes after birth.
The lower classes were a mixture of poor whites, castas , and native peoples who worked in the same occupations as whites or castas but who had different rights and obligations. Indigenous groups were protected from the Inquisition (the Roman Catholic court designed to combat heresy), paid head taxes, and could not own property as individuals but were the primary beneficiaries of social services in health and education. Mestizos were under the same obligations as whites but were not considered for most of the jobs in the Spanish administration. These jobs were held only by peninsulares . Poor whites and mestizos often competed with native people for the same jobs. The only unifying force in a society that was divided by race and privilege was the Roman Catholic Church. The clergy provided education and social services to the rich and the destitute alike, and clergy also functioned as a buffer in social conflicts.
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