Socioeconomic Strutures
The towns that emerged in the Argentine Northwest were the result of favorable local conditions, and they became important economic centers in the colonial period. Although small, this frontier society was set up along clearly defined social lines, where discrimination against mestizos, blacks, and Indians regulated even the clothes they wore. The upper class was initially formed by the early settlers and their descendants, who prided themselves on their Iberian origins.
Later on, offspring of conquistadores and Indians also shared in the power structure of wealth and position. This mestizo criollo upper class came to dominate all aspects of frontier colonial life. Its members held the land and controlled the labor force, commerce, and the civil and religious administration of the towns.
The rest of the population was a mix of both racial gradations and levels of income. By the late sixteenth century, black slaves and freemen started to move to the interior from the coastal areas, and they joined the labor force in various capacities. At the bottom of the social scale were the Indians from the nearby villages who tilled the soil or were assigned other specific chores. Their numbers declined steadily through the colonial period as a result of harsh work conditions, a high death rate, and assimilation into Spanish society. The interior towns evolved into centers of royal administration and commerce that were staffed by bishops, governors, merchants, and military and civilian personnel from Spain.
The colonization of the Rio de La Plata basin in the late sixteenth century was different from that of the interior. The main objective was to establish trade on the Atlantic coast and supply Asunción with goods. The region was inhospitable, having wild herds of horses and cattle, no local labor pool, and few prospects for agricultural exploitation.
Its separation from the main colonial centers in the Northwest left Asuncion in almost complete isolation for many years, and intermarriage with local Cuarani Indians produced a large mestizo population. Garay's expedition founded Santa Fe and resettled Buenos Aires with a contingent of mestizos who formed a criollo upper class in a society less stratified than that in the interior. The lack of large Indian communities made the encomienda impractical in the Rio de La Plata basin.
Because the shortage of labor prevented the development of manufacturing, the most viable economic activity in the area was cattle raising. Merchant interests in Panama and Lima persuaded the crown to create the Córdoba customhouse in 1618 and, four years later, to prohibit Argentine trade with Brazil.
Despite the imposed restrictions, trade flourished in the region. In 1676 the crown moved the Córdoba customhouse farther north to Salta and Jujuy, in recognition of Buenos Aires' control of the Argentine interior markets.
In 1680 the Portuguese founded Colônia do Sacramento across the Rio de la Plata from Buenos Aires, and it soon became a source of border frictions. It was occupied by Spanish troops on several occasions and was restored to Portuguese hands in a series of peace efforts: by the Treaty of Utrecht in 1713, which ended the War of the Spanish Succession and recognized Philip V as king of Spain, and by the Treaty of Paris between England and France in 1763, at the end of the Seven Years' War.
Despite all prior institutional arrangements, the question was settled only by the Treaty of Santo Idelfonso between Spain and Portugal, signed on October 1, 1777. According to the terms of the treaty, the Colônia do Sacramento and the missions east of the Rio Uruguay were to be transferred to Spain, whereas Portugal kept the areas of Santa Catanna, Guaira, Mato Grosso, and both banks of the Rio Jacuy and Rio Grande.
In the eighteenth century economic opportunities in the area attracted foreigners who joined the urban labor force as craftsmen, whereas Negro slaves were brought from Brazil as servants and laborers in small industries. In the mid-eighteenth century, outdated mining techniques provoked the decline of Peruvian silver production.
At the same time, the annual fleet system was abolished, destroying the mercantile monopoly of the Panama and Lima interests. Unaffected by the economic decline in the mining regions, the area of the Rio de la Plata continued to thrive and finally attracted Spain's attention. To establish effective control over the region, in 1776 the crown created a new administrative unit in Spanish America—the Viceroyalty of the Rio de la Plata—with its seat in Buenos Aires.
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