The Atlantic islands and the entrepreneurial development of Southern Castile

              THE ATLANTIC ISLANDS AND THE ENTREPRENEURIAL
DEVELOPMENT OF SOUTHERN CASTILE
CARLOS ALBERTO CAMPOS
University of Leiden
The role played by the Atlantic Islands as a prelude to the Castilian en-terprises
of discovery and those that led to the rapid «mise en valeur» of her
newly acquired territories in America is well known. The importance of the
foreign influences upon the inspiration, organisation, and the actual exe-cution
of those enterprises, needs no introduction eitherl. Hitherto, far less
1. Charles VERLINDEN, Précédents Mediévaux de la Colonie en Amériqzce,'México, Ins-tituto
Panamericano de Geografía e Historia, 1954, Publicación Núm. 177, Comisión de His-toria,
70. Seeesp. pp. 10-11. 17, 37, 45-49.
---- , «Les Influences Italiennes dans I'Économie et dans la Colonisation Espagnores i
la Époque de Ferdinand le Catholique~,S eparata del Volumen 111 de Estudios del V Congreso
de Historia de la Corona de Aragón, Zaragoza, Institución <Fernando el Católicox, C.S.I.C..
1954, pp. 269-283.
----, «Les Italiens et I'Ouverture des Routes Atlantiquesx, Les Routedde ('Atl'antiqzce, Travaux
du Neuvieme Colloque International d'Histoire Maritime. (Sevilla. 24-30 Septembre, 1967).
Paris, S.E.V.P.E.N., 1969, pp. 259-276.
----,e Quelques types de marchands italiens et flamands dans la Péninsule et dans le premieres
colonies ibériques au XVe. ,&le», Fremde Kaufleute auf der Iberirchen Halbinsel, Kolner
Kolloquien zur Internationalen Sozial und Wirtschaftsgeschichte, KolnIWien, Bohlau
Verlag. 1970, Band 1, pp. 31-39.
----d,t alian influence in Iberian colonization>~T, he Hispanic AmericBn Histoncal Review,
Vol. XXXIII, Num. 2, 1953, pp. 199-211. «Italian influence was very important in Iberian
colonization during the late Middle Ages and early Modern Times, but it should always be
kept in mind that externa1 influence combines with interna1 development. There exist no Ita-lian
nor Spanish, nor Portuguese history of such evolution; there is only the general western
one.», p. 211.
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in the Castilian economy remains largely unexplores, despite its enormous explanatory
potential to further our understanding of the Castilian and European expansion and the process
of economic development itself. From an economic point of view, the real importance of those
foreign influences in the economy of Castile cannot be assessed without a prior evaluation fo
the Castilian economic actors and economic conditions. This paper is an effort in that direc-tion,
not an attempt to deny the importance that foreign influences of foreign entrepreneurs
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Islands. It may be useful to underline though, that without aadequatex reponses to economic
incentives the efforts of foreign entrepreneurs would have come to nought. This has been
often overlooked.
attention has been given to the economic aspects of those entreprises, and
particularly, to what they reveal about the economic actors and the eco-nomic
conditions in Southern Castile during the late XV Centuty.
An important indication of both can be found in the Castilian answer
to the stern entrepreneurial challenges represented by the occupation, set-.
tlement, and in the turning of the opportunities offered by the Canary Is-lands
into economic reality. As a business venture, those events were un-doubtedly
an element of the business situation in Southern Castile -as
Schumpeter noted with referente to their American counterparts2. Indeed,
as any other contemporary enterprise undertaken in Castile, they were
bound to be an element of that business situation, as well as a reflection of
the economy, the economic thinking and the economic attitudes prevailing
in Castile at the time.
Here we shall explore those entrepreneurial challenges brought about
by the islands of Gran Canaria, La Palma, and Tenerife -heredter referred
to collectively as The Islands. We shall examine first the operations leading
to the conquest of The Islands, with particular emphasis upon their mana-gerial,
financial, infrastructural and organisational requirements. Through
a detailed scrutiny of some of the psychological and economic demands that
those requierements exerted upon the participants, we shall endeavour to
limn then as economic actors, and in the process, to gather valuable infor-mation
about basic characteristics of the Castilian economy. The second
part of this inquiry will be concerned with the same aspects, as they pertain-ed
to the activities that, partly by design, and partly through the unfore-seen
consequences of human action, led to the mi se en valeur~o f The Is-lands.
Aside from focusing upon attitudes to risk and uncertainty, ambi-guity,
competition and cooperation, special attention will be placed upon
the interplay between individual behaviour and overall performance, a re-lationship
that may be of no small importance not only for our understand-ing
of the Castilian and European expansion, but also of the process of eco-nornic
development.
The exarnple of The Islands is a deliberate, not an accidental choice.
The events in which we are interested are often inter-connected in The Is-lands
and have characteristics that set them apart as a distinct microcosm.
Consideration of the archipielago as a whole would have meant the broad-
2 . Jospeh A. Schurnpeter, Bzsi~essC ycLes. A Theoretid, Historical, andStatistzCaLAnu-lysis
of the Capitalist Process, New York and London, McGraw-Hill Book Company, 1939,
Voiurne 1, p. 8.
and Guinea. The need to start anew the economic life of The Islands com-pounded
those difficulties.
The territory repossessed in the Iberian Peninsula was generally adja-cent
or close to the home base of the conquerons, and often commercially
linked to it, depending on political and military circumstances. Those terri-tories
enjoyed, on the whole, a comparable economic life, and not infre-quently
a superior one to that of Castile. Provided that severe devastation
had not taken place, the victors were generally able to carry on with an eco-nomy
that was normally not much disrupted by changes at the top or the
bottom of society, which could be easily integrated with the economy of
Castile, and whose output had established markets there or abroad. Spoils
provided the conquerors with housing, tools, equipment, beasts of burden
and domestic animals, and other accoutrements of a civilisation comparable
te the Cadian ene. Fxdxmxxe, &e hmty cedd he :%he:! in p:emt!y
and safely. A highly institutionalised system ensured that, through the «al-monedas
(public auction of booty) and through the services of «alfaque-ques
» (officials in charge of redeeming prisioners and captured goods).
We may assume, therefore, that these type of operations presented to
the investors and al1 other participants not only the comfort of doing some-thing
tried and almost habitual, but also offered substantial economic ad-vantages,
such as a relatively quick turnover of the investment, the possibil-ity
of selling personal services and of using or renting equipment and ani-ma
l ~du ring the slack agricultura1 periods in which those ventures normally
took place, and a visible time horizon for the termination of the operation
and return home, or the beginning in sita of what was regarded as the pos-sibility
of a new and better life.
Al1 these factors should not be construed as an indication that these
operations were free from hazards; often enough they ended in disaster.
However, as a business proposition, the long experience of the «reconquis-
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on having reduced the perils that confronted the prospective participant to
a statistical or measurable uncertainty, that is to risk, as defined by Frank
Knight6.
6. Frank KNIGHT, K z d , Üncertaznty andprofit, London, The London School of Econo-mics
and Political Sciencie, 1939, Fourth Impression, First Reprinted, 1933, (Series of Reprints
of Scarce Works on Political Economy, 16). (Reprint of First Edition, Boston and New York,
Houghton Mifflin Company, 1921), pp. 19-21.
In contrast, a project as untried and with as many new elements as tiie
conquest of Gran Canaria -and to a slightly lesser extent of those of La Pal-ma
and Tenerife- must have been perceived by the prospective partici-pants
as a true or unmeasurable uncertainty, a higher form of uncertainty
not susceptible to measurement, and hence to elimination.
In real life, the differences between those two categories of uncertainty
may have never been as sharply distinguished as in Frank Knight's defini-tion7,
the notion of probability on which they are based is arguable, and
the men whosc business behaviour we are endeavouring to analyse probably
never thought of formulating their dilemma in those terms. Nevertheless,
this bold distinction is a useful way of introducing the business option that
must have been perccived by the prospective participants in these ventures.
What the Iberian undertakicgs demanded from them, and what they
could expect in return was as clearly established as in any other routine bu-siness
in Schumpeter's sense. Such reassurance did not exist in a project to
conquer any of The Islands. To the logistic complications the much higher
cost of transportation to and from the target area, the wider time range and
space range of the action, and consequently, the bigger investment requir-ed
and the slower turnover of capitd, we have to add what certainly was a
different economic prospect upon successful completion of the opera-tion.
Although the smaller Canary Islands were economically opened up,
and a rough idea of the potential of the larger ones existed before the
attempted conquest, it was an intelligence that could confirm only one ba-sic
fact: The Islands were economically undeveloped relative to Castilian
standards. The economic possibilities were there, but they were not as ob-vious,
easy to estimate, and quick to realise as the well tried ones existing
within the Iberian Peninsula.
In the absence cf evidence that would allow us to make a meaningful
business comparison within and between the Iberiar. undertakings and
those whose objective was to conquer The Islands, it is impossible to rank
these two types of business ventures in terms of financiai requirements, re-turns
on investments, or in any other way. Because we lack the bases to
make a serious use of statistical or business anal~sist echniques, the diffe-rences
pointed out must stand or fa11 within the domain of logic. (Metho-
7. Idid, pp. 198-232
S84
dologically, it is extremely important, in our judgement, to follow in this
regard the strict approach of Qskar Morgenstern and o t h e r g
Ir is obviously more diff'cult to discern the psychological motivations
that might have moved the pcrticipants to take part in those ventures; mo-reover,
they can be counted cn having differed from individual to indivi-dual,
and as time went on, as a result of other participant's actions andvo-litions.
However, it seems evicient to us, that undertakings such as the con-quest
and settlement of The Isiat.,ls exen-ed far more taxing demands upon
rhe participants, the investors, the Castilian economy and resources, and
above all, the leaders, than their counterparts during the Castilian Recon-quista.
If we think that al1 decisiones are based on some abstraction of a desir-ed
situation, we may say that these new vtntures required decision-makers
capable of visualising further into thr: future, and of bringing some existing
situation into conformity with some desired situation along a longer, diffe-rent,
more complex path than the routine Reconquuista ventures. Funda-mentally,
therefore, the undertakings to conquer and settle The Islands re-quired
men capable of conceiving and carrying out new economic combina-tions;
in other words: they demanded ENTREPRENEURS, and may be pro-perly
called ENTERPRISES in Schumpeter's sense.
A aapitulacion» (articles of agreement) with the Crown served to
launch the enterprises to conquer and settle The Islands -hereafterreferred
to as The Enterprise(s). Those agreements formed their basic core. Around
them grew a myriad of contractual and sub-contractual obligations -some
probably just oral ones- that formed the neme and substance of the busi-ness.
From the point of view of business and financia1 analysis, the latter are
the most important ones. They alone can allow a tme assessment of the in-tricacies
of The Enterprise, its organisation, costs, investments, manage-ment,
managerial abilities of the leader, and how uncenainties were dealt
8. Oskar MORGENSTERN, On the Accura~y ofEconomic Observatoim, Princeton, New
Jersey, Princeton University Press, 1963, Second Edition, completely revised, First Edition
1950, passim.
John von NEUMENN and Oskar MORGENSTER, Tberoy of Gamer and Economic Be-haviour,
Princeton, New Jersey, Princeton University Press, 1947, Second Edition, First Edi-tion,
1944, passim, and esp. pp. 1-45.
with by management, investors, and other participants. The <capitula-ciones
» with the Crown give only a broad outline of the business and the
demarcation of the responsibilities. liabilities and benefits that were to be
received by the signatories upon successful attainment of the objectives.
In any of these areas, the «capitulaciones» we have seen as well as those
alluded t09 show a clear division between the parties: the Crown on the one
hand, and the other contractors on the other. As fas as the bearing of risks
was concerned the distinction was unequivocal: the Crown bore virtually
nil; the other signatories most of them. Indeed, in these agreements the
Crown was in the enviable position of contributing to an uncertain enter-prise
with nothing more than promises to distribute «benefits>, that had to
be gained by the «beneficiaries» entirely at their own risk, cost, and effort.
On the few occasions in which we found the Crown offering something
more tangible, the substance of that offer or the final outcome of it tend to
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Crown waiving the export duties on the weapons, equipmerit, victuals,
beasts, and proveder necessary for the expeditionlO, t ~thte t rue «cost» of
this largesse was most likely borne by the tax farmer, who in accordance
with the custom of the time, had tendered an offer, bought, and paid for in
advance for the temporary right to collect that tax. On another occasion,
the Crown offered the fleet mustered for other specific roya1 service by Iñi-
9. Gran Canaria:
Martín FERNANDEZ de NAVARRETE, Colección de los Viajes y Descubrimientos que hi-cieronpor
Mar los Espanoles desde Fines delsiglo XV, Madrid, En la Imprenta Real, 182 5, To-mo
11. ApéndiceNúm. IV. (1478). pp. 390-393; Apéndice Núm. VI, (1480), pp. 395-396.
Rafael ARIAS FUENTES, A(fonso de Quintanila, Contador Mayor de los Reyes Católicos,
Oviedo, Tipografía de la Cruz. 1905. Vol. 11, Doc. Núm. XIX, (1480), pp. 75-78.
La Palma:
Leopoldo de la ROSA OLIVERA y Elías SERRA RAFOLS, ElAdelantado D. Alonso de Lugo
y su ResidenciaporLope de Sosa, La Laguna de Tenerife. C.S.I.C., Instituto de Estudios Cana-rios
en la Universidad de La Laguna, 1949, (Fontes Remm Canarium, 111) , Memorial, LXXXVII,
p. 45; Iii;ei~ogritoziü, CLIII, p. i i i, esp. (Gaiiiriniv); =;V. pp. i i i-i ii; C 3 , p. i ii, (Aica-raz)
and (Gallinato); Diversos, Doc. 1-4, pp. 147-151, (1492-1494), Doc. 7, (1496), pp. 154-
155.
Tenenfe:
ROSA OLIVERA y SERRA RAFOLS, Residencia, Memorial, LXXXVII, p. 45: Interrogato-rio,
CLV, p. 112, (Benítez); Diversos; Doc. 5, (1496) pp. 15 1-152.
Antonio RUMEU DE ARMAS, La Conquirta de Tenenife, 1494-1496, nip Aula de Cultura
de Tencrie, 1975, Doc. 4-5, (!?4?), pp. AZO-422, Doc. 7, (149:j, pp. 424.425, DOL. 14,
(1494), p. 433.
10. Ibid., Doc. Num. 4, (1493), pp. 420-421.
go de Artieta to transport the expedition of Alonso Fernández de Lugo to
Tenerife, but the offer carne to nought, and Lugo ended up having to char-ter
vessels in the open market when a new offer of assistance from the Crown
was unfulfilled~~.
The limited instances of financia1 commitment from the Crown to The
Enterprises neither appear to have been substantial nor to have altered the
outlined pattern. Perhaps the Crown was instrumental in obtaining some
secondary sources of financing, such as the funds from the «Diezmo de la
Cruzada, (Tithe of the Crusade), but these funds were rather incidental to
The Enterprises. However, the Crown probably made a contribution re-garded
as important at the time: the umbrella of a just, legal, and sanctifi-ed
war. It is impossible nowadays to gage the tme value of that, but at a
deeply religious time, and one highly concerned with legal niceties, one can
ness factor, with an important bearing on business outcome.
It is beyond the scope of this paper to dwell in detail on those docu-ments;
our main concern is analytical, and the reader can only be referred
to them. However, one aspect worth examining is the background of the
participants in the «capitulaciones». The first document referring to a «capi-tulación~,
dated in 147812, mentions two main entrepreneurs: Juan de
Frías, Bishop of Rubicón, with family ties to the Usodimare and other im-portant
Southern Castilian families's, and Roya1 Chaplain Juan de
Bermúdez. Both, and particularly Bishop Frías, carried the entire financial
burden of The Enterprise to Gran Canaria, but had much to gain from its
success. The were respectively appointed Bishop and Dean of the Canary Is-lands,
and, as far as the documents can tell, they certainly looked well after
their economic interests and the legal means to protect them. Captain Juan
Rejón, described alternately as «criado» (servant) of the Crown and of Bi-shop
Frías. was apparently in chargc of milita? ~ a t t e r2sn d !2wr ~ p p e ~ r e d
as General.
11. Ibid., Doc. Num. 7, (1493). pp. 424-425, Doc. Num. 11-12, (1494), pp. 430-432.
ROSA OLIVERA y SERRA RAFOLS, Residencia, MemokaZ, LXXXVII, p. 45; Interrogato-n.
o.-, C LV, p. 112, (Benítez), CLVI, pp. 112-113, (Alcaraz), (Benítez), CLVII-CLXIII, pp. 113- 11 l .
12. FERNANDEZ DE NAVARRETE, Cokcción, Apen. Num. IV, pp. 390-393.
13. Hipólito SANCHO DE SOPRANIS, Historia d e l P u e ~ ode Santa Mada, Cádiz, Esta-blecimientos
Ceron y Libería Cervantes, S.L., 1943, p. 73.
Other names mentioned in this «capitulación», but not original parties
to it, were a Micer Agustín de Spinola, Treasurer of the Indulgence for the
Conversion of the Infidels of the Canary Islands, who advanced 420,000
Maravedis to Bishop Frías. He is almost surely the «Comendador» (Knight
Commander of a Military Order) of Almendralejo Don Agustín de Spinola
de Vera, a central figure in the XV Century of the notable Spinola family
from Genoa, a branch of which was by then well settled in Castile and
mixed with local families, as his name suggestsl*. He was a politician and
diplomar, courtesan, and noble frontierman, with vast business interests,
and he was probably farming the above mentioned Indulgence. i\nother
name appearing in this «capitulación» is Pedro de Setien, «vecino» (citizen)
of Burgos, treasurer for the collection of the same Indulgence in most of the
Bishoprics and Archbishoprics of Castile and Leon. He is reckoned to have
advanced, 300,000 Maravedis for the venture, wich, like the prior loan,
were secured by Bishop Frías and Dean Bermúdez.
The second «capitulación», alluded to in a document dated in 148015,
between the Crown and two partners, A1oc;o de Quintaniila and Pedro
Fernández Cabrón, was also concerned with Gran Canaria. Alonso de
Quintanilla was an interesting character. «Contador Mayom to the Crown
(Crown's Chief Accountant), he was one of severa1 Castilian Crown officials
who in the XV Century displayed a proven ability in the business world.
Without suggesting any malfeasance on his part -of which we have no evi-dence-
it seems obvious that this man, born into a good but improverish-ed
fami!y, used his office ably to obtain money, possessions, and honours,
as suggested by his last will. He had varied business interests, ranging from
minting coin arid mining to tax farmifig16. Pedro Fernández Cabrón was a
sea captain and shipowner, «Regidor» (Alderman) of Cádiz, with a reputa-tion
for vast experience in carrying out acabalgadas», along the African
coast. He is sometimes described as Genoese, but as his name suggesa, he
must have belonged to a family well scttled in Czstile".
14. ----, «Los Genoveses en la Región Gaditano-Xericiense de 1460 a 1800u. Hispania,
VIII, 32, Madrid, 1948, p. 364.
Miguel Angel LADERO QUESADA, *Unas Cuentas en Cádizo, Cuadernos de Es~uzLdiosM e-dievales,
11-111, Granada, 1974-1975, pp. 92, 97.
15. FERNANDEZ DE NAVARETE, Colección, Apén. Núm. VII, pp. 397-399.
16. ARIAS FUENTES, ALfonso de QuintmUa, Vol. 1 and 11, passim.
17. uiDz í iO QÜ~ SAZ~AÜ%, m& en&, p. 97.
SANCHO DE SOPXANIS, Histoiria delpuerto de Santa Mana, p. 68, The «Capitulacióno of
1480 suggesn that he was a shipownel- and <Capitán de la Marx.
ERNANDEZ DE NAVARRETE, Colección, Apén. Núm. VII, p. 397.
Quintanilla and Fernándcz Cabrón constributed 300,000 and 600,000
Maravedis respectively to The Enterprises. A third party mentioned in this
document, who afterwards acquired half of Fernández Cabrón's share and
became a full fledged partner, was Pedro de Vera Mendoza. A «caballero»
from Xerez, related to somc of the oldest noble houses of Southern Castile,
he had been «Alcaide» (Governor of a foitress or castle) of Jimena, Cadiz
and Arcos, as wdl as Lieutennant of the Marquis of Cadiz, before this en-terprise.
He had also made two profitable «entradas> to Morocco, to the is-lands
of Fadala and to Larache. He consummated the conquest of Gran Ca-naria
and was governor of the island between 1480 and 1483. Later, he was
again «Alcaide of Arcos», «Guarda del Real de los Reyes Católicos» during m
the War of Granada (1485- 1492) and «Veinticuatrg» (Alderman) of SevillelB.
The «capitulaciones» concerning The Enterprises of La Palma and O
n
-~ ~ i:i c i i>iccc iii A - to hd-v-.c- lL l. aAu a ,a:,i,liei gic s.uLc-i-i~ciclL:,i:a,i,y,.w... AAr linwimiawc FnLP ,.VA~,LA.d~,L ,Ae T- ,,,- - m
O
go. Born probably in Sanlúcar de Barrameda, the ancestors of Fernández de E
E
2 Lugo appear to have come from Galicia erarly in the XV Century. and after E
almost a century of residence in the region, the fainily «could be considered
to be pure Andalusian stockd9 -an appelative that does not seem to be as 3
liberally applied to families of foreign origin ir1 a similar situation. Lugo Om-lived
in Seville, where he owr:ed land and other propenies, and had carried E
out at Ieast one expedition to Guinea in 1477, for which he chanered aves- O
se1 from Iñigo de Artieta. This experience and the Iinks of his family with n
E The Enterprises of Gran C. naria may have been of importance in deciding a
Lugo's path. He was a nephew of a rich merchant from Seville, J u ~ dne Lu- n
go, who lent considerable funds for the conquest of Gran Canaria and the n
n
bother-in-law of the «contino» (salaried member of the Roya1 Household) 3
and Governor of Gran Canaria D. Pedro de Algaba, in whose army Lugo O
enlisted in 1478. In 1G80 he accompanieci the new Governor, D. aedro de
Vera, and having distinguished hirnseIf in the final campaign to conquer
Grxi Czaiia, U - G V ~ ~ ~VGer;a lefe him as &!caide~ af :he f~r a e s:s:f W p c -
te. From that day on, Alonso Fernández de Lugo occupied the centre stage
in The Islands, conquering La Palma in 1493 and Tenerife in 1494-149620.
18. Marcos JIMENEZ DE LA ESPADA, La Gzerra delMon, a Fines del Siglo XV, La pre-senta
con notas D. Hipólito Sancho, Ceuta, Instituto General Franco para Ia Investigación
Hispano-Arabe, 1940, (Sección 4a - Reediciones, Num. 1). pp. 27-32.
19. Antonio RUMEU DE ARMAS, España en ei Afnca Athtica, Madrid. C.S.I.C., Insti-tuto
de Estudios Africanos, 1956, Tomo 1, p. 308.
20. Ibid., pp. 308-312.
ROSA CLIVERA y SERRA RAFOLS, Residen&, pp. VII-XLVIII.
RUMEU DE ARMAS, La Conqlczit~p, . 135, ref 22.
These biographical sketches are at once revealing and deceiving, They
give an indication of the wide interest that TheEnterprises aroused on every
leve1 of Castilian society. A perusal of the documents will readily confirm
that. The Duke of Medina-Sidonia, Inés Peraza, Lady of Lanzarote and
Fuerteventura, or Beatríz de Bobadilla, Lady Tutoress of La Gomera and El
Hierro, appear just as easily financing these enterprises as Francisco Gorva-lan,
a servant of Lugo, Jerónimo de Herrera, a merchant from Sevilla, or
Guillermo Blanco and Mateo Viña, «Genoese» merchants with deep roots in
the political and economic life of Puerto de Santa María. Some participants
were almost born into The Enterprises: Pedro and Fernando de Lugo, sons
of Alonso, for instance, and Jerónimo de Valdés and Andrés Suárez Galli-nato,
Lugo's nephews, and ihe sons of the mentioned Captain Pedro de
Algaba. Others may have been drawn to them by farnily links or ties of
frienship: amongst the former Pedro Benítez de Lugo, Juan Benítez and
Bartolome Benítez, nephews of Lugo; in the latter group Lugo's friends
Gonzalo Suárez de Quemada, «Regidor» of Sanlúcar de Barrameda and
Francisco de Espinosa, «Jurado» of Seville.
Others participated obviously at arm's length from the promoters,
such as the brothers Diego and Cristóbal Garrido, shipowners from Palos.
And yet others, like Father Niculido Angelat, a Majorcan priest and Fran-cisco
Palomares, a «Genoese» merchant from Valencia, major investors in
one of these ventures, may not even have resided in Castile, but must have
been already involved in the Castilian commercial life or have been its pro-fit
potential.
A random sample of the participants would easily corroborate that
along the entire social spectrum of Castile were men ready to react positive-ly
to economic possibilities, and that the opportunities were bright enough
to attract a large number of outsiders. These possibilities could not have
existed in a vacuum, they were pan of the business situation in Castile, to
which a significant number of Castilian are bound to have contributed.
However, the biographical outlines are also deceiving. The may convey
an idea of simplicity that is nowhere to be found in these enterprises. A
study of the documents confirms Schumpcter's assertion that it is a pre-judice
to believe that ~pr imi t ivefo~r ms of a type are the «simpler» or the
«more originh in the sense rhat they show their nature more pureiy and
with fewer complications than later ones. Very frequently, the opposite is
the case, since increasing specialisation differentiates specific functions
more sharply21. Most of the persons named above appear in various busi-ness
roles in these documents, often simultaneously, they may be entrepre-neurs
and capitalists (in the sense of banker or financier), landowners, ship-owners,
merchants, or soldiers. In spite of this analytical difiiculty, and
bearing- in mind that data were recorded for purposes differing widely from
our interests, these documents are altogether eloquent witnesses of the eco-nomic
and entrepreneurial development of the Castilian society, and the
managerial and organisational resources it could muster for the attainment
of business goals.
It appears that the participants in The Enterprises sought shelter from
uncertainty chiefly by means of what is technically know as consoliclation
and diffusion. Both are significant indicators of business behaviour and
economic attitudes. Aside from insurance -which in addition to vessels22
most likely would have covered injuries to combatants and loss of weapons,
beasts, and equipment, customary in the legislation of warfare- the most
important example of consolidation was the centralisation of authority and
responsability in order to secure the unity of interest implied by the orga-nisation
with which The Enterprises were carried out.
It seems that the participants saw obvious advantages in allowing a lea-der
to take charge of the overall decision making of the enterprise. We can
perceive the emergence of a leading figure initialiy around the person who
takes care of the execution of military activities and has control in the field,
as it seems to have happened with Juan Rejón, and certainly did happen
with Pedro de Vera. Eater we see centred around the leader the administra-tion
of the entire business, the military and naval operations as well as the
dealings with the Crown on the one hand, and the contractors, sub-con-tractors,
and other participants on the other. Alonso Fernández de Lugo
gradually acquires these distinct features in the documents; he is the first of
a long list of entrepreneurs of this type, who, nos surprisingly, were soon to
be predominant in the American enterprises.
The centralisation of the intricate diplomatic, political, administrative
and naval functions was probably an indispensable convenience from the
standpoint of organisation and logistics. The discernible utendency to
specialise~th e leadershipe function of The Entergrises around a single cen-tral
figure could well have been due in this case to the personal qualities of
iugu, his experience, rhe quaiiry of bis comperirors, [he iessons accumAar-
2 1. SCHUMPETER, The Theoty ofEcononzic Developnzent, p. 76.
22. RUMEUDE ARMAS, La Conqzista, Doc. 19, (1945), pp. 437-438
ed through negative feedback of prior experiences (which as Burton Klein
rightly aErms is critica1 in management23), good luck, or any other number
of reasons. The sarnple is far too small and the timespan too short to reach
any firm conclusion or be nothing but circumspect about it. What is really
important is the event itself, and what it says about the state of develop-ment
of business organisation in Castile.
Centralising the decision making of the organisation around one indi-vidual
and his council means -in theory, and in the event of the Law of
Large Numbers being operational- a greater statistical probability that
errors would be cancelled out by successes in the end than if each partici-pant
would have been forced to take every decision by himself24. It stands
to reason that although a leader may have the final voice and resp~nsibilit~,
the existence of an inner council of subordinate oficials is not only natural
but necessary. The inner and the general council had furthermore a long
&--A:&:-- :- /---&:1:-- -:1: -- J :-- -L 1 3 L -..- LA-- -..
Llaulilull 111 L ~ L I I I - I~IIIII ILYIY VCI ILUIC~a, uu I L a~ u x 1 l L c WUUIU I IYVC UCCII CX-traordinary
in an enterprise with so many resembling features and in which
a number of members had significant financia1 stakes. Such a decision-making
system should have resulted, as propounded by organisational
theory, in a sharpened focus on action and on solutions to attain the main
objectives of the organisation. A large body of findings in organisational
psychology confirms that group decision making is more action oriented
than individual decision making, and tends to concentrate on solutions
even before al1 possibilities of attaining a certain goal have been evaluated25.
Aside from these considerations, it is unlikely that a business under-taking
of the magnitude of The Enterprises could have been ateempted
without the participants divesting themselves of individual decision making
and entrusting it to a central organiser and manager and his assistants. This
implies the readiness of the participants to use and be used by others for the
accomplishment of activities that none could accomplish alone. Whilst the
use of someone else's productive resources and services is easy enough, to
cixiüst oiie's owil p;od~aiuc rcsmices md sciviccs to the jüdgement of
others is to take a step whose business and economic significance cannot be
underestimated.
23. Burton H. KLEIN, Dynamic Economics, Cambridge, MassachusettsiLondon, Eng-land,
Hamard University Press, 1977, p. 230.
24. KNIGHT, Rhk, Uncertainty andProfi, p. 252.
25. Kari E. WEICK, Tbe Social Psychology of Organizing, Reading, Mass., Addison-
Wesley Publishing Company, 1969, (Topics in SocialPsychology, Charles A. Kiesler, Edic.),
pp. 11-12.
The iikelihood that constant outside pressure maintained the organisa-tion
of The Enterprises -perhaps even the sheer extent of the undertak-ing-
cannot detract from the suggestion that the Castilian society was used
to routinely organising itself to achieve economic goals well in the future.
The continuous functioning of an organisation with the complex network
of relationships of The Enterprises is al1 the more remarkable because of the
proven existence of interna1 forces tending to simplify such organisation.
Karl Weick and others have shown that those forces can destroy the level of
complexity acquired by the organisation, and in some instances release the
level of anxiety felt by individual members26. However temporary that ef-fect
might be, it is easy to imagine that many members of The Enterprises
may have felt that way, especially at times in which the overall goals pursu-ed
seemed at variance with their private goals. The formation and the
maintenance of organisations such as The Enterprises, for the achievement
of long term goals, suggests maeure business thinking, and a disciplined,
consistent, unrestricted commitment of productive resources and services to
the attainment of economic objectives in the future. This is symptomatic of
a society economically well beyond the mere contentment with the satisfac-tion
of immediate needs.
Such business and economic attitudes are confirmed by the use of dif-fusion
as a method of dealing with unfavourable contingencies. Closely
linked to consolidation, there is, according to Frank Knight, a logical dis-tinction
between the two concepts and a practica1 possibility of separating
them27, which in this case we think to be useful. Hedging one's bets or
committing assets to different projects is the typical non-specialist method
of difising risks -specialists diminish risks by concentrating on the same
type of vennire, so that, statistically, errors in judgement must show a ten-dency
to cancel out. If we observe the ways in which Lope Fernández -one
of Lugo's lieutenants- participated in The Enterprises of Tenerife -lend-ing
money to Lugo to carry it out, taking clothes and other goods to se11
during or after the carnpaign, and providing his own personal services to
26. Ibid.., PP. 25-35.
27. KNIGHT, R&, Unce~t&tyandP-ofit, pp. 232-263, esp. p. 239.
For an earlier ueatrnent of the topic, which constituted the basisof ~ n i ~ h tan' sal ysis, see Ir-ving
Fisher, The Nature of Capitd and Income, New YorkILondon, The MacMillan Com-panylMacMillan
& Co., Ltd., 1906, pp. 288-300.
The Enterprise28- we have a text-book example of diffusion. Besides, the
carrying of goods to se11 during or after the conquest of Tenerife required
the anticipation of the wants and needs of the prospective buyer. This re-veals
a business mentaiity and is characteristic of a society whose production
is geared to the general market, not only to fill the direct demand of a given
consumer. We have here the critically distinguishing feature of a market
economy, and a clear sign that at least a considerabie sector of the Castilian
society functioned in such an economy.
The likelihood that most participants in The Enterprises took pan in
them only in response to the proposals of the promoting entrepreneurs
neither detracts from our assesment of the business and economic attitudes
demanded from those participants nor from the type of attitudes implied
by their actions. On the contrary, this outward and visible sign of inner Cas-tiie
strengthens the argument. The incentive that impels a man to act is
aiways some uneisiness. But as iudwig von Mises noted, «uneasiness and
the image of a more satisfactory state alone are not sufficient. A third con-dition
is required: the expectation that purposeful behaviour has the power
to remove the felt uneasiness. In the absence of this condition no action is
feasible»*9.
The evidence at our disposal gives ample reasons to believe that the
participants in The Enterprises entered free and voluntarily into the econo-mic
agreements and exchanges indispensable to carry them out. Their
behaviour, examined in the light of von Mises' argument, must have been
prompted by a desire to advance to a more desirable personal position, and
the expectation that their actions should result in economic gain -clear in
many cases- or whatever they perceived as attainable through economic
and social gain. This picture is not altered by the singie example to the con-trary
we have found: the men, who took a pardon offered by the Crown to
those convicted of exporting or falsi@ing coin, wiliing to join The Enterpri-se
of Tenerife may have had a different immediate motivation, though per-haps
one that was neither at variance in substance nor in iong run expecta-tions
with that of the other participants. Besides, hese men could have been
only a minority of those who joined, and there was still an element of choi-
28. Leopoldo DE LA ROSA Y OLIVERA, <El Conquistador Lope Fernández», Revkta de
Historia, XIX, La Laguna, 1953, pp. 6-10.
ROSA GL;;TKA y SEEA KAFGLS, Resiaéncia, interrogatorio, CLiX, p. i 15, (Ámariiioj.
29. Ludwig von MISES, Hzcma~A ction. A Treatise on Economicj, New Haveii, Conn.,
Yale University Press, 1949, p. 14, see also 11-29.
ce in their decision. The vast majority of the participants decided to take
part of their own volition. This freedom of contract and exchange is another
essential characteristic of a market economy30, and a further indication of
its existence in at least one sector of the Castilian economy.
A close examination of the social and economic advantages enjoyed by
many promoters and participants indicates that many of those who risked
the most must have had safer economic alternatives. The Duke of Medina-
Sidonia and most others were men of su& economic and social position that
rendered unnecessary for them to enter into risky enterprises to obtain fur-ther
advancement and recognition. Neither Alonso Fernández de Lugo nor
Pedro de Vera appear to have been compelled to run awsome risks. Both
men seem to have enjoyed a comfortable economic and social station before
their initial involvement with The Islands; neither of them appears to have
been at thar: point in a remporary Íina~iciasl itüatioli deaaiidiiig dariilg mi!
risky manoeuvring to stave off disaster. Besides, their social status was such
that they could have found an easier, more secure way of making money, if
that was their goal. Shipowners like the brothers Garrido or merchants as
Jerónimo de Herrera may not have Leen confronted by relatively «sofr» al-ternatives,
but they must have been able to direct their business efforts into
more conventional, well proven, and thus more predictable economic
paths, than those offered by The Enterprises.
An exhaustive study of the evidence in our hands has not shown the
specific motivations and expectations of any of the participants in The En-terprises.
However, Adam Smith may have provided us with a plausible ex-planation.
He said that men are more likely to risk a small amount of mo-ney
in the hope of winning a large one when the adverse possibility
-known or estimated- against winning is much in excess of the ratio of
the arnounts, but commonly will refuse to incur a small chance of losing a
large amount for a virtual certainty of winning a small one, even though the
. .
accüaiia! of the chal?ce ;S ;E &í=i; fzcGU:3l. Wha: cGr,s:hE:esa
or a «smalb amount is of course a relative matter, varying from individual
to individual.
Whatever may have been the rationaie behind the participanr's deci-sion
to join The Enterprises, it seems obvious to us that they expected high
owards, 2nd prrsurnably. though not necessarily, higher ones than those
30. KNIGHT, Risk, Unceltainty andP~o$t, pp. 240-1, 244-245, 351-358.
31. Ibid., quoredon pp. 235-236.
that could derive from alternative actions. The participants may have been
prompted also by expectations other than pure profit and loss estimates.
The goal of lordship may have been such a desired prospect. As Schumpeter
stresses, that was a perfectly legitimate economic inducement32, and proba-bly
just as effective as comparable incentives today, be they monetary or
non-monetary, such as «actualising» oneself in MasIow's sense33.
Alonso Fernández de Lugo may have been spurred on by any of those
motives when in order to raise money for The Enterprise of Tenerife he sold
at e. huge loss a hard earned property in Gran Canaria with a fortress of
which he was «Alcaide», accepting for it just a fraction of the large invest-ment
he had made to develop the property and to build a sugar mil1 on it34.
This was a perfectly «rational» business decision if in his judgement the like-ly
returns of the enterprise would offer ample compensation for the loss and
the risks incurred. ín this, as in [he prior seiiing of his properties in Castiie
and the heavy burden of debts the acquired with family and friends there,
as well in the pawning of his clothes, jewelry, and even of his sons to secure
needed capital for The Enterprises, Lugo many have exhibited and egregious
folly in the eyes of many, but we do not know the odds he saw for the suc-cess
of them. He may have even found himself at the point of no return, so
comrnitted to The Enterprise that he could no fonger extricate himself from
it. From the depositions at his «Residencia» triai @ubiic investigation of his
conduct as public administrator) there can be little doubt that people re-membered
and respected him for those actions, which perhaps comforted
the more timorous participants or dispelled the doubts of others contem-plating
joining The Enterprise in some capaciiy.
Pedro de Vera, before Lugo, acted in a similar way when he found
himself at a criticai point during the conquest of Gran Canaria. He sold his
property in Castile -in this oi in a similar situation he also pawned his
sons, and not to a Castilian noblewoman as Lugo did but to a Morrish chief-tain-
to buy supplies and charter a ship :o carry them to Gran Canariasr.
32. SCHUMPEER. She Theo~yo fEconomic Development, p. 93.
33. A.H. MASLGW, Motivation and Personalzty, New Yor!~, Hzrper & Row, 1954,
passim.
34. ROSA SiLíVEM y SERXA XAFiSLS, Residencia, Memorid, --XXVi, p. 18, IXXXVII,
p. 45; Interrogatorio, CLiX, pp. 114-1 15, (Alcaraz), (Amarillo), (Eenírez), (Serrano). See also
Cm-SLXIII, pp. 115-117 for hrther dctails of Lugo's effom :o secure funds.
RUMEU DE ARMAS, Le Conquüta, pp. 208-210.
35. ROSA OLIERA y SERRA RAFDLS, Resideencia, pp. X X X - m I , ref. 7 l .
Both men performed true aca of leadership, in the ordinary rneaning of the
word as well as in the specific one of Schumpeter's theory, in the sense of
«leading» the means of production into new channels36. Through their ac-tions
Vera and Lugo also exhibited a highly speculative nature, which is
indispensable for advancement not only within the restricted entrepreneu-rial
field of this theory, but for the economy as a whole.
A separate speculative function is not clearly discernible in the
documentation available. Speculation is much in evidence, but on the
whole it would appear to have been carried out in a non-specialist fashion.
The case of Lope Fernández, already mentioned as an exarnple of the
method of diffusion is typical of that. We see the merckant Mateo Viña in-vesting
capital for the conquest of Tenerife, and at the same time carryi~g
goods for sale, and either fighting in the campaign or just going along to
supervise personaiiy his investmentji. Instantes of this pattern of business
behaviour are indeed common, but perhaps nothing illustrates better the
speculative nature of the participants in the conquest of The Islands than
the financing of The Enterprises.
In carrying out new enterprises, financing is as fundamentally neces-sary
in practice as in theory. As a rule, Schurnpeter stresses, new combina-tions
must draw the necessary rneans of production from old combina-tions38.
These productive means must be withdrawn from the relative safety
of tried opera.tions into new high risk ventures. We may think, for instance,
of vessels involved in fishing or in ordinary freighter duty to Flanders or the
Mediterranean. This required a shipowner not confining himself to routine
business, which would Iead to a very static economy in Schumpeter's theo-ry,
but willing to try new things, to take new risks, presuinably for higher
monetary rewards. If the entrepreneur happened to be the owner of the ves-se1
-as Fernández Cabrón most likely was- no problem as fas as the corn-mand
of this particular productive resource for The Enterprise existed. Hf
36. SCHUMPETER, The Theory ofEconomic Developmelzt, pp. 87-90.
37. ROSA OLIVERA Y SERRA RAFOLS, Residencia, Intercogatorio, CLXIII, p. 116, (Ai-caraz);
Diversos, Doc. 8, (1497), pp. 155-156.
RUMEU DE ARMAS, La Conquista, Doc. 19, (1495), p. 437, Doc. 20, (1495), pp. 438-439.
Miguel Santiago RODRIGUEZ, «Un documento desconocido en Canarias referente a la
conquista de Tenerifes, RevW-ta de ieHrrton2, XVI, La Laguna, 1950, pp. 44-5 1.
Elías SERñA y Lropnldo DE LA RISA, Fdi:~., RefVrmwión del Repri~iimiento de Tene*
en 1 ~ 0y6 C olección de Docmentos sohe elAdehntrido y su Gobierno, Sanea Cmz de Tene-rife,
Cabildo Insular de TenerifeJInstituto de Estudios Canarios de ia Universidad de La La-guna,
1953. (Foontes Remm Cmanamm, IV), Proceso, 111, (Viña), p. 56.
38. SCHUMPETER, The Theory ofEconomzk Development, p. 68.
the entrepreneur was not the owner of the required productive resource, as
appears to have been the case with Bishop Frías or Lugo, the entrepreneur
either had to have disposable property to obtain the necessary funds or con-vince
an investor to finance the operation on a partnership basis.
Schumpeter emphasized that control over required productive resour-ces,
rather than ownership of them, is indispensable for the carrying out of
new combinations. Eventually, for any sum above the combined resources
of the entrepreneurs they would have to reson to credit financing. To pro-vide
this is the function of a category of individuals which he called capita-lists
». In what is known as a «capitalistic» tyge of socieyt, credit financing is
the obvious method of shifting the economy into new channels -and its
«differentia specifica»- as Schumpeter rightly asserted39. He was wrong
though, or at leas not clear, in the dating of that phenomenon40.
T~Li- -i- ~ c-ra-rii- l.- -.. -..-,L--- l.-..- -.l- -..+---:-.- -C ---A:+ :- TL- E- UL iiu ~ U L J L I V I IO .UVUL LILL L A L C ~ ~ J L V L UJL VI LILUIL 111 1 1 1 b~ u -
terprises. This took place in a number of ways, albeit in most cases, without
a distinguishable separate «capitalist» function. Examples of credit extended
in money or money substitutes are abundant in the documents examined.
In some of them, the existence of a loan contract is rendered evident by the
mention of the multifarious sureties used as collaterals for the loan. In
many of these instances one can perceive the creation of new purchasing po-wer
out of nothing, as it is carried out by banks in a modern economy. This
was clearly so when those credits were guaranteed by securities which were
not themselves circulating media -real estate and other property, future
revenuedl, or the pawning of Lugo's sons to Lady Inés Peraza42.
In other cases, credit was granted fully or partly against a participation
in the expected profits of The Enterprise. In other words, the creditors
advenced productive resources, such as good, equipment, weapons, the
money-capital required 6 purchase or hire them43 or their personal servi-
39. Ibid., 69.
40. Ibid., p. 70.
He appears to have modified his views later - Buszness Cycles, 1, p. 222, see also 223-234.
41. SCHUMPETER, The Theory ofEconomic Development, pp. 70-74.
See the sources cited in our ref. 34 for examples.
42. ROSA OLIVERA y SERRA RAFOLS, RenaSmrla, Memorial, XXVI, p. 18, LXXXVI,
p. 45; Interrogatorio, CIX, p. 115.
43. ROSA OLIVERA y SERRA RAFOLS, Residencia, Diversos, Doc. 4, (1494). pp. 150-
151, Doc. 8, (1497), pp. 155-156.
RUMEU DE ARMAS, La Conqurcta, Doc. 19, (1495), pp. 437-438, Doc. 20 (149J), pp.
438-439, Doc. 32, (1496), pp. 455-456, Doc. 23-24, (1496), pp. 442-444, Doc. 48-50, (1505),
PP. 475-483.
ces44, and in consideration of submitting thernselves to the risks of The En-terprise
acquired the right to participate in the profits. Sometimes, promi-nently
with hired manpower, the agreernents seern to have involved a salary
and a share of the profits45.
In al1 the above mentioned examples, even those in which people
agreed to provide personal services againsé a claim to payment of wages
upon the successful completion of The Enterprise, the participants fulfilled
a function basically different to that which would result frorn a similar ac-tion
within the routine business of the established economy. Because these
participants were engaged in new cornbinations or enterprises in Schumpe-ter's
definition, they played essentially an entrepreneurial role. At the same
time, they were risk bearers. In Schurnpeter's theoq, these are two distinct
functions that need not be carried out by the sarne person. According to
him, risk as such, always falls on the owner of the means of production or
the money-capital which was pais for them, never on the entrepreneuic4; of
course, this does not apply to the resources owned by him and invested in
the enterprise or to those guaranteed by him.
It is perhaps not a disgression to insist here that Schumpeter's entre-preneur
is a temporary condition, not a perrnanent category. The difficult-ies
of isolating special functions in The Enterprises need not disturb us.
This is not on account of the refinernents of pure theory being seldom ap-plicable
to concrete situations, or our endeavours to apply them to a diffe-rent
economy, but because the theory itself assigns a temporary existence to
the entrepreneur and conternplates the possibility of a single individual
performing concurrently several functions in the enterprise.
The willingness to bear risks even of low wage earners associated with
The Enterprises conf~msa n attitude towards risk and speculation that seems
to have characterised at least one sector of the Castilian economy, and one
where al1 social groups were represented. (To those who rnay argue that low
44. Ibid., Doc. 44-45, (1504-1505). pp. 470-473. Francisco Gorvalan, servant of Lugo
(Doc. 23-24, pp. 442-444) had rendered personal services and advancedcash to finance The
Enterprise is one of many such examples. Lope Fernández and Mateo Viña had also contribut-ed
with personal services to The Enterprises in addition to their participation in other areas of
them.
45. RUMEU DE ARMAS, La Conqílirta, Doc. 21, (1496), pp. 440-441.
The combination of a sala. and a share of the profits was customav in Castilian militw en-terprises.
46. SCHUMPETER, The Theoly ofEconomic Developnent, p. 75.
Frank KNIGHT concurs - Rkk, Uncertainty andProfit, p. 289, ref. 1.
wage earners may not have had alternative employment, we would point
out that up to 1492 the War of Granada absorbed large quantities of
manpower and productive resources, probably with lower risks, that after-wards
the American enterprises took up a good share of the slack, and that
the seemingly increasing numbers of slaves sold in Castile without visible
effects on the price leve1 suggest that there were shortages of manpower in
some segments of the Castilian economy.) Without this attitude 2nd mori-vation
it is difficult to imagine the many followers that rendered possi-ble
The Enterprises and who entered into them with rather fiimsily secured
investments or rendered productive services on credit ar4 ihus, became
technically entrepreneurs as well.
The widespread bearing of risks, the methods used to minimise them,
the many modes or participations and competition must have added a dyna-mic
dimension to The Enterprises well worth considering. A temporary mo-nopoly
granted to the promoters may have enhanced <heir attractiveness,
but did not insulate them from competition. The promoters had to face
competitors and competing projects, and had to compete to secure produc-tive
resources. Reference to a competitor, Diego de Ferrera, was specifically
made in a document referring to the «capitulación» with Quintanilla and
Fernández Cabrón*'. He was probably the son of Diego García de Herrera,
to whom Enrique IV had granted the lordship of the entire archipielago in
146848, and he was to be prevented from taking any action in The Islands.
Known losses to the promoters resulting from the breach of their monopoly
by competing entrepreneurS19, suggest the difficulty of enforcing the mo-nopoly,
and that with or without license, there were entrepreneurs prepar-ed
to compete for the oportuniries for presumably higher than average re-turns
on investment offered by The Islands.
Such opportunities existed as well in alternative projects, theoretically
also examples of enterprises demanding entrepreneurs in Schumpeter's sen-se.
Falling squarely into this category are the trade ventures to «La Mina de
Oro»5O, Guineasi, «Befberia»j2, and the ~merican voyages after í49¿.
47. FERNANDEZ DE NAVARRETE, Colección, Apén. Núm. VII, p. 398.
48. RUMEUDEARMAS,EspañaenelAf&a, 11, Doc. IV,pp. 6-8.
49. ----L,a Conquirta,D oc. 8,( 1493). pp. 495-497.
50. FERNANDEZ DE NAVARRETE, Colección, Apén. Núm. 111 (1478), pp. 386-389,
Apén. Núm. V, (1480), pp. 393-394, Apén. Núm. VI, (1480), pp. 395-396.
5 1. RUMEU DE ARMAS, Esplaña en eZ Afn¿a, 11. Doc. Num. V-VI1 (1475), pp. 13-14.
n e enthusiasm evoqued for the enterprises to La Mina de Oro and Guinea is reflected in the
These alternative investment o-p p- ortunities must have exerted a competitive
pressure to obtain key productive resources, such as vessels and specialized
manpower, that were equally indispensable to them and to The
Enterprises. Similar pressures came also from activities that, being older
practices, might be better classified as routine business, such as the «African
Fisheries~w, hich in 1490 were rented to Juan de Venegas and Pedro Alonso
Causino , shipowners of Palosr3.
The productive resources required by the above mentioned enterprises
and routine business, along with the necessary consurnptive and interme-diate
goods to carry them out, had to be obtained in Castile and in compe- m
tition with ordinary business and consumers. A simple perusal of a set of
E accounts of the conquest of Gran Canaria will readily confirm thats*. At the O
same time, these accounts illustrate the demands that the conquest and set- -
tiement of The Isiands made upon <he economy of Zastiie, that prpduction m
O
E
for the market characterised at least an important sector of the Castilian SE
economy, and how productive resources were drawn out of the routine sec- E
tor of this economy for the enterprises to The Islands, as required to satisfy 3
Schurnpeter's theory. Al1 these aspects, however, will be seen in detail in
section 111 of this paper.
-
0
m
E
These accounts represent only a fraction of the requirements of The O
Enterprises to conquer Gran Canaria, needed there to re-supply the main
expedition. They embody a variety of goods and services available in Castile, E
and range frorn foodstuffs and victuals to finished and semi-elaborated a
goods. Amongst the foodstuffs and victuals we find wheat and barley, and
processed items, such as wine, oil, vinegar and the only made-to-order pro-
-
duct mentioned in these accounts: biscuits. The finished goods form an O3
well known commentaries from the conternporaty chroniclers Hemando del Pulgar, Andrés
Bernáldez, and Alonso de Santa Cruz.
52. RUMEU DE ARMAS, España en elAfnca, 11, Doc. VI11 (1480), pp. 15-16, Doc. IX
I IAQI I ,.,. I Y I Q , nrirY TTT-YTV ~ I A O ? \ ?Y?/: nrirm 7 I IA OXI . *, A n -." -"L. LL..L-zs., , {.7/A,, yy. *A-*=, -"L. Z-h 7 , \A=/",, y. 7".
JIMENEZ DE LA ESPADA, La Guerra delMom, passirn.
LADERO QUESADA, U m Cuentas, pp. 98-100. The Marquess of Cadiz stirnulated fur-ther
those enterprises by reducing 113 of the customary Fifth owed to hirn by the successful en-trepreneun.
53. RUMEU DE ARMAS, Espaga en e Z A f k , 11, Doc. XI, (1490), pp. 20-21. This was
notified to the ports of Palos, Moguer, Huelva, Gibraleón, Cartagena, Lepe, Ayamonte, San--
lii.r...a . r , -P i.i e.~.r r.n. d -e. S. a... .n r-a- M-. -a..r..í.a., anri n- t h ~ r c
----<,L as Pesquerías Españolas en la Costa de Africa. (Siglos XV-XVI)», Hispania, XXXV, Ma-drid,
1975, pp. 295-319, pp. 295-312.
54. Miguel Angel LADERO QUESADA, «Las Cuentas de la Conquista de Gran Canaria»,
Anuano de Estudios Atlá~ticos1, 2, 1966, pp. 11 -1 04.
interesting catalogue: a variety of weapons (swords, lances, crossbows, hel-mets),
shoes (some made in Cordoba), needles, horseshoes, nails, pieces of
harness for horses, shirts made of linen from Britanny (probably made in
Castile, since cloth was normally exponed unfinished and in bales), gun
powder (at the time freely manufactured in Castile)ss, metals such as lead
and iron from Milan or Milan type, and a compass. The list of intermediate
and productive goods includes leather for soles and shoes, thread, tools,
cauldrons (probably for making sugar), equipment for sugar mills and flour
mills, bricks for ovens (presumably for bakers and smiths), components to
make arrows in Gran Canaria, a vessel in parts to be assembled there, as
well as spare sails, ropes, masts, boxes, casks, and other containers.
Exarnples of productive services acquired in the Castilian market are
also prominent in these accounts. Chanered vessels, one clearly showing its
mode of ownership by shares56, and payments for overland transportation
services are mentioned frequently, and there is an instance of the renta1 of a
beast of burden, which was common in Castile57. The availability of these
services bespeaks the existence of a segment of the Castilian economy that
specialized in supplying transportation. Payment for professional services to
shipbrokers, shipwrights and various shipbuilding specialists, carpenters,
and others, along with the array of goods prchased in the market indicate
that many in the Castilian economy lived chiefly by supplying specialized
services or goods to the market. Further evidence that the market operated
in at least a sector of the Castilian economy comes from the mention of im-poned
goods in these accounts; for in the end, impons are never paid with
«money», but with local goods and services, regardlees of the origin of those
acting as intermediaries58.
Since no central authority allocated the goods and services referred to
in these accounts, or was in a position to do so, we must conclude that, for
the most pan, the requirements to carry out The Enterprises had to be pro-
55. Jorge VIGON, ElEjército de b s Reyes Católicos, Madrid, Editora Nacional, 1968, p.
249, also p. 245.
56. LADERO QUESADA, Las Cuentas, p. 20.
57.Carlos Alberto CAMPOS, EntrepreneurialSpirit andthe Climate of Business in Caszde-
Aragon Before the Incorporafion ofAmerica, M.A. Dissertation (currently being prepared for
publication), Carleton University, Canada, 1980, p. 20.
58. iüdwig von MISES, The Theory of?víoney ana7Crea?t, Transiared frorn the Geman by
H.E. Batson, London, Jonathan Cape, 1953, New enlarge edition, First English translation
1934, p. 252, see also pp. 242-252.
One of rnany posible authorities that could be cited. Most econornists agree on this point.
cured in the market, and competitively bid away from other users. Up to
this point, we have spoken about competition in the classical sense of rivalry
amongst buyers and sellers in the market place. Competition, in this sense,'
looks at the business organisation as a single unit in its relations with the
outer world. Burton Klein has expanded the theoretical notion of competi-tion
to include the inner world of the business organisation59. Competition
can exist within a business organisation; and must have existed within the
enterprises under consideration.
Diversity amongst the participants and the organisation of The Enter-prises
was bound to produce that. Diversity existed not only in the social
and economic background, and in the psychological make up of the partici-pants,
but also in their economic interests. From a business organisational
point of view, we may describe these ventures as a large umbrella organisa-
+<A- L;VII -,;W+l.. ILU Aa a&ir- im5! La uvLl+a-iIli u+ -~,Lb .c.-~ .a.- iudv 2~ i. i.u.i.iei b -c.i. u-L1 -a. .u b -v..Ai u:--i--i i a c C------~-A---~ L C I ~ ~ ; > C >
dependent upon the success of the main objective. Thus, the normal con-flict
between people with different backgrounds and different perceptions
of the world, was certain to have been heightened by conflicting personal
interests pursued concommittantly. These differences amongst the partici-pants
who, arrayed in accordance with their primary needs in life, from to-tal
adventure to total security were also bound ta have differed, may have
been an invaluable asset -even a necessary condition- for the success of
The Enterprises.
A traditional theoretical emphasis on the analysis of similarities
amongst groups members has resulted in overlooking the differences be-tween
them. Departing from that tradition, Georg Simmel considered the
perceived differences between members of a group to be far more impor-tant
than the perceived similarities in determining individual action. The
practica1 interest of members, he said, would make them concentrate on
their perceived differences in order to know what gives them advantages in
m. rheir deaiings with others. lnis observation was vitai for an individuai
member in order to use other members of the group and to adapt his beha-viour
to them". Modern theorising and research in group psychology un-derlines
the constant vacillation felt by group members between identifying
themselves with the group and stressing their individuality. This tension is
L L
59. KLEIN, Dynarnic Econornics, passirn.
60. Georg SIMMEL, The Sociology of Georg Sirnmel, Trans. K.N. Wolf, New York, Free
Press. 1959, p. 30.
regarded as essential to preserve group unitybl. The perceived social and
economic diversity arnongst the members of The Enterprises may thus have
furnished the basis for their association and affected those organisations as
an ongoing group, intensifying internal competition and cooperation be-tween
the participants, whilst strengthening the organisation's overall goal
as a way of preserving group's ties and cohesion.
The reciprocal forces of competition and coopc.xion within must have
been further augmented by the temporary nature of these organisations,
which newly formed, were likely to have fostered greater interaction
amongst their members whilst at the same time evoking less caution in their
pursuit of influence in The Enterprise and control of it. Free from the scle-rosis
that tends to set in older permanent organisations, The Enterprises are
also likely to have been more alert organisations, more reactive to externa1
circumstances, and more adaptable to them, than more established structu-res
could have ever been. Their sucess does not appear to have resulted so
much from one brilliant entrepreneur planning the conquest to the minu-test
detail as from the interaction of a large number of entrepreneurs pursu-ing
an overall objective along with individual goals, whose attainment
hinged on achieving the primary objective. From an organisational as well
as from an economic point of view, the participants were thus prodded by
two interests: simultaneous competition and cooperation. In the absence of
an able interplay between them, it seems obvious that neither general nor
individual success could have been obtained
The quality and intesity of that interplay may have been a vital factor
for success. Burton Klein asserts that the greater the uncertainty of the envi-ronment
in which an organisation exists, the greater are their internal inter-actions62.
Statistically speaking, The Enterprises were carried out in a world
of strong uncertainties, because probabilistic predictions could not be made
regarding the dilemrnas that would arise in the pursual of their goals or the
p~ssih!e ways of solving them. Though we have seen severa1 methods of
shifting risks, and various procedures LO guarantce credits that reduce the
risks borne by some individual participants, since in effect they resulted in
making a single credit run statisticall~i ndependent chances of default,
none of these practices fundamentally altered the uncertain environment in
which The Enterprises were carried out.
61. WEICK, Tbe SocidPsycbology, p. 15.
62. KLEIN, Dynamic Economics, pp. 140-176.
The Crown added to that uncertainty: the evidence suggests not only
that her promises and guarantees were written on very thin paper, but also
that she was incapable of fast responses, none of which could have gone to-tally
unnoticed by the entrepreneurs. In addition to that, the world in
which The Enterprises existed was not only completely removed from the
«given» environment of Bayesian probability theory, but also physically re-moved
from any Castilian political jurisdiction, so that there were not even
political friends on whom to cal1 for temporary assistance or a suitable
change of the rules of the game.
Having to contend with a world of high uncertainties and having no re-course
to manipulate it in their favour must have exerted a continuous pres-sure
to internalise risks upon The Enterprises; that is, to deal with dilemmas
when and as they arose. Under such conditions there were greater incentives
for these organisations to engage in risk taking. and since there were no
known alternatives to some of the most serious dilemmas that may have
confronted them, there were greater possibilities that they would be resolv-ed
in an imaginative fashion and that adjustments could be made in the be-haviour
of The Enterprises as demanded by circumstances.
Lugo's decision to risk al1 and press ahead when the Crown failed to
provide the promised transportation from the mainland to Tenerife is a
good example of fast reaction and adaptive behaviour under an increased
leve1 of uncertainty. It was a decision demanding a greater leve1 of risk-tak-ing
for The Enterprise as a whole as well as for the individual participants;
and as such, one unlikely to have been taken without the acquiescence of
the majority arnongst them. Approval could not have been granted lightly.
Lugo's creditors were confronted with perhaps the hardest choice: the deci-sion
demanded from Lugo to go heavily into further debt, thus not only
weakening his already strained ability to repay, but also making Lugo a
poorer credit risk, by saddling him with a worsened debtlasset ratio. At the
s 2 ~ he e , w ith an entended time I,e:izm 2nd highe: t i ~ 2end r n ~ ~ e t a r y
costs, a greater share of the expected returns would have been required to
cover costs, and a slower turnover on investment could not be avoided. Big
and small investors alike can be visualised as been on the horns of an acute
dilemma with equally unpleasant alternatives: to press ahead with higher
risks and costs, orto quit, cutting their losses but removing themselves fur-ther
from recuperating them, and completely from potentially high returns.
Though the participants may have never conceptualised the situation
in this fashion -and even nowadays perhaps neither would we- it is use-
ful to think of them as facing a very small portion of their trade-off cutve
be-tween time and cost uncertainty. Technically, a smooth trade-off cutve
exists only when there are «known» statistical uncertainties. Given the fresh
experiences of Gran Canaria and La Palma, the participants could expect
Tenerife to be eventually conquered. But it was impossible to predict when;
and that meant an ill-defined limit to the time and cost uncertainty of the
enterprise. The decision of Lope Fernández to se11 for 16,000 Ducats his ha-cienda~
a nd «ingenio» (Sugar mill) in Gran Canaria to assist Lugo may have
been prompted by the much respected behaviour of Lugo on that occasion.
However, Lope Fernández' impressive record as entrepreneutd3 would sug-gest
that the aationalitys of his actions did not consist of imagining less un-certainty
than there really was, but rather of reappraising the situation and
extracting new conditions reflecting the new risks and uncertainties of his
investment .
At the other end of the scale, the smallest entrepreneurs may not have
been confronted by such complex problems, but faced nonetheless perhaps
more vital decisions. Those contributing to The Enterprise only their per-sonal
services on credit may have had only a choice between losing their ac-crued
wages and forfeiting any claim to a share of the spoils, or deferring
those claims further into a mote uncertain future. In the end, there were
none of the alternatives imaginable in a sedate, static environment. With-out
greater risk-taking, this particular dilemma, which the participants and
the participants alone could resolve, would not have been resolved.
There is a strong suggestion thetefore, that the incentives created by
the pressure to internalise risks, combined with the peculiar make up and
organisation of The Enterprises, resulted in a greater ability to deal with
uncertainty, to survive, and eventually to succeed. Not only were high
rewards attainable upon meeting the general performance goals within he
time and monetary cost constraints, but dependent on the sucess of the
main enterprise was that of individual subordinate ones, creating strong in-centives
to increase its dynamic efficiency. As defined by the dynamic theo-ry
of Burton Klein, this meant incentives to use the committed productive
resources in such a manner that the general and individual objectives were
accomplished and the new economic opportunities uansformed into realities.
63. LA ROSA y OLIVERA, EIConqzirtadorLope, pp. 6-7, 10-12.
ROSA OLIVERA y SERRA RAFOLS, Residencia, Interrogatorio, CLIX, p. 115, (Amarillo).
To determine whether dynamic efficiency was achieved would require
measurements and a type of analysis for which the fundamental data are
wanting. Wowever, by focusing alternatively on individual behaviour and
overall performance (rnicrobehaviour and rnacroperformance in Klein's ter-minology),
it is possible not only to illustrate many of the points raised in
the prior discussion, but to draw conclusions which are entirely consistent
with those reached above and with the ideas set forth by Schumpeter.
We shall endeavour to demonstrate further those conclusions and ela-borate
on the relationship between microbehaviour and macroperformance
in chis sectim, whi!st ztte111pti~gte !imn a p amr z ~ i cvi ew of the «&e en
valeun of Tenerife. Particular attention will be paid to some of the serious
problems to be overcome in that economic pursuit, including a necessary
detour with the African ventures of Lugo, which sapped productive resour-ces
from the Islands, because we believe strongly that it is against this back-ground,
even only in its broader contours. that the calibre of entrepreneur-ship
responsible for the creation and the seizing of economic opportunities
in a world of high uncertainties can be seen and assessed best.
The documents at our disposal permit us to identify a seizable number
of entrepreneurs, representing a wide cross-section of the Castilian society,
cornpeting to secure productive resources and to carry out enterprises in that
world of high uncertainties, and cooperating with each other in the conven-tional
as well as in Klein's cense, by imposing risks upon each other -be-cause
for this author entrepreneurial self-interest and risk-taking are not
enough in a dynamic world. In the absence of simultaneous competition
and cooperation the results attained by these men seem most unlikely.
In Schumpeter's view, any economic actor, however briefly, has a
chance to be an entrepreneur at least once throughout his economic life.
Most men would not see it, some would seize upon it. A few amongst the
latter, either on account of personal characteristics or favourable circums-tances
were able to remain entrepreneurs during most of their business
iives, and thus became something approaching a «professionaL entrepre-neur.
Men like Lope Fernández, and particularly Lugo, emerge from those
documents as almost akin to Schumpeter's «professionalw entrepreneur.
Both men, had at the end of their lives, managed to assemble an im-pressive
array of real estate and other property which required heavy invest-
ments and imaginative management to developa. It is most unfortunate
that we know next to nothing about their beginnings. Many details of their
activities reveal their bold entrepreneurial nature, as well as their resource-íulness
and managerial skills, but knowing neither the economic base from
which they started nor the restrictive covenants, mortgages (or more accu-rately
live gages)65 and other obligations to be weighed against their assets
(in some instances very onerous ones)66, it is impossible to assess how well or
how badly they really performed from an accounting poinr of view. It is di-sappointing
not to be able to use interesting information, such as the sale
by Lope Fernández of irrigated land in Gran Canaria in 149 1 for 100 carro-bas
» (1 arroba = 25 Lbs. or 11 ,> Kilograms) of white sugar to Vasco López,
who subsequently sold it in 1506 for 1,500 «arrobas» of sugar of the same
quality. Quite simply, this information is economicaily meaningless unless
we have some idea of the rate of inflation, the improvements that were
made in the property, and the accuracy of the price measurements, a noto-rious
source of errors of observation. However, with the reader's indulgen-ce,
we might be able to ovetcome some of these obstacles: as entrepreneurs,
our men can be best appraised through their actions in the field.
The behaviour of the conquerors immediately after the conquest of
The Islands is a good indicator of how undeveloped they were relative to
Castilian standards, and that the slow materialisation of the expected gains
from the main and subordinate enterprises was a major hurdle to be over-come.
Slave hunting and c'ave trading have always been potentially lucrati-
64. Ibid., Diversos, Doc. 16, (1506). pp. 164-166, Doc. 17, (1515), pp. 166-171, Doc.
22, (1525), pp. 179-184, Doc. 25, (1507). pp. 187-189.
LA ROSA OLIVERA, ElConquütadorLope, pp. 6, 10-12, 22-28.
In spite of the indictment of this author against the activities of Lope Fernández («he was
more a merchant than a farmer*. -p. 12), from an econornic point of view, there can be no
question that the presence of men who undentood speculation was indispensable for the eco-nornic
deveioprnent of the isiand and even to ensure the viability and survival of the «tme far-mem.
Both the Re~idence and the Reformaxión contain valuable inforrnation about the eco-nomic
activities of Lope Fernández and Lugo.
65. Since her lender normally took possession of the land and retained it, until the loan
was repaid. Meanwhile, the lender was entided to keep any of the crops or rents earned from
the land. For an example: Serta y de la Rosa, Reformación, Apéndices, pp. 244-245, (1515).
66. José PERAZA DE AYALA, <El contrato agrario y los censos en Canariasu, Anuario de
Histon'delDerecho Español, XXV, Madrid, 1955. p. 287, ref. 92.
The inhability of Lugo to meet the sureties required to becorne the iegai tutor of Guillén
and Inés Peraza, the children of his second wife, Beatriz de Bobadilla, is a further indication of
the difficulties one fin& trying to assess Lugo's net worth and how unreliable is real estate as
an indicator of wealth. For the documents about the Peraza minors see: SERRA y DE LA RO-SA,
Befomación, pp. 165-167.
ve undertakings, but the emphasis on this type of activities during the early
stages of the conquest surely indicates the absence of available economic al:
ternatives in The Islands and the need to find a faster turnover of the capital
invested as well as means to finance the productive resources and the time
required to deveíop their economic potential.
Inmediately after the conquest of Gran Canaria, and well before the
conquest of La Palma and Tenerife was attempted, one «cabalgada» after
another was carried out there and along the African coast without apparent
ill effect upon the Castilian or fot that rnattet the Valencian market price
for slaves, which would suggest the presence of labour shortages in those
economies67. The African «cabalgadas» were further stimulated by granting
Pedro de Vera 50% of the Roya1 Fifth belonging to the Crown «in payment
of past services»6*.
Cven those enterprises were not without shoricomings. The expectcd
quantity of slaves captured in a raid may have had to be higher in order to
compensate qualitatively for the captures that could be made in the Iberian
campaigns or closer to the home waters. The market price that a Guanche
or another «Canario» or Negro could fetch was not comparable to the ran-som
that could be extracted for a wealthy merchant, landlord, or an impor-tant
Moorish official. Admittedly not al1 those captured in or near the Ibe-rian
Peninsula would fa11 into that category, but even the lowliest Moor was
used to organised work, and likely more able to perform a task suited to the
Castilian economy than a «Canario» or a Negro. Al1 other things being equal,
a Moor might have been regarded as a better investment even as a nawy and
thus as a better prospect to reach a higher price at the auction block@.
67. Vicenta CORTES. La esclavitud en Valencia durante el Reinado de los Reyes Católicos
(1479-1516), Valencia, Excmo. Ayuntamiento, 1964, passirn.
Alfonso FRANCO SILVA, La Es~cavitude n Sevilla y su Tierra afines de bela Edfd Meedia, Se-villa,
nld, 1979, passirn.
LADERO QUESADA, Unas Cuentas, pp. 98-100.
---- , «¿a esciavitud por guerra a fines dei sigio XV: Ei caso de Maiaga*, Hispania, Tomo
XXVII, Madrid, 1967, pp. 63-88.
----L,a s Cuentas de la Conquista, Doc. 3.3.3., pp. 81-89.
José-Enrique LOPEZ DE COCA CASTAÑER, «Esclavos, Alfaqueques y Mercaderes en la
Frontera del Mar de Aiborán (1490-15161>H, ispaaia, XXXVIII, Madrid, 1978, pp. 275-300.
José SANCHEZ HERRERO, Cádiz, La Ciudadhiedievaly Crirtiana, (1260-1J71), Córdoba,
Publicaciones del Monte de Piedad y Caja de Ahorros de Córdoba, nld, pp. 161-168.
68. LALiEiiZ, QiiESADA, Las Cuentas &la Lonquhta, Doc. 3.3.2., pp. 79-S.
Lugo was also the recipient of a similar franchise: ROSA OLIERA Y SERRA RAFOLS, Re-sidencia,
Diversos, Doc. 2 (1492), pp. 148-149.
69. CORTES,Laesclavitud,pp.103-104.
LOPEZ DE COCA, Esclavos, A&queques, p. 282.
FRANCO SILVA, LaEsclavittla', pp. 105-120.
staggering. Those awarded land for example, must have seen the capitali-sation
of the grant retarded, and with it the capitalisation of The Island's
economy must have been retarded as well.
The existence of these problems and some of their consequences in
The Islands is beyond doubt -al though they sould be treated with cir-cumspection,
because it is bad or troubled business that normally leaves tra-ces,
but statistically tends to be a minority in any economy. It is most inte-resting
that Lugo himself affected by the same problems in spite of his po-wer
and position.
To some extent, these problems may have been a major reason behind
his entrepreneurial behaviour after the conquest of Tenerife. The pace of it
was most striking. Lugo may have been forced to keep entrepreneurially
very active, for it seems that despite a discernible unity of purpose in al1 his
endeavours he spread himself thin, spending and investing heavily and pro-bably
mostly on credit. If Lugo's financia1 position was as precarious as it
seems, it made excellent business sense to keep as active as possible. Main-taining
his credits and debts rolling rnay have been irnportant, since creditors
would have been tempted to foreclose or otherwise seek repayment more
eagerly unless bright and renewed prospects of gain were clearly visible on
the horizon.
The African ventures, a potentially good source of badly needed cash,
must have been considered by Lugo amongst his top priority options. On
2nd. October 1499 Lugo signed a new «capitulación» with the Crown, this
time to conquer the «Verberia» coast of Africa, from Cape Aguer to Cape
Bojador. Once again, the Crown contributed preciously little to the
enterprise; Alonso de Lugo committed himself to cover al1 the costs, includ-ing
the building of three fortresses and the recruiting of an army of 50 «Lan-zas
» (that is, about 250 men, 50 knights on horseback and assistants) and
300 foot soldiers. In return, Lugo obtained the usual set of promises: he
would be the Captain and Governor General of the conquered region for
life, with a salary of 365,000 Maravedis per annum, and he could be involv-ed
in the «rescates» with those the Crown would send to the area for this
purpose -an interesting clause we shall examine in detail. Lugo's expenses
were to be reimbursed from the first proceeds of the enterprise. Once that
debt was satisfied, Lugo was to receive 20% of the rents to be collected in
n._ -.:. L - --~- .-c-.. T ..-. > . T T . - . ~ . J /--.-.L... I &--.-. «Drrveria» vy way or a «juro uc nrreuau> (ycrpcruq aririuiry .asigricu upori
the revenue of the Crown) transmissible to his heirs. Lugo was to be the
«Alcaide» of the fortresses to be built by him at his expense, but the salaries
and rents corresponding to these «Alcaidías» as well as those of Captain and
Governor General were to be paid only from the revenues accruing from the
enterprises and not from any other source74. In the same vein, Lugo could
carry out «cabalgadas» against rebel or enerny Moors at his expense, and was
granted half of the customary Roya1 Fifth to be levied upon the earnings
derived from those activities.
In other words, as on previous occasions, the Crown was entering into a
sound business arrangernent and incurring neither risk nor expense, both
lying squarely in the entrepreneur's lap. The commercial concerns of Feman-do
and Isabal with regard to these enterprises are manifest in a paragraph of
the instructions given on 20th. June, 1500, to Antonio de Torres, «Veedor»
(Crown's Overseer) to supervise Lugo's actions and expenses. He was com-manded
in a thorough fashion to verify Lugo's expenses and to deduct al1
those he did not judge to be strictly indispensable for the construction of
AL- C-------- ,.-A cL- ..:-L:l:+.l +La a-+a--C;PP M ~ P P; n t ~ r ~ c + ~fnnrm A I I ~ ulr l u l u c . 3 3 C . 3 auu u1L vlnwluLy ~f L u L L u L u y I u L . A r l v x b u ~ C b ~ ~ o C ; I I S
purpose is that Torres eas ordered to gather comprehensive intelligence
about the best season, rnanner, and locations to carry out «rescates» in the
region to be conquered by Lugo. He was to find out which items would be
most profitable to take along for that purpose, and to repon the best terms
that, in his estimation, thr: Crown could be able to secure from third parties
interested in undertaking «rescates%in «Berveria»75.
The surreptitious behaviour of Fernando and Isable is most suggestive.
Though the gathering of intelligence could not have been alien to people
with their military and political experience, the kind of interest exhibited
by thern on this occasion bears the mark of those who feel at home in the
business world, who could think and act in business terms, and who were
thus bent on maxirnising the business opponunities they decided to seize
upon. This first-hand experience with business is unlikely to have existed in
isolation. It reflects an attitude entirely consonant with the generally favour-able
business climate that would seem to have prevailed at the time in Cas-
-:1-7L --A -. -.-.- 12 -.- cL- L.-.-:-aco i-r7nlT,--~*+o n -nnx7 e n , , ~ -
LUL.-, ~ L I U whi~hw u u l u LiiL v u a i i i c a a i i i v v z v L i u L r i w vf i r i a i i y c v u i b -
iers and court off~cials.I t is hard to believe that they could have been enti-rely
unaware of the business consequences of their decisions.
74. ROSA OLIVERA Y SERRA RAFOLS, Residencia, Diversos, Doc. 9, 2nd. October,
1499, PP. 156-158. -- t . &a!, Doc. i0, 29th. juric, ;XG, pp. I;O-:VO, Eoc. 11, 12, 13, sziic &:e, pp.
160-161.
76. Campos, Entsepreñeun'a/ Spin't, passim.
As fate would have it, the enterprise to «Berveria~e nded in disaster.
Surprised by a superior Moorish force in San Miguel de Saca, towards the
end of 1500, Alonso Fernández de Lugo was lucky indeed to save his life.
He suffered many casualties amongst hard to replace settlers from The Is-lands
who formed the bulk of his force, including many members of his fa-mily
and a monetary loss that Lugo claimed to have been upward of
10,000,000 Maravedis77.
The opportunity to make up his losses eluded him this time. Alonso
de Lugo prepared with astonishing rapidity a second expedition to «Berve-ria
» and had successfully established a bridgehead at Cape Aguer (Agadir) ,,
around September 1502, when the Crown ordered him abruptly to cal1 the n
E enterprise off, after the foundations of a fortress and considerable work had
O
already been completed. It seems that a diplomatic agreement with Portu-n-=
& cxose d J--.-.-- -r &l - P m
LIIC UCCWIUI~0 1 CLK Lrown. «Tnings were going weii this time» O
E
-as Lugo's wife Beatriz de Bobadilla bitterly stated78- and Lugo compli- E
2
ed with the Royar Order, &ter spending al1 the had on the effom79. =e
The contractual details of this second enterprise to uBerveria» are un-
3
fortunately unknown; the havoc caused to the finances of the leading entre- -
preneur, however, is only too palpable. Many references to these economic -
0m
E problems in the Memorial and his Residencia and in the Proceso de
O
Reformación del Repartimiento de Tenenye point clearly to a dangerous g
compounding of Lugo's financia1 diffkulties. Lugo's deposition at his Resi- n
E dencia, and particularly the summation -after making due allowances for -
a
the circumstances in which it was made- is adroit, and reveals in clear 2
n
words and syntax the attitude and poise of a man of action, a cool tactician, 0
quite sure of himself and not unjustifiably proud of his achievements, who 3 0
in 1509 was yet to have received a single Maravedi for his expenses80.
Beatriz de Bobadilla seems to have forecast this problem, as can be
gathered from a direct, even terse letter addressed in 1504 to Queen Isabel
77. ROSA OLIVERA y SERRA RAFOLS, Residencia, Memorial, XXXVII, p. 26,
IXXXVII, p. 46, Interrogatorio, X, pp. 53-54, CX., pp. 106-107, esp. (El Vicario), p. 107.
An interesting point in the testimony of the latter is the exhaustive examination of the ac-counts
of this enterprise by the <;Veedon~T orres, which would suggest that the Crown was
obliged to pay for at least some of the expenses in case of failure.
78. SERRA g LA ROSA, Rfi.mnri&, Memcrid de EoBa Eeafriz de E&di!!r, 7:h. 0 c -
tober 1504, pp. 190-191.
79. ROSA OLIVERA y SERRA RAFOLS, Residencia, Memorial, LXXXVII, p. 47.
80. Ibid, pp. 44-47.
and King Femandogl. Her foreboding was not only attributable to feminine
intuition: in addition to vas business and political experience and a firshand
knowledge of the Court, she had a personal financial interest as entrepre-neur
in the African enterprise. We know that she had been the victim of a
fraud in connection with the sale of 144,000 Maravedis worth of orcheal to a
merchant of Majorca, Mateo Bofill, carried on a vessel owned by the Casti-lian
noble Pedro de Portocarrero and mastered by Juan Sánchez, who man-aged
to spirit away from Seville without paying for the merchandise. The
proceeds from this sale were destined to buy supplies in Seville for the expe-dition
to San Miguel de Saca82, and most likely it was not the only financia1
involvement of Beatriz de Bobadilla in that enterprise. A few months after
the disaster of San Miguel de Saca Lugo pawned clothes and jewelry belong-ing
to himself and to his wife to Gonzalo de Burgos in order to satisfy debts
to the owners of vessels chanered for the enterprise83.
Aside from Lugo and his wife, many more seem to have been adverseiy
affected by the outcome of the African enterprise, as it transpires from the
depositions of Lugo's Residencia. In some cases the damages caused appear
to have been quite seriours, even if we dismiss al1 the exaggerations, feign-ing,
and venting of enmities that a judicial process of that sort was bound to
encourage. Although Lugo had compensated some of the panicipants or
their heirs as early as 1503@, most claims seem to have been pending in
1506, 1509, and as late as 15 1185. To make matters worse, Lugo was far
from clear of debts incurred in the conquest of Tenerife. Nine years after-wards,
Jerónimo de Herrera, a merchant from Seville, was still pursuing
court action for payment of goods he had contributed to The Enterprise86.
Funher evidence of Lugo's suained finances are his being forced to make
81. SERRA y LA ROSA, Reformación, pp. 190-194.
82. RUMEU DE ARMAS, España en ef A f k a Atlántica, 1. pp. 344, 363, ref. 34; 11, Doc.
XXXVIII, (1500). pp. 88-89.
A good idea of her entrepreneunhip and her interest for this typc of cnrqriccc. hdoo mar-rying
Lugo, can be gathered from her approach to the Crown in order to gain acceptance as an
investor in The Entepise of Lugo to La Palma -RUMEU DE ARMAS, La Conqaicta, Doc.
13. (1494). p. 432. Referentes to her political acumen, from witness at Lugo's Residencia:
ROSA OLIVERA y SERRA RAFOLS, Residencia, Interrogatorio. XII, p. 55-56.
83. Ibid., Interrogatorio, CXXXIX, p. 106, (Amarillo).
84. RUMEU DE ARMAS, Esparia en el Afeca, pp. 359-360; 11, Doc. LXVIII, (1 5O3), p.
126, Doc. LXXVI, (1506), pp. 146-150.
85. This is obvious from a pemsal of the Refonnación and Residencia.
ROSA OLIVERA y SERRA RAFOLS, Residencia, Reales Cédulas, 7, (15 1 l), p. 137-138.
86. RUMEU DE ARMAS, k Conquirza, Doc. 48-50, pp. 475-481.
provisions for the payment of 500,000 Maravedis interest on a debt to the
Riberol father and sons during the preparations for the enterprise to San
Miguel de Saca, and to make other settlements87. Strangely, there are no
records of losses suffered by Mateo Viña of Lope Fernández in the African
enterprise, to which one is almost sure they had contributed. If that was the
case, their claims must have been settled before 1506, when they had a
good chance to speak out at the Reformación del Repartimiento and make
their own cases look strongeP.
In 15 11 Lugo was still making presentation to the Crown for the rein-bursement
of his expenses. No evidence is known of them having been ever
paid to Lugo in full or in part, or having been finally repudiated by the
Crown. In contrast to this apparent inaction of the Crown, Lugo was com-manded
to pay al1 outstanding salaries to the participants in the enterprises
to San Miguel de Saca and Cape Aguer in 151189. Al1 Xugo seems to have
received from the Crown in compensation for those enterprises was the title
of «Adelantado, which carried with it the treatment of <Magnífico Señor,
and considerable prestige, but meant neither any real additional power for
him nor stimpends, salaries or financia1 rewards of any sort.
By contrast, it is remarkable that the Crown found money to pay punc-tually
at least the first instalment of the salary of the appointed «Veedar>>
for the African enterprises and the man required to gather business intelli-gence
for the Crown's benefit. Antonio de Torres received 90,000 Marave-dis
on 25th. June, 150090. Not only was he personally a well esteemed
87. ----E,s paña en JAj ñ c a , 11, Doc. CVI, (155 1). pp. 217-218. The principal rernained
unpaid at that h e .
88. Lope Fernández, <Maestro Artillerm (Artillery Captain), took pan in the enterprise to
San Miguel de Saca and prior to that accornpanied Lugo to Castile, along with the notary Gon-zalo
de Burgos, during the negotiation with the Crown and other panies in the venture. See:
ROSA OLIVERA and SERRA RAFOLS, Residencia, Interrogatorio, X, p. 54, (La Laguna), and
RUMEU DE ARMAS, España en dAfkca, 1, pp. 321,332, ref. 2, 341.
Given his high ~moponeuria!a nc! pi!iticd p f i ! ~~t & e :il?\le, gfid h$ psir ecoi2 aj in-vestor
and active participant in earlier enterprises it seerns unlikely that he had not contributed
financially to the African enterprise. The sarne would apply to Mateo Viña.
89. RUMEU DE ARMAS, Erpaña en dAjñca, 11, Doc. CI, (June, 1511), pp. 207-208.
Lugo seems to have countered with renewed efforts to obtain cornpensation -Doc. CII-CIV,
(July-October. 15 1 l), pp. 208-215- but, at the sane time. his nephew was claiming payment
frorn the Crown of salaries owed to hirn as a ccontinoa for his participatin in the African enter-prises
-Doc. CV, (October, 1511), pp. 215-216 In v i m of thic Iugo's movr camcc he :e
garded as exclusively tactiral.
90. ROSA OLIVERA Y SERRA RAFOLS, Re~idencia, Diversos, Doc. 10, 20th. June,
1500.
Court favourite with good connections, especially through his sister91; it
would appear that the Crown attached great importante to his mission, re-cognised
the need to reward his services on time, and was capable of finding
the means to do so. Others equally well placed at the Roya1 Court and more
meritorius were kept waiting «in aeternum» and were frequentl~p aid with
further promises. Unfortunately we can only speculate whether Fernando and
Isabel were well aware of the different make-up of entrepreneurs and bu-reaucrats,
or simply had a keen eye on revenues and wanted to ensure that
their interests were well served.
The Crown's obligation to compensate Lugo may have not been clear
with regard to the enterprise to San Miguel de Saca, but it was unquestion-able
in the enterprise to Cape Aguer. In this case, the precedent of Tenerife
wouid suggest that Lugo might also have undertaken this enterprise entirely
at his own risk. However, the Crown, aside from ordering him to stop the
performance of the contract -it matters not whether the contract was writ-ten
or oral- had repudiated it by necessary implication when entering into
an agreement with Portugal that rendered Lugo's performance impossible:
the breach of contract admits no doubt. Consequently, to determine
whether this particular agreement between Lugo and the Crown established
a master-servant or an arm's length relationship is a moot point; either as
an agent-employee or as an independent contractor Lugo should have been
entitled to a compensation. It seems unlikely that such compensation was
ever paid.
This is not the only instance in which the Crown's actions can be found
contributing more uncertainty to a highly uncertain world and being an
obstacle for the «mise en valeum of The Islands. Sometimes this resulted
from what might have been basically good intentions, marred by conceit,
self-deception and a thorough inconsistency between the Crown's actions
and stated principles. Al1 of them are readily discernible in the instructions
issued by King Fernando to the «Licenciado» Juan Ortíz de Zárate, who on
his orders carried out in 1506 the Proceso de Reformación del Repartimien-to
de Tener@. The «Reformadon> (Reformer) was expected for example to
decide how much water should be made available to the sugar cane planta-tions
in Tenerife, a crop and a territory as unknown to him as to King Fer-nando
and his CounciP. The example becomes even clearer in the «Refor-
91. RUMEU DE ARMAS, Espasa en elAfn'a, 1, pp. 322-332.
92. SERRA y DE LA ROSA, Refomación, P. 5 .
mador'sw numerous revocations of titles to land grantes by Lugo in accord-ance
with powers invested in him by the Crown, terminated just as easily
when there were legal grounds for it as when there were none at all.
From a careful examination of the Reformación del Repartimiento de
Tenen3 it would appear that in distributing land in Tenerife Lugo was not
simply rewarding his family, his friends, and the powerful, but rather com-pensating
investors in The Enterprises and exercising not only a good deal
of business and administrative talent, but a high dosis of plain, ordinary
common sense: Pedro Benítez was surely Lugo's nephew, but he was also an
investor and an active participant in the conquest, as well as a merchant
with business interests in Andalusia who was involved in trade between the
latter and the Canary Islands93; Mateo Viña had made a huge investment to
put his land into production, and not only played a key role in The Enter-prises
to Tenerife, but married in the Island and cimp!iec! alith the residen-ce
requirementsy*.
The recipient of a large tract of land, the Duke of Medina-Sidonia, was
probably the major single capitalist behind the conquest of Tenerife, to
which he contributed with a large armed force and equipment. Granted the
Kingdon of Abona, he made heavy investments in his land with disap-pointing
results95. Subsequently he entered into a partnership with Mateo
Viña to exploit land and «ingenios, in Dabte, and bought land and uinge-nios
» from Lope Fernández, Jerónimo Valdés, and from «as many as he
could», in the words of his factor96.
On the whole, it is clear that Lugo distributed land in Tenerife to en-sure
its setrlement and its «mise an valeurw. Various recipients of land grants
93. Ibid., pp. 19 (Vallejo), 35 (Galván), 55 (Rodríguez), 59 (Vallejo), 64 (Lope Fernán-dez)
, 69 (Las Hijas), 76 (Galán), 79 (Lope Femández) , 86 (Molina) , 87 (Salamanca), 90 (Lope
Fernández); Proceso del Mayorazgo, p. 166.
ROSA OLIVERA y SERRA RAFOLS, Residencia, Interrogatorio, XX, p. 60, XXII, p. 62,
XLIV-XLV, pp. 73-74, XLVIII, p. 75, L. LIII, p. 76, Reales Cédulas, 8, p. 140 (merchandis-ingj,
Diversos, Doc. 23, (1525). pp. 164-165, at that time he was still Regidor of Tenerife.
94. SERRA y DE LA ROSA, Refomación, pp. 40 (Las Hijas), 47 (Valdés), 48 (Llerena), 50
(Albornoz), S3 (Roddguez), 56-58 (Viña), pp. 103-107 (business with shells).
ROSA OLIVERA y SERRA RAFOLS, Residencia, Memorial, XXVI, pp. 18-19, XLIII, p. 27,
LX, p. 32; Interrogatorio, LV-LVI, pp. 77-78, LXXXVII, p. 89, CLXVII, pp. 1 18- 1 19; Diver-sos,
DOC. 8, (1497). pp. 155-156.
95. Ibid., Memorial, LXXXVII, pp. 47-48; Interrogatorio, LXXXVIII, pp. 89-90.
SERM y DE U ROSA, Refomacion, pp. 32 (Vallejo), 38 (Tmjiiio), 40 (Las Hijas), 46
(Valdés), 48 (Llerena), 50 (Albornoz), 54 (Rodríguez), 56 (Viña).
96. Ibid., pp. 32 (Vallejo), 40 (Las Hijas), 46 (Valdés), 48 (Llerena), 50 (Albornoz), 54
(Rodríguez).
were connected to the conquest of the island, and were thus paid for invest-ments
or for military and other services rendered. Another group of gran-tees
received land in payment of productive or consumer goods brought to
Tenerife or for provision of transportation services to and from the island.
Seeing Lugo's grants in perspective, we must conclude that land given to
travelling merchants was an important enticement to maintain their inte-rest
in Tenerife and so to ensure a vital nexus to the outer world. In its ab-sence
needed imports would have had to be done without; and more im-portantly
the sugar and other outputs produced and warehoused in the is-land
would have been valueless.
The grants cancelled and awarded by the «Reformadon> Ortiz de Zára-te
were in sharp contrast to those aims. In some cases the Reformador's de-cision
was justified through a strict adherence to the conditions under
which &ose grants were awarded, but certainly not to the spirit or the inte-ligent
interpretation of the rarionale behind them. This is more apparent
when we consider that without exception the new land grants were award-ed
to members of the Roya1 Council by gracious concession from the Crown
and against the grand principles laid down in the instructions to the <(Refor-mado1-
97. Those dispossessed to favour the Licenciado Moxica98, the Licen-ciado
Luis de Polanco99, the Licenciado de la Fuenteloo, and the Dr. Lo-renzo
Galíndez de Carvajallol, were a mixed lot, but they were men who
provided essenrial inputs to the conquest and settlement of Tenerife and to
its economic «mise en valeun>.
Yet, if the precedent of Mateo Viña is a good general indicator, it
might not have been exceedingly difficult to circumvene the decisions of
the «Reformadon> Oniz de Zárate. Viña's title to a large tract of land in
Dabte (Daute), which he had developed at a cost of over 2 million Marave-dis
was granted by a «Merced Real» (roya1 favour) to the Licenciado Luis de
97. ibid, pp. 3-6, esp. 5-6.
98. Ibid, pp. 139-141. Amongst &ose dispossessed, playing an active role in the economy
were Juan de Vérriz (pp. 45, 57-58), Fernando Gallegos (p. 44). Francisco Bmxei (pp. 55, 58j.
Juan Ruiz Requena (p. 45), Barrera (45), and others.
99. Ibid, pp. 122-124. An important economic actor in the island dispossessed to favour
the Licenciado Polanco was Batista d'Escaño, (pp. 36,41,49, 57).
100. Ibid., pp. 112-114. Francisco d'Espinosa, who traded between Seville and Tenerife
(p. 40), was one of those dispossessed to favour the Lic. de la Fuente.
101. Ibid, pp. 145-146. Andrés Xuárez (Suárez) Gallinato, nephew of Lugo and brother
ofJerónimo de Vddés, one of the men most active economicaiiy, poiiricaily and rriiliiady iii
the island (pp. 36, 40, 43-44, 46, 62-63, 67) was dispossessed to favour the Dr. Galíndez de
Carvajal.
Zapata, member of the Royal Council. Viña, however, continued in posses-sion
of this property by paying a canon to the new ownerl02. A similar ar-rangement
may have taken place between Blasino Romano and another
member of the Royal Council, the Licenciado Vargas, who was granted Ro-mano's
land in the Valley of Güidmad as a «merced03.
Precedents aside, the «Reformadon> Ortiz de Zárate rnay have been
quite willing to cooperate in overcoming the problems created by himself.
It appears that whilst on a similar mission to Gran Canaria, also in 1506, eh
and his brother-in-law, Juan de Ariñes, Notary of the Cabildo of La Palma,
devised a clever scheme to rake off handsome fees from those whose land
titles had to be approved by the «Reformador~H. e was accused, at the same ,,
time of illegally acquiring and distributing land in Gran Canaria and of E
entering into questionable business dealsl04. O
I-Iiwewr accimidlting the Criwn's envnys 2nd heneficiirries may have n -
=m
been to solve those probiems, the net economic results were undoubtedly O
E
an increase in the uncertainty and the costs of doing business in The Is- E
2
Iands. Had the new land grants been made to people who qualified accord- E
ing to a stricter interpretation of the powers given to Lugo or indeed the 3
~Reforrnadori~t ,c ould be argued that these measures were to serve a moral- --
ising purpose and strengthen the confidence of settlers and investors in Te- 0m
E
nerife. The favoured members of the Roya1 Council, however, would scar- O
cely qualify as settlers who came with their families to put down roots in the
island. The Crown's public flouting of her own rules allowed men who in- n
E
curred neither risks nor costs to make a profit only by virtue of their posi- a
tion. The Licenciados Moxica, Santiago, and Galíndez, for example, sold n
their land titles to Lugolos, showing an easier way of making money than by
entrepreneurial toil. In addition to that, the Crown's habit of contradicting O3
herself -even within six days and through the sarne officials- on the sub-ject
of free emigration to The IslandslM, her little devotion to the sanctity
~f contraas, -,?d a. tcndemy :o uhilgc the i ü k s of :he g m e , especia!!j:
when it suited an increasingly voracious fiscal appetitel07, renders the
102. &d., p. 56 (Viña).
103. Ihd
104. RUMEU DE ARMAS, Espuea en eZAfnm, 11, Doc. XCII, (1509), pp. 191-193.
105. ?.OSA QLIVEPU4 y S E X X h XAFGLS, ,Dejidea&, Eiv-eisos, Doc. i 7, p. 167.
106. RUMEU DE ARMAS, La Conquista, Doc. 29, (141 11 11496). pp. 450-451, Doc. 31,
(20/1111496), pp. 452-455.
107. A measure also taken to favour two members of the Royal Council, the Lic. Luis Za-pata
and Antón Ibañez de Aguirre, if ever implemented, was bound to have such effect. This
Crown a most unlikely source of comfort to investors or settlers in The
Islands.
As Lugo himself stressed, the expectations of the prospective settlers
were high, and so were their demands. He stated in his Memonal that sub-sidies
and free transportation had to be offered to theml08, and Mateo Viña
declared bluntly in a sober and by far the most concise and well balanced
deposition made to the «Reformardor» Ortiz de Zárate, that interested part-ies
recoiled from the heavy investment required to put the new land into
production. They expected «haciendas fechas*, land already in production
or just about to go into itlo9, that is, they -perhaps with the fresh memory
of the Reconquista- demanded an asset with a visible income stream,
rather than the possibility of investing and working to create one.
It is possible that Viña exaggerated, but it seems that the prospective
settlers were rather difficult to please, and other sources state that fewer
fhan expected came to Tener&. Perhaps the harsh reaiirirs of tÍie cady days
deterred many, whilst Lugo's sales pitch may have contributed to create un-realistic
expectations. Lugo assured the Duke of Medina-Sidonia, for exarn-ple,
that «antes de mucho vería maravillas» (he should see wonders in a
short whi1e)llO. Thus, it is not unlikely that credulous people were led to ex-pect
El Dorado, found an inchoate world where plenty was perhaps only at-tainable
after incurring considerable risks, expenses and effort, and became
understandably dissappointed.
Yet Lugo was absolutely right, because that inchoate world was, ai-most
by definition, a land of opportunity. As a man used to taking risks in
order to avoid more serious risks, and to make fast decisions on the bases of
scanty evidence, Lugo was uniquely equipped to perceive the benefits that
time they were awarded a mining concession with absolute freedom to interfere with land in
production and to use water for purpose other than irrigation. The grantees of these mining
rights, either whilst prospecting for them or for the purpose ofexploiting a find, were permitt-ed
to remove materials such as tres and ores that were previously the real property of the ho1:d-er
of absolute title to the land. Thus, these materials became the real properry of the rnining
concessionaires, who were granted an interest in land equivalent to that known as aprofit a
prendre~w, ithout the consent of his owner. It may be argued that chis was technically possible
under Castilian law, which generally appears to have regarded rninerals as a Crown property,
but that does not make the measure less noxious for economic output or economic attitudes.
For text of this grant see: SERRA y DE LA ROSA, Refomación, pp. 242-244, (1515).
108. ROSA OLIVERA y SERRA RAFOLS, Residencia, Memorial, =VI, pp. 45-46.
Lugo's deposition was confirmed by other dedarations: Ibia!, Interrogatorio, XIX, pp. 56-
60, XXIII, pp. 63-64.
109. SERRA y DE LA ROSA, Refomación, pp. 30, S6.
110. Ibia!, p. 40 @Hijas).
could be derived from that world. However, visualising the future of plenty
that men like Lugo could foresee, let alone living up to the challenges of
that land of opportunity, imposed conceptual and behavioural demands
upon the other economic actors that Lugo perhaps underestimated. These
entrepreneurial requirements and the world of high uncertainty that we
have tried to illustrate must be borne in mind for a proper assessment of the
«mise en valeur» of The Islands and the men responsible for it.
The Crónica Anónima de la Conqzcha de Gran Canaria furnishes the
earliest examples of long term investments made with a view to the forma-tion
of a negotiable asset in The Islands, that is, one capable of affording an
income stream that is expected to continue. Captain Pedro de Vera bu& the
first «ingenio» near the Ciudad Real de la Palma using water power, quick-ly
followed by another one employing horse traction owned by the Alférez
Haimes de Sotomayor. Similar «ingenios, were eorted in Ancas, Fiqys,
and Guadalupe: Thomas de Palenzuela owned four, and his brother Alon-so
Rodríguez de Palenzuela three in Tijarana, the plains of Sardina and Tel-de,
whilst in Agaete another «conquistadon> the «caballero» Palomares
made a similar investment. Many of those properties apparently changed
hands with a relative ease, their buyers md sellers being Castilian as well as
men from French and Italian extractionlll. As we have noted, Lugo had
soon after the conquest of Gran Canaria constructed an «ingenio» and deve-loped
sugar fields in Agaete, and Eope Fernández, also a conqueror, had
made the same type of investments in the island.
Obviously, these could neither be isolated examples of entrepreneur-ship
nor could they exist in vaczco. The materialization of those investments
was contingent upon a number of inputs, goods and services, which to a lar-ge
extent must have been freely produced and available in the market. Ac-cording
to the Crónica, many of those productive inputs were brought from
Castilell2. Thus, productive means were removed from the ordinary flow of
the Castilian economy to form new combinations in The Islands -Le. they
were enterprises carried out by entrepreneurs in the fullest sense of Schum-peter's
theory .
Coming hard on the heels of the conquest of The Islands, the speed
with which the new economic opportunities were created or seized upon be-
111 . Eyemientura EG?JET y E!% SEYIUPA IUALFOLSE,d iís., Co~qiiWtúd e *ú; - I s h de GTBZ
Cana&, Crónica Anónima, La Laguna, Instituto de Estudios Canarios en la Universidad de la
Laguna, 1933, (Fontes Remm Canan'awm, 1), p. 41.
112. Ibid, p. 40.
comes more impressive when one considers the wide assortment of econo-mis
activities involved, the different technologies they required, and tbe va-riety
of financial, productive and managerial arrangements resoned to by
the entrepreneurs. In the search of new financial, productive and manage-rial
formulae they may have gone in some instances well beyond what was
current at the time in Andalusia and other areas of Casrile as shown in the
legal forms used to put into effect different modes of agricultura1 produc-tion
arrangements in The Islands. José Peraza de Ayala has found forms
that were common in the High Middle Ages, but had long before fallen in-to
desuetudel13. Any of these forms reviewed by him allowed, in theory, an
almost infinite variety of combinations; it is obvious that characteristic
did not go unnoticed by their users.
The earliest surviving complantatio contracts from Tenerife are dated
in 1506, and they, as well as others from La Palma, reflect in practice the
rich variety of agreements that could be arrived at in theroy. The share of
the land accruing to the cultivators varied from 50% to 33% in accordance
with the original investment. In one example of complantatio, Banolomé
Benítez -Lugo's nephew, merchant and conqueror- supplies al1 the land.
irrigation water, and the trees to piant 6 «fanegas» (roughiy 750 acres or 300
hectares), plus cereals, seeds, and beasts of burden, while the cultivators
Alonso Ramos and Juan de Manzanilla, P?JO were to plant 10 11 2 «fanegas»
of trees and vegetables were to receive 11 3 of the land at the end of the
contractll4.
The temporal emphyteusis granted for severa1 lives, resembling the
contractual form used in Andalusia, often carrying the obligation to renew
the contract every nine years, was also used in The Islands. The first surviv-ing
example is one agreed to by Alfonso de Lugo and Diego de Llanes con-cerning
lands and cattle owned by the former in the island of La Palma, for
whkh the !mer was te p y m amm! cmnnn ~f 4% o fme g ~ (s!i~ke !j nAn-dalusian~
f anegas, one equals about 1 I /2 hundredweights or 5 5 litres) of
wheat delivered at the ports of Tenago and Apuron, plus 100 pairs of
hensll5.
113. PERAZA DE AYALA, FI~cxtmton gfmo, p. 258.
114. Ibzd., pp. 265, 265-267.
Reference to one likely to be older, already established on 28th. August, 1506, appears in a
conveyance made by Lugo [o his nephew Diego de Suazo on thac date -RUMEU DE ARMAS,
España en eCAfnta, 11, Doc. E V I , p. 147.
115. PERAZA DE AYALA, ECcontrato agrano, pp. 272-273.
More common however, because of the conditions with which land was
granted in The Islands, was its cession on the basis of a perpetual annuity.
The oldest of such contracts found dates from 1501 and was granted by Ana
de Lugo, niece of rhe conqueror, and her husband Pedro de Vergara to Juan
Hernández and Beatriz Lorenzo, who received 100 «fanegas» of land in Ta-coronte
for an annual fee of 150 «fanegas» of wheatll6. In 1502, Alonso Fer-nández
de Lugo gave land in Daute to Gonzalo Yanes for a perpetual an-nuity
of 630 *fanegas» of sugar. In 1509 the Adelantado sold this property
to the merchant Rafael Fonte for 5,000 Ducats (equal to 2,500,000 Mara-vedis
of The Islands) -a rather large sum attesting to the importance of the
property- and similar contracts were signed on the same date between Ya-nes
and the new ownersll7. For the most part payment in these contracts
was stipulated in kind, though sometimes, as in a contract signed by Barto-lomé
Benítez in 1509, payment was accorded to be partly in money and
partly in productsn*.
The renta1 contracts are equally varied, their subject ranging from
beasts of burden to labour services and land. The length of these contracts
differed considerably, some contained a penalty clause, and payment was
generally to be made in kindll9. As might be expected, some contracts gave
rise to further contracts, such as a sharecropping agreement, in which the
share to be received by a cultivator was used by him as a collateral to gua-rantee
his purchase on credit of a slavel20. The sharecropping agreements
were rarely simple, and they were often mixed with partnership contracts,
as admitted in Roman Law and the Siete Partidas.
Some of these partnerships permit to distinguish a clear-cut capitalist
function as envisaged by Shcumpeter. In one of such contracts, dated in
1506, Antón de Vallejo supplied seed, 2 Ducats after sowing and first la-bours
were completed, plus half of the remaining expenses, whilst the
owner of the land, Pedro de Párraga, contributed land and half of the la-bour
expenses. The contract between Lope Sequera and Juan de Castañeda
was andogousl21. Other partnerships were formed to exploit third party
lands. A good example is the one between the Portuguese Juan González
and Gil Rodríguez, whereby the former supplied the capital (cereal seed
116. I&d, p. 274.
117. Ibid.
118. Zbid: p. 275, of 50.
119. Ibid., pp. 267-268.
120. hd, p. 270.
121. &d., p. 271.
and the sowing costs) and the latter agreed to rent the land and a team of
oxen, whilst contributing with a team of steers and one labourer -i.e. Ro-dríguez
supplied primarily the management function, along with some ca-pital,
and probably personal labour as ~ e l l lS~im~il.ar to this contract is thc
one agreed to by Fernando Soriano and Gonzalo Yanes in 1508. The forme]
had rented land in Tacoronte, that from then on was to be shared by both;
whilst Soriano was to supply seed and the food to maintain Yanes, the lar -
ter was to provide labour and a team of oxenl23.
On the whole, however, it is hard to find a single individua¡ pe.1 mi
ing consistently as a specialist a pure capitalist or investor function 1 hl
only exception is the one already noted in the enterprises to conquei -' Tnc-rife:
the Duke of Medina-Sidonia. In al1 the references he appears with thc
clearly distinguishing features of Schumpeter's capitalist, investing at
distance and entrusting the management function to a factor. Even maj..f.
inv-estmcíit decisions wch as ! a d pürchases, e: cemp!ex qerztiens -e :.. .
the development of sugar fields in Daute in lands that Mateo Viña had be-gun
to clear, involving the acquisition from the latter of slaves, tools and
supplies for money and an annuity in sugar- seem to have been entirely
left to the care and discretion of the Duke's factor, Gonzalo Xuarez (Suá-rez)
de Quemada, or his predecessor, Gonzalo Muñoz124.
Lugo, in some of his investments, seems to have played a role similar
to the Duke's, notably in one concerning a vessel owned by him and sub-sequently
lost because her captain sailed into waters declared off limits by
Lugol2'. However, in his agricultura1 enterprises and in other ventures Lugo
appears to have combined with his entrepreneurial role financia1 and mana-gerial
functions. Mateo Viña, Lope Fernández, Bartolomé Benítez, Francis-co
Suáret Gallinato and others seemingly also combined investment and
management functions. Yet, in other instances, these functions appear to
have been further interrningled with the rendering of labour services other
than rnanagerial.
122. Ibid., pp. 271-272.
123. i b i d , p . 2 7 2 .
124. SERRA y DE LA ROSA, Reformación, pp. 28 (Mesa), 32 (Vallejo), 35 (Galán), 38
(Tnijillo), 40 (Las Hijas), 43-44 (Lope Fernández), 46 (Valdés), 48 (Llerena), 50 (Albornoz),
54 (Rodríguez), 56 (Viña), 58 (Mesa), 78-80, 100 (JaimeJoben).
KGSA OZVEKA g SEXRA RAIGLS, Rmd~zcírt,X tnxiia!, XZ!!, p p 27-28; I r i ~ e i ? ~ g x ~ -
rio. XLIX, p. 75, LVI, pp. 77-78, LXXXVIII-WMIX, pp. 89-90.
125. Ibid., Memorial, XXX, pp. 2 1-22; Interrogatorio, mIV-LXXVIII, pp. 84-86.
To some extent, this may have been a deliberate way of dealing with
risk. Gonzalo Yanes for example, appears fulfilling an assortment of func-tions
in a number of agricultural contracts. Pedro de Vergara, ~ugo's
nephew and Alguazil Mayor of Tenerife, can be seen in one sharecropping
contract supplying the seed, an oxen team and its harness, and the land to a
Juan de Gallegosl26, whilst he was also known to plant cereals in his own as
well as in rented landl27. Francisco Suárez Gallinato, the nephew of Lugo
who was dispossessed of some landholdings by the <Reformador» Ortiz de
Zárate had enlarged his original land-grant through purchases, as his
brother Jerónimo Valdés and his cousin Bartolomé Benítez didl28, and later
appears renting irrigated land in Icod to Francisco de Madrigall29. Bartolo-mé
Benltez has already been mentioned in severa1 types of agricultura1 con-tracts.
Obviously, circumstances and the market determined the behaviour
of these iiieii, which is to say &ey attern~redro seize the economic opponu-nities
they perceived or those created by them as well as they could manage.
A desire to minimise risks through diffusion may also have played an im-portant
part in their decisions.
Somebody who seems to have been singularly adept and successful in
these practices was a shoemaker, Gonzalo Rodríguez. He owned at least one
slave, cattle and pigs, was involved in logging, sold an estate with houses
and vineyards in El Realejo for 300,000 Maravedis or 1,000 «arrobas» of
sugar, and must have been active in an assortment of business ventures,
since he also appears as guarantor of Rodrigo de Santelmo, the captain of a
vessel owned by Lugo, worth about 1,500 Ducats, and eventually lost whilst
en route between Messina and Rhodesl30.
126. PERAZA DE AYALA, Elcontmo agranb, p. 269.
127. ROSA OLIVERA y SERRA RAFOLS, Residencia, Interrogatorio, LI, p. 76.
PERAZA DE AYALA, Elcontruto agrario, p. 274.
12K ROSA OLIERA y SERRA RAFGLS, Re d e n c i ~k,: n:c::vga:c;:io, L!, p. 7 4 .
129. PERAZA DE AYALA, Elco;tatruto agruno, p. 269.
130. ROSA OLIVERA y SERRA RAFOLS, Residencia, Memorial XXX, pp. 21-22, LVII,
pp. 3 1-32 (trading wheat), LXI, pp. 32-33; Interrogatorio, XXVI (Gallinato), p. 65, (owner of
an «ingenio»), LVI (San Martín, Gallinato), p. 78, (expenses of Roddguez in his estate in
xDabte~L, XXIV-LXXVI, pp. 84-86, IXXVII (Benítez), p. 86.
SERRA y DE LA ROSA, Refomución, pp. 19 (house in El Realejo), 80 (sale of estate in El
Realejo). 209-236 (denunriatio' ofl-go km! ligs'i ziniorer, 1S!G) -acccrdicg :o LKG, Ro-dríguet
was ((hombre pobre y de baxa suerte y el dicho Adelantado le dió hacienda y le trató
bien» p. 222; Rodríguez gaoled due to debt of 1,050 uarrobaw of sugar to Mateo Viña and
other debts, pp. 228-229.
PERAZA DE AYALA, Elcontrato agruno, p. 207, contract with Mateo Viña regarding some
The shoemaker and entrepreneur Gonzalo Rodríguez server to illustra-te
an important point raised by Schumpeter: the social and economic conse-quences
of new economic combinations and of economic development.
Schumpeter thought that in a competitive market economy, in which new
combinations meant the competitivite elimination of the old, the economic
and social rise of individuals and families was to some extent an incidental
phenomena. In a non-exchange economy, Schumpeter saw only partial eco-nomic
consequences emanating from succesful new economic combina-tions,
and a total absence of the social consequences just mentionedl31. We
have no way of assessing the social ascent of Gonzalo Rodriguex, except to
mention that, rather suggestively, beyond a certain date, in the Aczerdos
del Cabildo de Tenerife the word «shoemaken> was no longer appended to
his name. It seems safe to assume that by then Rodríguez no longer plied
his trade, and that his status had changed. At a later date he appears to
have been a member ofthe Cabildo131 bis.
It is certain though, that the economic pursuits of Rodríguez would
have made little sense in a non-market economy, that entrepreneurship in
Castile was not confined to any particular social or economic group, and
that regardless of background, The Isiands were an open field for imagina-tive
entrepreneurs who were able to deal with a world of high uncertainty.
It is unfortunate that we cannot analise any enterprise carried out in
The Islands in its entirety. As in the conquering enterprises we do not know
in sufficient detail al1 the financial, managerial, and contractual arrange-ments
of any single enterprise. The documents, nevertheless, reveal a matu-re
business world. There are referentes, for instance, to the «cooperation»
between Bartolomé Benítez, Lope Fernández and Diego de San Martín to
build the first <ingenio» in La Orotava, later acquired by the Duke of Medi-na-
Sidonial32. These men were amongst the most active entrepreneurs in
land in the aDabtea, in 1507, with a canon to be paid in sugar, which probably resulted in the
above mentioned debt to Viña.
Elías SERRA RAFOLS, Edit.. Acuerdos de/ Cabildo de Tenen2 1497-1507, La Laguna de
Tenerife. C.S.I.C.IInstituto de Estudios Canarios en la Universidad de La Laguna, 1949,
(Fontes Remm Canariamm, IV), Ac. 128-131, 139, 204 (191 121 1500, «shoemaker» no longer
appended to his narne), 372,401.
131. SCHUMPETER, The Theoq ofEconomic Development, p. 67.
131 bis. From 1506 he appears to have assisted frequently to the Cabildo sessions -SE-RRA
RAFOLS, Acuerdos, pp. 204-206, and Ac. 503,693-695.
132. ROSA OLIVERA y SERRA RAFOLS, Residencia, Interrogatorio, XLIX, p. 75.
d2ooperation~o f a different kind, such as making temporarily available productive goods
Tenerife, competing fiercely for economic advantages and, with the excep-tion
of the Duke, also for political power in The Islands. Yet, their ability
to do business together, and to join forces in a project that upon completi-tion
was bound to have an effect on some of their individual undertakings,
is something that is likely to happen only amongst men who could live with
ambiguity and with the idea of imposing risks upon each other, simulta-neously
competing and cooperating with one another.
There are clear indications that the complexity of these business inter-relationships
was far greater than the above references would suggest. The
heavy investments made by the Duke of Medina-Sidonia, Lugo, Mateo
Viña and others to put land into cultivation must have given rise to a net-work
of contractual and sub-contractual agreements. Lugo for instance, .in
order to develop his property of El Realejo, spent a large sum of money on
slave and salaried labour and other productive inpiits tn bi~ild two «inge-nios*,
to clear away trees, shrubbery and stones, and to open up irrigation
canals and access roads. One of those roads went up a mountain to bring
down logs -a venture likely to provide a quick turnover of capital to help
financing the development of El Realejo estatel33.
The basic contractual formulae reviewed by us, in a number of varia-tions
and combinations, must have been the legal vehicle to carry out the
necessary work to put that estate into production and to finance those acti-vities.
Judging by known results, similar agreements must have been put
into effect shortly after the conquest to finance the planting of orchards and
vineyards. The Aczlerdos del Cabildo de Tene.nife mention vineyards alrea-dy
under production in May 1498, and April1500, whilst wine produced in
the island is reported as early as September 1501. By 1506, one vineyard
was producing about 1,000 «arrobas» (about 3,560 Imperial Gallons or
16,130 Litres) per annum134.
The Libro de Acuerdos del Cabildo de Tenerife provides by far the best
comprehensive view of the entrepreneurial attitudes and the interplay be-tween
microbehaviour and macroperformance. The Acuerdos del Cabildo
during the years 1497-1507 portray a vivid picture of a society actively en-gaged
in al1 aspects of economic production: farrning, fishing, logging, ma-nufacturing,
trading, transporting, and so on. In this vital process of screat-and
services to ni~gh_houns,o metimes free nf charge, YPPCPR :o hzve bccn commufi amoiigsi
Tenerife «ingenio» owners -Ibid, Interrogatorio. XXVI-XXVII, pp. 65-66.
133. Ibid, LXVI, p. 82.
134. SERRARAFOLS,