Spanish Rule

Mexico was of great economic importance to Spain, and it was rapidly colonized. Indians were gathered into communities governed by the Church. At first many of the Indians were held in slavery. Later they were legally free, but lived and worked wherever the Spanish directed. Indians supplied the labor for the great plantations, called haciendas, for the mines, and for the textile industry. Mexico was permitted to trade only with Spain and certain Spanish territories. After Spanish occupation of the Philippines in the early 17th century, a brisk Oriental trade developed.

Government officials were sent to Mexico from Spain. In the early colonial period all high offices were held by Spaniards. Mexicans of pure Spanish descent, called Creoles, could hold minor offices, but the mestizos (persons of mixed Spanish and Indian descent) were excluded even from these. Gradually, however, Spain relaxed its supervision. In the 17th century, the number of Mexican-born officials steadily increased.

After the death of Charles II of Spain in 1700, the throne passed from the Hapsburgs to the Bourbons. The new ruling house tightened its control of Mexico. Military forces were built up, and exploration and conquest in the north were resumed. All Creole and mestizo officials were replaced by Spaniards. This discrimination was deeply resented.

Import and export duties were reduced and Mexico was allowed free trade with other countries of the Spanish empire. The economy was built up until in the late 18th century Mexico supplied more than half the world's annual output of gold and silver and exported more than six times as much cotton as the United States.