The Real Cédula de Gracias (Royal Decree of Graces) was a measure published under the absolutist government of Felipe VII on August 10, 1815. It granted Puerto Rico greater economic freedom than any other measure taken by Spanish governments to that time. It was published on the island of Saint Thomas, in three languages, to avoid development of a revolutionary separatist movement in Puerto Rico and to change the economy in ways that would make the island productive for Spain.
From 1776, the western world had been shaken by revolutions inspired by the ideas of the Enlightenment. In Hispanic America, specifically, independence movements arose in Caracas, Buenos Aires and Mexico City in 1810, and by 1815 such movements were at their peak. This revolutionary process culminated in 1824 with Spain’s loss of all its old colonies in the New World, with the exception of Puerto Rico and Cuba. The Cédula de Gracias was a measure to prevent a revolution from taking place on those two islands.
The concessions granted in the Real Cédula can be divided into three main categories: freedom of trade, tax changes, and freedom of immigration.
Freedom of Trade
The cédula consisted of Spain’s formal abandonment of its policies of exclusion. It established a period of 15 years of free trade between Puerto Rico and the other Spanish colonies, and “in the case that Puerto Rico was in urgent need,” it allowed trade between Puerto Rico and foreign islands. It also gave permission to introduce black slaves into Puerto Rico for 15 years and even to go to friendly or neutral colonies to get them. It legalized foreign trade that already existed, illegally, in the form of smuggling. In granting freedom of trade, it dissolved its control of the companies that enjoyed trade monopolies, particularly of the slave trade.
As to the “free” trade with other Spanish islands, a tax of 2 percent was to be paid, and in trade with foreigners, the tax was to be 6 percent. Importing of agricultural machinery was to be tax free for 15 years, if it was from Spain, and if it was from foreign islands, the tax would be 3 percent. In importing black slaves from neighboring islands, a 3 percent tax applied. The greatest concessions were obtained by the colonists, Spaniards and foreigners, as part of the incentives to attract and retain immigrants. They were exempted from paying diezmos (tithe or tenth part) and the alcabala (sales tax) for 15 years. To recover the taxes lost through these exemptions, the governor and treasurer established a new tax called the encabezamiento in the form of an internal subsidy which brought in 122,187 pesos the first year. This was more than the sales tax and the tithe taken together. This new tax was a provisional measure that was to disappear once the fiscal crisis had been overcome.
Freedom of Immigration
The concessions made in the cédula that had the greatest scope and impact were those related to immigration. The measure offered entry permits to new immigrants and legalized residence in Puerto Rico for many foreigners who had already become established. In addition, the freedom to be naturalized was offered – exclusively for foreign Catholics from friendly countries –after five years of residence in the country. New white colonists, both men and women, were granted four fanegas and two séptimos of land, plus half of that amount for each slave he or she brought. Free blacks and mulattos were also given incentives, but only half of those received by whites. The lands granted to new residents were crown lands or waste lands.
As to fiscal incentives, it was established that white colonists would never have to pay personal taxes. The only tax was one peso per year for each slave in their possession, but this was only after 10 years of residence. The exemption period was limited to the first five years. Another exemption that the Spanish and foreign colonists – white colonists – were to enjoy was exemption from payment of tithes and sales tax for 15 years. After that period, they were to pay only 2.5 percent of the tithes and sales taxes per year. This latter tax was not to be paid if the goods were transported in a Spanish ship.
The cédula also freed the colonists who brought black slaves to the island of taxes, but it established a payment of 6 percent and the requirement of a special permit to remove them from Puerto Rico to sell them on other West Indian islands. For the purchase of slaves on other neighboring islands, the colonists were to pay a tax of 3 percent.
The cédula also offered concessions that reduced the risk that the new colonists took in establishing themselves in Puerto Rico. If they returned to their own country within the first five years, they could take out their capital, paying only 10 percent on the increase in their wealth and returning the lands obtained as concessions under the cédula.
Immigration was stimulated by granting the colonists the right to bear arms, and colonists who had suffered from violent slave rebellions on neighboring islands were encouraged to come by the establishment of new regulations to avoid slaves escaping. The law was intended to create a regime of concessions to the colonists so that the competitive advantages of Puerto Rico would be increased in comparison with other West Indian islands. Puerto Rico’s economy grew rapidly in the first half of the 19th century, which traditionally has been attributed to the concessions made under the cédula.
Although the new immigrants were of a number of nationalities – US, French, German, Italian, Corsican, Dutch, English and Scottish – most of the initial immigrants were already in the Caribbean, residing on nearby West Indian islands. Most thought of themselves as French or from the French islands.This is no surprise given the large number of exiles in the West Indies, a product first of the French Revolution and then of the Haitian Revolution. The other large group was made up of Venezuelans, who were probably fleeing from the revolutionary wars in Venezuela.
These freedoms had a social effect due to the great increase in the number of slaves that were brought to Puerto Rico thanks to the concessions made under the cédula and the growth of the sugar industry. During the period from 1815 to 1845, thousands of esclavos bozales were imported directly from Africa; it is estimated that there were between 60,000 and 80,000, brought in largely to work in the sugar industry.
Another effect was the population increase in the countryside of Puerto Rico. The jíbaros campesinos – country folk of Spanish descent – sought refuge in what was until then the unpopulated, mountainous interior of the island, where they could continue to farm and remain self-sufficient. This phenomenon increased the population in the Central Mountain Range between 1820 and 1850, and it stimulated the founding of new towns in the interior, which together created the infrastructure that eventually would stimulate the growth of the coffee industry at the end of the 19th century.
The Cédula further spurred the existing trade relationship with the United States. The United States took advantage of the opening for trade created by this measure to increase its commerce with Puerto Rico. By 1830, 49 percent of Puerto Rico’s exports went to the United States, and only 6.8 percent went to Spain, while 27.2% of the imports came from the United States and only 12.1 percent came from Spain.
Author: Maria Elena Carrión
Published: September 12, 2014.
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