Colonial Venezuela's primary value to Spain was geographic: its long Caribbean coastline provided security from foreign enemies and pirates for the Spanish bullion fleet during its annual journey between Portobelo, in present-day Panama, and Cuba. Venezuela's own form of mineral wealth, petroleum, was noticed as early as 1500, but after being hastily scrutinized, its vast deposits were ignored for nearly four centuries.

Venezuela lacked political unity for the first two and a half centuries of colonial rule, in part because it was of no economic importance to the Spanish officials. Before 1777, what we today label Venezuela consisted of a varying number of provinces that were governed quite independently of one another. These provinces were administered from neighboring colonies that the Spanish considered more important. Beginning in 1526, they were under the jurisdiction of the Audiencia de Santo Domingo. Then in 1550 their colonial administrative seat moved to the Audiencia de Santa Fé de Bogotá, which in 1718 was upgraded to become the Viceroyalty of New Granada. During most of the remainder of the eighteenth century, what is today Venezuela consisted of five provinces: Caracas, Cumaná, Mérida de Maracaibo, Barinas, and Guyana. Because these provinces were far from each other and from the centers of Spanish colonial rule, their municipal officials enjoyed a degree of local autonomy unknown in most of Spanish America.

By the late sixteenth century, agriculture had become Venezuela's chief economic activity. The rich farmlands of the Andean region, the western llanos, and especially the fertile valleys surrounding Caracas made Venezuela agriculturally selfsufficient , and also provided a surplus of a number of products for exportation. Wheat, tobacco, and leather were among the early products exported from colonial Venezuela. The Spanish crown, however, showed little interest in Venezuela's agriculture. Spain was obsessed with extracting precious metals from its other territories to finance a seemingly endless series of foreign wars. As a result, as late as the early eighteenth century, Venezuela sold the bulk of its considerable surplus of agricultural goods to British, French, or Dutch traders who, under the Spanish crown's medieval notions of commerce based on bureaucratic control and mercantilism, were labeled as smugglers.

Starting in the 1620s, cocoa became Venezuela's principal export for the next two centuries. Cocoa was a quasi-narcotic bean used in the processing of chocolate, a native product of Venezuela's coastal valleys. Its impact on colonial Venezuelan society was immense. Its sizable profits attracted, for the first time, significant immigration of Spaniards, including relatively poor Canary Islanders, and its plantation culture created a great demand for African slaves during the seventeenth and early eighteenth centuries. These two population groups would complete a social hierarchy that became virtually a caste system. On top was a small elite of white peninsulares (those born in Spain) and criollos (those born in America of Spanish parentage); they were followed by the white Canary Islanders, who typically worked as wage laborers; then came a large group of racially mixed pardos (see Glossary), who by the late eighteenth century made up more than half the total; they were followed by African slaves, who constituted about 20 percent of the population; and, lastly, by the Indians. The native population, decimated by slavery and disease throughout the colonial period, constituted less than 10 percent of the total at independence.

Enormous profits obtained from the triangular trade of African slaves for Venezuelan cocoa, which was then shipped across the Caribbean and sold in Veracruz for consumption in New Spain (Mexico), made the Venezuelan coast a regular port of call for Dutch and British merchants. In an effort to eliminate this illegal intercolonial trade and capture these profits for itself, the Spanish crown in 1728 granted exclusive trading rights in Venezuela to a Basque corporation called the Real Compaña Guipuzcoana de Caracas, or simply the Caracas Company.

The Caracas Company proved quite successful, initially at least, in achieving the crown's goal of ending the contraband trade. Venezuela's cocoa growers, however, became increasingly dissatisfied. The Basque monopoly not only paid them significantly lower prices but received favored treatment from the province's Basque governors. This discontent was evidenced in the growing number of disputes between the company and the growers and other Venezuelans of more humble status. In 1749 the discontent erupted into a first insurrectionary effort, a rebellion led by a poor immigrant cocoa grower from the Canary Islands named Juan Francisco de León. The rebellion was openly joined by the Venezuelan lower classes and quietly encouraged by the elite in Caracas. Troops from Santo Domingo and from Spain quickly crushed the revolt, and its leadership was severely repressed by forces headed by Brigadier General Felipe Ricardos, who was named governor of Caracas in 1751.

The growth of the cocoa trade, the success of the Caracas Company, and the assertion of the royal will manifested by the suppression of the 1749 revolt all helped to centralize the Venezuelan economy around the city of Caracas. In recognition of this growth, Caracas was given political-military authority as the seat of the Captaincy General of Venezuela in 1777, marking the first instance of recognition of Venezuela as a political entity. Nine years later, its designation was changed to the Audiencia de Venezuela, thus granting Venezuela judicialadministrative authority as well.

Barely three decades later, however, Venezuela would suddenly--after almost three centuries on the periphery of the Spanish American empire--find itself at the hub of the independence movement sweeping Latin America. Present-day Venezuelans continue to take pride in having produced not only Francisco de Miranda, the best known of the precursors of the Spanish American revolution, but also the first successful revolt against Spanish rule in America and, of course, the leading hero of the entire epic of Latin America's struggle for independence, Simón Bolívar Palacios.

Data as of December 1990