Trade, Colonies and Navigation Laws: The Flag Differential Duty and the International Competitiveness of Spanish Shipping in the Nineteenth Century

This paper analyses the role played by colonial trade and the Navigation Laws in the development of the Spanish merchant fleet and its international competitiveness in the nineteenth century. The Spanish Navigation Law, which consisted of a differential duty on merchandise imported in foreign-flagged vessels, was in force from 1820 to 1868 in all the ports of Spain and its colonies and was maintained in Cuba and Puerto Rico until 1898. The author combines archival, primary sources - such as Spanish, British and US consular reports, and Spanish and British trade and navigation statistics - with material from specialised journals, such as Lloyd's List. The first part examines the crisis, recovery and the final heyday of the Spanish sailing fleet between 1800 and 1860. The second section deals with the factors that explain the decline of the sailing ship in Spanish shipping in the 1860s and 1870s, and particularly its incapacity to compete with foreign flags (both sail and/or steam). The final part is dedicated to the transition from sail to steam and the international competitiveness of Spanish steamship companies in the last three decades of the nineteenth century. To illustrate this, the paper focuses on the "AngloSpanish" shipping companies, joint ventures by Spanish and English shipowning and shipbroking firms. These companies were the largest shipping firms in Spain in those years (with the exception of the Compania Trasatlantica) and controlled the greater part of the export of general cargo from Britain to the Spanish colonies of Cuba and Puerto Rico. They made use of their comparative advantage in these ports to carry sugar to American Gulf of Mexico and East Coast ports and to return to Britain with cotton, timber, grain and other bulk cargoes. The main conclusion is that both colonial trade and the maintenance of a flag differential duty in the Spanish colonies played a substantial role in the development and modernisation of the Spanish merchant fleet throughout the nineteenth century.