Excerpts from A Brief History of the Red Lion
Chapter 7 - The Two Covenants
By the early eighteenth century it was increasingly clear the Spanish Empire had a major problem: it was simply too large for the technologies of the time and the administrative competence of Spain. It would easily take six months for a round-trip across the Atlantic, and sometimes over a year for voyages to the domains even further flung. Add the this the increasing passivity of Spanish governance. Until King Charles II the Spanish monarchs had been actively involved in the affairs of their domains. There were decisions, sometimes good and sometimes not, but still decisions. The King decided what to happen, and the Committees worked out how to carry out the royal desire.
Charles II didn’t really make many decisions, apart from showing a keen interest in Madrid’s beautification. In the absence of his commands authority naturally devolved to the Committees, but as anyone knows a committee is only rarely a good place for a decision to be made. Oh sometimes a figure emerges with the energy and clout to act as a leader, but more often committees become a way of avoiding responsibilities, of catering to smallest attainable act.
Not only that but over the four decades of Charles II’s reign the Committees became increasingly riven with factionalism, both within Committees and between Committees. Add into this the inherent conservatism of Spanish society, which remained highly stratified in Spain itself. Rules regarding non-Catholics were very strict. The Iberian universities produced some very able administrators, but never enough: simply too few students were admitted from too narrow a class of people. In addition there was a simple inflexibility on matters of faith and trade.
All this Carlos de Aranda had observed on his grand tour of the Empire. When he had power this personal knowledge allowed him to argue long and hard - and successfully - that something had to be done. In his own writing that has survived he admits he never really thought he could seriously reform Spanish administration. He didn’t ignore it entirely: he opened a series of scholarships to train more administrators, for example. However the Committee system was no entrenched. If he had come from a great family like his mentor, or if Charles III had been a more actively engaged monarch and not, ultimately, a foreigner then perhaps things would have been different. Rather than wage a war he knew he could not win he tinkered where he could, and focused his efforts elsewhere.
The first of these efforts was shipping. Spain simply didn’t build enough ships. It is not that Spanish ships were poor - they were not. There were just not enough of them, especially for the burgeoning trans-oceanic trading. In theory cities of the Spanish Empire were not meant to trade with non-Spanish ships except in very particular circumstances. In reality they had no option. Smuggling and dodged taxes were rife. The nation that did most of this was England, or rather Great Britain as it was now known, being the only other large colonial power (even more so after France’s eventual defeat).
Carlos de Aranda’s approach was unorthodox and direct: he negotiated with the British. Of course he could not do so openly, so he used the offices of the Red Lion. The Red Lion had maintained contacts, and for several years the discrete negotiations continued. The conclusion of the French War gave an added impetus, and by 1718 the deal was more or less done. It became known as the Covenant of Shipping between the two Empires, and in its first form essentially went like this. An British shipbuilder would build two ships. The two ships would be inspected by a Spanish agent. The Spanish agent would choose one ship that would be gifted to Spain, the other would have the right to trade in Spanish ports. In consequence for ending smuggling the tariffs would likewise be lowered.
It was, in fact, rather more involved than that, with a complicated protocol for already existing ships. When Walpole - the British leader and negotiator - and de Aranda revealed the Covenant to their respective sides both faced uproar. However these two wily men had each allowed the other certain clauses which could be shifted, allowing both to claim negotiating victories over their outsmarted colleagues.
In terms of making up the lack of merchant marine it is hard to overstate how successful this agreement was. The economies of both Empires were duly enhanced, a difference being felt within a decade. It also created a new set of ships known as Treaty Ships. There was the Atlantic Treaty ship that specialised in voyages to America, the India Treaty Ship which went to India, and the Pacific Treaty ship which went further - but also the Great River Treaty ships that went up the Mississippi and Amazon, and the Small River Treaty ships that ventured on more modest waterways.
The Covenant is still extant today, greatly modified of course. It is regarded as the longest continually running commercial treaty in the world. Originally though it was not just a commercial arrangement, as there were then-secret clauses about how both nations would cooperate against potential colonial rebels. It was the first alliance Spain had ever signed with a non-Catholic Christian power.
The Red Lion, for their good offices, received their due share. From Carlos de Aranda they negotiated the use of every other ship awarded to Spain. There were certain conditions - these vessels had part of their cargo capacity reserved for Imperial shipments and the like, or they might be used to carry troops. For a fee, but a much smaller one than if the Spanish were to use regular contractors.
Hand in hand, and indeed agreed at around the same time, was the Covenant of the Red Lion. It too remains extant to this day, though again highly modified. In its original form however the Red Lion were granted the right to form enclaves in a number of Spanish Imperial cities, some in Europe, but most in the overseas possessions. Within the boundary of each Enclave the Red Lion could largely set their own laws, though certain crimes were still enforced - in particular treasonous matters. In return the Red Lion ceased its own smuggling, paying a tariff on its earnings - and, as ever, acting as agents of the Empire. This was the second prong of Carlos de Aranda’s attempts to increase the economic vitality of the Empire - because if the Red Lion had proved one thing since Charles Simmonds had arrived in Madrid it was their capacity for business.
There were two other motives. The first of these was that Carlos de Aranda hoped to slowly reform Spain through these enclaves. He knew enough of the Red Lion to know that the enclaves would be free of slavery, and would allow non-Catholic worship, as just two particular measures. He hoped this would slowly cause a shift in attitudes elsewhere.
His second motive was also to bind the Red Lion to the Spanish Empire in an unbreakable bond. Given everything it is hard to argue he was unsuccessful in doing so, but it is also hard to believe he would be happy at our modern world.
