The defeat of Lempira’s revolt, the establishment of the bishopric (first at Trujillo, then at Comayagua after Bishop Pedraza’s death), and the decline in fighting amongst rival Spanish factions all contributed to expanded settlement and increased economic activity in the 1540s. A variety of agricultural activities was developed, including cattle ranching and, for a time, the harvesting of large quantities of sasparilla root. But the key economic activity of sixteenth-century Honduras was mining gold and silver.
The initial mining centers were located near the Guatemalan border, around Gracias https://lempiratimes.com/2020/02/23/gracias-a-nice-part-of-the-world/. In 1538 these mines produced significant quantities of gold. In the early 1540s, the center for mining shifted eastward to the Río Guayape Valley, and silver joined gold as a major product. This change contributed to the rapid decline of Gracias and the rise of Comayagua as the center of colonial Honduras. The demand for labor also led to further revolts and accelerated the decimation of the native population. As a result, African slavery was introduced into Honduras, and by 1545 the province may have had as many as 2,000 black African slaves. Other gold deposits were found near San Pedro Sula and the port of Trujillo.
By the late 1540s, Honduras seemed headed for relative prosperity and influence, a development marked by the establishment in 1544 of the regional audiencia of Guatemala with its capital at Gracias, Honduras. The audiencia was a Spanish governmental unit encompassing both judicial and legislative functions whose president held the additional titles of governor and captain general (hence the alternative name of Captaincy General of Guatemala). The location of the capital was bitterly resented by the more populous centers in Guatemala and El Salvador, and in 1549 the capital of the audiencia was moved to Antigua, Guatemala.
Mining production began to decline in the 1560s, and Honduras rapidly declined in importance. The subordination of Honduras to the Captaincy General of Guatemala had been reaffirmed with the move of the capital to Antigua, and the status of Honduras as a province within the Captaincy General of Guatemala would be maintained until independence. Beginning in 1569, new silver strikes in the interior briefly revived the economy and led to the founding of the town of Tegucigalpa, which soon began to rival Comayagua as the most important town in the province. But the silver boom peaked in 1584, and economic depression returned shortly thereafter. Mining efforts in Honduras were hampered by a lack of capital and labor, difficult terrain, the limited size of many gold and silver deposits, and bureaucratic regulations and incompetence. Mercury, vital to the production of silver, was constantly in short supply; once an entire year’s supply was lost through the negligence of officials. By the seventeenth century, Honduras had become a poor and neglected backwater of the Spanish colonial empire, having a scattered population of mestizos, native people, blacks, and a handful of Spanish rulers and landowners.
Although mining provided much of the limited revenue Honduras generated for the Spanish crown, a majority of the inhabitants were engaged in agriculture. Attempts to promote agricultural exports had limited success, however, and most production remained on a subsistence level. If anything, the province became more rural during the seventeenth and eighteenth centuries. As a result of economic declines and foreign attacks, several town governments simply ceased to function during this period.
The cattle industry was probably the most important agricultural activity. Much of the cattle industry was on a small scale, but by 1714 six ranchers in the areas of the present-day departments of Yoro and Olancho owned over 1,000 head of cattle each. Some of the cattle were driven to Guatemala for sale. Such sales, however, occasionally produced meat shortages in Honduras and led to conflicts between Guatemalan and Honduran provincial officials.
Much of the Honduran interior remained uncolonized and outside of effective Spanish control during the colonial era. The Jicaque (a native group of northern Honduras) fleeing into the hills, managed to retain considerable cultural autonomy. Other indigenous groups, however, were increasingly brought under Spanish influence and began to lose their separate identities. This assimilation was facilitated by occasional expeditions of government and church officials into new areas. One such expedition into Yoro in 1689 found forty villages of native people living outside of effective Spanish control.
Collage: Colonial architecture in Honduras, found in old Spanish mining towns.
By the end of the seventeenth century, governing Honduras had become a frustrating, thankless task. Only Comayagua, with 144 families, and Tegucigalpa, with 135, had over 100 Spanish settlers. The province boasted little in the way of education or culture. The lack of good ports, especially on the Pacific coast, limited contacts with the outside world. Whenever possible, the Spanish colonists forced native people to move to the Tegucigalpa area, where they were available for labor in the mines. However, illegal resettlement and corruption in the mining industry, where every available ruse was used to avoid paying taxes – created a constant series of problems for colonial authorities. Smuggling, especially on the Caribbean coast, was also a serious problem.
Early in the eighteenth century, the Bourbon Dynasty, linked to the rulers of France, replaced the Habsburgs on the throne of Spain and brought change to Honduras. The new dynasty began a series of reforms throughout the empire designed to make administration more efficient and profitable and to facilitate the defense of the colonies. Among these reforms was a reduction in the tax on precious minerals and in the cost of mercury, which was a royal monopoly. In Honduras these reforms contributed to a revival of the mining industry in the 1730s. Efforts to promote the Honduran tobacco industry as a royal monopoly proved less effective and encountered stiff local opposition. The same was true of plans to improve tax collection. Ultimately, the Bourbons abolished most of the corrupt local governmental units, replacing them in 1787 with a system of intendencias. This was the name of the new local unit and also its administrator; a royal official who supervised tax collections and commercial matters, controlled prices and credit, and exercised some judicial functions.
Information obtained from reports submitted to the US library of congress.