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 or 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, 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.

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 (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).

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Source: U.S. Library of Congress