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For tax reasons, all trade with Spain had

to pass through Panama by land to the Caribbean and Havana, Cuba, instead of

directly by ship from the port of Valparaiso. This system was definitely one of

the reasons Spain lost its American colonies.

Spain was also facing problems in providing its colonies with a good variety

of manufactured goods...

The Spanish economy was not doing well. The colonies

began buying manufactured goods from other countries, especially Britain. The

British in turn, supported Criollo political demands.

There were many other factors which also contributed to the fever of

independence. Among them was the independence of the United States from Britain,

in 1776, the overthrow of the Frnch Monarchy, Napoleon's invasion of Spain,

and many new intellectual ideas of the times...

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