Under Nicolás de Ovando y Cáceres' governorship, the Indians were made to work in the gold mines, "where they were grossly overworked, mistreated, and underfed," according to Pons.By 1503, the Spanish Crown legalized the distribution of Indians to work the mines as part of the encomienda system.The tax system remains among the most regressive in Latin America; custom taxes are selectively levied; and foreign companies operate mining, tourist, and sugar enclaves virtually independently of the state.
Ever since, Dominicans have been struggling to establish a functional democracy.According to Pons, "Once the Indians entered the mines, hunger and disease literally wiped them out." By 1508 the Indian population of about 400,000 was reduced to 60,000, and by 1514, only 26,334 remained.About half were located in the mining towns of Concepcion, Santiago, Santo Domingo, and Buenaventura.Public works projects are seldom allocated on the basis of open bids.The army and the Catholic Church retain enormous political influence.Two major mining areas resulted, one along San Cristobal-Buenaventura, and another in Cibao within the La Vega-Cotuy-Bonao triangle, while Santiago de los Caballeros, Concepcion, and Bonao became mining towns. Ferdinand II of Aragon "ordered gold from the richest mines reserved for the Crown." Thus, Ovando expropriated the gold mines of Miguel Diaz and Francisco de Garay in 1504, as pit mines became royal mines, though placers were open to private prospectors.