Spain's first permanent settlement in the New World is established on the southern coast at the present site of Santo Domingo.

Under Spanish sovereignty, the entire island bears the name Santo Domingo.

Indications of the presence of gold—the lifeblood of the nascent mercantilist system—and a population of tractable natives who can be used as laborers combines to attract Spanish newcomers interested in acquiring wealth quickly during the early years.

Their relations with the Taino natives, whom they ruthlessly maltreat, deteriorated from the beginning.

Aroused by continued seizures of their food supplies, other exactions, and abuse of their women, the formerly peaceful natives rebel—only to be crushed decisively in 1495.

Columbus, who rules the colony as royal governor until 1499, devises the repartimiento system of land settlement and native labor under which a settler, without assuming any obligation to the authorities, can be granted in perpetuity a large tract of land together with the services of the natives living on it.