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( 64 .)


the considerable transfers of funds. But overall, the ¬scal statistics suggest
a general rise of government income as a result of the introduction of new
taxes and ¬scal monopolies in all the viceroyalties, New Spain, Peru, New
Granada, and the R´o de la Plata, as well as in the captaincy generals of
Chile, Venezuela, Guatemala, and Cuba, particularly during the reign of
Charles III.

Tax Reforms and the Construction of an Imperial Tax State
The historical reconstruction of royal income in the different regions of colo-
nial Spanish America has advanced leaps and bounds in the last two decades.
The statistical sources collected by Herbert Klein and John TePaske and
other historians provide basic guidelines. The detailed series of tax receipts
in almost one hundred royal treasuries in Spanish America demonstrate a
rising trend from mid-eighteenth century onward. In the early 1780s, there
was a temporary drop in tax income in much of the empire as a result of

16 Alejandra Irigoin, “Bargaining for Absolutism: A Spanish Path to Nation State and Empire Build-
ing,” forthcoming in the Hispanic American Historical Review.
Imperial Tax State 53

agrarian and demographic crises and popular revolts, but from the later
part of that decade, a general recovery of receipts can be identi¬ed, with the
result that the 1790s were witness to the age of greatest ¬scal revenues in
the history of Spanish America.17
In terms of ordinary income, there were vast differences from one colony
to another. Further research is necessary to be able to have a detailed eval-
uation of the ¬scal accounts of each of the many treasuries of the Spanish
empire, but general estimates can be offered that suggest some problems
of scale. Three viceroyalties led the way: circa 1790, colonial Mexico pro-
duced between 18 and 20 million pesos annually in ordinary revenues; New
Granada, approximately 3 million pesos; Peru and upper Peru together
more than 6 million pesos. The other Spanish American colonies produced
somewhat lesser sums: Cuba, close to 2 million pesos; Venezuela, between
1.5 and 1.8 million pesos; Guatemala and Chile each with over 300,000
pesos; and the viceroyalty of the Rio de la Plata with a regional tax collection
of perhaps one million pesos.18
The most successful case of ¬scal reform was unquestionably that of New
Spain which experienced the greatest increase of tax income. The question
is how and why this was so. As already established in Chapter 1, colonial
Mexico produced such large revenues that it could export a great portion
to cover the administrative and military costs of empire in the greater
Caribbean as well to Spain itself, in the second half of the eighteenth century.
According to Herbert Klein, by 1800, residents in Bourbon Mexico paid

17 This is the conclusion of H. S. Klein, The American Finances, Chapter 1. Much of the data can be
found in an Excell format in H. Klein and J. TePaske, Las cajas reales de la real hacienda, which can be
consulted in the Web site at El Colegio de M´ xico, “Estad´sticas Hist´ ricas de M´ xico.” There are
e ± o e
numerous accounting problems in this data (particularly after 1787), and it is therefore obligatory
to confront with many other primary sources in the Spanish and Spanish American archives.
18 Our speci¬c source for government income in New Spain in the 1790s is from Memoria instructive del
estado comparativo de los productos de la Real Hacienda (M´ xico, 1813), Biblioteca Nacional (Mexico),
ms. 1282; for a summary, see Table 2.1. On Peru, see H. S. Klein, The American Finances, Chapters
3 and 4. On New Granada, see Jaime U. Jaramillo, Adolfo R. Meisel, and Miguel M. Urrutia,
“Continuities and Discontinuities in the Fiscal and Monetary Institutions of New Granada, 1783“
1850,” in M. Bordo and R. Cortes Conde, eds., Transferring Wealth and Power, pp. 414“424 but
compare with Alvaro Jara and John J. TePaske, “El virreinato de Nueva Granada: la caja central de
Santa F´ de Bogot´ , ingresos y egresos, 1700“1808,” ms., Universidad de Chile, 1994. On Cuba,
e a
see R. de la Sagra, Historia econ´mico-pol´tica y estad´stica, p. 291 and Nadia Fern´ ndez de Pinedo
o ± ± a
Echevarr´a, Comercio exterior y ¬scalidad (1794“1860) (Bilbao, Spain: Universidad de Pa´s Vasco,
± ±
2002), p. 172. On Central America, Miles Wortman “Rentas publicas y tendencias econ´ micas en o
Centroam´ rica, 1787“1819,” Hispanic American Historical Review, 55, 2 (May 1975), 251“286. On
the viceroyalty of the R´o de la Plata, see H. Klein, “Structure and Pro¬tability of Royal Finance
in the Viceroyalty of the R´o de la Plata in 1790,” Hispanic American Historical Review, 54 (August
1973), 440“469 and the critique by Samuel Amaral, “Public Expenditure Financing in the Colonial
Treasury: An Analysis of the Real Caja de Buenos Aires Accounts, 1789“1791,” Hispanic American
Historical Review 64 (May 1984), 287“295.
54 Bankruptcy of Empire

70 percent more taxes per capita than Spaniards in the metropolis.19 While
this is evidently an estimate, it would appear to be pretty much on the mark,
as we shall see. There is no doubt that Mexican taxpayers were making a
striking contribution to the imperial administration.
If we extend the comparisons further, the high levels of ¬scal pressure
in New Spain are con¬rmed. By 1790, colonial Mexicans were paying a
yearly average of 3.6 pesos (3.6 dollars) per capita in taxes to the royal gov-
ernment, which was more than paid by the average taxpayer in absolutist
Spain (approximately 2.5 pesos per annum) or in pre-Revolutionary France
(3.2 pesos per capita).20 On the other hand, Mexicans paid less than taxpay-
ers in Great Britain who provided their government with the equivalent of
9.5 pesos per capita, but this was in the richest nation of Europe and that
with the highest tax rates in the late-eighteenth-century world.21
The Bourbon ¬scal regime was certainly rigorous, considering the
poverty of the majority of the population of New Spain, but also diverse. To
begin with, it is important to note that the colonial tax system was quite
broadly based: taxes on silver directly produced close to one-quarter of total
revenues, while the remaining three-quarters came from a fairly wide range
of exactions, of which sales taxes, Indian tribute, and the receipts from state
produced monopoly goods were most important. For comparative purposes,
one possibility would be to calculate tax payments in relation to average,
individual income. According to Richard Salvucci, a review of the existing
historical estimates indicates that two-thirds of Mexican families (mostly
peasants) received no more than sixty pesos in income at the end of the
eighteenth century.22 If we calculate that each average working family had
four members, we can estimate that their tax burden may have been as high
as eight pesos per year.23 This implies that they would have to contribute

19 Hebert S. Klein, “La econom´a de la Nueva Espana, 1680“1809: Un an´ lisis a partir de las cajas
± a
reales,” Historia Mexicana, xxxiv, 4 [136] (1985), 598.
20 According to the ¬scal data in J. P. Merino, Las cuentas de la Administraci´ n, by 1790 the ordinary
revenues of the Spanish government were averaging 520 million reales (26 million silver pesos),
which, divided by a population estimated at 10.2 million (Floridablanca Census of 1787) gives us
a ¬gure of 2.5 pesos per capita per year. On the other hand, in Mexico the ordinary income of the
colonial administration was close to 20 million pesos per year, which divided by a population of
approximately 5.5 million gives us a ¬gure of 3.6 pesos per capita per annum, 69% more than the
Spanish ¬gure.
21 The data for France and Britain is in current prices of 1790. See Peter Mathias and Patrick O™Brien,
“Taxation in Britain and France, 1715“1810. A Comparison of the Social and Economic Incidence
of Taxes Collected for the Central Governments,” Journal of European Economic History, 5, 3 (Winter
1976), 611. The silver peso was worth between 5.6 and 6.0 French livres. However, an accurate
comparison would require comparison of real per capita income in each country as well.
22 R. Salvucci, “Mexican National Income, 1800“1840,” 220.
23 We here use an estimate of 2 pesos taxes paid per capita, a lower ¬gure than the 3.6 pesos per capita
(which is the result of dividing total ¬scal income by total population) for several reasons. In the ¬rst
Imperial Tax State 55

to the state close to 15 percent of their extremely limited income, a high
level for an ancien regime society.24
What were the reasons for extraordinary ef¬ciency of the tax machinery
in New Spain in terms of extraction capacity? To answer this question it is
necessary to turn attention ¬rst to the overall ¬scal strategy and secondly to
the precise nature of tax reforms. This can help us understand how Bourbon
reformers extracted money from all sectors of colonial society, both rich and

Bourbon Fiscal Strategies in the Americas: Reforms and Varying
Degrees of Resistance
Despite the changes that were introduced in the second half of the eigh-
teenth century, the colonial tax structure in Spanish America was not
a modern ¬scal system, for it retained many typical features of secular
ancien regime tax structures. It was modeled in part on the old ¬scal regime
of Castile but also had pronounced differences as is demonstrated by the
fact that there existed a number of direct taxes that were not applied in
the metropolis, in particular Indian tribute and taxes on silver mining.
Generally speaking, the tax system in the Americas was oriented toward
revenue-raising, since the colonial administrations were not as inclined as
the government in the metropolis to offer much ¬‚exibility with regard to
the interests of tax-paying groups. It is true, of course, that there were some
signi¬cant exemptions for privileged groups (landowners, churchmen, mil-
itary of¬cers), which might suggest that the ¬scal system was regressive.
Nonetheless, a number of taxes, such as those on silver mining, were not
regressive “ a fact which suggests that the interpretation of the entire range
of taxes should be analyzed with attention to nuance. Fiscal administration
was also a matter of political negotiations between the state and diverse
social corporations, as can be also observed in the case of the Indian com-
munities that also received certain ¬scal exemptions.
From the mid-eighteenth century, Bourbon reforms made for a more
centralized and ef¬cient tax machine throughout Spanish America. The
basic model was that established by royal envoy, Jos´ de G´ lvez, during his
e a
mission in New Spain (1765“1771). His vigorous reform campaign con-
sisted in the introduction of a complex set of administrative, accounting,

place, it is extremely dif¬cult to calculate average tax payments because it is necessary to differentiate
between peasants of Indian towns (republicas de indios) who paid tribute but were exempt from the
alcabalas and other workers who did not bene¬t from exemptions. Moreover, any calculation should
eliminate silver taxes which did not directly affect workers.
24 According to Brewer, in Great Britain, the most advanced economy (and the most heavily taxed)
of the eighteenth century, “the share of per capita income appropriated as taxes reached 23% in
1783 . . . almost twice the comparable French ¬gures. . . .” J. Brewer, The Sinews of Power, p. 91.
56 Bankruptcy of Empire

and tax instruments aimed at increasing revenues. G´ lvez also proceeded
to eliminate most tax farming in the viceroyalty, particularly that exercised
by the powerful Mexico City Merchant Guild, which had become accus-
tomed to administrating extremely pro¬table contracts for the collection of
sales taxes (alcabalas) throughout the viceroyalty. The result of greater state
control was to generate a great increase in the revenues generated by these
indirect taxes, which were collected in every rural and urban market in the
At the same time, G´ lvez and a generation of high-level functionaries
of the Spanish monarchy pressed for the establishment of a larger, more
hierarchical, and professional ¬scal administration.25 This was not a unique
trend. As John Brewer has demonstrated in the case of eighteenth-century
Britain, the activity of thousands of well-trained clerks was key in improving
state administration.26 In the case of Spanish America this is also veri¬ed by
the high quality of the Bourbon accounting records of taxes and expenditures
from 1760 onward.27 The improvement was visible in the records of the
majority of the regional colonial treasuries and the principal branches of
the royal tax administration, including the state monopolies and the royal
mints. But it should be noted that since the colonial regime was absolutist
and there were no local legislatures, there was little publicity given to the tax
records. In fact, the summaries of the revenues of the colony were normally
known only by the viceroy and his closest advisers, as well as by the Spanish
Cabinet. The original documents were kept in the government archives
in each colony, and copies of most of the documentation were remitted
annually in warships to C´ diz and Seville.28
Another innovation of the Bourbon was the reinforcement and modern-
ization of ¬scal monopolies.29 The production and sale of key commodities
tobacco, powder, and mercury was now thoroughly controlled by the royal
administration. This was accomplished by the transformation of the old
monopolies into large and relatively ef¬cient state companies, as we shall

25 L. A. J´ uregui, La Real Hacienda de Nueva Espa˜ a and L. Arnold, Burocracia y bur´ cratas en M´xico,
a n o e
1742“1835 provide the essential analysis and description of the Bourbon ¬scal bureaucracy.
J. Brewer, The Sinews of Power, particularly Chapter 3.
Scores of historians who have worked in the archives of Bourbon Mexico and Spain attest to the high
quality and detail of the colonial ¬scal accounts. For detailed observations, see the introduction to
J. TePaske and H. S. Klein, Royal Treasuries of the Spanish Empire.
The enormous volume of documents has proved invaluable for scores of contemporary historians.
The richest sources are to be found in the Archivo General de Indias in Seville and in the Archivo
General de la Naci´ n in Mexico, but there are also major repositories in all the capitals of the Spanish
American nations.
A thorough analysis of the administrative innovations in the ¬scal regime of New Spain can be found
in L. A. J´ uregui, La Real Hacienda de Nueva Espa˜ a.
a n
Imperial Tax State 57

have occasion to comment in greater detail in pages following. At the same,
an additional revenue source, state lotteries, was introduced in the Span-
ish American colonies, following in the steps of the ancient lottery of the
Kingdom of Naples, where Charles III had been monarch previous to assum-
ing the Spanish throne.30
The G´ lvez tax reforms as applied in New Spain were extended to the
rest of the Spanish American empire and the Phillipines in the 1770s with
considerable speed and homogeneity. Other visitor-generals (royal inspectors
with great powers) were sent from Madrid to Peru, New Granada, and
other parts of the Spanish American empire with the same end. However,
opposition to tax reforms in the diverse colonies varied notably. In colonial
Mexico, for example, the Visitor-General G´ lvez responded to initial tax
protests by summary executions of almost a hundred workers in the late
1760s and the imprisonment of many more; afterward, there were few
Royal functionaries found greatest resistance in the Andes. The most
extensive and violent opposition in the early 1780s to the tax reforms took
place in two viceroyalties, New Granada and Peru. According to numer-
ous historians, the catalyst of rebellion in 1780 and 1781 in many towns
and cities in the valleys and mountains of southern Peru and, later, in
upper Peru (modern-day Bolivia), were “the ¬scal reforms initiated by the
Visitor-General, Jos´ Antonio de Areche and implemented in the viceroy-
alty from 1777 onwards.”31 The popular disturbances that broke out in
early 1780 in Arequipa, Huaraz, Cerro de Pasco, La Paz, and Cochabamba
were the prelude to full-scale social rebellions headed by Indian nobles
Tupac Amaru and Tupac Catari. Soon, tens of thousands of inhabitants of
the Peruvian sierra “ rich and poor “ were engaged in a revolution which
devolved in a regional civil war. The internecine struggle among the lead-
ers of rival Indian lineages contributed to the ¬nal defeat of the rebels by
Spanish forces. The repression was ¬erce as thousands were persecuted and
Although much traditional historiography has tended to focus attention
on the great Peruvian revolts of 1780 and 1781, more recently researchers
have argued that there were many important antecedents that demonstrate



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