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de Yermo, 20,000 pesos. On the other hand, one of the richest proprietors
in the country, the marquis of Jaral de Berrio wrote to the viceroy, telling
him that he would only be able to contribute 6,000 pesos as “I suffered a
severe drought this year, with the loss of more than ninety thousand head
of sheep and goats as well as a large number of cattle of my properties.”124
At the same time, the royal administrators increased their pressure on
those least able to pay: the estate laborers and the inhabitants of the Indian
peasant communities. For example, on a large estate in Apan (a famous
pulque zone), the overseer contributed ten pesos while the laborers were
obliged to make lesser contributions; twelve individuals paid four reales per
head and ¬fty-¬ve sent two reales per head.125 The of¬cial responsible for
receiving donations in the town of Guaxuapa in the Intendencia de Oaxaca
commented on some of the dif¬culties in collecting funds from the most
miserable population:
There have been collections among the very poorest people, who were unable to
sign their name, some giving a half real, others one real, the total collected here
being scarcely eight pesos, seven reales.126
From early 1799, the local governors (intendentes) and their representa-
tives began to collect silver accumulated in the Indian town treasuries. As

AGN, Donativos y Pr´stamos, vol. 16, f. 22.
AGN, Donativos y Pr´stamos, vol. 16, fs. 1“2.
Gazeta de M´xico, IX, 84 (September 1799), supplement.
For the complete list of contributions from each inhabitant of Guaxuapa, see AGN, Donativos y
Pr´stamos, vol. 15, fs. 86“88.
Imperial Wars and Loans from New Spain, 1780“1800 117

of March of the same year, the Gazeta de Mexico began to publish notices of
these contributions. For example, the newspaper reported: “the communal
funds of the indigenous republics” (las Rep´ blicas de Naturales) from Xiquil-
pan donated 13,709 pesos; from Apacingan 11,924 pesos; from Xicayan
7,4551 pesos; from Zitaquaro 4,235 pesos; from Orizava 4,390 pesos; and
from Huetamo 12,811 pesos.127
That the government had decided to take funds from the Indian towns
was indicative that the royal treasury of New Spain had begun to hit rock
bottom. The community funds were not only the principal source for the
payment of the tribute tax, but also a cushion that assured survival in
periods of subsistence crisis. The treasury of¬cials were aware of this since
the 1782“1784 donation, when the extraction of community funds had
caused serious problems: as historian Dorothy Tanck has demonstrated,
these measures left a large number of poor populations unprotected at the
time of the severe agrarian crisis and the famines of 1785“1786.128
Nevertheless the treasury of¬cials proved impenitent and continued to
clean out the community funds during the 1790s. In his famous Political
Essay on New Spain, Alexander Humboldt expressed his indignation at the
arbitrary behavior of the royal functionaries:
The intendentes were accustomed to regard community funds as if they had no
considered purpose. The Intendente of Valladolid sent around 40,000 pesos to Madrid
that probably had taken some 12 years (for the local Indian communities) to save
up, telling the king that it was a free and patriotic donation from the Indians of
Michoac´ n to him as a contribution to continue the war against England.129

As this chapter has demonstrated, the chain of successive loans and donations
taken from 1780 until 1798 weighed ever more heavily on colonial ¬nance
and society. Indeed, on both sides of the Atlantic, the rise in royal debts
bespoke the lurking dangers of potential bankruptcy. This was so because
in the Spanish realms, ¬nancial markets were not especially deep and in the
case of colonial Mexico, depended altogether too much on the productivity
of the silver mines. But in the 1780s and early 1790s, the Mexican silver
boom was in full swing and the Crown found little dif¬culty in obtaining
extraordinary funding.

127 Gazeta de M´xico, IX, 32 (March 18, 1799).
128 D. Tanck, Pueblos de Indios, Chapter 4.
129 A. Humboldt, Ensayo pol´tico, pp. 70“71. [The original work was published in Paris in two editions
in 1807 and 1810“1811. The ¬rst complete, Spanish translation is from 1822, which is actually
the basis for the 1991 edition cited; the latter has excellent notes by Juan Ortega y Medina.]
118 Bankruptcy of Empire

The success of the royal authorities in carrying out their campaigns of
emergency ¬nance can be attributed mainly to the contributions of the
af¬‚uent sectors of colonial society, re¬‚ecting their commitment to sustain a
royal administration that guaranteed the status quo. It is more dif¬cult to
evaluate the attitude of the popular sectors as a result of the royal treasury™s
repeated campaigns to collect forced donations. It may be presumed that
the incidence of these contributions on their well-being and consumption
level were considerable, but this must be left to future research. In any case,
the ¬nancial campaigns contributed to the indebtedness of the colonial
government, mortgaged diverse various tax branches, squeezed the credit
system, and contributed to a growing scarcity of specie in the colonial
The accumulation of donations and loans con¬rm the progressive exten-
sion of the metropolitan ¬nancial crisis to the Americas. The crisis would
reach its apogee with the extension of the Royal Consolidation (Real Con-
solidaci´n) to New Spain at the end of 1804 which, in essence, constituted
another type of forced loan, but on a larger scale, as we will see in the next
chapter, and with much graver consequences. This step severely affected
both the Catholic Church and the multitude of debtors that had borrowed
ecclesiastical funds and would eventually be one of the detonators of the
colonial regime™s political and ¬nancial crisis.
The Royal Church and the Finances
of the Viceroyalty

The wheels on which runs the weighty Monarchy [ . . . ] are the sectors of
agriculture, mining and trade. [ . . . ] The entire metallic currency of the
kingdom is distributed among them and incorporated into the Pious Foun-
dations. This is the blood that runs through the veins of the political body
of the kingdom and keeps it alive. Thus, if for any reason the blood were to
be drained from that body, its ruin would be inescapable.
Municipal Council of Mexico City (1805)1

By 1800 the government of the viceroyalty in New Spain had already
amassed a voluminous debt that had been contracted essentially to pay
for war expenses of monarchy and empire. This debt was in good mea-
sure the result of loans collected among Mexican elites, merchants,
miners, landowners, and rentiers, but the royal administration had also
garnered much ¬nancial support from the church, which constituted a
multifaceted array of institutions with an unparalleled ideological and
economic in¬‚uence on colonial society. Indeed, a close analysis of rev-
enues collected by the viceregal administration from 1780 to 1800 reveals
that the Catholic Church was perhaps the most important individual
supplier of funds to the colonial treasury and hence to the monarchy
for its war efforts. These included transfers to the state of substantial
portions of tithes, donations, and direct loans from cathedral chapters,
monasteries, convents, bishoprics, and pious foundations throughout the
The ¬nancial collaboration between ecclesiastical institutions and the
royal administration re¬‚ected the fact that in Spanish America “ as well as
in Spain “ the state was not merely a civil power but a dual entity, based

1 A copy of the document titled Representaci´ n against the Consolidaci´ n de Vales Reales sent by the
o o
Municipal Council of Mexico City to Viceroy Iturrigaray is found in Masae Sugawara, La deuda
p´ blica de Espa˜ a y la econom´a novohispana (Mexico: Instituto Nacional de Antropolog´a e Historia,
u n ± ±
1976), pp. 27“35 (Colecci´ n Cient´¬ca, 28).
o ±

120 Bankruptcy of Empire

on a secular alliance between the Crown and church.2 What is more, the
bonds between them were so strong in ¬scal and ¬nancial areas “ and in
many other domains “ that it is entirely proper to speak of a Royal Church,
as William Callahan has suggestively argued.3 This alliance “ we contend “
was crucial for the survival of the Spanish empire in the Americas at the end
of the eighteenth century since the collaboration of the church was essential
both to raise funds for the many wars in which the crown engaged as well
as to assure popular support for these costly endeavors.
It is well known, of course, that the relationship between the two bodies
(civil and ecclesiastic) was asymmetric, since in terms of worldly powers the
monarchy was prevalent and could implement statist policies “ such as the
expulsion of the Jesuits in 1767. As many authors have stressed, the regal-
ism of the Bourbons entailed a clear division between the government and
the church in their respective rule over temporary and spiritual domains.
Even so, it is worthwhile emphasizing that the church was still extremely
in¬‚uential in ideological terms among all social classes. This explains, in
turn, why royal of¬cials were repeatedly obliged to seek the active collab-
oration of hierarchy and clergy of the Catholic Church in New Spain in
the monarchy™s grand ¬nancial campaigns to raise money for the successive
wars against the principal European rivals of Spain.
The Catholic Church agreed to the royal demands for war ¬nance, but by
the end of the eighteenth century the pressure by the monarchy to extract
resources from religious corporations surpassed all historical precedent. In
New Spain the ¬scal campaigns involved increasing transfers to the royal
treasuries of monies collected by various ecclesiastical branches “ tithes,
papal bulls, vacantes, and medias anatas.4 In addition, revenues from spe-
cial branches such as the Temporalidades “ which managed the old Jesuit
properties “ were remitted to Spain. And, increasingly, the government in
both metropolis and colonies called for ecclesiastical subsidies and a series
of loans and donations from religious institutions.5 Financial contributions

2 David Brading, Una iglesia asediada: el obispado de Michoac´ n, 1749“1810 (Mexico: Fondo de Cultura
Econ´ mica, 1994), p. 19: “In fact, in some areas of the empire the Church was the State and its
ministers acted as judges and representatives of the monarchy.”
3 William Callahan, Church, Politics and Society in Spain, 1750“1874 (Cambridge, Mass.: Harvard
University Press, 1984), especially pp. 2“5.
4 These were percentages to be paid to the royal treasury of salaries of newly appointed ecclesiastical
5 Perhaps the most important study on this issue is D. Brading, Una iglesia asediada, pp. 195“282.
According to the author (p. 210): “In the last decades of the Spanish government, the cathedral
chapters of New Spain overtly confronted the crown, when ministers and of¬cers tried to invade
their jurisdiction and levy on their incomes. Attempting to take control of tithes collection from
jueces hacedores; charging an ecclesiastic subsidy on every religious income, and disentailing church
properties were some striking examples of the bureaucratic assault.”
Royal Church and the Finances of the Viceroyalty 121

reached a peak in the years 1805“1808 as a result of the establishment in
New Spain of of¬ces of the Consolidation Fund (Consolidaci´n de Vales Reales),
a sinking fund for the amortization of public debt. In 1798 the of¬cials of
this fund had begun to collect a great income in Spain by affecting various
¬scal branches but also by the transfer of church properties to the state, in
exchange for royal bonds. The new strategy, put into practice in November
of 1804, was to extend the same policies to Spanish America and ¬nance
royal debt by the disentailment of assets and properties belonging to con-
vents, religious foundations, and charitable works. This inevitably implied
a massive capital transfer from religious institutions to the royal treasury.6
While the Catholic Church resented the wrenching demands of the
monarchy of Charles IV, the exigencies of war prevailed. Despite the imper-
ative nature of the demands by the Crown, religious authorities in New
Spain did not refuse to take part but rather became key actors in campaigns
to collect donations and loans to pay for military expenses of the monar-
chy. Indeed, if we ask why inhabitants of the viceroyalty provided so much
money “ and so systematically “ to the royal treasury between 1780 and
1810, it would appear that the reason was not simply coercion “ which
indeed existed “ but also the desire of broad sectors of the population to
cooperate with authorities and the monarchy. But one might justi¬ably ask
whether it was likely that the loans were a sign of marked devotion by the
inhabitants of colonial Mexico toward the Spanish sovereign? The answer
is not self-evident, for the question of loyalties and identities in colonial
society was complex. In this respect, it is worthwhile keeping in mind that
the inhabitants of the Spanish empire in America had mixed loyalties and,
almost certainly, the strongest were not toward the monarch but to the
corporations they belonged to and, particularly, to the Catholic Church.
In the case of the campaigns to raise emergency funds, the ¬scal rigor
of the monarchy was therefore tempered by the spiritual persuasion of the
church. When priests, bishops, and other ecclesiastical authorities asked
the members of the ¬‚ock to cooperate in donations or loans for the monar-
chy, the reaction of the faithful poor generally was linked to social and

6 Despite their importance, ecclesiastical loans and donations have been less studied than the Consol-
idaci´n, on which there is a broad literature. See, for example, Masae Sugawara, “Los antecedentes
´ ˜
coloniales de la deuda publica en M´ xico. Espana: los Vales Reales, or´genes y desarrollo de 1784 a
e ±
1804,” Bolet´n del Archivo General de la Naci´ n, 2a serie, 8, 1“2 (1967), 129“402; M. Sugawara, La
± o
deuda p´ blica; Romeo Flores Caballero, “La Consolidaci´ n de Vales Reales en la econom´a, la sociedad
u o ±
y la pol´tica novohispanas,” Historia Mexicana, xvii, 3 [71] (1969), 334“378; Asunci´ n Lavrin, “The
± o
Execution of the Laws of Consolidaci´ n in New Spain: Economic Aims and Results,” Hispanic American
Historical Review, 53, 1 (1973), 27“49; Margaret Chowning, “The Consolidaci´ n de Vales Reales in
the Bishopric of Michoacan,” Hispanic American Historical Review, 3, 69 (1989), 451“478; and Carlos
Marichal, “La Iglesia y la Corona: la bancarrota del gobierno de Carlos IV y la consolidaci´ n de Vales
Reales en la Nueva Espana,” in Pilar Mart´nez L´ pez-Cano, ed., Iglesia, estado y econom´a, pp. 241“262.
± o ±
122 Bankruptcy of Empire

religious concerns and not to political or administrative duties.7 On the
other hand, among the wealthy and professional classes, ¬nancial participa-
tion was undoubtedly linked to considerations regarding the maintenance
of the status quo in both an individual and a collective way. This complexity
obliges us to reconsider the true nature of the state in the old regime and
how the different sectors of colonial society perceived it.
This chapter explores the complex network of ¬scal and ¬nancial ties that
linked an increasingly subordinated colonial church to the royal treasury.
We will explore, ¬rst, the historical mechanisms for transferring a portion
of tithes and other ecclesiastical contributions to the royal coffers. Secondly,
we will present an overview of loans supported by Mexican religious per-


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