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in alienation whenever they constitute funds whose yield constitutes the support
and sustenance of its members. . . . 75

But the new policy did force many religious institutions and foundations
to call in outstanding credits and hand them over to the government by
means of a rigorous campaign that affected a considerable number of the
most in¬‚uential merchants, miners, and landowners of the viceroyalty who
had taken loans from the religious institutions. The illustrious nineteenth

73 Numerous testimonies of these fears were expressed in protests: see D. Brading, Una iglesia asediada,
pp. 248“250.
74 Still in 1813, for example, religious corporations owned 47% of Mexico City™s houses, “not including
religious buildings: convents, churches, parishes, teaching establishments, and welfare institutions
that covered a considerable share of the urban area.” Dolores Morales, “La distribuci´ n de la propiedad
en la ciudad de M´ xico entre 1813 y 1848,” Historias, 12 (1986), 81.
75 See the text of the edict in M. Sugawara, La deuda p´ blica, pp. 13“26.
Royal Church and the Finances of the Viceroyalty 143

century historian Lucas Alam´ n recognized the serious injury that the recall
of credits caused to the private economy of the viceroyalty:
The af¬‚uence of the clergy (in New Spain) did not consist so much in their prop-
erties “ which were many, especially in the most important cities, such as Mexico,
Puebla, and so on “, but of interest-bearing loans applied to particulars. Further-
more, the business resulting from the imposition and redemption of those funds
made each juzgado de obras p´as y capellan´as (pious works) a sort of bank. . . . 76
± ±
Alaman™s account, however, should be quali¬ed, since “ in each region
of the viceroyalty “ the respective juzgado de obras p´as y capellan´as was not
± ±
actually a bank but rather a sophisticated institution created by the Catholic
Church to supervise the ¬nancial legacies made by thousands of individ-
uals and families to religious foundations. The juzgados in each diocese of
Mexico received and managed funds donated for the maintenance of chari-
table organizations, religious colleges, and hospitals or for the performance
of certain services, most frequently to pay chaplains to offer prayers and
masses for the dead on a regular schedule, often during decades. Generally
speaking, the of¬cers in charge of these legacies lent most of the available
monies to property owners at a 4 or 5 percent annual interest rate. The total
sum of capital managed in this way is not known with precision, although
according to well-informed contemporaries in late, colonial Mexico, it may
have amounted to perhaps as much as forty to ¬fty million pesos.77 These
funds were pillars of the old-regime credit system in the Spanish Ameri-
can colonies and they constituted precisely the monies with which crown
expected to amortize or “consolidate” the growing stock of public debt held
in the shape of securities known as vales reales.78
The new decrees, thus, did affect not only the church but virtually all
property owners, landowners, merchants, and miners, who had borrowed
money from religious foundations. The royal decrees also represented a
serious blow for numerous foundations, schools, hospitals, and persons
that received the bene¬ts of funds bequeathed to pious works or chaplain-
cies.79 According to the exhaustive study by historian Gisela von Wobeser,
the Consolidation affected the capital assets of four classes of religious

76 Lucas Alam´ n, Historia de M´xico, 5 vols. (Mexico: Fondo de Cultura Econ´ mica/Instituto Cultural
a e o
Hel´ nico, 1985) [facs´mile of the ¬rst edition of 1849“1852], p. 66.
e ±
77 Abad y Queipo, who was for many years in charge of the Juzgado de Obras P´as at the bishopric of
Michoac´ n, provided similar estimates as did almost all the written protests by diverse corporations
of New Spain: among the contemporary estimates of capital available for loans, see M. Sugawara, La
deuda p´ blica, pp. 29, 36, and 48.
78 For an insightful review of this problem, see the introductory essay in A. Bauer, La iglesia en la
79 M. Chowning, “The Consolidaci´ n de Vales Reales,” p. 472, claims that the Consolidaci´ n had a more
o o
direct impact on the wealthy elite of the Michoac´ n region.
144 Bankruptcy of Empire

organizations, all of which were expected to transfer at least a part of their
assets to the monarchy.80 In the ¬rst place, the decrees struck the core insti-
tutions of the church: cathedrals, parishes, sanctuaries, monasteries, and
convents. In the second place, they hit a great number of charitable socially
bene¬cent entities, such as religious schools, hospitals, orphanages, asylums,
and poor houses. In the third place, they affected associations that were not
necessarily ecclesiastical, such as fraternities and brotherhoods. Finally, the
extraordinary measures allowed the state to take funds from a vast number of
religious foundations and chaplaincies. Not surprisingly, the implementa-
tion of this extraordinary ¬nancial measure spurred a large number of com-
plaints, known as representaciones, demanding the annulment of the decrees.81
Despite mounting complaints, Viceroy Jos´ de Iturrigaray complied with
the peremptory orders of the Minister of Treasury, Soler, to act promptly
to begin collection of funds and remittance to the peninsula. The Council
of the Indies and the Junta Suprema de Consolidaci´n (Supreme Council of
the Consolidation Fund) in Spain ordered the viceroy to proceed with the
establishment of a supervisory board ( Junta Superior de Consolidaci´n de Vales
Reales) in Mexico City, to be composed of the viceroy, the archbishop, the
regents, and the ¬scal of the leading colonial court (Audiencia) as well as two
of¬cials appointed by the Crown, General Deputy Antonio Jos´ Arangoiz
and bookkeeper Diego Madolell. The latter took several months to arrive
from Spain, so the archbishop begged the viceroy to provisionally suspend
the process of disentailment of church assets. But Iturrigaray peremptorily
refused to do so and ordered the creation of subordinate juntas in every
intendancy aimed at carrying out a preliminary record of existing funds
or properties to be eventually incorporated into the Consolidation Fund.83
(See Figure 4.3.)
From the fall of 1805, the regional juntas began collecting the required
funds, obliging debtors to reimburse the loans they had taken from local,

80 Gisela von Wobeser, Dominaci´ n colonial: la Consolidaci´ n de vales reales, 1804“1812 (M´ xico: UNAM,
o o e
81 M. Sugawara, La deuda p´ blica, includes a splendid selection of representaciones against the Consolidaci´ n
u o
in New Spain.
82 For a very clear depiction of the organization of the Junta, see L. A. J´ uregui, “La anatom´a del ¬sco
a ±
colonial,” Chart 14, p. 235. As to the appointment of of¬cials for the Consolidaci´n in New Spain,
see the letters to Iturrigaray from the Count of Montarco, president of the Council of the Indies, and
from Antonio Porcel, secretary of Charles IV, in AGN, Reales C´dulas Originales, vol. 195, ¬le 30, fs.
61“63 and ¬le 114, fs. 243“246.
83 The basic rules for keeping the books of collected funds are contained in the exhaustive “Real
instrucci´ n que S. M. se ha servido aprobar para el cumplimiento del Real Decreto de enagenaci´ n
o o
de bienes pertenecientes a Obras P´as en los Dominios de Am´ rica y en las Islas Filipinas,” in M.
± e
Sugawara, La deuda p´ blica, pp. 13“26, which transcribes the document in AGN, Reales C´dulas
u e
Originales, vol. 192, ¬le 143, fs. 149“161. Also see the regulations signed by Manuel Sixto Espinosa,
director of the Caja de Consolidaci´n in Madrid, dated January 21, 1805. AGN, Consolidaci´n, vol. 1,
o o
¬le 5, fs. 84“85.
Supreme Junta
Consolidation Fund

Junta Superior
(Mexico City)
Treasury of Royal
Royal Treasury Consolidation Fund
Mexico City (Madrid)
Provincial Juntas
(Mexican dioceses)

Religious foundations
Bishoprics and orders

2/9ths of
Merchants Royal instructions
Small rural Income from Consolidation

Figure 4.3. Income of the Royal Consolidation Fund, Mexico, 1805“1808.
Source: drawn by Carlos Marichal
146 Bankruptcy of Empire

religious foundations and pious works. In other cases the real estate of char-
itable institutions was auctioned off with the same purpose.84 Among the
individuals most affected by the abolition of the traditional credit system,
were many large landlords who had been assiduous clients of credits offered
by religious foundations. For example, the Marquis of Aguayo, an extremely
af¬‚uent livestock breeder, was pressed to restore 462,000 pesos to his cred-
itors (and thence to the Consolidation Fund), a huge amount for that time,
although he apparently was successful in reducing this sum to 43,000 pesos.
Gabriel de Yermo, owner of numerous sugar haciendas, was instructed to
return loans amounting to 131,000 pesos, although he later negotiated a
¬rst payment of 15,000 pesos to be followed by successive installments
over various years.85 Similarly, the Count of Santiago Calimaya, owner of
a huge hacienda in the Toluca valley, was ordered to reimburse 51,300
pesos. Not surprisingly, the leading landowners “ headed by the Marquis of
Aguayo “ reacted to ¬scal pressures and sent a formal petition that enraged
the viceroy.86
The wealthier miner owners also protested against the Consolidation. A
fair number had arrears on money lent to them by pious works, convents, and
confraternities. The Count of La Valenciana, owner of the most productive
silver mines in Guanajuato, was asked to repay 57,000 pesos, and so were
the enormously wealthy Count of Regla (70,000 pesos), the Count of Rul
(83,348 pesos), and several members of the af¬‚uent Fagoaga mining family
(115,937 pesos).87 The Junta de Consolidaci´n also requested the Mining
Tribunal to pay off half a million pesos it owed to several religious founda-
tions, instructing it to deposit the money in the royal treasury. However, the
miners answered that they had already advanced funds to the Crown as dona-
tions in 1793 and 1798 and, therefore, did not feel obligated by this new
claim. For that reason and with the intention of protecting its members,
the miners sent a protest (representaci´n) to the viceroy, declaring that the
new ¬scal policy entailed a threat of bankruptcy to silver miners, in general:

Mine owners do not possess by themselves enough capital [ . . . ] nor can they
otherwise obtain it, since there are no moneychangers, banks, or public funds in
this kingdom from which to obtain monies . . . and the only recourse they had

84 Often, when authorities required ecclesiastic properties to be sold in auction, complaints and ¬ghts
arose. See, for example, the ¬ery protests by the cathedral chapter of Mexico City in AGN, Consol-
idaci´n, vol. 6, ¬les 1 and 2. In the same volume, fs. 340“344, the nuns of the Convent of Santo
Domingo in Quer´ taro claimed they would not auction some urban properties since these were vital
for their survival.
85 For actual payments realized, see G. von Wobeser, Dominaci´ n colonial, p. 189“192.
86 See the text of the letter in M. Sugawara, La deuda p´ blica, pp. 88“92. Also see commentaries in D.
Ladd, Mexican Nobility, p. 102.
87 D. Ladd, Mexican Nobility, pp. 100“101.
Royal Church and the Finances of the Viceroyalty 147

in the past were the religious foundations, the coffers of convents, those of the
confraternities, in sum, the Pious Works . . . 88

But pressures by the of¬cers of the Consolidation Fund did not only
affect the leading landlords, merchants, and mine owners: less af¬‚uent sec-
tors were also forced to pay their outstanding debts to the Crown of¬cials.89
In the intendancy of Valladolid, for example, 537 property owners signed
a protest written by the distinguished cleric Manuel Abad y Queipo, cen-
suring land concentration in the hands of the major hacendados, and the
meat-trade monopoly in Mexico City controlled by “four rich cattle raisers
of that court.”90 But, above all, these regional property owners demanded
the annulment of the Consolidation since it seriously injured regional agri-
culture by undermining the local credit system.
Information on repayment of outstanding loans by property owners of
the intendacy of Valladolid (Michoac´ n) is not complete, but enough is
known to make a preliminary estimate. According to a recent study by
Margaret Chowning, it would appear that while the larger landlords and
merchants repaid part of their loans relatively quickly, medium-size farm-
ers and ranchers did not. In many cases, they were allowed to repay in
low installments in ten- or twelve-year terms (known as a composici´n to
their debts). Chowning claims, therefore, that the economic impact of the
Consolidation in Michoac´ n was not acute, although she suggests that in
political terms it was a cause of discontent among the elite and medium-size
owner sectors.91 Nonetheless, her views are at odds with other historical
The recent and exhaustive analysis of the Consolidation in New Spain,
published by Gisela von Wobeser indicates that in the intendancy of Val-
ladolid alone, total payments between 1805 and 1808 reached the colossal
¬gure of almost one million pesos.92 Cathedral chapters in the bishopric
were required to deliver to the Consolidation some 25,000 pesos in cash,
religious schools approximately 65,000 pesos, chaplaincies 330,000 pesos,
parishes over 80,000 pesos, and convents 269,000 pesos. In some cases,
the money was taken from the operating funds of these institutions. But

88 M. Sugawara, La deuda p´ blica, p. 37.
89 For a detailed review of contributors to the Consolidaci´ n in the intendancy of Oaxaca, see Brian
Hamnett, Politics and Trade in Southern Mexico, 1750“1821 (Cambridge, U.K.: Cambridge University
Press, 1971), pp. 110“111 and Appendix 9.
90 M. Sugawara, La deuda p´ blica, pp. 66“67.
91 M. Chowning argues that the economic impact of the Consolidaci´ n in Michoac´ n was a decline in


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( 64 .)