<<

. 3
( 64 .)



>>

in both metropolis and colonies, which would eventually have catastrophic
consequences for the monarchy and empire.
In short, by looking from the colony toward the metropolis, we argue
that it is possible to gain a new perspective on the complex dynamics “
military, ¬scal, and ¬nancial “ of the Spanish imperial state in the successive
wars with Britain and France between 1780 and 1810. Such an approach
feeds into the current debate on the antecedents of globalization in one
of the many paths suggested by A. G. Hopkins in a recent seminal study
aimed at stimulating more comparative history.17 It also speaks to the
need for more transatlantic history, linking the already rich historiography
of eighteenth-century Spanish America with that of Europe and North
America.18

17 Anthony G. Hopkins, ed., Globalization in World History (New York: W. W. Norton & Co., 2002).
18 A recent examplar is Horst Pietschmann, ed., Atlantic History: History of the Atlantic System, 1580“
1830 (Gottingen, Germany: Vandehoek & Ruprecht, 2002).
6 Bankruptcy of Empire

The Longue Dur´e of the Spanish American Empire: Military
e
and Fiscal Resurgence in the Eighteenth Century
Historians have argued in many different studies that of all European
empires, the Spanish empire was long the most productive in strictly ¬s-
cal terms. The tax and ¬nancial surpluses obtained from Spanish America
that were transferred to the metropolis from the mid-sixteenth century
onward have been described in classic works by Earl Hamilton and Michel
Morineau as well as more recent studies by Mar´a Emelina Mart´n Acosta
± ±
19
and Carlos Alvarez Nogal, among others. During the late sixteenth and
early seventeenth centuries, the great transfers of volume of silver (and gold)
were used in good measure to ¬nance the military forces of the Habsburg
administration in Italy and Flanders, engaged in almost constant war from
the 1570s until the late 1640s.20
The historiography on the second half of the seventeenth century tends to
emphasize the decline of the Spanish empire after 1648 and, indeed, many
historical works go as far as to suggest that there was never any recovery.21
This is a serious mistake which long misled much European historiography.
It is true that in the second half of the seventeenth century, the Hapsburg
monarchs of Spain proved singularly ineffectual. It is also true that during
the ¬rst half of the eighteenth century, the new Bourbon regime was rel-
atively slow in materializing reform in both metropolis and the colonies.
But it should also be recognized that in the last four decades of the same
century (1760“1800), the Spanish empire in the Americas experienced a
remarkable resurgence, visible in the recuperation of naval strength and
land defense and, equally so, in the notable increase in ¬scal income of
most colonies (which allowed for greater military strength). The Spanish
imperial state was, therefore, neither static nor condemned to permanent
decline.

19 Earl Hamilton, American Treasure and the Price Revolution in Spain, 1551“1650 (Cambridge, Mass.:
Harvard University Press, 1934); Michel Morineau, Incroyables gazettes et fabuleux m´taux: les retours
e
des tr´sors americains d™apr`s les gazettes hollandaises, xvie-xviiie si`cles (Paris/London: University of Cam-
e e e
bridge Press/Maison des Sciences de l™Homme, 1985); Mar´a Emelina Mart´n Acosta, El dinero
± ±
americano y la pol´tica del imperio (Madrid: Mapfre, 1992); Carlos Alvarez Nogal, El cr´dito de la
± e
monarqu´a hisp´ nica en el reinado de Felipe IV (Avila: Junta de Castilla y Le´ n, 1997).
± a o
20 Classic works on the Spanish possessions in Italy are Helmut G. Koenigsberger, La pr´ ctica del a
imperio (Madrid: Alianza, 1969) and Antonio Calabria, The Cost of Empire: The Finances of the Kingdom
of Naples in the Time of Spanish Rule (Cambridge, U.K.: Cambridge University Press, 1991) and those
on Flanders and the Low Countries are Geoffrey Parker, The Army of Flanders and the Spanish Road,
1569“1659: The Logistics of Spanish Victory and Defeat in the Low Countries™ Wars (Cambridge, U.K.:
Cambridge University Press, 1972) and Jonathan Israel, The Dutch Republic and the Hispanic World,
1606“1661 (Oxford: Clarendon Press, 1982).
21 A typical example of this view of irremediable decline can be found in Carlo M. Cipolla, The
Economic Decline of Empires (London: Methuen, 1970) but is also adopted by most of the “great power”
theorists.
Introduction 7

To use a metaphor, the Spanish empire may have been slumbering but
it reawakened in the late Bourbon era. David Brading has eloquently illus-
trated this point:
If in the reign of Philip II, the mines of Potos´ rescued the monarchy from
±
bankruptcy and paid for Spanish hegemony in Europe, during the reign of Charles
III, in contrast, the silver mines of New Spain provided the funds for the recon-
struction of the Spanish navy and the resurgence of the American empire.22

But the road to imperial recovery was paved with enormous dif¬cul-
ties. The wars of Spanish Succession (1702“1713) re¬‚ected the military
decadence of the Spanish state as many European powers fought in the
peninsula for the spoils of an ancient power. After the accession of the
Bourbon dynasty, nonetheless, there was a gradual transition to a more
modern and powerful military and ¬scal state. The Spanish imperial
state regained strength progressively during the eighteenth century,
although this did not imply that “ in the long run “ it was able to match its
chief competitors, in particular Great Britain, which had begun its extraor-
dinary march forward as the ¬rst industrial power and the leading naval
power in the world.
Despite the naval superiority of Britain in the Atlantic, the Spanish
empire responded and restructured during the second half of the eigh-
teenth century and therefore retained control of most trade and military
dominion in its extensive colonies overseas. The process of imperial reno-
vation was driven by the fact that Spanish America continued to ful¬ll an
absolutely critical function for the world economy: the viceroyalties of Peru
and New Spain provided the bulk of silver, which served as the basis of
the metallic currencies of virtually all countries in the world. In particular,
the steady increase of silver production in Mexico during the eighteenth
century contributed to its increasingly important role in the dynamics of
world money and trade at the same time that it provided a fundamental
stimulus to the economy of the viceroyalty and created the conditions for a
spectacular rise in tax revenues of the colonial administration. The Bourbon
reforms in Spanish America were a notable example of the capacity to use
the silver boom to forge an increasingly productive and ef¬cient tax state,
on an imperial scale.23
From the perspective of the comparative history of the eighteenth cen-
tury in the Atlantic world, the present book raises a simple question: did

22 David Brading, “Balance cr´tico,” in Oscar Maz´n, ed., M´xico en el mundo hisp´ nico, vol. 2 (Mexico:
± ± e a
El Colegio Mexiquense, 2000), p. 656.
23 This hypothesis is developed at length in the major quantitative study by R. Garner and S. E.
Stefanou Economic Growth and Change in Bourbon Mexico (Gainesville: University of Florida Press,
1993).
8 Bankruptcy of Empire

Spain and Spanish America matter? Our answer is loudly af¬rmative and
argues for the need to incorporate the recent, rich literature on the history
of the ¬scal organization and ¬nancial dynamics of the Spanish American
empire (metropolis and colonies) within the broader historical debates on
the destinies of the diverse and rival European imperial states in the eigh-
teenth and early nineteenth centuries. For, it is important to emphasize that
the hypotheses advanced in this book are based on a vast, collective effort
of recent historical research realized over the last two decades. The labors of
a diverse cohort of scholars from Latin America, Europe, the United States,
and Canada have progressively illuminated large parcels of the vast and com-
plex ¬scal structure of the Spanish monarchy both in the metropolis and in
its overseas possessions.24 Particularly important strides have been made in
the reconstruction of the tax system and ¬nances of colonial Mexico in the
eighteenth century.25 These studies lay the basis for a deeper understanding
of the common dynamics of ¬nancial administration over the vast mosaic of

24 Miguel Artola, La hacienda del antiguo r´gimen (Madrid: Alianza Editorial, 1982); Herbert S. Klein,
e
The American Finances of the Spanish Empire: Royal Expenditures in Colonial Mexico, Peru and Bolivia,
1680“1809 (Albuquerque: University of New Mexico Press, 1998); John J. TePaske and Hebert
Klein, Ingresos y Egresos de la Real Hacienda de Nueva Espa˜ a, 2 vols. (Mexico: Instituto Nacional de
n
Antropolog´a e Historia, 1987“1989); John J. TePaske and Herbert S. Klein, The Royal Treasuries of
±
the Spanish Empire in America, 3 vols. (Durham, N.C.: Duke University Press, 1990); Herbert Klein
and Jacques Barbier, “Revolutionary Wars and Public Finance: The Madrid Treasury, 1784“1807,”
The Journal of Economic History, 41, 2 (1981), 315“339; Jacques A. Barbier, “Peninsular Finance and
Colonial Trade: The Dilemma of Charles IV™s Spain,” Journal of Latin American Studies, 12, 1 (1980),
´
21“37; Jacques A. Barbier and Hebert Klein, “Las prioridades de un virrey ilustrado: el gasto publico
bajo el reinado de Carlos III,” Revista de Historia Econ´mica, III, 3 (1986), 473“496; Javier Cuenca,
o
˜
“Ingresos netos del Estado espanol, 1788“1820,” Hacienda P´ blica Espa˜ ola, 49 (1981), 183“208;
u n
Jos´ P. Merino Navarro, “La Hacienda de Carlos IV,” Hacienda P´ blica Espa˜ ola, 18, 69(1981), 131“
e u n
181; Renate Pieper, La Real Hacienda bajo Fernando VII y Carlos III, 1753“1788 (Madrid: Instituto
de Estudios Fiscales, 1992).
25 For an overview of the recent literature on colonial ¬scal history in Mexico, see Luis J´ uregui,
a
“Vino viejo y odres nuevos. La historia ¬scal en M´ xico,” Historia Mexicana, lii, 3 (January“March
e
2003), 725“773; also see references in Carlos Marichal, “La historiograf´a econ´ mica reciente sobre
± o
el M´ xico borb´ nico: los estudios del comercio y las ¬nanzas virreinales, 1760“1820,” Bolet´n del
e o ±
Instituto de Historia Argentina y Americana Dr. E. Ravignani (Buenos Aires), tercera serie, 2 (1990),
161“180. Among the numerous studies on colonial Mexican taxes and ¬nance, see the overviews by
the following authors: Luis J´ uregui, La Real Hacienda de Nueva Espa˜ a: su administraci´n en la ´poca de
a n o e
los intendentes, 1786“1821 (Mexico: UNAM, 1999); John J. TePaske, “The Financial Disintegration
of the Royal Government of Mexico during the Epoch of Independence, 1791“1821,” in Jaime
Rodr´guez, ed., The Independence of Mexico and the Creation of the New Nation (Los Angeles: University
±
of California Press, 1989), pp. 63“84; John J. TePaske, Jos´ Hern´ ndez Palomo, and Mari Luz
e a
Hern´ ndez Palomo, La Real Hacienda de Nueva Espa˜ a: la Real Caja de M´xico, 1576“1816 (Mexico:
a n e
˜
Colecci´ n Cient´¬ca INAH, 1976); H. Klein, “La econom´a de la Nueva Espana, 1680“1809: Un
o ± ±
an´ lisis a partir de las cajas reales,” Historia Mexicana, xxxiv, 4 [136] (1985), 561“609; Carlos
a
Marichal, La bancarrota del virreinato. Nueva Espa˜ a y las ¬nanzas del imperio espa˜ ol, 1780“1810
n n
(Mexico: Fondo de Cultura Econ´ mica and El Colegio de M´ xico/Fideicomiso Hist´ ricos de las
o e o
Am´ ricas, 1999).
e
Introduction 9

multiethnic territories under Spanish rule. They also provide a huge amount
of reliable, quantitative data for the detailed study of the income and expen-
diture of most parts of the Spanish American empire. This represents a major
step forward in our understanding of the eighteenth-century world.

Atlantic Wars, Mexican Silver, and Colonial Debts
in the Second Half of the Eighteenth Century
In the ¬rst chapter of this book, the principal objective is to illustrate
the military and especially the ¬scal resurgence of the Spanish empire in
the second half of the eighteenth century. We argue that from the end of the
Seven Years™ War (1756“1763), the ¬nances of imperial defense in Spanish
America depended to a great degree on Mexican silver tax remittances. We
propose a model for analysis of the ¬scal logic of imperial expenditures and
look particularly at how they contributed to sustaining the defense of both
Mexico and the Spanish colonies in the greater Caribbean. Special emphasis
is placed on the description of the complex network of tax transfers from
one colony to another “ known as situados “ which ¬nanced the military and
naval infrastructure of the empire. In this sense, our study demonstrates
how Spain increasingly shifted many of the costs of imperial defense and
of war to Mexico, precisely as the viceroyalty experienced a great silver
boom that allowed royal functionaries to implement a rigorous campaign
to increase extraction of taxes. In order to facilitate estimates of the relative
importance of the data presented, we include in the appendix at the end
of the book basic information on the colonial monetary system and several
key indicators of the colonial economy.
In the second chapter we analyze the ¬scal income structure of the admin-
istration of the viceroyalty of New Spain during the decades 1760“1800.
We extend the concept of national tax state developed by historians of
eighteenth-century Europe and propose that, in the case of Spain and Span-
ish America, it can be useful and appropriate to think in terms of an imperial
tax state. Despite the vast extension of the empire, the Bourbon reforms
allowed for the development of a relatively homogeneous ¬scal administra-
tion, particularly in the colonies. The operation of the almost one hundred
different regional treasuries in the western hemisphere is illuminated by a
case study of those of New Spain, the wealthiest viceroyalty. The recent and
rich historical literature on colonial taxes provides the foundation for this
analysis of what Herbert Klein has described as one of the most complex
and, in many ways, ef¬cient tax machines of the eighteenth century.26
The emphasis in this chapter is on the anatomy of the ¬scal system in the
viceroyalty of New Spain in the ¬nal decades of colonial rule. The review

˜
26 H. Klein, “La econom´a de la Nueva Espana,” 592.
±
10 Bankruptcy of Empire

of the trends of major tax branches raises many questions as to the relation
between the ¬scal and the general performance of the colonial economy. To
obtain a more complete view of overall trends, it is recommended that the
reader complement our analysis with the broad historical literature on the
Mexican economy in the eighteenth century. While major overviews have
been published by such historians as John Coatsworth, Eric Van Young, and
particularly Richard Garner, researchers have not yet reached a consensus
view on the nature of economic growth in this era.27 It is clear that Mexico
then experienced the greatest silver boom in colonial history, but also that
the colonial economy modernized slowly in a period that one historian has
baptized the “age of paradox.”28 What our ¬rst two chapters demonstrate
is the enormous weight of the of¬cial extraction of silver from the economy
and society and the large percentage of it shipped abroad.
The remaining chapters are devoted to analysis of two major questions:
(1) How many loans and donativos (forced contributions) were raised in
Mexico to assist in the ¬nance of the wars of the Spanish crown in the second
half of the eighteenth century? These ¬nancial instruments gave rise to a
steadily rising volume of colonial debts that have been seldom analyzed in
depth. (2) How important were the Mexican silver remittances in the wars
between Spain, Britain, and France in the ¬nal decades of colonial rule?
Silver was a crucial means of payment for armies and navies, and therefore
all the European powers were acutely interested in these ¬‚ows of coins and
precious metals, the greatest amounts coming from New Spain.
Chapter 3 focuses on the ¬rst issue, namely the methods by which the
Spanish imperial administrations were able to raise an astonishing volume
of donations, forced loans, and interest-bearing loans in Mexico to pay for
successive wars in the 1780s and 1790s. Fundamental in this strategy of
raising loan capital for the Crown Wars was the collaboration of colonial
privileged corporations: wealthy merchant guilds, the silver miners, royal
of¬cers, landowners, and rentiers. The loans re¬‚ected the increasing sophis-
tication of colonial ¬nancial markets but at the same time proved to be
essentially a mechanism of extraction of funds for the royal coffers rather

<<

. 3
( 64 .)



>>