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o a
the short-term credit, but that prices or real estate transactions did not drop: M Chowning, “The
Consolidaci´ n de Vales Reales,” 460“478.
92 Calculated on the basis of lists published in the appendix from G. von Wobeser, Dominaci´ n colonial,
pp. 265“449.
148 Bankruptcy of Empire

in most cases it came from loans which had been quickly reimbursed by
debtors, fearful of losing their properties since the rapacious royal func-
tionaries threatened with auctioning off houses, ranches, and haciendas of
those who did not liquidate their debts to religious institutions. The Indian
peasants communities also felt the brunt of the campaign: in the intendancy
of Valladolid, close to 60,000 pesos were collected from the communal funds
of the peasant towns and villages in the years 1807 and 1808. In this sense,
it can be suggested that the Consolidation represented the deathblow to a
great number of communal funds of peasant towns which were forced to
hand over two-thirds of their reserves to the royal treasuries.93
An especially signi¬cant testimony that con¬rms the extractive nature
of the Consolidation was that of Bishop Abad y Queipo, former director of
the Juzgado de Obras P´as (administration of pious works) in the city of Val-
ladolid, who presented a document that contained the protests by medium
and small ranchers and farmers from Michoac´ n against the Crown.94 The
historian David Brading has reviewed the texts of Abad y Queipo in a
recent monograph on eighteenth-century Michoac´ n and argues that the
bishop was undoubtedly right about the negative impact of this policy for
the debtors and the clergy.95 Moreover, in other regions of the viceroyalty,
numerous disagreements were also voiced against the Consolidaci´n, such as
the protests presented by the hacendados of Tepeaca™s wheat region (in the
intendancy of Puebla), who deplored the forced collection of funds. The
careful quantitative review by historian Francisco Cervantes of the impact
of such measures on the economy of Puebla indicates that the claims were
not rhetoric; he demonstrates that the result of the Consolidaci´n was a
drastic reduction of agricultural credit in Puebla during and after this
As Gisela von Wobeser has argued in her detailed study of the Consolida-
tion Fund in Mexico, disentailment had a negative impact on the complex
system of reciprocities which underlay the colonial credit system. One of
the principal reasons was that the Consolidation in New Spain concentrated

93 This was the resolution of the Junta Superior de Consolidaci´ n approved on June 25, 1806. On long-term
consequences of this resolution, see A. Lavrin, “Execution of the Laws,” pp. 41“42.
94 Several documents written by Abad y Queipo are contained in Jos´ Mar´a L. Mora, Cr´dito P´ blico
e ± e u
(Mexico: UNAM, 1986) [facsimile of the ¬rst edition, Par´s, 1837]. See the superb portrait of Abad
y Queipo, the bishop in D. Brading, Una iglesia asediada, pp. 254“282.
95 The recent survey by Iv´ n Franco, “La Intendencia de Valladolid de Michoac´ n, 1787“1809. El
a a
proceso de formaci´ n del poder civil en una regi´ n de la Nueva Espana,” Master™s thesis, El Colegio
o o
de Michoac´ n, Zamora, Mich., 1995, Chapter 7, also stresses the negative impact of the Consolidaci´n
a o
on Michoac´ n™s economy and society.
96 See F. Cervantes, “El cr´ dito eclesi´ stico en Puebla,” and by the same author “La iglesia y la crisis
e a
del cr´ dito colonial en Puebla, 1800“1814,” in Leonor Ludlow and Carlos Marichal, eds., Banca y
poder en M´xico, 1800“1925 (Mexico: Grijalbo, 1986), pp. 51“74.
Royal Church and the Finances of the Viceroyalty 149

on appropriating the capital managed by religious foundations (88 percent
of total collections) whereas it raised little money by sale of mortgaged
properties.97 By forcing property owners to return a great number of loans
outstanding, the Crown not only weakened a vast mass of debtors, but it
also wiped out most of the capital reserves of the great number of religious
institutions and foundations that had provided the bulk of credit in the
viceroyalty for more than two centuries.98 The result was doubly severe: by
weakening the credit markets and the organizations that supported it, the
Crown contributed to destroy a secular tradition of donations and legacies
that was essential to the social welfare of Mexican society; at the same time,
the disentailment of capital assets of the church gravely weakened the entire
¬nancial system of the colonial, old regime economy.
Contemporary testimonies con¬rm this view. The Mexico City Merchant
Guild and the Mining Tribunal, as well as other privileged corporations and
groups of property owners, stressed the negative impact of the Consolidation
because of the devastating impact on the credit system.99 The many written
protests (representaciones) they sent to the viceroy are one of the most revealing
evidences of the intensifying political and economic tensions within the
viceroyalty, shortly before the outbreak of insurgency in 1810.

The Importance of New Spain™s Consolidation:
Some Imperial Comparisons
According to the most reliable estimations, the process of Consolidaci´n in
New Spain yielded in toto 10,321,800 pesos to the Crown (see Table 4.2).100
A regional analysis reveals that the diocese of Mexico was the salient con-
tributor, followed by those of Puebla, Michoac´ n, Guadalajara, and Oaxaca;
this appeared to correspond to the relative wealth level of each bishopric
(see Table 4.2).101 Since many of the wealthiest men and women of the
viceroyalty then lived in the capital city and since it was there that the

97 G. von Wobeser, Dominaci´ n colonial, p. 242, documents that real estate auctions only produced
12% of the ten million pesos collected in New Spain by the Consolidation Fund.
This symbiotic relationship between ecclesiastic ¬nancial institutions and the landlord class is one
of the main arguments of the detailed research monograph by M. I. S´ nchez Maldonado, Diezmos y
cr´dito eclesi´ stico.
e a
These texts are included in M. Sugawara, La deuda p´ blica.
There are some divergences on total sums collected via the Consolidaci´n, but the most reliable
¬gures appear to be those in A. Lavrin, “Execution of the Laws,” quoted in Table 4.2. Compare
with Brian Hamnett, “The Appropriation of Mexican Church Wealth by the Spanish Bourbon
Government: The Consolidaci´ n de Vales Reales, 1805“1809,” Journal of Latin American Studies, 1,
2 (1969), 100“110 and R. F. Caballero, “La Consolidaci´ n de Vales Reales,” pp. 362“364.
There are exhaustive lists with geographical and chronological distribution of collected funds in
G. von Wobeser, Dominaci´n colonial, appendixes, pp. 265“449.
150 Bankruptcy of Empire

Table 4.2. Revenues of the Royal Treasury from the Royal Consolidation Fund in
New Spain, 1805“1809 (in Pesos)

Bishoprics 1805 1806 1807 1808 1809

M´ xico
e 785,826 2,273,982 1,522,028 671,433

Puebla 142,094 548,420 1,006,053 460,517

Michoac´ n
a 6,483 243,610 461,106 253,578
Guadalajara 125,385 269,028 345,155 150,365 1,027
Oaxaca 30,300 244,559 149,429 98,482 24,851

M´ rida
e 11,450 72,896 69,177 26,284

Durango 3,910 35,082 42,588 53,701
’ ’ ’
Monterrey 21,781 40,748
’ ’ ’
Arizpe 39,068 3,974
totals 1,093,998 3,626,131 3,599,855 1,818,102 98,727
Source: Based on Asunci´ n Lavrin, “The Execution of the Laws of Consolidaci´ n in
o o
New Spain: Economic Aims and Results,” Hispanic American Historical Review, 53, 1
(1973), Tables 4.1 and 4.2, 35 and 45.

largest number of religious institutions was found, it is not surprising that
the diocese of Mexico collected the highest volume of funds.102
However, we must bear in mind that sums collected do not re¬‚ect
the total assets managed by religious foundations and institutions in each
region, but speak only of the capital value of redeemed loans that had been
sent to royal treasuries.
The Mexican contribution to this great debt operation for the Crown was
the most important in Spanish America. The ten million pesos collected in
New Spain through the Consolidaci´n corresponded to almost two-thirds of
the sum total funds collected by the same means in all the Spanish Amer-
ican colonies. In the rest of the American viceroyalties and general cap-
taincies, only 5,100,000 pesos were collected, with the main contributors
being the general captaincy of Guatemala and the viceroyalty of Peru (see
Table 4.3).103
The divergence in the collected sums in various colonies did not cor-
respond precisely to ecclesiastic wealth distribution in the Americas, but
rather would appear to suggest that the Consolidation was more severely
implemented in New Spain.104 Several factors requiring further research

102 D. Ladd, Mexican Nobility, Chapter 5, pp. 89“104.
103 Reinhard Liehr, “Statsverschuldung und privatkredit: die consolidaci´ n de vales reales in His-
panoamerika,” Ibero-Amerikanishes Archiv, N. F. Jg. 6, 2 (1980), 150“183 is still the only compre-
hensive study on the Consolidaci´n in the Americas, as a whole.
104 According to D. Brading, Una iglesia asediada, Appendix 1, revenues of the Mexican church equalled
40% of total revenues of the Catholic Church in all of Spanish America. However, New Spain™s
contribution to the total collection for the Consolidaci´n in the Americas represented roughly 67%.
Royal Church and the Finances of the Viceroyalty 151

Table 4.3. Revenues Collected through the Royal Consolidation Fund in
Spanish America and the Philippines, 1805“1810 (in Pesos)

Total Transfers
Provinces Revenues Overhead to Europe
Viceroyalty of New Spain 10,321,800 923,700 9,398,000
Viceroyalty of Peru 1,487,093 136,222 1,350,970
Viceroyalty of New Granada 447,779 n. i. n. i.
Viceroyalty of R´o de la Plata
± 366,573 26,191 n. i.
General captaincy of Guatemala 1,561,673 134,988 1,422,685
General captaincy of Cubaa 350,000 n. i. 308,409
General captaincy of Caracasa 350,000 n. i. n. i.
General captaincy of Chile 164,063 n. i. 164,063
General captaincy of Philippines 353,059 27,265 325,794
subtotal 15,402,040 12,969,921
Note: n.i., no information available.
a Income of Cuba and Caracas are estimates.

Source: Reinhard Liehr, “Statsverschuldung und privatkredit: die consolidaci´ n de
vales reales in Hispanoamerika,” Ibero-Amerikanishes Archiv, N. F. Jg. 6, 2 (1980),
table on p. 20.

could account for this fact. Uneven external ¬scal pressures on colonies
could explain it, revealing more stringent demands by the Spanish crown
as regards to New Spain viceroyalty™s contributions. Also, an alternative
explanation could be an improved ef¬ciency in the organization of Mexico™s
religious foundations, or else there was more liquidity among debtors of
pious works in this viceroyalty than in other regions of the Americas.
Some comparisons with the outcome of the Consolidation Fund in Spain
between 1798 and 1808 can be illustrative as well. In terms of contributing
to the solvency of the royal treasury, the Consolidaci´n may be regarded as a
success for the government of Charles IV. It allowed for the collection of a
huge amount of money, in both the metropolis and the colonies: approxi-
mately 1,300 million reales vell´n were raised through the auction and sale
of ecclesiastic properties in the peninsula over a period of ten years, while a
lesser but not insigni¬cant amount of 300 million reales (almost 15.4 mil-
lion pesos) was collected in three years in the Americas.105 This represented
a huge transfer of wealth from church to the state. It temporarily staved off

105 The classic study on the Consolidaci´ n in Spain is R. Herr, “Hacia el derrumbe del antiguo r´ gimen,”
o e
37“100 and his monumental Rural Change and Royal Finances in Spain. Herr suggests that the
auction within Spain of properties belonging to the church or to religious foundations generated
1,600 million reales vell´n (81.5 million pesos fuertes); nonetheless, Herr™s nominal ¬gures must be
analyzed critically, since the Spanish government accepted not only cash but also (highly depreciated)
vales reales in exchange for the properties auctioned. Manuel Espinosa, director of the Consolidaci´n,
estimated that 850 million reales worth were received in vales. See the report prepared in 1808 by
152 Bankruptcy of Empire

the bankruptcy of the monarchy but, at the same time, it signalled impend-
ing royal insolvency and the marked weakening of the greatest secular ally
of the monarchy, the Royal Church.
The Consolidation Fund re¬‚ected the paradox of a monarchy which still
depended on religious institutions but which, at the same time, siphoned
off their wealth to pay off international war costs. This strategy, moreover,
was not adopted by a revolutionary government (as in neighboring France)
but by a reactionary, absolutist administration, headed by a not particularly
enlightened despot, Charles IV of Spain. In sum, the adoption of these
policies signalled the imminent crisis of the ancient regime in both the
metropolis and the colonies.
An overview of church ¬nancial contributions in New Spain indicates
the dimensions of the sacri¬ce made on behalf of the Crown and its wars.
Apart from the sizeable amounts collected via the Consolidation in the
viceroyalty between 1805 and 1808, we must also consider the already
huge donations to the viceregal government provided in previous decades
by Mexican ecclesiastical institutions in the form of taxes, donations, loans,
and subsidies. A rough estimation of these contributions suggests that the
church in New Spain handed over to the Crown treasuries a total of close
to 35 million pesos (700 million reales) between 1780 and 1808, a truly


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