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for Spain. Iturrigaray later broadened the authorization so that these same
bills of exchange could be paid directly to the merchant ¬rms in charge of
transporting the silver to the port of Veracruz. There, a large number of
neutral vessels began to arrive from the summer of 1805.71
In September 1805, one month before the battle of Trafalgar, the director
of the Consolidation Fund sent an additional four bills of exchange to Mexico
to cover naval expenditures in C´ diz.72 However, the subsequent defeat of
the Spanish Navy made it increasingly dif¬cult to maintain regular lines
of communication with the colonies. During the rest of 1805 and 1806,
the of¬cers of the Fund in Madrid continued sending new packets of drafts
to the viceroy in Mexico, despite the increased obstacles to shipping silver
from New Spain as the British Navy was lying in wait for each transatlantic

69 The ¬rst letter from Iturrigaray to the Minister Soler, indicating he had received the decrees regarding
the establishment of the Consolidation Fund in the New Spain and four orders “relating to the
expeditions to Veracruz under a neutral ¬‚ag” is dated April 23, 1805, AGN, Correspondencia de
Virreyes, 1a serie, vol. 224, leg. 740, f. 104; see also in the same volume, the letters concerning this
subject in fs. 127, 174, 214, 215, 274, 288, 289.
The new nine-tenths (noveno decimal) charged by the Royal Exchequer was intended to swell the
coffers of the Consolidation Fund: AGN, Correspondencia de Virreyes, 1a serie, vol. 224, exp. 740,
f. 104.
Already in November 1804, Iturrigaray had delivered 500,000 pesos to Guardamino for the payment
of the Consolidation Fund™s bills of exchange. Of this amount, 150,000 pesos were sent to Havana,
but there is no information about the rest. It remains a mystery exactly how Guardamino sent the
remaining 1,500,000 pesos that he received between November 1804 and May 7, 1805. For some
details, see AGN, Correspondencia de Virreyes, 1a serie, vol. 219, exp. 653, f. 282 and vol. 224, exp. 766,
f. 127 and Marina, vol. 217, exps. 50 and 78.
These amounted to almost one million pesos. AGN, Reales C´dulas Originales, vol. 196, exp. 95,
f. 123; exp. 141, f. 179; exp. 158, f. 198; and exp. 163, f. 204.
The bills of exchange sent almost monthly were to cover payments for armaments, provisions, copper
sheets, and other essential articles for the Spanish Navy. See references AGN, Reales C´dulas Originales,
vol. 195, exps. 47, 54, and 126; vol. 196, exps. 95, 141, 158, 163, and 194; vol. 197, exps. 62, 251,
252, and 253.
Napoleon and Mexican Silver, 1805“1808 175

On January 27, 1806, the viceroy received another bulky package of bills
of exchange sent by Espinosa and endorsed to the agents of the Hope/Baring
consortium.74 The value of the thirty-four drafts was the enormous sum of
5,586,000 pesos, to be paid to the local employee of the Consolidation Fund,
Colonel Guardamino, who, in turn, was to transport the treasure from Mex-
ico City to Veracruz and deliver it to the merchant Gabriel Villanueva, agent
of the Hope/Baring syndicate, responsible for their shipment to Europe.75 In
a letter dated March 7, 1806, the military governor of Veracruz informed
the viceroy of the arrival of “the American ship Aspacia out from New
York. . . . in which has come Gabriel Villanueva.”76 Soon after disembark-
ing, Villanueva set off for the capital to present his letters and credentials
to Iturrigaray. The viceroy offered his support for the mission and provided
him with a large amount of silver accumulated by the Consolidation Fund
in exchange for an undisclosed number of bills of exchange. Nevertheless
on his return to Veracruz, Villanueva found to his dismay that the port
of¬cials refused to allow him to load the silver on the Aspacia and prevented
its departure to the United States.
Villanueva wrote to the viceroy, asking him to extend his orders to ensure
the cooperation of both the Military Governor Pedro Alonso and the head
of the city government of Veracruz, Pedro Telmo Landero. He wrote: “The
transfer to Europe of the considerable amounts in my power will depend
in great part on the favorable sale of the cargos and the swift return of
the neutral ships.”77 The viceroy did not hesitate to comply and ordered
the Veracruz of¬cials to permit the entrance and exit of the neutral ships
consigned to Villanueva. From then on, no greater dif¬culties arose with
the presentation and payment of the bills of exchange from the Fund, nor
with the dispatch of close to ten million pesos in the vessels chartered by
the Hope/Baring consortium between 1806 and 1808.78

74 For details on the bills of exchange sent to Villanueva, see AGN, Correspondencia de Virreyes, 1a serie,
vol. 229, exp. 932, f. 53; exp. 933, f. 54; exp. 934, f. 55; exp. 935, f. 56; exp. 936, f. 57; exp. 937,
f. 58; exp. 938, f. 59; and exp. 952, f. 77.
The French-Basque trader Armand de Lestapis (alias Gabriel Villanueva) had been employed by
Hope for some time, carrying correspondence from the ¬rm to their agents in Spain, so it is evident
that he was well trained for his mission. Nevertheless in Veracruz, he depended on his partners, the
traders Pedro de Echeverr´a and Francisco Septien, who received 6.5% of all pro¬ts from the joint
operations. For details on Villanueva, see M. G. Buist, At Spes Non Fracta, pp. 295“297 and J. A.
Jackson, “The Mexican Silver Schemes,” pp. 68 and 129“130.
AGN, Marina, vol. 233, f. 1.
AGN, Marina, vol. 233, fs. 2“3.
It is not easy to estimate the precise value of the silver sent by this consortium or by the rival
Gordon/Murphy group between 1806 and 1808, as in most cases the documentation of neu-
tral shipping (which is to be found dispersed in the volumes of the naval branch of the General
National Archive (Archivo General de la Naci´n) does not ascribe a value to the produce exported nor
176 Bankruptcy of Empire

While the greater part of Mexican silver left in neutral vessels, the single
greatest shipment was carried “ somewhat surprisingly “ in a British war
frigate. The shipment was valued at more than three million silver pesos and
loaded on to the British frigate Diana that had arrived at Veracruz toward the
end of August 1806, carrying on board the young banker Charles Baring.79
The English ¬nancier brought both instructions and bills of exchange to
be paid to the Hope/Baring account. The viceroy did not hesitate to order
delivery of the huge amount of 3,829,835 pesos, “resulting from the said
bills of exchange (libranzas)” to be loaded onto the Diana.80
This was the largest individual silver delivery to the Hope/Baring con-
glomerate. It was, however, not the only one; smaller amounts of silver
were shipped out from Veracruz, on some seventy neutral merchant vessels
between 1806 and 1808 sent from different North American ports by the
various agents of the British/Dutch merchant bankers. This neutral trade
has been largely ignored in Mexican historiography but was of great ¬nan-
cial signi¬cance for the viceroyalty, and it is therefore worth describing in
some detail.81

The Mercantile Operations of the Hope/Baring Consortium
in Veracruz, 1805“1808
The most complex part of the Mexican silver operation, coordinated by the
Hope/Baring conglomerate, was organizing the arrivals and departures of
the neutral ships at the viceroyalty™s principal port between 1805 and 1808.
This triangular commerce between Mexico, the United States, and Europe
is of special interest because it revealed important changes in New Spain™s
external trade. Further, it set a precedent for the liberalization of trade that
would later gain strength during the wars of independence.
As already noted, at the end of 1805, the bankers Hope and Baring had
sent three agents to the United States where they began to hire neutral
vessels to sail for Veracruz and to cash the royal drafts (on the Consolidation

to the value of the precious metals. The calculations are based on overall estimates in S. Bruchey,
R. Oliver, Merchant of Baltimore, M. G. Buist, At Spes Non Fracta and J. A. Jackson, “The Mexican
Silver Schemes.”
79 J. A. Jackson, “The Mexican Silver Schemes,” pp. 209“213, describes the voyage of Diana and of
Charles Baring in some detail. The Diana™s cargo was insured for 658,600 pounds sterling, the
largest risk covered by Lloyd™s insurance company in this era: G. J. Cudinach, La Gran Breta˜ a y la
independencia de M´xico, p. 211.
80 The relevant documents are to be found in AGN, Correspondencia de virreyes, vol. 233, exp. 1326,
fs. 244“245.
81 The study that records these operations in greatest detail is S. Bruchey, R. Oliver, Merchant of Baltimore;
a later very helpful work is J. A. Jackson, “The Mexican Silver Schemes”; G. Jim´ nez Codinach,
Gran Breta˜ a y la independencia de M´xico, pp. 210“215 also has some materials on these transactions.
n e
Napoleon and Mexican Silver, 1805“1808 177

Fund) as well as to carry on a brisk import/export trade with licenses autho-
rizing North American ships to enter and leave the chief Mexican port.
David Parish, an Anglo-German trader, was responsible for the supervision
and leadership of the whole enterprise. After an apprenticeship in his father™s
Hamburg merchant house (correspondent to both Hopes of Amsterdam and
Barings of London), the young speculator had opened a house in Antwerp
and committed himself to a risky but lucrative commercial business in the
midst of the Napoleonic wars.82
Parish™s acceptance of Hope™s offer to run the Mexican silver operation
using neutral shipping was the most audacious of his adventures. In Decem-
ber 1805, he traveled to the United States, having chosen Philadelphia as
headquarters for the consortium™s operations. The other two agents selected
by Hope were also young traders; Vincent Nolte was sent to New Orleans,
a port near to Veracruz which offered excellent possibilities for the dis-
patch of commercial shipments.83 The third agent Gabriel Villanueva was
charged with establishing an of¬ce in Veracruz and implementing what
was, perhaps, the most delicate part of the business as he had to negotiate
the settlement of the bills of exchange with the viceroy and, at the same
time, make arrangements with Veracruz merchants for the sale of the cargos
sent by Parish and Nolte from the United States. (See Figure 5.2.)
The work of this adventurous trading trio required considerable coor-
dination. The ¬rst part of their business consisted in organizing the dis-
patch of numerous cargos (authorized by the licenses already mentioned)
from the United States to Veracruz, where the imported goods would be
sold to local merchants. In exchange, they hoped to receive payment in
silver coins and some commodities, sugar, dyes, cocoa, vanilla, cotton,
etcetera, to be exported in the same neutral vessels. The pro¬t from these
commercial transactions went beyond that expected on the settlement of
the royal drafts, which in themselves promised extremely lucrative comm-

82 Parish made huge pro¬ts from speculating on various imported raw materials whose price ¬‚uctuated
wildly on account of the war. Some of his business was associated with Talleyrand, Napoleon™s minister
of Foreign Affairs, who supplied secret information about his government™s political-military strategy
in exchange for a share in Parish™s commercial speculations. On Parish™s dealings with Talleyrand
and the house of Hope, see V. Nolte, Fifty Years in Both Hemispheres, pp. 80“82 and P. G. Walters,
“The American Career of David Parish,” The Journal of Economic History, 4, 2 (1944). The classic,
but little known, study of the house of Parish in Hamburg is that of Richard Ehrenberg, Das Haus
Parish in Hamburg ( Jena: G. Fischer, 1925.)
83 For an autobiographical account with abundant information about this fantastic mercantile adven-
ture, see the work of V. Nolte, Fifty Years in Both Hemispheres.
84 With each shipment sent from Veracruz in the hired neutral vessels, Villanueva would include
quantities of silver that ¬‚uctuated between 50,000 and 100,000 pesos, the result of cashing in bills
of exchange of the Consolidation account.
178 Bankruptcy of Empire

Royal Treasury
Mexico City

Silver Royal drafts and trade licenses

Mexican produce Silver on ships
G. Villanueva
and silver of British Navy

V. Nolte Baring Bros.
Trade bills and
New Orleans Londres

Bills of
R. Oliver

Mexican exports
and silver
D. Parish Hope + Co.
Philadelphia Amsterdam
Royal drafts Mexican
Trade licenses
A. Gracie
Nueva York
Cie. de
Credit, provisions
Royal bills
and licences
Royal drafts and trade Royal Treasury
licenses of Spanish Madrid
government Consolidation
Flows of silver and

Figure 5.2. Operations of the Hope/Baring Consortium with Mexico, 1805“1808.
Source: Drawn by Carlos Marichal

On his arrival at Philadelphia in January 1806, David Parish apparently
did not have a clear idea which naval and mercantile houses would be used
for the proposed trade. However, in less than two weeks he had made agree-
ments with the in¬‚uential ¬rms of John Craig of Philadelphia and Robert
Napoleon and Mexican Silver, 1805“1808 179

Oliver of Baltimore. John Craig became a key ¬gure in the transactions
owing to his ample range of personal contacts; on the one hand, he was
the father-in-law of Francisco Sarmiento, Spanish citizen, then resident in
the United States, and the of¬cial envoy there of Manuel Sixto Espinosa,
director of the Fund (Caja de Consolidaci´n de Vales Reales); on the other, he
was brother-in-law of Robert Oliver, owner of one of the most important
trading houses in Baltimore, a port renowned for the number and speed of
its sailing ships.85
The link with Oliver was of great importance. This house was to be in
charge of sending at least thirty-eight expeditions to Veracruz between 1806
and 1808.86 The choice by Parish of this particular ¬rm was probably based
on its ample experience in Caribbean commerce, having specialized from
1790 in coffee and sugar exports from Haiti, Santo Domingo, San Croix,
Martinique, Cuba, and Trinidad. Moreover, the house of Oliver™s principal
European correspondents was none other than Hope in Holland and Baring
Brothers in England.87 Their participation in the Veracruz business ¬tted


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