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Despite the misfortunes of hundreds (if not thousands) of Indian peas-
ant villages, the tax of¬cials continued their efforts to collect resources
and insisted that contributors should explicitly declare their payments as
voluntary.40 This was the case in dozens of Indian peasant villages around
Veracruz, as illustrated by the following extract from a letter sent by the
subdelegate there on November 24, 1808:
The governor of the town of San Miguel de Texistepeque, his republic and other
Tlatoques (chiefs) say that . . . they freely, with thanks and spontaneously and with-
out any advantage, contribute to our Sovereign by donation of all the funds in their
ownership. . . . 41

Detailed studies of the government ¬scal offensive to appropriate peasant
resources have been published by historians Marta Ter´ n and Iv´ n Franco
a a
on the Intendancy of Valladolid de Michoac´ n that demonstrate how ¬s-
a
42
cal demands intensi¬ed. Iv´ n Franco provides a precise account of the
a

38 The detailed lists of donations, 1808“1810, are to be found in various sections of AGN, Donativos
y Pr´stamos; for example, for Guanajuato, vol. 12, fs. 207“215; for San Luis, vol. 4, exp. 38, fs.
e
137“144.
On the 1809 agrarian crisis, see Enrique Florescano and Victoria San Vicente, eds., Fuentes para la
39
historia de la crisis agr´cola (1809“1811). Selecci´n documental (Mexico: UNAM, 1985). Also, there are
± o
important considerations in Brian Hamnett, La pol´tica espa˜ ola en una epoca revolucionaria (Mexico:
± n ´
Fondo de Cultura Econ´ mica, 1985), Chapter 4.
o
See L. A. J´ uregui, “La anatom´a del ¬sco colonial,” Chapter 6, pp. 246“248 for a synthesis of the
a ±
40
formulas employed by ¬nance of¬cials to evaluate the sums available in the community treasuries.
AGN, Donativos y Pr´stamos, vol. 12, f. 66.
e
41
Marta Ter´ n, “Muera el mal gobierno: las reformas borb´ nicas en los pueblos michoacanos y el
a o
42
levantamiento ind´gena de 1810,” Ph.D. thesis, El Colegio de M´ xico, 1995 and I. Franco, “La
± e
Intendencia de Valladolid.”
Mexican Silver for the Cortes of C´ diz and the War against Napoleon 227
a

Table 7.2. Donations Collected in the Intendencia de Valladolid (Michoac´ n) 1808“1809
a

Contributors Pesos Percent
Bishop of Valladolid 80,000 38.5
Augustine Order 10, 000 4.8
149 Indian peasant communities in ¬fteen subdelegations 86,701 41.7
Neighbors of the city of Valladolid 17,176 8.3
Employees of the royal treasury 7,320 3.5
Valladolid City Council 5,556 2.7
Members of Regiment of Dragoons of town of Patzcuaro 1,229 0.6
total 207,892 100.0
Source: Iv´ n Franco “La Intendencia de Valladolid de Michoac´ n, 1787“1809. El proceso de formaci´ n
a a o
˜
del poder civil en una regi´ n de la Nueva Espana,” Master™s thesis, El Colegio de Michoac´ n, 1995,
o a
p. 379.


contributions and donations which indicates that in Michoac´ n, during the
a
years 1808“1809, 42 percent of the donated funds came from 149 Indian
communities, followed by ecclesiastical institutions (38 percent), while the
landed proprietors “ Creoles and Spanish “ scarcely contributed 8 percent
of the 207,000 pesos collected in the region.43 (See Table 7.2.)
That a great part of the funds should have been raised from peasant com-
munities bespeaks the persistence of the power of the royal administration.
But, paradoxically, as historian Marta Ter´ n has noted in a detailed study, it
a
was the richest and most productive peasant villages that suffered the great-
est exactions since they had accumulated “surpluses” in their community
funds.44

To Save Crown and Commerce: Merchant Loans from Mexico
for the Spanish Patriots, 1809“1811
The ¬nancial demands of the metropolitan government, 1808“1811,
weighed upon the entire society of colonial Mexico, but there were certain
social sectors that participated enthusiastically. In particular, the wealthiest
merchants of Mexico City and Veracruz lent large sums quickly and repeat-
edly between 1808 and 1810. This participation was clearly not a matter of
coercion but of collaboration by the key sectors of New Spain™s elite, almost
certainly because of their desire to maintain secular political privileges and
economic oligopolies.

43 I. Franco, “La Intendencia de Valladolid,” p. 346.
44 “Los pueblos pobres, sin bienes o con pocos . . . perdieron menos con esta pol´tica . . . En cambio, a
±
los pueblos m´ s abundantes y de vida resuelta les fue mal. . . . ”; M. Ter´ n, “Muera el mal gobierno,”
a a
pp. 154“155.
228 Bankruptcy of Empire

It may be presumed that this enthusiasm re¬‚ected the fact that after
the coup against Iturrigaray, the capital city™s merchant elite had assumed
the real power behind the viceregal throne. If we consider how impor-
tant it was for the great Mexican merchants to maintain control of trade
with the metropolis and, in particular, with C´ diz, the great entrepˆ t of
a o
colonial trade, then their willingness to collaborate with large sums of
money in the of¬cial ¬nancial war campaigns can be readily explained. In
fact, maintenance of this vital transatlantic connection was indispensable
to the survival of much of their business activity and of the privileges
of the merchant guilds, which as many old regime corporations assured
control of key business opportunities. If the Spanish government should
disappear as a result of the Napoleonic onslaught and if Mexican ports
should be opened to free traf¬c from other countries “ in particular from
England and the United States “ this would radically alter the status quo.
It would probably lead to the end of the secular trading oligopolies that
the rich Mexico City guild merchants had exercised for more than two
centuries.45
There is, therefore, little mystery on the size of the ¬nancial contributions
of the Mexican colonial plutocracy to the metropolis in the critical years
of 1808“1810. Initially, however, loans made up only a small part of the
remittances sent from Veracruz to C´ diz to help ¬nance the war against
a
France. Between August 1808 and August 1809 the astounding amount
of over fourteen million pesos was shipped to C´ diz, but most of this sum
a
consisted of accumulated tax reserves, plus a donation collected during that
year and four million pesos from the of¬ces of the Consolidated Fund in
the viceroyalty.46 Subsequently, however, as tax reserves became depleted,
the largest contributions did come in the way of loans from the wealthy
Mexican merchant oligarchy and silver miners. (See Table 7.3.)
In July 1809, the new Viceroy, Archbishop Lizana, received orders from
the Spanish minister of ¬nance “to send 3 million pesos to pay drafts owed
to the British government.”47 These bills were receipts that the Regency
in Seville had delivered to British diplomats in Spain in exchange for the
money and arms supplied from London to the ¬rst Spanish juntas for their

45 For detailed analysis of the mercantile and ¬scal privileges of the powerful merchant guild, see the
doctoral thesis of G. Valle Pav´ n, “Consulado de Comerciantes.”
o
46 The resumption of silver shipments to Spain in the English warships Diamante and Melp´ mene o
that left Veracruz in December 1808 were effected principally with funds from the Mexico City
mint, although a part of the monies also came from the tobacco monopoly. See L. A. J´ uregui, “La
a
anatom´a del ¬sco colonial,” pp. 250“251. Later, at the beginning of 1809, the warship San Justo
±
set sail for C´ diz, loaded with funds of the Consolidation Fund: see A. Lavrin, “Execution of the
a
Laws.”
47 L. A. J´ uregui, “La anatom´a del ¬sco colonial,” p. 252, who cites the Gazeta de M´xico, July 12,
a ± e
1809.
Mexican Silver for the Cortes of C´ diz and the War against Napoleon 229
a

Table 7.3. Colonial Mexico: Donations and Loans for Spain, 1808“1810

Donations and Loans Years Pesos Interest Rate
Donationa 1808“1810 1,941,643 No interest
Patriotic loan 1809 3,176,835 6%
Patriotic loanb December 1809 1,393,500 No interest
Patriotic loan 1810 2,010,000 6“8%
Patriotic loanb July 1810 1,000,000 No interest
Patriotic loanb December 1810 2,000,000 No interest
Patriotic loanb March 1810 1,194,000 No interest
Note: See list of loans in Appendix III.2.
a The donation which commenced in October 1808 continued throughout 1809 and 1810.
b These so-called patriotic loans were non-interest-bearing advances requested from the wealthiest

merchants of the viceroyalty in order to provide the silver to be borne by the warships arriving at
Veracruz and bound on their return voyage for C´ diz.
a


struggle against Napoleon in the initial months of resistance. Historian
Luis J´ uregui has described the negotiations:
a
A few days later, the ¬rst agent of the British government sent to New Spain arrived
at Veracruz. On July 22 (1809) Alexander Cochrane-Johnston (the English naval
of¬cer who arrived in Veracruz) began negotiations with the new viceroy Lizana
“to receive the 3 million pesos that England had lent Spain during the ¬rst months
of their alliance and with a license to export the silver destined for the English
treasury.”48
Given the scarcity of hard cash in the coffers of the royal treasury in Mexico
City, Viceroy Lizana asked wealthy Mexicans for a loan by means of an edict
published on August 5 which called upon the inhabitants of the viceroyalty
to show their “patriotism, loyalty, love and virtuous sentiment” to help
“the most sacred cause that any nation has been called on to defend until
now.”49 It was a notable success. By the end of August, more than 3 million
pesos (equal to 3 million dollars) had been collected as a patriotic loan, with
the greatest amounts provided by the leading merchant houses of Mexico
City. Among the wealthy contributors were Antonio Bassoco who loaned an
impressive 200,000 pesos; the brothers Francisco and Alonso Ter´ n with an
a
equal amount; Tom´ s Domingo Acha for 150,000 pesos; Sebastian Heras,
a
100,000 pesos; Gabriel Yturbe, 100,000; the Count de la Cortina, 50,000;
and Gabriel de Yermo, 50,000. Another ¬fty merchants contributed with
amounts that ranged between 10,000 and 50,000 pesos, and dozens more

48 L. A. J´ uregui, “La anatom´a del ¬sco colonial,” p. 252.
a ±
49 The loan was authorized by the Seville Supreme Junta in March 1809, so we may suppose that the
of¬cial instruction was received by the viceroy in June. The viceroy delayed its proclamation for
unknown motives. AGN, Donativos y Pr´stamos, vol. 3, fs. 16“17.
e
230 Bankruptcy of Empire

with lesser contributions. Such large sums bespoke the great wealth of
the Mexican oligarchy, which in terms of capital assets rivaled the largest
contemporary mercantile fortunes in Europe.
The terms of this loan were favorable to the investors. In contrast to the
donations that offered neither return of capital nor interest to contributors,
this new transaction guaranteed a high return and security to the most
opulent members of New Spain™s society. The ¬nancial conditions set out
in the edict of August 5, 1809 reveal the bene¬ts clearly: the punctual
payment of an annual 6 percent interest “under the secure endowment of
the Tobacco Monopoly or a ¬scal department that the Lender may choose
specially. . . . ”50 To reassure creditors, the royal treasury soon began to effect
several return payments on a part of these funds to the merchants who had
lent monies.51
The close collaboration between the government and the mercantile
elite was recon¬rmed by the successful issue of various emergency loans
requested in the months of December 1809, July 1810, and December
1810, on arrival of Spanish and British warships at Veracruz. The ships had
come with the express purpose of transporting treasure to assist the Spanish
patriot government in C´ diz. The loans were solicited because of temporary
a
scarcity of tax funds in the Mexico City and Veracruz royal treasuries, but
in these cases no interest payments were promised. The viceroy requested
the great merchants to make short-term advances since they were the only
individuals who had large quantities of precious metal at their immediate
disposal.
The ¬rst of the emergency loans was requested in December 1809 on
arrival at Veracruz of the Spanish war frigates Asia and Algeciras, which
brought peremptory orders to load all the silver that was available in the
royal treasuries. The viceroy called for a series of meetings “of the principal
residents of this capital” to solicit their help in collecting one million and a
half pesos in less than two weeks. The major contributors, as was customary,
were members of the merchant guild of the capital, among them Antonio
Bassoco (who again advanced 200,000 pesos and was awarded the title of
Count of Bassoco), Gabriel Yturbe e Iraeta (100,000), Tom´ s Domingo a
de Acha (150,000), and the Count de la Cortina (50,000), followed by
sixty-¬ve individuals who provided amounts ranging between 2,000 and
20,000 pesos.52 As investors, these merchants, however, were not risking
their capital. The government promised that when tax funds arrived at the

50 For additional details, consult Appendix III.2 and the sources given there.
51 Lucas Alam´ n noted that on September 6,1809, an announcement was published by the treasury
a
that investors who so preferred could have payments deposited at interest: L. Alam´ n, Historia de
a
M´xico, vol. 1, p. 306.
e
52 See Gazeta de M´xico, December 2, 6, 9, and 13, 1809, for the complete list of contributors.
e
Mexican Silver for the Cortes of C´ diz and the War against Napoleon 231
a

treasuries, they would be quickly reimbursed. This was con¬rmed three
months later in an article published in the recently founded newspaper, the
Diario Mercantil de Veracruz, which called all parties that had provided money
for the interest-free loan to turn up on March 7 “at the of¬ces of the royal
treasury to receive the value of half the amount that each one had lent.”53
Six months later, in July 1810, the viceroy again asked for a second
emergency loan when the British warship, Bulwark, anchored in Veracruz.
The captain Charles Fleming traveled by horse and carriage to Mexico City,
carrying instructions from the Spanish Minister of Finance the Marquis de
Hormazas authorizing him to load “whatever wealth, products and effects

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