<<

. 46
( 64 .)



>>

are ready for shipment and transfer them to this Peninsula.”54 On this
occasion the sums collected for the loan were less substantial, amounting to
550,000 pesos, to which was added an important quantity of tax revenues
accumulated in the capital city™s treasury.55
Finally, at the end of November 1810, another British warship, the
Implacable, arrived with instructions to load a million and a half pesos
for the patriot government at C´ diz. The ship™s captain George Cockburn
a
insisted that Viceroy Venegas gather all possible treasure urgently in order
to aid the Spanish and British armies waging battle at that very moment
against Napoleon™s troops.56 The viceroy collected all the funds available
including 900,000 pesos from the tobacco monopoly, 500,000 pesos from
the Mexico City mint, and a relatively small donation of 88,000 pesos,
collected between September and November.57
At the same time, the viceroy decided to approach the Mexico City
Merchant Guild to contribute to another new short-term loan, emphasizing
the “urgency of sending aid” to the Spanish patriot government. In fact, the
correspondence of the viceroy reveals that his intention was not to ship the

53 The Merchant™s Guild of Veracruz was responsible for the payments being liquidated “by presenting
a guarantee in his favor (the moneylender) with a signed receipt on the reverse”: Diario Mercantil de
Veracruz, 6 de marzo de 1810, BN (Madrid), secci´ n de raros, R/60136.
o
The correspondence on Fleming™s visit to Puebla and Mexico City in AGN, Archivo Hist´rico de o
54
Hacienda, vol. 766, exp. 1.
After departing from Veracruz, the Bulwark called at Havana where it probably collected additional
55
sums, arriving at C´ diz on December 19, 1810 with 1,566,244 pesos of American silver: J. Canga
a
¨
Arguelles, Observaciones sobre la historia de la guerra, vol. 1, p. 162.
In one of his letters to the viceroy, Cockburn called attention to the recent victory of Wellington
56
over troops commanded by the French General Massena. It should be noted that the anxiety of
the English captain to load more wealth was not disassociated from the fact that all British naval
commanders usually charged between 1 and 2% commission on shipments of silver to Europe. For
the correspondence of Cockburn with the viceroy, see AGN, Marina, vol. 144, fs. 254“255. For a
discussion of the commissions, see G. Jim´ nez Codinach, Gran Breta˜ a y la independencia de M´xico,
e n e
Chapter 4.
Documentation about the origins of the funds sent in the Implacable is to be found in AGN, Marina,
57
vol. 144, fs. 253“265.
232 Bankruptcy of Empire

money but to replenish the already depleted colonial treasury. Nonetheless,
the wealthier merchants did not hesitate to cooperate. Not surprisingly,
the biggest contributor was Antonio Bassoco, once again advancing the
colossal individual sum of 200,000 pesos, although other merchants were
not far behind, such as Ram´ n Fern´ ndez (100,000), the Count de la Cortina
o a
(100,000), Pedro Echeverr´a (100,000), and Tom´ s Acha (100,000). They
± a
were followed by another sixty merchants who contributed smaller amounts,
for example Pedro Alles (25,000), the Marguis de Inguanzo (25,000), Jos´ e
58
Vicente Olloqui (20,000), and Diego de Agreda (30,000).
In the case of short-term loans, it was assumed that the lenders would be
reimbursed quite quickly. On the other hand, providing long-term credit in
late colonial Mexico was more risky, which made investors wary and made
it more dif¬cult for the government to collect money with speed. This was
the case of the enormous twenty million peso patriotic loan requested by the
Central Junta of Spain on January 10, 1810. The ¬rst negotiations for this
huge credit began in early May in Mexico City but collection was delayed
for several months. The exorbitant loan was severely criticized by different
members of the elite, in particular, Bishop Abad y Queipo who considered
that the funds could only be obtained by exercising unheard-of pressure on
the population.
Government of¬cials in Mexico City, nevertheless, were con¬dent that
the great loan could be collected successfully “through the merchant guilds
of Mexico, Guadalajara and Veracruz.” To entice investors, higher interest
rates were offered, and the merchant guilds were named as intermediaries to
obtain subscriptions. (For details see Appendix III.2.) They were also offered
receipts from an increase in sales tax (alcabalas) charged at Acapulco as well as
other tax income. Two members of each merchant guild in the viceroyalty
attended the ¬rst meeting on May 19, 1810, in Mexico City to discuss
the loan: Gabriel de Yermo and the Count de la Cortina from the Mexico
City guild, Jos´ Ignacio de la Torre and Pedro Miguel Echeverr´a from the
e ±
Veracruz merchant guild, and Juan Jos´ Cambero and Eugenio Moreno de
e
Texada, representing the Guadalajara guild. They agreed not to publish
the proclamation until September 25, when the viceroy formally invited
the three merchant guilds to proceed with the subscription. Nevertheless,
investment was extremely slow. By the end of 1812, only 983,000 pesos
had been raised, mainly subscribed by ecclesiastical corporations which
contributed mostly silver ornaments, and individual investors, many of
whom deposited family silverware in the government treasuries.59 These

58 The complete lists were published in the Gaceta de M´xico, December 7 and 11, 1810, and supple-
e
ments.
59 The texts of the Royal Order and documents of the Council ( Junta) are published in Juan E.
Hern´ ndez y D´ valos, Historia de la guerra de independencia, vol.2, docs 14 and 15.
a a
Mexican Silver for the Cortes of C´ diz and the War against Napoleon 233
a

extraordinary contributions suggest the marked scarcity of hard currency
which had begun to affect even the wealthiest sectors of Mexican society.
This last loan exhausted the patience of the propertied classes of New
Spain and reduced possibilities of further contributions for the metropolis.
The failure of the loan was con¬rmed by the testimony of Bishop Abad y
Queipo, one of the most lucid and informed minds on colonial ¬nancial
matters. Responding to the requests of the merchant guilds to lend money,
the skeptical bishop remarked that he did not believe the twenty-million-
peso patriotic loan could be paid back:
it would seem impossible to me that it can be realized completely or in part. Not
completely because there is not enough hard cash in the kingdom to cover it without
taking all the silver from the churches and all the silverware that is the property
of individuals, both of these dangerous methods in the critical circumstances in
which we ¬nd ourselves.60
For Abad y Queipo, the Mexican economy simply could not provide
more money to the state: the catastrophic agrarian crisis (1809) had caused
a steep drop in agricultural production; trade was increasingly stagnant and
money was becoming scarce in all regions. Except for “some ten or dozen
mercantile houses in the cities of Mexico and Veracruz,” traditional credit
networks had been devastated:
We see all commerce constrained, bills delayed, and nobody able to make the
stipulated term payments on credits. . . . All this is the effect of the impolitic and
ruinous contributions and other extraordinary extractions that have left the viceroy-
alty without savings and without the necessary cash for business and trade.61
The viceroyalty of New Spain, however, faced not only an economic
recession but also an imminent political crisis. The outbreak of popular
insurrection in Guanajuato in September 1810, led by the revolutionary
priest Miguel Hidalgo, marked the start of ten years of violent and extensive
con¬‚ict throughout Mexico, later known as the wars of independence. After
the outbreak of domestic warfare, further attempts to seek ¬nancial support
for the metropolis were bound to be much more dif¬cult, as historian
Luis J´ uregui has argued. The patriot subscription of March 1811 was the
a
last used to exclusively support peninsular troops and hence forward, the
colonial administration focused its efforts, ¬nancial and military, on defense
of royalist positions within the viceroyalty itself.62

60 Cited in J. M. L. Mora, Cr´dito P´ blico, p. 143.
e u
61 Ibid., p. 143.
62 L. A. J´ uregui, “La anatom´a del ¬sco colonial,” p. 266. Nevertheless, it should be observed that L.
a ±
Alam´ n, Historia de M´xico, vol. 2, pp. 235“236, af¬rmed that the last loan for the peninsula was in
a e
August 1811.
234 Bankruptcy of Empire

The Importance of the Flows of Mexican Silver to Europe:
A Recapitulation
While the remittance of tax funds and loans from Mexico was subsequently
suspended, it is important not to underestimate the astounding volume of
silver sent to C´ diz between late 1808 and early 1811. This fact has been
a
largely ignored by traditional as well as most modern historiography. In
the short period between October 1808 and February 1811, the value of
of¬cial remittances to Spain from Mexico amounted to twenty-four mil-
lion silver pesos, an average of almost one million pesos per month. (See
Table 7.4.) This was approximately half of the total amount of silver minted
in the viceroyalty, to which should be added the considerable sums exported
on private account, especially by the great merchants of Mexico City
and Veracruz who were desperate to recover their control of transatlantic
trade.63
The of¬cial silver exported represented a signi¬cant drainage of resources,
and therefore implied signi¬cant costs for the Mexican economy. On the
other hand, from the perspective of the patriot government at C´ diz, the sil-
a
ver ¬‚ows were a crucial lifeline. The enormous transfers of silver were critical
for the ¬nancial sustenance of the Spanish patriot armies and administration
in Andalusia as they struggled to contain the advance of Napoleon™s troops.
In this sense, the viceroyalty of New Spain performed a key role in defending
the mother country against the French invaders. Without Mexican silver,
neither the Regency nor the government of the Cortes of C´ diz could have
a
survived the powerful offensive of the Napoleonic army, particularly during
the terrible years of 1809“1811.64
The information presented here on the volume of Mexican silver remit-
tances calls for a revision of the interpretation of such in¬‚uential historians
as Joseph Fontana who have argued that the Spanish American contribution
was substantial but not decisive to the war effort of the patriots.65 Fontana
argues correctly that in Catalonia, Valencia, and northern Spain, patriot
resistance against the French invaders was ¬nanced locally. However, the
situation was different in Andalusia, where the seat of patriot government
remained throughout the war. From the data we have presented in this


63 For details on royal remittances in these years, see Carlos Marichal “Bene¬cios y costes ¬scales del
colonialismo,” pp. 490“505.
64 The issue is analyzed in C. Marichal, “Bene¬cios y costes ¬scales.”
65 J. Fontana and R. Garrabou, Guerra y Hacienda, p. 97, state that between 1809 and 1814 the patriot
government collected some 1,500 million reales, of which around 600 million came from American
remittances, abundant up to 1810 but in rapid decline after 1811. However, it is more pertinent to
focus on the contrast between periods; in 1809“1811, total income was 1,000 million reales, of which
60% came from the Americas; while in 1812“1814, according to Fontana, income was 500 million,
of which scarcely 5% were funds from the colonies.
Mexican Silver for the Cortes of C´ diz and the War against Napoleon 235
a

Table 7.4. Government Silver Remittances from Spanish America to C´ diz, 1808“1811
a

Amounts of
Date of Arrival at Silver Pesos
C´ diz
a Names of Ships Port of Departure Transported
December 24, 1808 British warship Diamond Veracruz 1,696,344
December 24, 1808 British warship Melpomene Veracruz 1,605,446
January 6, 1809 Spanish warship San Lorenzo Havana 121,659
February 1, 1809 Spanish warship San Justo Veracruz and Havana 6,753,133
August 6, 1809 Spanish warship San Francisco de Veracruz and Havana 3,361,869
Paula
August 10, 1809 Spanish brigantine San Miguel Honduras 205,567
August 17, 1809 Spanish warship San Fulgencio Callao de Lima 1,415,122
December 1, 1809 Spanish frigate San Prueba Montevideo 152,959
December 22, 1809 Spanish warship San. Ramon Veracruz 1,500,000
January 19, 1810 Spanish frigate San Francisco de Campeche 21
Borja
February 17 and 18, British warships Undaunted and Puerto Rico 2,369,971
1810 Ethalion
March 12, 1810 Spanish corvette Palomo Cartagena de Indias 44,636
March 16, 1810 Spanish frigate Primera Callao de Lima 284,830
April 28, 1810 Spanish frigate Joaquina Callao de Lima 310,235
May 2, 1810 Spanish warships Asia and Veracruz and Havana 4,146,189
Algeciras
May 4, 1810 Spanish brigantine Alerta Cartagena de Indias 4,021
June 7, 1810 Spanish brigantine Cazador Montevideo 24,904
June 24, 1810 Spanish corvette Diamante Montevideo 13,182
June 24, 1810 Spanish frigate Neptuno Callao de Lima 96,133
August 1, 1810 Spanish schooner Correo C´ rmen
a Cartagena de Indias 638
August 7, 1810 Spanish frigate Fuerte-hermosa Callao de Lima 230,518
August 25, 1810 Spanish brigantine Catalina Veracruz 200
September 24, 1810 Spanish warship Pedro de Callao de Lima 1,726,016
Alc´ ntara
a
October 6, 1810 Spanish frigate Nicaragua Honduras 228,582
December 19, 1810 British warship Bulwark Veracruz and Havana 1,566,244
February 18, 1811 British warship Implacable Veracruz 1,530,000
February 22, 1811 Spanish warship Astrea Callao de Lima 18,596
March 14, 1811 Spanish corvette Nueva Atrevida Veracruz 1,000
total 29,408,015
¨
Source: Jos´ Canga Arguelles, Diccionario de Hacienda, vol. 1 (Madrid, 1833), p. 162.
e


chapter, it is clear that during the three years, 1809“1811, the treasuries
of the patriot forces at Seville and C´ diz would have collapsed had it not
a
been for the numerous shipments of silver from the colonies. These funds
were successively destined to the sustenance of the Supreme Junta, the
236 Bankruptcy of Empire

Regency, and the C´ diz Parliament, as well as the armies of Andalusia and
a
Extremadura. Without this transatlantic ¬nancial assistance, their destiny
would have been highly in doubt.
At the same time, the Mexican silver shipments were of great signi¬cance
for Great Britain, Spain™s principal European ally against Napoleon. To
begin with, the silver was required to assist Wellington™s army in Portugal.
Historians of British military strategy argue that, after naval defense, the
Peninsular War was the most important priority in the struggle against
Napoleon in Europe. The soldiers under Wellington were considered to be
the ultimate bulwark of British in¬‚uence on the continent. Nowhere else
were so many troops of the regular British army and nowhere else were
military expenditures so considerable. The latter were covered by sums
authorized by the Parliament but a substantial portion came, indirectly,
in the shape of Mexican silver: the British government taxed the colonial
trades with Spanish America, and the Bank of England accumulated much
silver on this account. These monetary resources were also indispensable to
cover the numerous and large subsidies provided in cash to the allies of Great
Britain in various parts of continental Europe engaged in war with France.66

<<

. 46
( 64 .)



>>