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included the expensive cooperation of the Spanish Navy with France (during
several decades) as well as the subsidy payments demanded by Napoleon
from October 1803 onward. The Spanish General Treasury was unable to
cover the subsidy payments and, therefore “ as we have seen “ ingenious
expedients were devised to obtain Mexican silver for their ful¬llment. Once
again, the richest colony was to save the metropolis from insolvency.
Finally, it is worthwhile commenting on the role of American tax and loan
remittances to Spain after 1808, which have been described in Chapter 7.

18 The ¬‚uctuations in the quotations of the vales reales (see Figure 4.2) offer an instructive guide to the
degree of con¬dence of investors in future payment by the government.
19 Furthermore, by the time of the Napoleonic invasion, less than 10% of the original vales reales had
been amortized. See Miguel Artola, La hacienda del Antiguo R´gimen, pp. 455“458.
e
264 Bankruptcy of Empire

The Napoleonic invasion implied the virtual defeat of the Spanish monar-
chy and the appropriation by the French of ¬scal resources in most of the
Iberian Peninsula. The patriot armies struggled bravely to resist but, in
practice, had few domestic ¬scal resources once forced into refuge in C´ diz.a
Nonetheless, the relation with the colonies across the Atlantic saved the
Liberal government at C´ diz. Despite the cracks in the empire, the remit-
a
tances of American treasure to the metropolis were not interrupted between
1808 and 1811 “ a fact that re¬‚ected the continued vigor of the colonial
treasuries. These shipments of American monies (the bulk from New Spain)
were initially used in part to support the patriotic councils (juntas patri´ticas)
o
that sprang up in different Spanish regions from June 1808. Subsequently,
in 1809, the silver was used to ¬nance the three-man Regency as well as
the Central Junta at Seville. And ¬nally, when the Army of Andalusia was
forced to beat a retreat and fall back to the southern port city of C´ diz, the
a
colonial silver remittances served to ¬nance both the defense of this last
outpost of Spanish resistance and the ordinary expenses of the extraordi-
nary experiment in Liberal government, known as the Cortes of C´ diz (C´ diz
a a
Parliament) of 1810“1812.
Spanish American silver remittances, nonetheless, would not continue
inde¬nitely. The outbreak of rebellions in three of the viceroyalties (Buenos
Aires, New Granada, and New Spain) from 1810 onward marked the begin-
ning of the end for the integrated ¬scal system of the Spanish imperial state.
Combined with the ¬nancial crisis of the absolutist monarchy, this circum-
stance helps to explain the failure of the absolute monarch Ferdinand VII
in his persistent attempts to recover the Americas after his return to power
in Madrid in 1814. The Spanish state no longer had the military, naval,
or ¬scal strength to maintain a vast and far-¬‚ung empire. On several occa-
sions, the absolutist regime sent the remains of its once important ¬‚eet and
signi¬cant portions of its army to South America between 1815 and 1824
but failed in the bid to recover empire.
The bankruptcy of the metropolitan treasury of the monarchy implied
that the costs of waging war against the insurgent movements in Spanish
America during the years 1810“1824 had to be covered fundamentally by
the respective colonial administrations. The royalist authorities in Mexico
spent the bulk of their ¬scal resources to ¬nance the struggle against the
rebel movements between 1810 and 1820 as did the royalists in upper and
lower Peru during the war years of 1818“1824. But in the colonies “ as
in the metropolis “ the cumulative burdens of more than thirty years of
¬nancing the wars of the Spanish crown had severely weakened the royal
administration as well as the ¬scal and ¬nancial structures on which it
depended. The wars of independence would eventually destroy both.
The main objective of this book has been to emphasize the importance
of the ¬scal and ¬nancial antecedents of the ¬nal bankruptcy and breakdown
Conclusions 265

of royal administration in late colonial Mexico. We have argued that the
major cause of this bankruptcy “ which clearly reached its apogee during
the wars of independence in the years 1810“1820 “ was generated, in good
measure, by the previous and incessant metropolitan demands to cover the
costs of war and of the debts of the monarchy, particularly in the decades of
1790“1810.
Was there any alternative to participation in the wars that swept Europe
and the Atlantic or to the ¬nancial maelstrom in which the monarchy of
Charles IV was engulfed? This remains an open question. In the event, by
the time of the Napoleonic wars, Spain had become but a pawn of the more
aggressive European powers and was soon subject to the most violent and
prolonged invasion in its history. These events shook the Spanish empire to
its roots. While the Spanish American colonies were not so directly affected
by European military events, the ¬scal and ¬nancial pressures continued to
intensify as a result of war demands and skyrocketing royal debts. Imperial
bankruptcy was the prelude to the wars of independence.
Appendixes




Appendix I

Monetary Equivalents in the Late Eighteenth Century
A silver peso in colonial Mexico was worth eight silver reales and each real
was worth twelve granos.
In Spain one silver peso was equivalent to twenty reales de vell´ n, the
o
monetary unit most common there.
For additional details on the Spanish monetary system at that time, see
´ ˜
Bernardo Garc´a Mart´nez, “El sistema monetario de los ultimos anos del
± ±
periodo novohispano,” Historia Mexicana, xvii, 3 [67] (1968), 349“360.
Exchange Rates. From 1783:
One silver peso was equal to one silver dollar;
one silver real was worth the equivalent of twelve cents;
one grano was worth one penny.
Before 1776, there was a substantial difference in the trade value of these
coins between England and its colonies. In England the Spanish milled
dollar (silver peso) was worth anywhere between 4s. 3d. and 4s. 6d. st., up
to 4s. 9d. st. In New York, however, the Spanish milled dollar was rated
by custom at 8s., in Pennsylvania at 7s. 6d., and in Virginia it was worth
6s. 8d. by 1764. These variations were also common in other regions and
markets around the world.
Generally speaking, at this time 1 silver peso was equivalent to approx-
imately 5 francs and to 1.7 Dutch ¬‚orins.
The prices of silver varied in relation to gold. The variation of silver
against gold after 1760 was not trivial. The ratio of gold to silver in 1760“
1769 was about 14.51:1.00. In 1780“1789, it was 14.45:1.00, and in 1781,
it hit 13.33. In this sense, the Mexican silver boom of the late eighteenth
century tended to erode the metal™s purchasing power when converted to
gold prices.
For details, see “The Real Exchange Rate of the Mexican Peso, 1762“
1812: A Research Note and Estimate,” Journal of European Economic History,
23, 1, (1994), 131“140.

267
268 Appendixes

Table I.1. General Treasury of Spain, Income, 1763“1811 (in millions of reales a )

Indies as
Ordinary Tax Income Sent Percentage
Years Income from Spain from the Indies of Total total
1763 416,854 58,056 12.22 474,910
1764 396,633 55,923 12.36 452,556
1765 402,453 88,075 17.96 490,528
1766 377,455 63,635 14.43 441,090
1767 384,356 78,162 16.90 462,518
1768 382,340 65,593 14.64 447,933
1769 391,856 17,839 4.35 409,695
1770 350,147 109,487 23.82 459,634
1771 367,308 12,241 3.23 379,549
1772 349,468 94,688 21.32 444,156
1773 351,053 32,055 8.37 383,108
1774 352,702 134,503 27.61 487,205
1775 348,477 67,125 16.15 415,602
1776 361,752 80,021 18.11 441,773
1777 390,050 21,659 5.26 411,709
1778 408,797 123,970 23.27 532,767
1779 427,300 10,349 2.36 437,649
1780 706,776 5,329 0.75 712,105
1781 627,975 33,346 5.04 661,321
1782 709,885 4,826 0.68 714,711
1783 503,624 18,883 3.61 522,507
1784 515,720 79,903 13.42 595,623
1785 548,013 43,942 7.42 591,955
1786 519,586 77,143 12.93 596,729
1787 533,063 67,217 11.20 600,280
1788 572,371 85,152 12.95 657,523
1789 498,084 24,767 4.74 522,851
1790 515,963 100,768 16.34 616,731
1791 514,289 161,269 23.87 675,558
1792 499,275 130,331 20.70 629,606
1793 473,391 141,728 23.04 615,119
1794 509,316 195,718 27.76 705,034
1795 595,364 138,764 18.90 734,128
1796 698,473 236,896 25.33 935,369
1797 664,232 12,360 1.83 676,592
1798 516,480 131,800 20.33 648,280
1799 460,132 90,861 16.49 550,993
1800 436,576 1,326 0.30 437,902
1801 432,619 341 0.08 432,960
1802 485,817 350,195 41.89 836,012
1803 561,257 240,260 29.98 801,517
1804 689,239 291,200 29.70 980,439
Appendixes 269

Ordinary Tax Income Sent
Years Income from Spain from the Indies Percentage total
1805 473,285 50,073 9.57 523,358
1806 499,508 40,820 7.55 540,328
1807 552,545 2,751 0.50 555,296
1808 n.i. n.i. n.i. n.i.
1809 126,577 295,000 76.03 388,000
1810 150,500 250,500 62.47 401,000
1811 260,000 73,000 21.92 333,000
The equivalency is one silver peso = twenty reales vell´ n.
a o
n.i., no information.
Sources: Jos´ Patricio Merino, Las cuentas de la Administraci´n central espa˜ ola, 1750“1820 (Madrid:
e o n
Instituto de Estudios Fiscales, 1987); Carlos Marichal, “Bene¬cios y costes ¬scales del colonialismo: las
˜
remesas americanas a Espana, 1760“1814,” Revista de Historia Econ´mica, xv, 3 (1997), 475“505.
o




Table I.2. Fiscal Transfers from New Spain to the Caribbean and Spain, 1720“1799
(Five-Year Totals)

Situados to Remittances
Caribbeana
Five-Year to Spain
Periods (in Silver Pesos) (in Silver Pesos) total Situados (%) Spain (%)
1720“1724 4,499,062 3,234,788 7,733,850 58.17 41.83
1725“1729 3,085,054 3,059,482 6,144,536 50.21 49.79
1730“1734 4,197,179 5,106,367 9,303,546 45.11 54.89
1735“1739 4,656,450 4,373,282 9,029,732 51.57 48.43
1740“1744 6,912,558 1,690,717 8,603,275 80.35 19.65
1745“1749 8,959,912 4,532,150 13,492,062 66.41 33.59
1750“1754 5,617,366 4,988,090 10,605,456 52.97 47.03
1755“1759 10,287,737 7,186,906 17,474,643 58.87 41.13
1760“1764 12,490,166 4,375,698 16,865,864 74.06 25.94
1765“1769 12,415,397 1,962,393 14,377,790 86.35 13.65
1770“1774 15,239,170 5,895,231 21,134,401 72.11 27.89
1775“1779 19,299,632 8,455,391 27,755,023 69.54 30.46
1780“1784 39,182,777 6,644,404 45,827,181 85.50 14.50
1785“1789 22,466,573 9,911,646 32,378,219 69.39 30.61
1790“1794 23,185,235 24,323,787 47,509,022 48.80 51.20
1795“1799 24,118,964 18,850,747 42,969,711 56.13 43.87
a Situados were remittances to Spanish administration and military garrisons in Cuba, Puerto Rico,
Santo Domingo, Trinidad, Florida, and Louisiana.
Source: J. J. TePaske and H. Klein, Ingresos y egresos de la Real Hacienda de Nueva Espa˜ a, 2 vols. (Mexico:
n
Instituto Nacional de Antropolog´a e Historia, Colecci´ n Fuentes, 1986“1988).
± o
270 Appendixes

Table I.3. Silver Coin Mintage and Remittances by the Royal Treasuries of New Spain

Remittances Remittances Total
to Castille to Caribbean Remittances Mintage of New Spain
Years (Silver Pesos) (Silver Pesos) (Silver Pesos) Silver Production

Silver (Marks) Silver (Pesos)
1720“1729 6,294,270 7,584,116 13,878,386 9,873,198 83,922,183
1730“1739 9,479,649 8,853,629 18,333,278 10,650,545 90,529,633
1740“1749 6,222,867 15,872,470 22,095,337 12,067,202 102,571,217
1750“1759 12,174,996 15,905,103 28,080,099 14,793,893 125,748,091
1760“1769 6,338,091 24,905,563 31,243,654 13,280,859 112,887,302
1770“1779 14,350,622 34,538,802 48,889,424 19,361,189 164,570,107
1780“1789 16,556,050 61,705,650 78,261,700 22,050,436 187,428,706
1790“1799 43,174,534 47,485,230 90,659,764 26,021,253 221,180,651
Note: 1 mark = 8.5 pesos.
Source: John J. Tepaske. and Herbert S. Klein, Ingresos y egresos de la Real Hacienda de Nueva Espa˜ a, 2 vols.
n
(M´ xico: Instituto Nacional de Antropolog´a e Historia, Colecci´ n Fuentes, 1986“1988). Alexander
e ± o
´
von Humboldt, Ensayo pol´tico sobre el reino de la Nueva Espa˜ a, Mexico, Ed. Porrua, 1991. Richard Garner,
± n
Economic History Data Desk, that can be consulted in http://home.comcast.net/∼richardgarner04/.




Table I.4. Index Numbers a

Remittances Remittances Total Mintage
Years to Castille to Caribbean Remittances Silver (Pesos)
1720“1729 100 100 100 100
1730“1739 117 117 117 108
1740“1749 115 209 158 122
1750“1759 169 262 212 150
1760“1769 88 328 198 135
1770“1779 199 455 317 196
1780“1789 263 814 515 223
1790“1799 600 626 612 264
a These index numbers are based on date in Table 1.3.
Table I.5. State Expenditures in Spain and Great Britain (1764“1793)

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. 52
( 64 .)



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