Bankruptcy of Empire: Mexican Silver and the Wars Between Spain, Britain and France, 1760–1810 (Cambridge Latin American Studies, Series Number 91)

Originally published in 2007, this book incorporates the rich literature on the history of the fiscal organization and financial dynamics of the Spanish empire within the broader historical debates on rival European imperial states from 1760 to 1810. The focus is on colonial Mexico because it served as a fiscal and financial submetropolis that ensured the capacity of the imperial state to defend itself in a time of successive international conflicts. Throughout the reign Charles IV, the finances of the Spanish state began to sink. This collapse was caused by the enormous expense of waging successive wars in the Americas and Europe. In each war, colonial Mexico was a most important source of resources for the Crown, but these demands gradually outstripped the tax base of the viceroyalty despite the extraordinary silver boom of the late eighteenth century. The bankruptcy of the Spanish monarchy and its empire was the inevitable consequence. Half-title......Page 3 Series-title......Page 5 Title......Page 7 Copyright......Page 8 Dedication......Page 9 Contents......Page 11 Table......Page 13 Figures......Page 14 Acknowledgements......Page 15 Introduction......Page 17 The Longue Duree of the Spanish American Empire: Military and Fiscal Resurgence in the Eighteenth Century......Page 22 Atlantic Wars, Mexican Silver, and Colonial Debts in the Second Half of the Eighteenth Century......Page 25 Comparative Issues in Colonial Finance in the Eighteenth Century......Page 29 1 Resurgence of the Spanish Empire: Bourbon Mexico as Submetropolis, 1763–1800......Page 32 The Military and Financial Consequences of 1762 for the Spanish Imperial State......Page 38 Bourbon Reforms and Grand Strategies of Imperial Defense......Page 41 The Fiscal Logic of Imperial Expenditures......Page 45 The Richest Colony: Mexico as Submetropolis......Page 48 Imperial Expenses Covered by the Mexican Situados......Page 52 Geographic Distribution of the Situados......Page 54 The Financial Contribution of New Spain to the War against Great Britain, 1779–1783......Page 57 2 Imperial Tax State: The Fiscal Rigors of Colonialism......Page 64 Tax Reforms and the Construction of an Imperial Tax State......Page 68 Bourbon Fiscal Strategies in the Americas: Reforms and Varying Degrees of Resistance......Page 71 The Tax Structure of New Spain: Microcosm of the Spanish Empire in the Americas......Page 75 The Fiscal Burden of Colonialism for the Inhabitants of New Spain......Page 89 Fiscal Pacts in Colonial Society......Page 91 Fiscal Benefits of Empire for the Metropolitan Treasury......Page 94 3 Imperial Wars and Loans from New Spain, 1780–1800......Page 97 Royal Donations and Loans in the Colonies: Between the Archaic and the Modern......Page 100 Origins of the Policy of Indebtedness in the Viceroyalty, 1779–1783......Page 103 The "Gracious Donation" of 1781–1784: Compulsion as a Financial Instrument of War......Page 106 The 1781–1783 War Loans: The Financial Contribution of New Spain’s Elite......Page 113 The War Loans of 1793 and 1795......Page 120 The Universal and Compulsory Donations of 1793–1795......Page 127 The Donation and Loans of 1798 for the Naval War against Britain......Page 129 Conclusions......Page 133 4 Royal Church and the Finances of the Viceroyalty......Page 135 Ecclesiastical Revenues and the Royal Treasury in New Spain......Page 138 Church Donations and Loans to Finance the Wars of the Spanish Crown, 1780–1804......Page 148 The Consolidation Fund as Second Royal Treasury......Page 154 The Consolidation Fund and the Appropriation of Church Assets in New Spain, 1804–1808......Page 158 The Importance of New Spain's Consolidation: Some Imperial Comparisons......Page 165 5 Napoleon and Mexican Silver, 1805–1808......Page 170 The Consequences of the Subsidy Treaty (1803) with Napoleon and the Negotiations with the Banker, Gabriel Julian de Ouvrard......Page 174 The Agreements with the Firms of Hope and Baring to Transfer Mexican Silver......Page 180 The 1805 Financial Crisis in Paris and the Bankruptcy of Ouvrard......Page 185 The Viceroy, the Hope/Parish Consortium, and the Dispatch of Silver from Veracruz......Page 187 The Mercantile Operations of the Hope/Baring Consortium in Veracruz, 1805–1808......Page 192 6 Between Spain and America: Royal Treasury and the Gordon & Murphy Consortium, 1806–1808......Page 200 The Import Dependence of the Colonial Fiscal Monopolies......Page 202 The First Naval War with England (1798–1802) and the Royal Licenses for Neutral Trade at Veracruz......Page 207 The Royal Treasury and Its Financial and Trading Agreements with the Gordon & Murphy Consortium, 1806–1808......Page 213 Gordon & Murphy’s "Neutral" Expeditions to Veracruz during the Second Naval War with England, 1806–1808......Page 217 The Agreements with the British Government and Jamaica-to-Veracruz Mail Packets......Page 220 British Warships and Silver Exports from Veracruz, 1806–1808......Page 224 7 Mexican Silver for the Cortes of Cádiz and the War against Napoleon, 1808–1811......Page 229 The Importance of Spanish American Contributions to the Struggle against Napoleon and to the Cadiz Parliament, 1810–1812......Page 230 The Coup against the Viceroy of Mexico in 1808 and the First Loans for the Spanish Patriots......Page 236 Mexican Silver for Defense of the Metropolis: The Donation of 1808–1809......Page 239 To Save Crown and Commerce: Merchant Loans from Mexico for the Spanish Patriots, 1809–1811......Page 243 The Importance of the Flows of Mexican Silver to Europe: A Recapitulation......Page 250 8 Rebellion of 1810, Colonial Debts, and Bankruptcy of New Spain......Page 253 The Colonial Debt in 1810......Page 255 Colonial Debt in the Early Years of Insurgency: The Bankruptcy of the Viceroyalty......Page 265 Conclusions: The Financial Collapse of Viceroyalty and Monarchy......Page 271 The Fiscal and Financial Burden of Colonialism in New Spain......Page 272 The Bankruptcy of the Spanish Monarchy and Its Consequences......Page 278 Monetary Equivalents in the Late Eighteenth Century......Page 283 Appendix II......Page 289 III.1: List of Donativos Universales Collected in New Spain, 1781–1810......Page 292 III.2: List of Loans Raised in New Spain to Finance Wars of the Spanish Crown, 1781–1811......Page 295 III.3: Loans Taken in Holland by the Spanish Crown, 1770–1806 (with Debt Service Mainly in Mexican Silver)......Page 302 Secondary Sources......Page 305 Index......Page 329 Half-title 3 Series-title 5 Title 7 Copyright 8 Dedication 9 Contents 11 List of Tables and Figures 13 Table 13 Figures 14 Acknowledgements 15 Introduction 17 The Longue Duree of the Spanish American Empire: Military and Fiscal Resurgence in the Eighteenth Century 22 Atlantic Wars, Mexican Silver, and Colonial Debts in the Second Half of the Eighteenth Century 25 Comparative Issues in Colonial Finance in the Eighteenth Century 29 1 Resurgence of the Spanish Empire: Bourbon Mexico as Submetropolis, 1763–1800 32 The Military and Financial Consequences of 1762 for the Spanish Imperial State 38 Bourbon Reforms and Grand Strategies of Imperial Defense 41 The Fiscal Logic of Imperial Expenditures 45 The Richest Colony: Mexico as Submetropolis 48 Imperial Expenses Covered by the Mexican Situados 52 Geographic Distribution of the Situados 54 The Financial Contribution of New Spain to the War against Great Britain, 1779–1783 57 2 Imperial Tax State: The Fiscal Rigors of Colonialism 64 Tax Reforms and the Construction of an Imperial Tax State 68 Bourbon Fiscal Strategies in the Americas: Reforms and Varying Degrees of Resistance 71 The Tax Structure of New Spain: Microcosm of the Spanish Empire in the Americas 75 The Fiscal Burden of Colonialism for the Inhabitants of New Spain 89 Fiscal Pacts in Colonial Society 91 Fiscal Benefits of Empire for the Metropolitan Treasury 94 3 Imperial Wars and Loans from New Spain, 1780–1800 97 Royal Donations and Loans in the Colonies: Between the Archaic and the Modern 100 Origins of the Policy of Indebtedness in the Viceroyalty, 1779–1783 103 The "Gracious Donation" of 1781–1784: Compulsion as a Financial Instrument of War 106 The 1781–1783 War Loans: The Financial Contribution of New Spain’s Elite 113 The War Loans of 1793 and 1795 120 The Universal and Compulsory Donations of 1793–1795 127 The Donation and Loans of 1798 for the Naval War against Britain 129 Conclusions 133 4 Royal Church and the Finances of the Viceroyalty 135 Ecclesiastical Revenues and the Royal Treasury in New Spain 138 Church Donations and Loans to Finance the Wars of the Spanish Crown, 1780–1804 148 The Consolidation Fund as Second Royal Treasury 154 The Consolidation Fund and the Appropriation of Church Assets in New Spain, 1804–1808 158 The Importance of New Spain's Consolidation: Some Imperial Comparisons 165 5 Napoleon and Mexican Silver, 1805–1808 170 The Consequences of the Subsidy Treaty (1803) with Napoleon and the Negotiations with the Banker, Gabriel Julian de Ouvrard 174 The Agreements with the Firms of Hope and Baring to Transfer Mexican Silver 180 The 1805 Financial Crisis in Paris and the Bankruptcy of Ouvrard 185 The Viceroy, the Hope/Parish Consortium, and the Dispatch of Silver from Veracruz 187 The Mercantile Operations of the Hope/Baring Consortium in Veracruz, 1805–1808 192 6 Between Spain and America: Royal Treasury and the Gordon & Murphy Consortium, 1806–1808 200 The Import Dependence of the Colonial Fiscal Monopolies 202 The First Naval War with England (1798–1802) and the Royal Licenses for Neutral Trade at Veracruz 207 The Royal Treasury and Its Financial and Trading Agreements with the Gordon & Murphy Consortium, 1806–1808 213 Gordon & Murphy’s "Neutral" Expeditions to Veracruz during the Second Naval War with England, 1806–1808 217 The Agreements with the British Government and Jamaica-to-Veracruz Mail Packets 220 British Warships and Silver Exports from Veracruz, 1806–1808 224 7 Mexican Silver for the Cortes of Cádiz and the War against Napoleon, 1808–1811 229 The Importance of Spanish American Contributions to the Struggle against Napoleon and to the Cadiz Parliament, 1810–1812 230 The Coup against the Viceroy of Mexico in 1808 and the First Loans for the Spanish Patriots 236 Mexican Silver for Defense of the Metropolis: The Donation of 1808–1809 239 To Save Crown and Commerce: Merchant Loans from Mexico for the Spanish Patriots, 1809–1811 243 The Importance of the Flows of Mexican Silver to Europe: A Recapitulation 250 8 Rebellion of 1810, Colonial Debts, and Bankruptcy of New Spain 253 The Colonial Debt in 1810 255 Colonial Debt in the Early Years of Insurgency: The Bankruptcy of the Viceroyalty 265 Conclusions: The Financial Collapse of Viceroyalty and Monarchy 271 The Fiscal and Financial Burden of Colonialism in New Spain 272 The Bankruptcy of the Spanish Monarchy and Its Consequences 278 Appendixes 283 Appendix I 283 Monetary Equivalents in the Late Eighteenth Century 283 Appendix II 289 Appendix III 292 III.1: List of Donativos Universales Collected in New Spain, 1781–1810 292 III.2: List of Loans Raised in New Spain to Finance Wars of the Spanish Crown, 1781–1811 295 III.3: Loans Taken in Holland by the Spanish Crown, 1770–1806 (with Debt Service Mainly in Mexican Silver) 302 Bibliography 305 Primary Sources 305 Secondary Sources 305 Index 329 This book emphasizes that the Spanish empire remained the third most important European state in terms of fiscal income and naval power, and first in size of territorial empire, particularly because of its colonies in Spanish America. The Spanish crown was involved in four wars with Great Britain and two wars with France during the decades 1760-1810. Colonial Mexico financed most of these wars by remitting silver in the form of taxes and loans. The expenditures of the imperial wars were so great that they eventually caused the bankruptcy of both the Spanish American colonies and of the monarchy itself. This book examines the rich literature on the history of the fiscal and financial dynamics of the Spanish empire within the broader historical debates on rival European imperial states from 1760 to 1810. The author also focuses on Mexico's financial role in this study. "This book incorporates the recent literature on the history of the fiscal organization and financial dynamics of the Spanish empire within the broader historical debates on rival European imperial states in the eighteenth and early nineteenth centuries."--Jacket