Bankruptcy of Empire

This book incorporates recent, 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 in the eighteenth and early nineteenth centuries. 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.

   Whereas the monarchy of Charles Ⅲ (1759–1788) was able to successfully meet the challenges of reinforcement of empire, the finances of the Spanish state began to sink under Charles Ⅳ (1789–1808). This collapse was caused by the enormous expense of waging successive wars in the Americas and Europe. In each war, colonial Mexico was the 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.

Carlos Marichal was born in Baltimore, Maryland, and has dual nationality of both the United States and Mexico. He earned his B.A. and Ph.D. from Harvard and has taught history at the university level in Mexico since 1979. Since 1989, he has been a professor of history at El Colegio de Mexico, the leading social science university institute in Mexico. He is the founder and former president of the Mexican Association of Economic History and has served on the executive committee of the International Economic History Association since 2003. He is the author of A Century of Debt Crises in Latin America, 1820–1930 (1989), and is the editor or coeditor of fifteen books in Spanish and English, published over the last twenty years, the majority on the fiscal and financial history of Mexico, as well as numerous texts on the economic history of Latin America.

CAMBRIDGE LATIN AMERICAN STUDIES

General Editor

Herbert S. Klein

Gouverneur Morris Emeritus Professor of History, Columbia University

Director of the Center of Latin American Studies, Professor of History, and Hoover Senior Fellow, Stanford University

91
Bankruptcy of Empire

Other Books in the Series

1. Ideas and Politics of Chilean Independence, 1808–1833, Simon Collier

2. Church Wealth in Mexico: A Study of the “Juzgado de Capellanias” in the Archbishopric of Mexico 1800–1856, Michael P. Costeloe

3. The Mexican Revolution, 1910–1914: The Diplomacy of Anglo-American Conflict, P. A. R. Calvert

4. Britain and the Onset of Modernization in Brazil, 1850–1914, Richard Graham

5. Parties and Political Change in Bolivia, 1880–1952, Herbert S. Klein

6. The Abolition of the Brazilian Slave Trade: Britain, Brazil and the Slave Trade Question, 1807–1869, Leslie Bethell

7. Regional Economic Development: The River Basin Approach in Mexico, David Barkin and Timothy King

8. Economic Development of Latin America: Historical Background and Contemporary Problems, Celso Furtado and Suzette Macedo

9. An Economic History of Colombia, 1845–1930, W. P. McGreevey

10. Miners and Merchants in Bourbon Mexico, 1763–1810, D. A. Brading

11. Alienation of Church Wealth in Mexico: Social and Economic Aspects of the Liberal Revolution, 1856–1875, Jan Bazant

12. Politics and Trade in Southern Mexico, 1750–1821, Brian R. Hamnett

13. Bolivia: Land, Location and Politics since 1825, J. Valerie Fifer, Malcolm Deas, Clifford Smith, and John Street

14. A Guide to the Historical Geography of New Spain, Peter Gerhard

15. Silver Mining and Society in Colonial Mexico: Zacatecas, 1546–1700, P. J. Bakewell

(Continued after index)

Bankruptcy of Empire

Mexican Silver and the Wars Between Spain, Britain, and France,
1760–1810

CARLOS MARICHAL
El Colegio de Mexico

CAMBRIDGE UNIVERSITY PRESS
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo, Delhi

Cambridge University Press
32 Avenue of the Americas, New York, NY 10013–2473, USA

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Information on this title: www.cambridge.org/9780521879644

© Carlos Marichal 2007

This publication is in copyright. Subject to statutory exception
and to the provisions of relevant collective licensing agreements,
no reproduction of any part may take place without
the written permission of Cambridge University Press.

First published 2007

Printed in the United States of America

A catalog record for this publication is available from the British Library.

Library of Congress Cataloging in Publication Data

Marichal, Carlos.
Bankruptcy of empire : Mexican silver and the wars between Spain,
Britain, and France, 1760–1810 / Carlos Marichal.
p. cm. – (Cambridge Latin American studies ; 91)
Includes bibliographical references and index.
ISBN-13: 978-0-521-87964-4 (hardback)
ISBN-10: 0-521-87964-7 (hardback)
1. Spain–History, Military–18th century. 2. New Spain–Economic conditions–18th century
3. Finance, Public–New Spain–History–18th century. I. Title. II. Series.
DP78.M27  2007
946′.057–dc22      2007017750

ISBN 978-0-521-87964-4 hardback

Cambridge University Press has no responsibility for
the persistence or accuracy of URLs for external or
third-party Internet Web sites referred to in this publication
and does not guarantee that any content on such
Web sites is, or will remain, accurate or appropriate.

To Soledad, with love and admiration

Contents

List of Tables and Figures

Tables

Figures

Acknowledgements

The late eighteenth century may be considered the greatest age of silver of the Spanish empire and, without question, Mexico was the tax jewel of the monarchy, providing it with the fiscal and financial resources to function on a world scale. This book documents and analyzes the enormous extraction of Mexican silver that was used mainly to finance an extraordinary succession of wars between Spain, Britain, and France that marked the crisis of the ancien regime in Europe and the Americas. The intention of this work is therefore to contribute to transatlantic history, a field so extensive that I owe a great deal to the work carried on by a great number of researchers from different countries.

   The approach adopted here has its roots in comparative history, a fact related to my personal intellectual trajectory. After working in the 1980s on the comparative history of Latin American debt crises in the nineteenth and twentieth centuries, I turned my attention to the history of colonial finance and debts because I found it to be a field on which work had just begun and was flourishing. I published a series of articles and directed a number of doctoral theses, learning much from the work on Mexican colonial finance by Luis Jáuregui, Guillermina del Valle, Matilde Souto, and Antonio Ibarra as well as Iván Escamilla, Gisela von Wobeser, Pilar Martínez, Leonor Ludlow, and Ernest Sánchez Santiró, among others. At the same time, I benefited from discussions with colleagues from Spain who had worked on the history of the transition from empire to nation, as aptly phrased by Leandro Prados de la Escosura; other Spanish historians who contributed to ideas in this book are Pedro Tedde, Francisco Comín, Nicolás Sánchez Albornoz, Pablo Martín Aceña, Gabriel Tortella, Albert Carreras, Josep María Fradera, and Jordi Maluquer de Motes, whom I thank for their collaboration in many things, large and small. At the same time, my research was nurtured by the research of a broad cohort of cosmopolitan historians who have contributed to the great edifice of historiography on Bourbon Mexico and Spanish America: among those who provided initial guidance on colonial finance and economy were Pedro Pérez Herrero, Juan Carlos Garavaglia, and our dear and lamented friend, Juan Carlos Grosso. Also fundamental have been the contributions of Herbert Klein, José Carlos Chiaramonte, John Coatsworth, Richard Garner, Richard Salvucci, Linda Arnold, John TePaske, Stanley Stein, Eric Van Young, and David Brading – through both their writings and intellectually stimulating visits to Mexico.

   Among the many persons who provided assistance in archives and libraries, I wish to single out Juan Manuel Herrera, Armando Rojas, and Eutiquio Franco at the Archivo General de la Nación, Teresa Tortella, director of the archives of the Banco de España, Micaela Chávez, and the personnel of the library of El Colegio de México, who have assisted me consistently for many years. In addition, I must thank the collaboration of Carlos Rodríguez Venegas who assisted me in many stages of the research; Irasema Infante who helped with tables and figures; Anthony Tillet who swiftly translated first versions of Chapters 3, 5, 6, and 7; and Lorena Murillo who translated Chapter 4. I am also grateful to the editors of diverse academic journals in which preliminary research of this volume appeared, as well as for the permission to translate previous versions of materials contained in a work published by the Fideicomiso de las Américas at El Colegio de Mexico, whose director, Alicia Hernández Chávez, is a dynamic promoter of the comparative history of Latin America.

   Finally, I wish to thank the professional and enthusiastic support of Herbert Klein, general editor of Cambridge Latin America Studies, the courteous attention of editor Frank Smith and his assistant Kate Queram, as well as the two anonymous readers from Cambridge University Press for their penetrating observations. Last, but certainly not least, my thanks go to Navdeep Singh and his team in Delhi who have done the work on the electronic version of the manuscript that was necessary to transform virtual reality into the physical book!