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7. The Aftermath in Spain
- Johns Hopkins University Press
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Neither agriculture nor manufactures have enjoyed any sizeable growth. José Moñino, conde de Floridablanca, Espíritu de los mejores diarios literarios, 1788 Technological education . . . protection of infant industries . . . incentive taxation . . . eVective economic planning . . . all these and a host of other material and intellectual factors implemented the remarkable progress. Earl Hamilton, War and Prices in Spain, 1651–1800 In evaluating the repercussions of the comprehensive October 1778 statute on colonial trade, one must take into account the broad policy considerations of the Spanish state for the metropolitan and colonial economies. Probably because of the virtual stalemate in the metropole in the aftermath of the fall of Esquilache in 1766, economic initiatives shifted to Spain’s colonies in America, where, Madrid concluded, policy could be more successfully implemented, because resistance would be less eVective. In 1778, the Spanish state’s major preoccupation was to augment its income from its extended American empire, especially from New Spain and Peru, through duties on exported goods, its most reliable source of Wnancial liquidity, given Spain’s agrarian economy. A second priority was the development of agricultural exportables, especially wine and brandy from Andalusia and Catalonia; in the colonies, there was emphasis on exports of sugar, tobacco, hides, cochineal, and indigo, which metropolitan intermediaries redirected to European consumers and manufacturers. There was, Wnally, a third priority integral to the Bourbon paradigm that proyectistas had been contemplating over the Wrst half of the century: creation of a broad base in manufactures permitting (belatedly, to be sure) the metropole to match the achievement of competing European colonial powers, a colonial pact whereby national manufactures were exchanged for 7.The Aftermath in Spain • • • • • • • • • • • • • • • • • • • • • • • prized colonial staples. Although perhaps not considered realizable in the short term, behind the Wscal priority was a protectionist factor favoring an import-substitution model that privileged what was still small-scale manufacturing of woolens, linens, silks, and cottons. Bernardo Ward’s Proyecto económico, originally written in 1762, had broached this, and his editor, Campomanes , had supported the concept in his Industria popular (1774), expounding on cottage industry that might avoid grouping potentially dangerousproletariansinlargeworkshops .Theseinterlockedobjectivesrequired more shipping capacity and a stimulus to lower maritime freight and insurance rates, which under the convoy system had discouraged shipments of high-volume agricultural staples with low unit value. Taken together, these measures might reduce the widespread smuggling of European manufactured goods (which was cheaper by far than reexporting them through Spain’s transatlantic trade system), a perennial problem in the Peninsula, and one now increasingly encountered in the Caribbean. Smuggling—the parallel economy in both metropole and colonies—translated into serious leakage of New Spain’s minted and unminted silver to non-Spanish suppliers and an irreplaceable loss of government revenue. Silver minted at Mexico City Wgured large in oYcial and unoYcial calculations . Analyzing the gap between silver minted in New Spain and the metropole’s receipts over a twelve-year period, 1767–78, Madrid’s Royal Economic Society found a diVerence of 45 percent. Over the following wartime period, 1779–83, the gap virtually doubled, reaching 81 percent.⁄ Even after making allowance for silver retained in New Spain’s internal economy, its customary subsidies to colonial governments in the Philippines and Cuba, and for silver withdrawn from Havana under contract by Cabarrús & Aguirre during the war, the gap was disturbing as a measure of the extent of smuggled imports and silver exports, on both counts a revenue loss. “[R]est assured . . . it is no exaggerated estimate that over six years, foreigners have supplied three-quarters of New Spain’s imports,” the Royal Economic Society’s report hammered home. A more conservative estimate lowered this to 50 percent.¤ Internal contradictions plagued attempts to curb smuggling in colonial markets. While the 1778 Reglamento removed the Proyecto’s toneladas and palmeo fees, among others, it increased the base prices of selected exports to colonial ports from 5 to 20 percent.‹ In addition, the tariV of 1782, although eVectively liberating Spain from the unequal commercial treaties of the seventeenth century, raised import duties between 14 and 25 percent on items constituting two-thirds of exports to the colonies, such as woolens, silks, thread, mercury, and hardware.› Moreover, colonial import prices were inThe Aftermath in Spain • 187 [44.197.113.64] Project MUSE (2024-03-19 12:54 GMT) Xated further by equating the colonial peso fuerte with the metropole’s peso sencillo, cutting colonial purchasing power by 25 percent.fi Thus, despite the government’s intention to provide the...