Edge of Crisis: War and Trade in the Spanish Atlantic, 1789–1808

10. Consolidaci

• • • • • • • • • • • • • • • • • • • • • • • 10. Consolidación: Spain [T]he pleasing, favorable feeling given the public by a Real Decreto for the sale of said properties and the deposit of its proceeds in the Caja de Amortización. Miguel Cayetano Soler, “Memoria que el ministerio de hacienda pasa al de Estado . . . 1801” Especially in May 1803, on the reopening of hostilities between France and England, the commerce of Spain, along with the resources of the Caja de Consolidación, began to stagnate, which had to lead to the uncertain neutrality of Spain. “Résumé historique des opérations de la caisse royale de Consolidación” Iturrigaray’s meticulous remission of ecclesiastical funds (fondos de obras pías) to the metropole simply conformed to a decree of December 1804 issued immediately after the renewal of hostilities between Spain and England . The decree extended to the colony of New Spain and other Spanish colonies a financial device, the consolidación, initiated in the metropole after 1798 by Finance Minister Soler to encourage the investing public to continue to support government-issued treasury bills, paper vales reales, at a critical moment when funds from America did not reach Spain.… It was another indicator of the metropole’s worsening financial situation. Unraveling the long-term roots of insolvency over two decades after the war of 1779–82 bares again the relationship between the economy of colony and metropole, New Spain and Spain, and the impact of Spain’s French connection , first Bourbon and then Napoleonic, in the crisis of 1808. The historiography of the consolidación in Spain and New Spain is intriguing . For long it was virtually neglected. Then decades ago, in a hardly respectful, pioneer biography of Iturrigaray in New Spain, the Spanish art historian Lafuente Ferrari highlighted the political impact of consolidación in 278 • Financing Empire the colony, and there followed attention to both its economic and political repercussions. The contributions of Brian Hamnett, Asunción Lavrín, Romeo Flores Romero, H. Masae Sugawara, Margaret Chowning, and Gisela von Wobeser included quantification of New Spain’s consolidación receipts, what Richard Herr and Francisco Tomás y Valiente have essayed for Spain. There has been a predictable Atlantic compartmentalization: studies of the phase in the colony of New Spain have barely alluded to the metropolitan phase; in the case of consolidación in Spain, we have the metropolitan rationalization of 1804 that the operation was so successful at home that it was applied overseas. In fact, New Spain’s silver and the vicissitudes of the metropole’s vales were interlocked from the initiation of the treasury bills after 1780, not to mention the preoccupation of French commercial and financial interests with silver exports from New Spain and with tapping them. As Richard Herr noted, the initiation of consolidación in Spain in 1798 occurred partly because “Spain could receive no funds from America” in wartime. Was it merecoincidencethatinNovember1804—onceagain,inwartime—oYcials at Madrid contracted with Gabriel-Julien Ouvrard for the transfer of government specie from Veracruz, while simultaneously extending consolidación to New Spain because it had produced “such excellent results in Spain”?À As will be clarified, Viceroy Iturrigaray’s execution of consolidación, although tending to separate landholding and mining interests from those of Mexico City’s almaceneros, produced on an annual basis more funds per capita of consolidación than in the metropole. In this area as in others, New Spain overfilled its role in Spain’s imperfect version of the colonial compact. The Financial Crisis Within months after Spain’s declaration of war with England in 1779, Madrid oYcials confronted a financial crisis whose main elements resurfaced in the 1790s and, with greater intensity, in the first decade of the nineteenth century. It was a complex of chronic misallocation of government income on royal household patronage (after all, this was what the monarqu ía was all about), spiraling military and naval budgets, gaps between government income and uncontrollable expenditures, and a Cadiz mercantile community whose funds were temporarily retained in the colonies in wartime and pressured to pay the costs of borrowed capital.Ã Analysis of the response to these interwoven pressures brings to the fore the eroding foundations of Spain’s transatlantic economy before the crisis of the old regime and the collapse of the first Spanish empire. Consolidación: Spain • 279 The government’s conditioned response in 1780 had been to turn first to its...