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• • • • • • • • • • • • • • • • • • • • • • • 12. Strange Saga:TheTransfer of New Spain’s Silver, 1804–1808 The Hacienda ministry, considering exclusively the largest revenue collection, ordered all available money to be dispatched to the Peninsula. José Luyando, 6 December 1810 One of the largest enterprises of the epoch, the transfer of silver from Spanish America, with the connivance of the English government. A. RaValovich Licenses, permits, or dissimulations . . . to carry on prohibited trade with Great Britain and its Islands. Gabriel de Yermo to Junta Suprema de Sevilla, 1808 Viceroy Iturrigaray’s dilemma after the outbreak of hostilities in late 1804 reflected the tactics of Madrid’s harried crisis managers. They confronted the strands of the old regime in metropole and colonies, which, interwoven by war, would ultimately strangle Charles IV, Godoy, Soler, Sixto Espinosa, and others, including the viceroy of the colony of New Spain, Iturrigaray, in that year of imperial crisis, 1808. The scenario of 1804 seems comparable to that of 1797, but the closer one examines the events of the four years 1804–8, the more the adage should be modified to, “The more it seems the same, the more it has changed.” In late 1797 Francisco Saavedra’s reaction to hostilities with England and Spain’s naval disaster at Cape Saint Vincent had led to the stratagem of comercio neutro, whereby some Spanish merchants could rely upon neutral shipping to maintain trade between the metropole and its otherwise isolated American colonies. The policy could be sustained for only eighteen months, however, collapsing under pressure from disaVected merchants in Cadiz, Veracruz, and Mexico City. Thereafter, from 1804 to 1808, Madrid had to revert to its traditional policy of restricting trade to Spanish citizens and on occasion issuing special licenses ( gracias, permisos) to firms in Cadiz 320 • Financing Empire and Havana in order to meet specific shortages, particularly the provisioning of Havana and Caracas. It is no accident that the two peaks in the performance of U.S. exports between 1790 and 1807 coincide, first, with the months of comercio neutro (1797–99) and, second, with the phase of Spain’s policy of gracias, permisos, and contratas with specific neutral merchant houses (1804–7).… How to tolerate the predominantly North American shipmasters entering and then departing from Veracruz in 1805, 1806, and 1807 with silver and seroons of cochineal, all under legitimate royal contracts , was the dilemma facing Viceroy Iturrigaray, further poisoning his relations with members of New Spain’s commercial elites. If Saavedra’s resort to comercio neutro in 1797 was a response to the Spanish colonies’ import needs and to massive smuggling, Soler and Godoy’s tactic of awarding contracts to neutral firms in 1804 was aimed at ensuring an uninterrupted inflow of colonial silver on government account—specifically , from New Spain—to peninsular ports. Of course, over three centuries the metropolitan government’s liquidity had always been maintained by American specie and bullion imports on galeones and flotas; after the extension of comercio libre to New Spain in 1789, the flow of silver, mainly to the port of Cadiz, rose. The metropole’s dependence upon its colony of New Spain was heightened: that colony’s rising net yields from turnover taxes (alcabalas), from customs receipts and Indian tributo, and from government monopolies of mercury, blasting powder, tobacco, and coinage fees, provided the metropolitan government with roughly 66 percent of all net colonial revenue from the colonies in America.À In addition, the almaceneros of Mexico City, together with the colony’s estate owners and ecclesiastical corporations, furnished both interest-free and interest-bearing loans to finance the metropole’s wartime expenditures from 1779 to 1781 and again from 1793 to 1795. The extraordinary burst of silver shipments from Veracruz to Cadiz from 1802 to 1804 would underscore New Spain’s critical role in sustaining the liquidity of the metropolitan government, while sharpening the appetites of young Basque and Asturian emigrants who were outward and also upward bound to relatives in New Spain’s commercial networks. There was in addition the international context of New Spain’s silver streams. A drying up of silver flows into France from Spanish sources just before the French Revolution was a factor in the financial instability of the French monarchy,Ã while in 1797 a similar shortage aVected England’s public and private sectors. Widespread smuggling in and around Cadiz of English goods purchased at Gibraltar after 1797 was possible only with American silver. In brief, upon New Spain’s silver production and...

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