The Politics of Giving in the Viceroyalty of Rio de la Plata: Donors, Lenders, Subjects, and Citizens

5: Donativos and Loans Collected During the Naval Wars Against England (1797–1802)

121 chapter 5 donativos and loans collected during the naval wars against england (1797–1802) The Naval Wars against England put Spain under increased financial pressure as the superior English navy interrupted trade and the flow of silver from the Americas. In 1798 the crown restructured its debt and issued the Consolidación decrees. In 1804 these measures were also enforced over the Spanish American possessions . It is noteworthy that even under financial pressure the crown did not increase existing taxes, nor did it implement new ones affecting the fiscal status and property rights of lay subjects. Instead, it opted for another donativo. Additionally, during this war the crown openly requested both interest-bearing and interest-free loans. Unlike the loans taken by the crown during the War against the French Convention, however, a large number of the lending operations brokered to finance the Naval Wars against England were negotiated separately from donativos. This chapter analyzes donativos collected between 1799 and 1801. Through these years, changing political circumstances coupled with warfare prompted the crown to change existing commercial policies. The new commercial policies impacted both donativos and loans. The first section of this chapter discusses financial and commercial policies implemented in the 1790s. The analysis that follows demonstrates that instead of draining specie from the viceregal economy, donativos pumped capital into the areas that benefited from the new commercial arrangements. As in the past, donativos stimulated commercial expansion and regional integration and remained an ineffective tool for transferring funds to Spain. The collection of new donativos included not only transactions in coin but also the issuing and trading of a variety of financial instruments that cleared in the royal treasuries. Additionally, donativos continued to channel power and income toward influential interest groups. Under the chapter 5 122 new commercial, political, and financial conditions, however, the politics of giving changed and therefore facilitated the advancement of certain powerful groups to the detriment of others. political circumstances and commercial and financial policies affecting the collection of donativos during the naval wars against england Donativos collected from 1793 to 1795 as well as the new ones collected during the Naval Wars against England (1799–1801) aimed at providing financial support for the crown. The first ones were collected earlier in the cycle of costly Atlantic warfare. However, in 1799, when the second collection started, the Spanish Crown was still struggling to financially recover from the previous war. Consequently, the crown took a more aggressive approach toward mobilizing the monetary resources of its subjects and even offered solid guarantees for the repayment of loans. In 1798 the king requested from Viceroy Olaguer Feliú “the shipment to Spain of all funds available in the royal exchequer . . . as well as those taken as loans from wealthy [pudientes] subjects and corporations [comunidades ] interested in investing their idle [parado] capital.”1 The crown promised to pay 5 percent interest annually backed by royal revenues and rents. The terms of these agreements were similar to those regulating the issuing of juros discussed in chapter 4. Simultaneously, the crown opened the subscription for voluntary donativos and “patriotic” loans and discounted bureaucratic salaries by 4 percent; patriotic loans would be returned with no interest within ten years after the peace was signed. These ordinances additionally made clear that the call went beyond the rich and powerful, as they stated that the king was willing to accept “voluntary donations in coin and jewelry from subjects belonging to all classes and hierarchies [with the intention to extend] the honor of such dignifying service to everyone [but making sure contributors did not] relinquish the capital they need to continue with their businesses.”2 Significantly, the ordinances spoke of “dignifying service” instead of taxation, indicating that even when facing continuous financial challenges, it was not necessarily easy for the Spanish Crown to tax at will. And by requesting donativos and loans instead of imposing taxes, the crown allowed contributors to stipulate the size and value of their contributions. It is also apparent that the king did not want to jeopardize the financial well-being of the donativos and loans collected during naval wars 123 contributors and trusted their ability to assess their own capacity to extend financial support to the monarch. Finally, these ordinances indicated that the Spanish monarch was willing to mortgage present and future revenues to back the repayment of loans and donativos. These royal orders combined the language of contracts...