La bancarrota del virreinato: Nueva Espana y las finanzas del imperio espanol, 1780-1810 (review)

La bancarrota del virreinato: Nueva España y las finanzas del imperio español, 1780-1810. By CARLOS MARICHAL. In collaboration with CARLOS RODRIGUEZ VENEGAS. Serie Estudios; Fideicomiso Historia de la Américas; Sección de Obras de Historia. Mexico City: El Colegio de México; Fideicomiso Historia de las Américas; Fondo de Cultura Económica, 1999 . Map. Tables. Figures. Appendixes. Bibliography. 366 pp. Paper.

Carlos Marichal (with the assistance of Carlos Rodríguez Venegas) has produced a remarkable study in late colonial fiscal history, a classic in conception and argument, range of sources and organization, synthesis and lucidity. He traces how metropolitan and colonial authorities--squeezed by the metropole's sheer incapacity to generate funds from domestic sources to cover rising defense expenditures in Europe and the Atlantic--launched an ofensiva fiscalizadora in New Spain. To be sure, deficits and the need to cover them were expected consequences of warfare in the Atlantic and on the West European continent in the three decades after 1780 . La bancarrota is about the getting and spending of New Spain's silver pesos, to explain "como el virreinato logró responder a las demandas financieras cada vez mayores del imperio" (p. 62 ).

La bancarrota's first third provides a detailed fiscal map of the two decades before 1800, as Madrid tapped into the extraordinary liquidity of New Spain's wealthy immigrant merchant oligarchy and then all layers of colonial society, to finance metropolitan military expenditures, especially those of its major Caribbean outpost, Cuba, where between 1765 and 1788 the colonial treasury had to transfer almost 58 million pesos. And in the 1790 s, as viceroys responded to pressure from Madrid, Revillagigedo boastfully sent 30 million in 48 months, and his successor Branciforte another 26 million in only 18 months! After reviewing returns from traditional imposts from mining operations, alcabalas, tributos and the new tobacco tax, Marichal highlights two fiscal innovations: first, colonial authorities' recourse to influential intermediaries--the Consulado de Mexico, the Tribunal de Minería--to market noninterest-bearing and later interest-bearing (5 percent) loans; second, enforcement of the misnamed donativo universal rigorously applied to high and low, from merchants, mine owners, landlords and high churchmen down to artisans, obraje workers, hacienda peons, day workers, and Indian communities. In the case of the lowest income levels, rising fiscal returns measured the ruthless loyalty of the empire's corregidores and curas in decades when New Spain's underprivileged were scissored--as Marichal notes in a sensitive section on "fiscal sociology" --by stagnating wage levels and rising subsistence prices. At the highest income levels of Spanish-born merchants, such as Bassoco, Alonso Alles, and Gomes de la Cortina, Madrid found that invariably they backed their loyalty with their pesos. And the decades before 1800 were only a foretaste of massive transfers on public and private account after the renewal of warfare between Spain and England in 1804 .

London's decision in 1804 to intercept trade between Spain and its colonies drastically curbed maritime access to New Spain's pesos, now the metropole's main support for the vales of the Banco de San Carlos and for satisfying subsidio commitments for the military operations of France, Spain's ally. Marichal now turns to New Spain's ecclesiastical funds (mostly out on loan), tracing how they were collected under the Caja de Consolidación, how they were transferred in wartime to Spain, Paris, and London.

The symbiotic relation between church and imperial state justified Madrid's decision to tap ever more into the very considerable liquid funds of the colonial religious establishment. For example, before 1800 a high percentage of bulas' receipts went to Madrid, between 1804 and 1808 up to 25 percent of all tithes. Grosso modo, between 1780 and 1808 New Spain's religious establishment had to transfer to Madrid about 35 million pesos; to...