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Revolutionary Wars and Public Finances: The Madrid Treasury, 1784–1807

Published online by Cambridge University Press:  03 March 2009

Jacques A. Barbier  and
Herbert S. Klein
Jacques A. Barbier
Affiliation:
Associate Professor of History, University of Ottawa.
Herbert S. Klein
Affiliation:
Professor of History, Columbia University.
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Abstract

This study is based on the manuscript accounts of the Madrid Treasury for 1784– 1807. It confirms the customary view of an inexorable descent into bankruptcy, but also shows why this situation arose. A detailed analysis of receipts demonstrates the importance of colonial revenues and the stability of traditional income sources. In wartime, such as repeatedly plagued the country, the former was jeopardized and the latter proved too inelastic to respond to rising demand. On balance, the inescapable conclusion is that Spain was a limited fiscal entity which could not meet the challenge of a revolutionary era without breaking decisively with the restrictive structures of the Old Regime.

Type
Articles
Information
The Journal of Economic History , Volume 41 , Issue 2 , June 1981 , pp. 315 - 339
Copyright
Copyright © The Economic History Association 1981

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References

1 Vales reales were redeemable, interest-bearing but money-like instruments.Google Scholar

2 The most obvious source of knowledge for Spanish public finances in the late eighteenth century is the well known work of José de Canga Argüelles, Dicionario de Hacienda, 5 vols. (London, 1826–1827). It does not, however, provide the kind of systematic serial information helpful to historians.Google Scholar

3 This description and that which follows is largely drawn from Argüelles, Canga, Diccionario; see particularly vol. 2, pp. 63, 189, 232–33, and 362, and vol. 5, pp. 87, 175 –76, and 188.Google Scholar

4 The accounts used are from the Archivo General de Simancas, Dirección General del Tesoro, and are henceforth cited as AGS, DGT. The cuentas formales for 1784–1805 are drawn from inventario 16, guión 3, legajos 10–19. Values for the General Treasury for 1784–1805, and for both the Madrid Treasury and its parent body for 1806–1807, were found in inventario 16, guión 19, legajos 45–67. The alterations based on closer examinations of the Extraordinario revenues were the result of a redistribution of the sums reported in inventario 16, guión 19, legajos 49–67. The supplementary documentation found with the cuentas formales, particularly that dealing with debits and the regional treasuries, was most useful in helping to understand the accounts. The same may be said of inventario 16, guión 24, legajos 34–35. The breakdown of types of deficit financing given in Table 3 is a composite drawn from the cuentas formales and the extraordinario reports. Note that carryovers were deleted in the construction of all tables, and that in Table 1 the Caja figure is exclusive of surplses received from regional treasuries.Google Scholar

5 Collection and disbursement of General Treasury funds were in fact more complex than indicated here. To cite only the most significant problems, at times the Treasurer General operated through separate Dirección General del Grio and Dirección General de Provisiones, while at others the important functions of these units fell to the Banco Nacional de San Carlos and the Companía de los Cincos Gremios Mayores de Madrid. In addition, naval treasuries and crown corporations were semi-autonomous and the reales sitios were run along special lines. Problems this might have caused were dealt with by making certain assumptions; see note 9.Google Scholar

6 See Decreto del Rey uniendo a las cinco secretarías de estado y del despacho de Espana los negocios respectivos a cada departmento en los Indias (Madrid, 1790).Google Scholar

7 The auditing and control structure was equally complex. Serving at the side of the Treasurer General were the Contador General de Valores (for income) and Contador General de Distribución (for outgo), and in each of the regional treasuries yet another contador principal. These various coniadurías, however, carried on their work at the operational level. Beyond that lay the final audit of accounts for the Madrid Treasury. This was vested in a Tribunal Mayor de Cuentas which effectively functioned as part of the Council of Finance.Google Scholar

8 Parenthetically one should note that Principal Treasury revenues were made up of the sum of the surpluses of this second category and of the entirety of the caja element. Also, the General Treasury did not handle all of the Crown revenues. Besides various trust funds, the debts of previous reigns were the province of a separate Pagaduria de Juror, until their abolition, the treasuries of the several administrations of rentas made payments of their own; and most importantly, the vales reales were most often handled outside of its structure. Much of this, however, had to do with the public debt. Insofar as operating income and expenditures are concerned, the General Treasury's primacy was unchallenged.Google Scholar

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10 This was ordered by R.D. of April 19, 1799. See R.D. of Feb. 27, 1800 in Archivo General de Indias, Ultramar, legajo 732. (These archives are henceforth cited as AGI).Google Scholar

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17 The original reads: “el modo de que salgamos de los apuros del dia,” and comes from Francisco Javier Castano to Marquess de las Hormazas, 02. 10, 1795, in AGS, DGT, inventario 31, legajo 40.The discounts of vales reales cited are drawn from the reports of the Treasurer of Royal Finance of Cadiz to the Treasrer General, in AGS, DGT, inventario 32, legajos 3–6.Google Scholar

18 The spirit which the monarchy would have wished as a guide is expressed in a R.D. of Aug. 17, 1794, establishing a special tax of 4 percent on government salaries: “ … siendo indispensable buscar nuevos arbitrios …, no permitindome mi corazón paterno recargar a mis vasallos pobres …, he creido que la justicia y la equidad exiglan que las clases mas acomodadas, las mas ricas, y las que reciben inmediatamente mas beneficios del gobierno contribuyen sus bienes a los gastos.” The reality did not correspond to such pious wishes. See AGI, Indiferente, legajo 14.Google Scholar

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22 Barbier, Jacques A., “Peninsular Finance and Colonial Trade: The Dilemma of Charles IV's Spain,” Journal of Latin American Studies, 12 (05 1980), 21–37.CrossRefGoogle Scholar

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26 AGS, SSH, legajos 52 and 53; and AGL, Indiferente, legajo 1747.Google Scholar

27 AGS, SSH, legajo 485. The annuity was imposed in Aug. 1789, and Tudó became its beneficiary in 06 1797.Google Scholar

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29 AHN, Estado, legajo 177. “Primero es acudir a la conservación de aquel sistema, que cuidar a los otros respectos políticos que emanen de intereses nacionales… ”Google Scholar

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32 See AGI, Indiferente, legajo 844, for the work of the junta. Typical of the measures adopted were the free gift and patriotic loan described in the R.D. of 05 27, 1798, in AGI, Ultramar, legajo 730. See also AGI, Indiferente, legajo 731.Google Scholar

33 AHN, Hacienda, libro 6020.Google Scholar

34 AHN, Hacienda, libros 6607, 8051, and 8052. See also Bosher, J. F., French Finances, 1770–1795:From Business to Bureaucracy (Cambridge, 1970).Google Scholar

35 See Hamnett, Brian R., “The Appropriation of Mexican Church Wealth by the Spanish Bourbon Government—The ‘Consolidación de Vales Reales,’ 1805–1809,” Journal of Latin American Studies, 1, no. 2 (11 1969), 85–113;Google Scholar and Lavrin, Asuncion, “The Execution of the Law of Consolidación in New Spain: Economic Aims and Results,” Hispanic American Historical Review, 53 (02 1973), 27–49.Google Scholar