Odyssey Marine Exploration, Inc. v. The Unidentified Shipwrecked Vessel

Filing 232

DECLARATION of Gianluca Morello re 230 Objection by Odyssey Marine Exploration, Inc.. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7 - Part 1 of 5, # 8 Exhibit 7 - Part 2 of 5, # 9 Exhibit 7 - Part 3 of 5, # 10 Exhibit 7 - Part 4 of 5, # 11 Exhibit 7 - Part 5 of 5, # 12 Exhibit 8, # 13 Exhibit 9, # 14 Exhibit 10)(Morello, Gianluca)

~1~ ~iJi
Revolutionary Wars and Public Finances: The Madrid Treasury, 1784-1807

STORm

Jacques A. Barbier; Herbert S. Klein
The Jozmial o/Econoniic HistOlJI, Vol. 41, No.2. (Jun., 1981), pp. 315-339.
Stable UR:
http;/lInks.isto.Ql'gtsici?sici;;OO'l!-0507%781981 06%2941 %3A2%,3C315%3ARW APFI%ll2.0.CO%3B2-N
The Journal

of Economic History is currently published by Economic History Association.

.,
Your use of the JSTOR archive indicates your acceptance of JSTOR's Tenns and Conditions of http://\vww.jstor.ondabout/icnns.htrL. JSTOR's Tenns and Conditions of

Use, available at

Use provides, in par that unless you have obtained prior pennission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use.
Please contact the publisher regarding any further use of

this work. Publisher contact information may be obtained at

htt:p' / /WV1W .jstor.org/joumah,/eha .htm L.

Each copy of any part of a JSTOR trnsmission must contain the same copyright notice that appear on the screen or printed page of such trnsmission.

The JSTOR Archive is a trted digital repository providing for long-tenn preservation and access to leading academic journals and scholarly literature from around the world. The Archive is supported by libraries, scholarly societies, publishers,
and foundations. It is an initiative of JSTOR, a not-for-profit organization with a rrissioii'to help the scholarly community take advantage of advances in technology. For more infonnation regarding JSTOR, please contact support(êjstor.org.

htt://ww.jstor.org
Tue Nov 13 08:22:08 2007

EXHIBIT

8

Revolutionary Wars and Public Finances:
The Madrid Treasry, 1784-1807
JACQUES A. BARIER AND HERBERT S. KLEIN
This study is based on the manuscript accounts of the Madnd Treasur for 17841807. It conf the customary view of an inexorable descent into banptcy, but this situation arose. A detailed analysis ofreceipls demonstrates the alo shows why importance of colonial revenues and the stabilty of traditional income source. In
warte, such as repeatedly plagued the country, the former was jeopardized and

the latter proved too inelastic to respond to riing demand. On balance, the inescapable conclusion is that Spain was a limited fiscal entity which could not meet
the chalenge of a revolutionary era without breaking decisively with the restrictive

structures of the Old Regime.

As it enterednt was poised to gather the fruits of a century the reform. governe the closing decades of the eighteenth century of Spansh
The ties, however, proved to be extremely diffcult. Inexorably drawn

into the wars between Britain and Revolutionary France, Spain saw its hard-won resources exhausted in an ultiately vai effort to preserve the existing regie.
Though of crucial importance to Spansh history, the years following the peace of i 783 have received inadequate attention, outside of the inevi-

table intellectual, political, and diplomatic studies. Save for such gross phenomena as the criis in colonial trade, the massive borrowig through vales reales, i and the fial forlorn recourse to the seizure of pious founda+.~u':naJ \ lW':U'''VI '" """UI' Ji u."" "' u.uvuu," CLU .u.,ude..c1""-..c..ls ut. u l. " . " " fd,.n"_~Ml;za~;..-\ +J... ..c,...""..:~ n...l t;..an~.,l "".liu Y . ivy.i ""f +1.e

period have been barely touched upon. The aim of ths study is to determie why the Crown was forced to resort to desperate measures, given the seemig 'prosperity of the Spånsh empire in the late eighteenth century.
Before answering that question, however, one must defie the sources of

royal income and the quantity of revenues they generated. This effort in

turn requies exploration of the very nature of the Bourbon fiancial
strcture, a task as yet not fuy undertaken.2

The Bourbon fiancial structure was an extremely complicated one,
and so it defies ready understanding.:3 Certainy, a clear grasp of the se-

Journal of Economic History, VoL XLI, NO.2 (June 1981). (£ The Economic History Association. All nghis rescrvcd. ISSN 0022-0507. Jacques A. Barbier is Assciatc Professor of History, UJUversity of Ottawa. Herbert S. Klein is Profesor of History, Columbia Univcrsity. Profesr Barbier wihes to than the Social Scicnce and Humanities Resch Counci of Canda for iis support

i Vales reales wer redeemable, intcrcst-beang but money-like instnicnis.

2 Th most obvious source of knowledge for Spanh public fiances in the late eighteenth century
is the well known work of José de Caga Argilellcs, Dicdonaro de Hacienda, 5 vols. (London, 1826-

1827). It docs not, however, provide the kind of systematic scrial information helpful to historians.

J This descrption and that which follows is largely drawn from Canga Argilellcs, DiccionarÎo; see

paricularly vol. 2, pp. 63, 189,232-33. and 362, and vol. 5, pp. 87, 175-76, and 188.

315

316

Barbier and Klen

riate flow of fuds though the system is beyond what can be hoped for in an article. Nonetheless, much can be leared from an examation of the
most importt unt in Bourbon fical admstration-the Caja Principal

of Madrid (hencefort simply caled the Madrd or Pricipal Treasury).
I
As was typical of an Ancien Regie fical structue, Spai's was charM

acteried by competig authorities and duplicate accounts. For our purM

poses, however, it is not necessar to analyze the involved arangements
for direct collection, indirect payment, or tax-farg of revenues. Nor do
we need to disentangle the relationships between central treasury offces and autonomous fical agencies.. A good approxiation of the actual inM

come avaiable to the Crown in its capital city can be obtaied though
the accounts of the Principal Treasury, and th sum, in tur, is a sign-

cant indicator of the fiancial fate of the monarchy as a whole. The Pricipal Treasury was an integral part of the General Treasury
(Tesoreria General).4 The latter intitution was largely responsible for dis-

bursing operating expenditures in Europe, and thus played a central role
in the Crown's fical admstration. Revenue collection as such, however,

was a generaly distinct fuction carred out by speciald admistrations or corporate bodies. These latter in tum passed most of the sums
gathered to the General Treasur's constituent depositories. Thus, in pri-

ciple, there already existed a division of labor destined to be systematized
in the nieteenth centur in the separate General Directorate of Revenues

(Dirección General de Rentas) and General Directorate of the Treasur
i ni,-øC,,/n.. ~d"D.nl JDT '1Of'I'..n. \ S
\~N "' "."'5 V..,...,.. IM.....1 .."'v.. U' J-

To carr out his fuctions, the Treasurer General headed a lage .sta

organed into the Prcipal Treasur in Madrid, the key unt in the sys.. The accounts used are from the Archivo Genera de Simancas, Dirección General del Tesro, and arc hencefort cited as AGS, DGT. The cuentasfonna/es for 1784-1805 arc drawn from inventario 16, guión 3, legajos 10-19. Values for the Genera Treasury for 1784-1805, and for both the Madrid
Treury and its parent body for 18061807. were found in invcntario Hi, guiön 19, legajo8 45-67.
The alterations based on closer cxamintions of the Extraordinario revenues were the reult of a re-

distrbution of the sums rcported in inventao 16. guión 19, 1egajos 49-67. The supplementa docu-

mentation found with the cuentasfonna/e:, parcularly that dealing with dcbits and the regional treasuries, wa most usful in helping to undersd the accounts. The sae may be said of inventaro 16, guión 24, legajos 34-35. The breadown of types of deficit fiancig given in Table 3 is a composite
drawn from the cuentasforma/e: and the extraordinaro report. Note that caovcrs were delcted in

the constrcton of aU tables, and that in Table I the Caja figure is exclusive of surluses reeived
from regiona truries.
, Collection and disburement of Genera Treasry fuds wcre in fact more complex th indicated herc. To cite only thc most signcat problems. at ties the Treasurer General operated through
separate Dirección General del Giro and Direcci6n General de Provislones. while at others the impor-

tat fuctions of tñese units fell 10 the Banco Nacional de San Carlos and lbe Compañia dc los Cincos Gremios Mayores de Madrid. In addilion, naval treauries and crown corporations were semi-autonomous and lbe reale: sltios were ru iiong special

lines. Problems this might have caused were deat

with by making ccrtai asumptions; sec note 9.

The Madri Treasry. 1784-1807

317

Secretarro de Eslado y del Despacho Universal de Hacienda

Departamento de Espaila

Tesorerro General

NOTES'
o TESORERO de REAL HACIENDA
1 TESORERO del REY Z TESO R ERa de Ed lRC ITO

3 PAGAOURrA

FIGURE I

SPANISH GENERAL TREASURY ORGANIZTION, 1790

tern, and a series of regional treasuries in the provinces. Admistratively. his direct superior was the Minster of Finance (Secretario de Estado y del
Despachû Uni¡;ersal de Hacienda) who, frOm 1790 on, seems to have com-

muncated with hi mostly though the penisular department of his miistr.6 The basic outle of this organtion is presented in Figure I.'

The General Treasur's receipts consisted of thee basic types of entries. The first. reported under the name caja, contained not only the re-

gional returns for the Madrid area, but also national revenues flowing into vatious income accounts, including everyhig from monopoly profits to the proceeds from imposts on trade. Secondly, there were the entries for

the regional treasuries throughout the penisUla, which were reported with the same sort of separation between the various types of revenues. Some of ths was spent in the provinces but the surplus was sent on to the Madrid Treasury. Lastly, General Treasur receipts were completed by a
~ See Decreto del Rey uniendo a las cir:o secrelarl de eslado y del despar:ho de Espana los negor:ios

respecli~os a caa departmeflo en las Ind/as (Madnd. 1790).
the Treasurer General were the Contador General de Valores (for income) and Contador Genal de D/stribuc/ón (for
outgo). and in each of the regional treaures yet another conlator principal. These varous r:on7 Thc auditing and control slrcture was equally complcx. Serving at the side of

taduras. however. carred on thcir worle at thc operational IcveL Bcyond that lay the final audit of
accunts for the Madnd Treaury. This was vesed in a Tribuool Mayor de Cuentas which effcctvely

functioned as part of the Council of Finance.

318

Barbie and Klein
TABLE 1

GENERAL TREASURY INCOME
(m thousands of reales dè vellón)

Year
1784 1785 1786 1787 1788 1789 1790 1791 1792 1793
1794' 1795

Caja
204,851 210,907 176,253 196,097 207,242 163,605 173,216 118,216 153,450 301,655 783,037 907,826 459,599 591,932 510,484 894,460 778,874 328,019 429,309 313,674 473,133 476,408 603,571 592,494

Regional
346,872 241,365 371,074 320,105 346,324 268,252 318,964 411,854 353,194 358,273 350,108 280,622 457,965 219.507 380,293 198,019 206,884 224,743 284,533 539,107 488,418 302,209 212,094 144,380

Data
104,698 102,532 105,170 115,326 130,912 122,561 154,762 167,255 136,060 150,801 196,621 249,623 201,306 204,534 206,819 154,684 154,719 190,699 454,129

Toial
656,691 554,805 652,497 631,528 684,478 554,418 647,300 697,325 642,704 810,729 1,329,766
1,438,371 1,118,870 1,015,972 1,097,596 1,247,163 1,140,476 743,493 1,167,971 1,025,376 1,137,411
940,5'75

1796 1797 1798 1799 1800
1801

1802
1803 1804 1805 1806 1807

17,595
175,860 161,958

237,358 309,919

1,053,023 1,046,781

Source: See note 4.

thd category of pre-commtted income known as data formal, or entrada pur salida. These weïe ïevenues assigned to the General Treasur'jj but
paid out by collectg agencies from specic tax accounts. These amounts,
therefore, never reached the Madrid Treasur, the majority of

them going

to pay for local salares, pensons, and other expenses.8

Comparg the income of the General Treasur as a whole with that
part of it received eventually by its constituent Pricipal Treasury, which
more properly concern us (as in Figue 2, below), reveals the importance

of the latter. On average, the Pricipal Treasur actualy handled nearly
two thids of the total revenues generated to defray the costs of European operations. Intitutional factors were clearly involved. The Madrid Treas~

ury was headed by the Treasurers General in person and served as a
clearghouse for the entire network. It is also interesting to note from Figure 2 that the ebb and flow of revenues for the two institutions pro~
B Parntheticay one should notc that Prcipal Treasury revenues wcre madc up of thc sum of the

surplus of ths second category and of thc entirety of the caJa elemenl Also, the Genera Treary
did not hadlc al of the Crown revcnues. Besides varous trut funds, the dcbts of previous reigns
werc thc provincc of a separatc Pogadurla de Juros¡ unti thcir abolition, thc treauries of thc sevcra

admintrations of rentas mnde payments of their own; and most importantly, the vales reales were most often handled outside of its strcture. Much of ths, however, had to do with the public dcbt. Inofar as operating income and expcnditures arc concerned thc Gcneral Trcaswy's primacy was un.
challenged.

The Madri Treasry, 1784-1807

319

1,400
General fr.asiiry

1,200
1,000

Princlpø/ fr.a$ury

800
600

400
200

i -"...-.," ".~_..,\, .,.__..._,..

, l'\ I' ,,, . /l'I, : \..'" ,V 1
: '__.41 " i ,~,~! ,:"\ l'

,. '\ i"i\ J. ! \ ,. ~\

1 \ l......
," \

l\

I , f \/ ,,##.._..

1784 1786 \788 1790 1792 1794 1796 1798 1800 1802 1804 1806
FIGURE 2

COMPARSON OF THE TOTAL INCOME OF THE GENERAL AND PRINCIPAL TREASURIES, 1184-1801
(in milons of remes de vel/ón)

Sourc: See Tablc 1 and Tablc B. i.

ceeded along siar lies. For thi reason, and since the income of the

Prcipal Treasury was clearly fudamental, an analysis of its accounts,
whie it does not encompass al income received by the penisular author.

ities, is neverteless of such importnce as to be highy revealg of the financial fate of royal governent.9

Acceptig the importance of the Pricipal Treasury accunts does not resolve the problems inerent in using the data. The royal exchequer had
a complex set of procedures, and one must understand them before pro-

ceedg with analysis. These procedures are descrbed in Appendi A. To begi with one must reale that the post of Treasurer General was an alternatig position. This meant that the chief treasurer hielf, his Princi-

pal Cashier (Cajero Prlcipal), and the vanous regional treasurers and
paymasters (pagadores), al held offce as disburors of royal fuds for one

year (year en actualidad), spent the followig year renderig their ac"
counts (year en cesación), only to resume their posts the next and so star a

new two"year cycle. In the "o.ff year a second Treasurer General admi9 Sincc th study is limited to thc Gencra and Pricipal Trcasurics, othcr Crown bureaus are

strctly trated as indcpc;ndcnt agcncies. Obligations which thc Gcnera Treury imposed on thcm
ar therefore, considcred as legitimatc income of ilc formcr. Likewi reonsbilties which it di.

ched to thcm or on thcir behalfbavc to bc decmed licit cxpcnditures. Thc cmphasis thoughout is
on thc solvcncy of thc Madrid Treary, not on ilat ofthc king. As is cvidimt, our asumptions arc

somcwhat arbitrar. Thcy constitute, ncvcrtcles. nc:ar prcliminanes for coming to any con-

clusion about the fical situation, for thc difcult naturc of the documcntation prccludes followig
any othcr systcm for now.

320

Barbier and Klein

istered the offce with the aid of his own subordinates, only to pass into cesación when hi parer came back into actualidad. One may thus speak of odd- and even-year teams of treasurers replacing each other in offce in an orderly sequence. From 1799 onward th was changed slightly with

the nomiation of a permanent Treasurer General. The alternation of
pricipal cashers, regional treasurers and paymasters continued as be10
fore, however, so the accountig scheme was not thereby altered.

II

From analysis of total revenues durig the period under consideration it would appear that the Crown in fact was able to respond to the post1789 period of cris with great rapidity, increasing royal revenues substantialy with each major war, As can be seen in Figue 3, total income
rose impressively in 1793-1795 and again in 1796-1802, the two key periods of major governent expenditure of a mitar nature.

11

If the Crown was able to generate funds so quickly, why then was it forced durg the war periods into the extraordinary measures that we
know it took? Here, a breakdown of total income quickly reveas the answer. Whe reguar tax revenues increased somewhat, the bulk of the new

income was generated though forced and voluntar loans and to a lesser
extent though special war-related taes as the subsidio de 300 milones.

But to say that warime expenditures were met priariy by extraordi-

leaves a clearly perceptible growth in tax revenues durg the periods of warfare,. Yet ths fact, as presented in Figue 3, does not take into account the related phenomenon of ination. Indeed, as Earl J. Hauiltûn. lûng agû dem.ûnstrated, the late eighteenth century witnessed
nar borrowigs stil

another of Spai's periodic bouts with rising prices. Although Hamiton's price index extends only to 1800, we ca neverteless use his figures to de-

flate the total income and tax revenues figures for the penod going to the
end of

the century. ii The results, presented in Figure 4, show that the re.

Feb. 27, 1800 in Archivo General de lndias, Ultramar, legajo 732. (These archives arc hencefort cited as AOI).
II The gross return for LSOl seem unduly low, perhaps as a. reslt of a chiue in accunting or

IDTh was ordered by RoD. of Apnll9, 1799. See R.D. of

fund tranfer procedures. Those for I Bol, on the other hand, seem unduly lugh perhaps refiecung the alierations which may have produced the abnormaly low return of IBo1. Note that the return for 18061807 remain loa fragmentary to drw conclusions as regards the 18041808 war. 12 Earl J. Hamilton. War and Prices in Spain, 1651-1800 (Cambridge, Mas., 1947). The figures

used were the index numbe for New Cae (given on page 155), which us 1771-1780 as a base.
Year
1784 1785

Index
111.9 115.3 117.0
116.1 118.1 119.6 127.7

Year
1792 1793 1794 1795 1796 1797 1798 1799 1800

Index
125.1 130.5 130.5 139.3

176
1787 1788 1789 1790 1791

1220

141.0 155.5 165.6 154.6 149.2

The Madrid Treary, 17841807

321

Total Incøm.

Taii re"enues

400
200

1784 1786 1788 17'0 1792 1794 1796 1798 1800 180Z 1804 1806
FIGURE 3

MAJOR TREASURY: TOTAL INCOME COMPARED TO TAX REVENUES, 1784-1807
(in millons of reøles de vellón)

Sourc: See Table 3 and Table B-L.

sponse of both the adjusted tax and adjusted total income was woefully

inadequate. Total income did respond directly to the French War but less impressively to the first English War. In fact, the adjusted tota income
figues clearly show the Crown's inbilty to increase revenues sub-

stantially ûi even maintain them at the French '"var levels in this new and

far more damaging struggle with the Englh. As for tax income, its response to the war years was weaker: it lagged behid even in the French War period and then did not respond at all to the Englh conflct. This
comparative diference is well retlected in the relatively low correlation between years and tax revenues on the one hand, and the somewhat better
response of total income.

13

It would seem apparent from these figures that while the Crown was temporariy able to increae borrowings and, to a lesser extent, tax income
for the French War of 1793-1795, it quickly exhausted its potential for expanion of

revenues. In the Englh Wars it was able to raise both tax and

total income only moderately above the trend lie and then only three

13 The respectve equations for the logs of the variables Tax Income (l) and Total Income (T.)

T = -7.0269+.00934 YEAR R2 =.37
('()(236)

T¡=-41.7443S+.02639S YE R2= .58

(.0058) .

For economic conditions in th period consult Josep Fontiii "Colapso y tmnformci6n del comerco extenD espatlol entre i 792 y 1827," Moneda y crUito. no. i 15 (Dec. 1970), 3-23.

322

Barbier and Klein
Tolal InCDm. Taii Int:øm.
FRENCH
WAR

ENGL ISH
WAR

+0.2
+0.1
0.0

-0.1

-0.2

1794 1786

1788

1790

1792
FIGURE 4

1794

1796

1798

1800

PLOT OF RESIDUALS FOR (LOGGED) TOTAL AND TAX INCOMES, 1784-1800
Source: See Table 3 and Table B-1.

years after the intiation of hostities with the English. Clearly, the late

and quite modest growt in the second war period was evidence of the very tight fiancial squeeze the Crown was sufferig, a squeeze which
revenues. The rigidity of tax revenues becomes even more obvious when one exames the individual tax categories in detail. For example, an analysis of income from such grouped income varables as Excise, Monopolies, the Administrative cadres, the Church, and the regional treasures shows relacompelled it to fid new, and previously unth;n1cable; sources of

tively low rates of change (as measured by their coeffcient of variation), as contrasted to those where more random and unusual revenues played
an important role. The latter included Indies income, Loans, Extraordinary. revenues, and the

Subsidy, al of whose coeffcient of varation exceeded i .0, as shown in Table 2. Moreover, these more stable categories accounted for the bulk of tax
gional treases was the sigle largest ta income, accounting on the av-

revenues generated. Thus the income drawn from the surluses of re-

revenue in the period 17841807. If all tax revenues (those with less than 1.0 coeffcient the most stable sources of total of variation) are added together, they account for some 76 percent of income less loan. Clearly, it was therefore the most stable incomes which
erage for 36 percent of ths type of

accounted for most of the tax revenues, and ths explais in tum the inelastic qualty of th basic source.

Comparig tax revenues and total income figures over time reveals not

TABLE 2

AVERAGE ANNUAL INCOME BY PERIODS FOR GROUPED VARIABLES
(iii thousands of reales de vellón)

tt
Chiirch

~
Regional

Period
Loans
Excise

Indies
Monopoly
Cesaciôn
Customs 4,904
25,379
26.461
5,481

47,481 20,737 344.681
17,653 17,079

Extraordinary
Admñustraiion
30,701 26,373 26,809

Subsidy

Totol Average

1784-1787 1788-1791 1792-1795 1796-1799
11,634 14,483 IS,891 78,066

12,590

25,048 33,282

31,385 19,762 14,769 30,946 36.298 31.341

:: ~.

f
~
11,288

11,128

306,100 3 1 4 ,0 4 5 687,582 737.975 638,571
366
109,942 148,436 151,090 123,856 1 7 6 ,1 0 2 140,350

18001803 18041807
98,270 24,894

35,822

321,036 157,088 338,621
34,306 32,819 31,754

24,833 37,831 36,868 34,252

28,103 25,789 42,798 31,054 77,803 27,213
7,394 7,784 6,256 4.488

34,404 39,713 20,292 21,254

60,460
1 4 1 ,6 0 0

~ i-

~

Mean
38,039

6,051

~
27,917 (10,805)

Standard Deviation

24,120 (24,778)

203,842 (201,950)
40,539 (96,379)
28,103 (12,652)

30,460 (8,209)

(28,23)
0.74

(3,309)

27,417 (17.536)

5,817 (8,877)

(77,917)

549,580 (251,397)

..
0.50 0.39
0.64
1.52

t
0.55

Coeflcieni of Variation
1.04

0.99
1.72

0.45 0.27

0.47

~ ~

Source: Sc: Appendix Table B-1.

~

324

Barbier and Klen

only the inelasticity of the former pointed to above, it alo points up the crucial role played by borrowing. Prior to the war years the Crown's need
for loans was quite lited. Furermore, the securty of its steady income

and the low level of its ongoing borrowig alowed it from 1793 onwards
to have recourse to the money markets for a signcant proporton of its

cash needs. It borrowed at such a rate as to make loans account for one hal of the Madrid Treasur receipts. From 1794 through 1800, in fact, the
rate of deficit was impressive. Whe the peace of Amens reduced the need for extraordinary measures and alowed pent-up income suddenly to war in late 1804 saw a decrease in increase royal revenues, the renewal of

traditional governent income as well as an obvious declie in loan.
In fact, ths declie in borrowig was not due to lessened need; rather,

the Crown had great diculty in obtaig credit. It would appear that
penses of

whie the economy was able to generate internal capital to meet the exrevolutionar crises, each succeedig confct found it less and less able to bear the burden. Ths can
the fist major war period in the era of

be seen not only in ters of total amounts of capital generated, but even

in the types of borrowig that did occur.
The sequence of events is fairly clear from Table 3. Although the period

imediately followig the America War was one of rising deficits, the economy drive orchestrated by Mister of Finance Pedro López de Lerena (Count of Lerena) from 1788 brought it down to manageable proportions by the early 1790s, and in any case the Treasurer General was able

to deal with the problem by simply delayig payments from one year to the next. 14 Whe it is not entiely tre that Spai "entered the war with
France in a strong fiancial position," its situation was indeed relatively sound and steadily improvig. IS
Massive borrowig began with war. Thus, in 1793 some 48,110,000

rea/es de vellón entered the Madrid Treasury from a Dutch loan, and in
ths and imediately succeeding years substatial sums were taken from

such special depositories and trust funds as the Pagaduria de Juros, Tem-

poralidades, Montepio de Oficinas, and Orden de Car/os III. Combined,
they amounted to about 45 percent of borrowig in that year but such

levels could not be maintaied, for these sources were soon exhausted and

terms demanded by foreign lenders were deemed to be ruous. Hen~fort, recourse to foreign baners was to be a sure indication of fisca desperation. The governent was forced to tu to the domestc money markets, issuig yales reales, resorting to various types of loans, and
ultiately refusing to pay its obligations.16 Massive issues of vales reales

14 See Archivo Historico Nacional Estado, libros 2-4, for the various meetigs of the Junta de Es-

tado in ths period which were concerned with economies. (Hencefort cited as AH.)
IS Richard Herr, The Eighteenth Century Re~olution in Spain (Pceton, 1958), p. 380.

16 For a disuson of the ÍStJes of vales reaJes by Chales II and Charles IV see Canga ArgUelles
Diccionario, vol. 4, pp. 228-30; and alo Earl J. Hamton, "Monetary Problems in Spai and Spanh America 1751-1800," th JOURNAL 4 (May (944),21-48, parcularly pp. 41-46.

The Madrid Treasry, 1784-1807 ..

325

were underten in 1794- i 795. Fearfu of overissue, the governent resorted to more conventional free and forced loans in 1796-1798, only to be

drven to vales reales once again in 1799-1800, and to desamortización as a
device for sutai their value. From 1803 to 1807, fearf of issuing yet
more vales reales, it simply delayed the payments of its bil to abetter
day, and desperately attempted to susta the value of

the vales by applythe re-

ing desamortización to the colonies.
Clearly, certai conclusions ca be drawn about the last phase of

royal credit. The imgie. The Second Englh War marlcs the collapse of pact of massive borrowig through vales realeSt as well as the increasingly depressed state of the Iberian economy produced by the effective end of overseas trade, can be seen in the discount rate for the vales reales themselves as recorded by the Treasurer of Royal Finance (Tesorero de Real Hacienda) ofCådiz. In March of 1804, before Spai's entry in the Second English War, the discount on vales reales stood at a relatively low 31.25-

31.5 percent. which with the sta of hostilties increased to 59-59.5 per-' cent in December of that year. In 1805 the situation improved somewhat, with the discount declig to 36-36.5 percent, only to rise agai to 56.2556.75 percent with the Trafalgar disaster in October. By May of 1808 the dicount stood at 63-64 percent. It is interesting to note that any rumors
TABLE 3

FINANCING THE MADRID TRSURY DEFICIT
(in percentages)
Year
1784 1785 1786 1787 1788 1789 1790
1791

Toral
24,694 44,908 53,411 61,790 32,695 29,045
15,449 5,526

Vales

Unpaid
93 83 100 100 100

Glfs

Deposits
10
I

Other
90
6
17

46
100 100 6

54

1792 1793 1794 1795 1796 1797 1798 1799 1800 1801 1802 1803 1804 1805 1806 1807

9,880
137,880

20
6 3 35
I

60,296
624,122 208,332 287,705 309,536 478,771

84.
72

1

74 9
19

6
19

46
61

38
19

5
1

76
16

83

433,44 .
39,311 17,965 112,947

93

I

4 7
93 92 99 99 100
5
I

29 34
1

6 67

59
1

22,998
329,852 426,152 377,485

5
I
1

2

Soure: See Appendix Table B-1 iid note 3.

326

Barbie and Klein

of peace produced a prompt reestablishment of the value of the vales realest as in Augut of 1806 when the discount declied to 27-36 percent in a very volatie market. The reason for such behavior is, of course, that with peace, Mexica silver was expected to enter port and the TreaSurys
cease. As one treasurer of Cådi noted, this practice was "the way in which we
resale on the open market of vales reales for coin would therefore

escape from our daiy anguish. unti such time as funds come from America."17 Colonial trade thus was doubly important in reestablishig royal
credit by 1805, for not only would the resumption of

the trade brig funds

to sustain the Caja de Consolidación de Vales Reales (the institution

charged with redeemig these treasur bill and payin their interest), but the coinage brought in by taxes on the colonies and imperial commerce would alow the government to reduce the offer of vales reales in the exchanges of the country.
The" fical importance of Spai's overseas domions is evident. Despite

the fact that a great deal of pressure was applied to have colonial offcials
remit funds and that they did faithy comply, income from the colonies,

above all from Mexico, was intimately tied to the changig fortunes of

war. As can be seen in Appendix Table B-1, there were quite sharp annual fluctuations in Indies revenues, due, of course, to the British blockade. Yet the colonies did respond, and the importance of such income was reinorced by the fact that it had a cumulative impact, afectig not only
tax revenues but also capacity to borrow and the value of the instruents
of public debt.

Dependence on borrowig, and to a lesser degree colonial resources,
could not be avoided, however, because of the penisular situation. Over-

al whie the Crown's fiscal position and the Spanish eooi1011Y Íf generai worsened steadily in the 17905 and early 18005 the relatively inllexible na-

ture of traditional royal revenues meant that tax 1l0w did not alter dramatically. This was due to two basic factors. The fist was the relative weakess of the monarchy in relation to traditional power groups in society; despite a systematic and widespread effort to increase taxes on the

royal bureaucracy and the Church, income from these two sources
changed litte over time. is Insofar as ecclesiastical revenues were concerned th relative stability of Madrd Treasury income was pary due to
the fact that Church-related receipts were increasingly directed towards

17 The original reads: net modo de que salgamos de los apuros del dla," and comes from Francisco
Javier Cataño to Marquess de 111 Hormii, Feb. 10, 1795, in AOS, DOT, inventario 3 I, legajo 40.

The discunts of vales reales cited are drawn from the report of the Treiiurer of Royal Finance of Cadiz to the Treasurer Genera, II AOS, DOT, inventaro 32, legajos 3-6.
IS The spirit which the monarchy would have wished as a guide is expressed in a R.D. of Aug. 17,

1794, esblihing a special tax of 4 percent on government salaries: .. . . . siendo indispnsable buscBr

nuevos arbitros. . ., no permiticndome in coraz6n paterno rccgar a Mis vasallos pobres . . ., he
creLdo que la justicia y la equidad exigfan que la claes mii Bcomodadas la mas rica, y la que
rcclben inediitaente mas beneficios dcl gobiemo contnbuyen sus bienes a los giios." The reality

did not corrpond to such pious wishes. See AOI, Indiferente,legajo 14.

The Madri Treary, 17841807

327

sustag royal crenit and thUs poured into the Caja de Consolidación de
Vales Reales. The second key fact was the relatively attenuated nature of

the relationship between ta income and general economic trends. The
collection system of such revenues as the Excuado (a par of

the tithes) in

parcular ensured a sluggish response to the ebb and flow of the econ-

omy.

This latter factor can be seen in the income generated from the Excise

tax-group which was presumably more related to national and international economic conditions than those discussed above. While more varation was noted in these areas than in those fuds comig from the
royal bureaucracy and the Church, there was sti much less variation
than could have been expected given the major economic changes which

were takig place at ths time. In any cae, even ths varation may be the
product of an aecounting ilusion. If one aggregates to the Excise, Monopolies, and cusoms the Cesación category (which consists of the same tye

of income, but which could not be broken down into its respective component par due to a pecularity in the bookkeeping system), one can

agai see the basic stabilty of tax revenues. (See Table 2.) Al of these problems were, of course, very much in the mids of contemporaries and

were a source of great concern. Canga Argüelles hiself who had served .

in the Mistry of Finance in these year, pointed to the relative inexCharles IV and the priacy given
ibilty oftreas.ur income in the reign of

to fiding means for servcing the public debt. 19 When we tum from this analysis of global trends to the relative importace of the varous taes and incomes within the context of overall Madrd Treasury revenues, several factors are imediately evident. In times of peace the regional surplus income was clearly the preeminent source of Madrid Treasury revenues, on average accountig for 26 percent of total
income. Next in importance-excluding the voluntar and forced loans-

were a series of categories al producig between 5 and i 0 percent of total revenues. These included such income groups as Monopolies, Excise, and
the import and export duties. As has been pointed out, the Cesaczón cate-

gory contaied many of the same revenue sources. Taxes and other income from the royal admistration and Church together provided about

6 percent of total revenues, whie Extraordinary and the special Subsidio de 300 Milones were, lie the Loans, much more important in the war
years than durig periods of peace.

The great importance of geographically classified income unortately
lits the value of our analysis of

that which is genericaly classifed. That

geographical diension, however, has an importance of its own. From ex-

19 See partcularly his Diccionario, vol. 1. p. 164, in which he writes that, faced with war, Charles iv
"restiéndose a costearla con el importe de nuevas cantrbuciones echó man a los recurs que facita el crèdito," pointing approvigly in contiuation to the RoD. of February 26, 1798, in which

Francisco de Saavedra had hi king commit hilf to the irrevocable character of the public debt as the natural consequence of the permanence of the state.

328

Barbier and Klein
TABLE 4

AVERAGE ANNAL REVENUES FROM REGIONAL TREASURIES, 17841805
Percent of

Total

Average Revenues.
(reales de vellón)

Treasry

Average Values

Cådi
Galicia

Andaucla

Ca1ufia

Catila Arson
Extremadur
Valencia

61.3 9.6 8.2 6.2 2.6 2.4 2.3
1.7 .3

MalofC
Romo
Todas pagadurlas

3.6
1.6

91,029 14,330 12,190 9,335 3,784 3,536 3,456 2,526 500 5,418 2,367
148,471

Tota
Sourc: See Appendix Table B- 1 and note 3.

99.8

amation of the regional income over timet it is evident that the major
source of such revenues for the Madrid Treasur was the fuds generated out of international and American trade in the region of Cådizt which accounted for some 61 percent of the tota surlus regional revenues going
to Madrd (see Tables 4 and 5). The Cådiz income is of

interest for its extreme fluctuation whicht lie such income as Indies, reflected the chang-

ing fortes of international war and trade. It is also useful to note that
whie offcialy designated colonial income accounted for only 4 percent of

total revenues, when the related receipts from the Cádiz royal treasur are
added in American-related fuds may have accunted for one fi of to-

tal Madrid Treasur revenues in th period, makg the Indies the single
largest ultimate source of Madrid income.20
It is difcult to detai the actual role of the other regional treasures in

ths same period becauset une the Cádiz offcet they seem to reflect the gatherig of funds related to local expense but comig from many regions
of the countr. Thus, the high values regitered in Galcia, Castilet Ara~

gon, and Catalonia durg the war yeas reflect temporar mitar needs.
and are therefore not necessarily reflective of income in those areas.

Moreover, it should be recaled that the Basque provinces and Navare
were outside th treaur organition because they enjoyed their own

special status. Of al the royal monopolies (which made up approxiately 7 percent of

tota income) the most importt were those on salt (about 26 percent of
Monopoly income) and tobacco (some 28 percent), with others producing

relatively litte income. Other major sources in th category were the
royal texte factories, which generated a high 19 percent of

total. Finally,

io The figure for American-related funds is a minmum, pending compleûon of research on Cádiz
and other regional treasuries. Nole that overa revenues from the Generales reflected a predominantly
colonial eicematrde; see Fontana, "Colapso."

Th Madrid Treasry, 17841807.õë'
TABLE 5

329

REVENUES FROM THE TREAURY OF CADIZ
(in thousads of reales de vellbn)

Year
1784 1785 1786 1787 1788 1789 1790 1791 1792 1793 1794 1795 1796 1797 1798 1799 1800 1801 1802 1803 1804 1805

Amounts
67,050 59,499 72,590 90,996 109,212 57,908 117,166 147,468 138,332 120,878

11,084
105,756 157,007 44,420 30,608 5,240 14,332 162 243,191

17,740
130,797
1,201

Mean
Standard Deviation
. Sourc: See note 3.

91,029 62,573

the famous lottery provided 12 percent of Monopoly revenues in ths pe-

Dod. (See Table 6.) As can be seen in Table 2, the income from these sources was the most stable the Pricipal Treasury received in the. entire
period. -

Wht may one conclude from such an analysis? The traditional widom holds that the wars of Charles IV were fianced through borrowig, and ths appears to be correct. It is curious to note, however, that the successive types of deficit fiancing corresnd to a crescendo of banptcy. The importance of colonial income as reflected in the overal role it played on its own and as a component of regional revenues is alo apparent. Lastly, we have the stabilty of

traditional income sources. In par, as

regards some of these, this might lead one to suspect that Crown pressure on vested interests was not very strong. Yet insofar as the Church and municipalties are concerned, some caution is in order. The work of

the Caja

de Consolidación de Vales Reales, which imposed special taxes and forced loans on these sectors, and whose activities are reflected in its volumous
tranactons with the Pricipal Treasur, convices one of

the opposite.:!!
guo rêgimcn: cnsis fiscal y desamort-

21 For a view of royal finance basd on the documentation prouce by the Caja de Consolidación
de Vales Reales see Richard Herr, "Hacin e1 demimbe del anti

zaci6n bajo Calos IV," Moneda y crëdito, no. 118 (Sept. 1971),37-100.

330

Barbier and Klen
TABLE 6

AVERAGE REVENUES FROM MONOPOLIES, 1784-1807 (Actual/dad only)

lereenlage afToral
Ramo
Average Values

Average Annal Revenues (in thousnds
of reales de velUm)

Number of Years

Esrancos Tabaeo Salinas Nomo y Nripes Aguardienie
PolvorD

Azogues Azufre

!Acre
Siele Reniillas Loteria
FåbricDS

(65.4) 28.4 26.0 4.4 3,2 2.0 .7 .2 .0
.5 12.4

(21,356) 9,271 8,488 1,423 1.030 636 241 87 o
174

(24) (24)

(17
(24) (9) (9) (9) (3) (8) (24) (23) (4) (2)

Panos CriraJes
PorcelDnas

(22.2) 19.2 2.8
.1

99.9

4,047 (7,263) 6,291 938 34 32,666

Source: See note 3.

Moreover, one could also say that the maitenance of the traditional levels of tax income, since this was a period of overall economic criis, implies a rising fiscal burden on the population in general. Here agai, however, the relative delay of fiscal income directly to reflect chagig market

conditions is a product of the special nature of exemptions, long-term tax
I'nll..l'tinn I'nnl..",l'tc. ",nrl nth.... in"nlQt~nD' f..l'tn.."

..""..'W_...... -_....... ..v..., .... "...-.. ..1._.a_~..c ..__.......

What is beyond question is the relative stabilty of Treasury income
over the medium term, with only short-term potential for major increases. Alo, the fact that the Crown could effectively generate credit and income
in just one major, albeit short, war, and not three or even two, meant that

the gap between normal income and normal expenditures was quite smal

and relatively inelastic. When demand for revenues increased and remained high over more than a few years, the governent was forced to
increase its external borrowing and forced loans; yet the swift exhaustion
of these funds brought the regie to the bri of collapse.

II
The Spansh Crown was, by the end of the eighteenth century, rela-

tively wealthy and comfortable, but it was living at the ful extent of its means. Any secular increase in spending could not be met by a corresponding increase in revenue. In the long ru the monarchy could not greatly increase tax and other regular income, nor did it have avaiable reserves from which to draw. Taxes were fied and traditional and the econ-

The Madrid Treasry, 17841807..

331

omy could not be made to yield new revenues in ties of deepenig crsis.

Nor, indeed, could the Crown aspire to have the power to extact an increased proporton of the national product uness it was also prepared to break decisively with the stctues of the Old Regie-and the attacks
on muicipal and certai Church propertes were, at best, only a tid star in th diecton. On balance, Spai was a prosperous but lited fis-

cal entity in the late eighteenth centu. The strai of war quickly destroyed its fiscal prosperity, and eventualy its economy as well.
Such conclusions, however, become fuy meagful only if one places

them with their proper chronological context. Their historical sign~ cace derives from the light which they shed on governent policy making in th period. It has aleady been demonstrated, for example, that

Charles N sacriced colonial trade to fical urgency. Thereby Spai abandoned the long nourished hope that protected overseas markets would tum the country into an industrial power.ll In the ultimate sense, of course, the real issue was less economic growt than regie surval.
Spansh parcipation in the War of the America Revolution was largely fianced by borrowig, often though the device of advances

agaist Crown silver detaed in the New World.23 The pricipal participant in these operations was the French-born François Cabarrs, founder
of the Ban of San Carlos and intiator of

the vales rea/es.24 In certin re-

spects Cabars played a role analogous to that of Necker in France, and
hi inuence remaied preponderant though 1784.

The death of Mister of Finance MúzqUÎ early in 1785 brought a
change of diection. His successor Lerena was most concerned about the size of the deficit and tried to remedy it though an economy drive and
r.,...".,.,&,'i-~ f'".. .n,....."'''..ri ....m."''';''.. "f' ".. ....u.U' ....,..¡ ..v ~"'''£...u. ......" Uw.v.& , 1.. ,n l,, .."'.. i.v.."'WO.."".. ..w~u...... f'..nr1", f'.."rn +1... ,."1"......,, 'Th",t "..,.h
policies had the support of Charles il and of his chief mister Florida-

blanca is unquestionable, for the important 1787 decree which formaly
created the Spansh cabinet and divided the colonial mistr in two take

up both themes.2S Emboldened by such support, Lerena and his successor Diego de Gardoqui embarked on a long but futie struggle which aimed at
controllg naval expenditures.26

The arval of Charles IV to the throne in Dember 1788 did not signy

an imediate change in policy, for he kept hi father's miisters. The
eventual diection of afais, however, should have been clear from an or~

:u Jacques A. Barbier, "Peniular Finance and Colonial Trade: The Dilemma of Charles IVs
Spain," Journal of Latin American Studies, 12 (May 1980), 21-37.

;i Sec James A. Lewis, "La damos de la Rohana, el precursor, and Francisco de Saaved A Note
on Spanh Parcipation in the Battle of Yorktown" The Americos, 37 (July 1980), 83-99.

24 The ban was the firs Spansh anogue to the Bank of England. AGS, Secretaa y Supenntendencia de Hacienda, legajo 997. (Tis seon is hencefort cited as AGS, SSH).

2. AGS, SSH, legajo 278. Also Deereto del rey esableciendo. . . /a Suprema Junta. . . de /!lado
do dos secretarias... del desacho de In-

(Madrd, 1787), paragrph 14, and Deeretos del rey crean

dios.. . (Madnd, 1787), pp. 9-10, both in AGI, Indifercte, legajo 662. 26 AGS, SSH, legajos 52 and 53; and AGI, Indiferente, legajo 1747.

332

Barbier and Klein

der to create a fictitious debt of 266,667 reales de vellón so as to provide an

anuity for the kig's favorite and the Queen's lover, Manuel de Godoy. Thi worthy was eventualy to transfer the annuity to his mitress, Josefa Tud6.27 With the court givig such an example, a policy of economy bew came harder to sustain; it was fialy dealt a mortal blow by Spai's entr into war with France.
The question of war or peace with the revolutionary governent was highy contentious, leading to the exile of the Counts of Aranda and Floiw idablanca two of the foremost lights of the previous reign.28 For Spai,

however, the struggle was a profoundly conservative one. As the
Marquess of Bajamar, governor of the Counci of the Indies, pointed out to Charles IV, the war effort was aimed at preservg the purty of the
Catholic faith, .the monarchical form of government, the countr's laws and customs. and "our obedience and fidelity to the sacred person of your
majesty and to your legitimate successors on the thone." National interw

ests, he insisted, should take second place.29
Th conservatism explai why the Crown continued to depend' upon

borrowing and colonial funds rather than carrg out a thorough reform of the ta system. The need for the latter. of course. is clear from our anal.
ysis of the Madrid treasury accounts which points to the inflexibilty of orw

dinary revenues. Instead, even the moderate new taxes proposed by Miw ister of Finance Gardoqui were fought in the Council of State, and the major isue of vales reales in September 1794 was authoried only after it
was demonstrated that the Mister could not secure modest advances

eveD from people in his debt.3o As has been shown, the Treaty of Basle brought only temporary relief.
The new åebi Duråen was heavy, anå peace omy a tranient phenomenon,

for dynastic motives soon drove Spain into war with the United Kigdom. The new struggle was less costly than the last but the collapse of colonial
revenues meant that conventional loan played a contiuing role in

Crown fiancig. As to the tax reforms carred out in ths period, they had only modest practical results if one can judge from the Madrid Treasury
accounts.31
27 AGS, SSH, legajo 485. Thc anuity was impoed in Aug. 1789, and Tudó became its beneficiary

in Junc 1797. .

2l Floñdablaca feU on Feb. 28, 1792. Arda was exiled in consuence of the Council of State
1792.
dar a IDS

meetig of Marc 14, 1794. Godoy became Secrtar of Staie on Nov. 13, 29 AHN. Eslado, legajo 177. "Pnero es acudir a la consivaci6n dc aquel sitema, que cui

olros rceet politico quc cmancn de inlercses nacionales. . . . "

3D For opposition to the new taes see AHN, Eslado. legajo 178, meetin of the Council of Slatc on

Aug. i, 1794. A typical new tax was thc 10 percnt deduction from offcial salañes ordcre by the
R.D. of Aug. 17, 1794, in AGI. Indiferntc, legajo 14. For Gardoqui's desperatc situation se his cor.

resondence of Aug. 10 and 11, 1794, with the Dulcc del Area and Estban Drouilhel and Co., in
AGS. SSH,lcgajo 1019. Lastly, sec RC. OfSCPL.8, 1794, in AGI. Ultramar, legajo 726. 31 Typical meares of the peñod arc thc RoC. of June 8, 1796, revoltg ali excmption from tithes and the R.D. of Junc 9, 1796, ordcrig thc opening of a subscnpiioD of 120,00,00 reales de ,ellón. both in AGI, Indüercntc, lcgajo 665.

Th Madrid Trea.ry. 1784-1807 .'", , '.' ' 333
By the star of i 798 royal fiances were in desperate trouble as the deficit of the General Treasur had reached an esated 800,000,000 reales

de vellón. Thi crtical situation provides the background for Godoy's decion to brig such "enlghtened" misters as Saavedra and Jovellanos

into the cabinet, and helps explai hi own temporar retiement from affais at tht tie. In any cae, the monarchy's dict response was to name

a specal junta to study the fical problem. a body which soon gave way to a smaler ad hoc commttee whose key members were Miguel Cayetano

Soler, soon to be miter of fiance, and Manuel SOOo Esinosa, who as
comptroller of the Caja de Consolidación de Vales Reales was to become
largely responsible for the state debt. The junta and commttee proposed a

series of measures designed to relieve the criis, pricipaly though new tax measures. The monarch. however, rejected the boldest of the latter and placed his faith in loan, gi, and more tid inovations.32 None" theless, Charles IV was drven by the end of the year to sign the various
decrees of September 25, i 798, which began the assault on religious and
muncipal property in Spai. This application of desamortización was a

desperate attempt to reestablih the value of the vales reales by backig
them with the seized propert, and as such was a prelude to a massive new
issue of those instrents in 1799. In effect, the old choice between bor-

rowig and attackig priviege vanhed, for it had become necesar to
attack priviege in order to borrow.33

Simarly, the long delayed admistrative reform caed out in these same y~ars were the result of the CMS. The most noteworty of these
were the restrcturg of

the revenues collectig agencies in 1799, and the

ephemeral controls imposed on naval treasurers that year. In th regard

the experience oÎ the Spansh treasur is sìnar to that of the French as

the fica burden of war produced a move towards greater bureaucratic
rigor.34

One could argue that, in effect, the Crown had exhausted al of its habitual peniular resources by i 801. Nor was its assault on muncipal

propert a solution, although it was a harbinger of thgs to come. Indeed,
desamortización was a relatively tid measure, for its application sign-

fied that the monarchy would rather contiue borrowig than embark on
meangful strctal reform.

With the metropole exhausted the monarchy was compelled to tum to

the colonies. These yielded nch frts: Madrd Treas Indies revenues
were the highest ever received in the 1802-1806 period; and the values of the vales reales were sustaed from December 1804 onward by the application of desamortización to the America. The latter, however, was at the
J2 Sec AGI, Indüerente,legajo 84, for thc work of thc junta Typica of the measures adopted were
the frcc gi and patrotic loan descrbe in the R.. of

May 27, 1798, in AGI, Ultrar,lcgajo 730.

See al AGI, Indüerente, legajo 731.

33 AHN, Hacienda, libra 6020. 34 AHN, Hacienda, Iibro 6607, 8051, and 8052. Sec also J. F. Boshcr, French Finances,1770-1795:

From Busines 10 Bureaucracy (Cambridge, 1970).

334

Barbi and Klein

considerable cost of alenating the colonies.J5 In any case, the most signcat figures produced by our analysis of the Madrid Treasury accounts

are that the percentage represented by deficit in the lat quinquennum of
Charles IV's reign was the highest of any five-year penod, and that by
1807 ths deficit was entirely compose of bils. The regie was bankrpt, and though its own

unpaid and unfunded Treasry choice, for it had

never deat seriously with the strctural problems which beset it.
APPENDIX

A

REPORTING PRACTICES IN THE MADRID TREASURY AcCOUNS

The system of alternatig treasuers produced certin pecuanties, as is exemplified by

the accounts of the Madrd Treaury. Durig his year en actualidad its pricipal cahier
was charged with credits (cargo) and dicharged of debits (data), all in normal fashion. In the year en eesación he was subjected to the auditing proces of ordenaCÎón durig which
new credits and debits were generated. These corresponded to transactions pertaiing to

hi year en actualidad which could not be brought to completion during hi term because
no fi receipt (caria de pago) had been isued. In addition, durg this procss, hi ac-

counts were arrnged in systematic form and outsanding credits and debits dealt with to the degree posible, the balance of payments between the Pricipal Treaury and the regional ones was calculated and, lastly, the transfer of asts and liabilties to the next pri-

cipal caer was carred out This process is repitulated in the fial product, the euenta
fonnal. The sae system was followed in the regional treases. In the cuenta fonnal, credits were divided into rentas y efeetos en actualidad, which in-

cluded caovers from the previous year (existencias), and cargos en cesación-listing in each cae under various subctegories the generic tye of income involved. Becus of the complexity and sporadic nature of some of the individual tax entries we have combincd may of them into grouped varables according to the type of activity so as to allow a more meagfu analysis. Lastly, surpluse received from regional treases en actualidad
as weÜ as en eesacíón were reporteà as a ioiBi without discriinating betweeü thes twu

sort of credits, although they were broken down geographicaly by treary. Under ideal
cirmstances these latter receipts would have been distributed among gcneric revenues

branches. The accounts, howcver, did not lend themselves to this procedure. Thc credits en actualidad are not to be considered simply as revenues. Thus, the sums
caed over from the previous year had to be subtrcted from credits to arrve at a genuine income. Simarly, it was nccesary to distinguish between cuent revenues and bor-

rowing. This was done eaily enough in most ca, but a number of difculties did arise
requig extensivc caculations and somewhat specultive defiitions. .
To determinc the total amount of

A large proportion of borrowing was hidden in the credits denominated extraordinario. borrowig, therefore, we wcre force to have recourse to

the basic documentation used to prepare the cuenta forml itslf. Th alowed us to break

down the extraordinario to individual entres which were then redistnbutcd into more

meaningf categories. There arc three other problem area in cargos en actualidad. In the
cae of funds coming in from thc Indics no distinction betwcen borrowing and tax reve.

nues was made, for the sums borrowed in America to send to Spai became the responsibilty of the colonial cxchequcr, and so they ca be considered as free income for the Mal~ Sec Brian R. Hamnett, ''The Appropriation of Mexica Church Wealth by the Spanish Bourbon Governent-The 'Conslidaci6n de Valcs Rcalcs' 1805-1809," Journal of Lati American Studies.

I. no. 2 (Nov. 1969), 85-113; and Asuncion Lavrin, "The Execution of the Law of COlUoJidacion in

New Spain: Economic Aims and Results," Hisanic Amercan Hisorical Review, 53 (Feb. 1973), 2749.

The Madrid Treasry, 17~1807

335

jor Treasur. Receipts from the consolidación de vales reales, on the other hand, presnt a
rea difculty. In some case th was siply the income of

the special taes asigned to it

but in others a loan was clealy involved Even in the latter cicumstance, however, the
peninular treasur's obligations to consolidación were oftn trnsferred to other organtions or evcn to America cajas. Without a more detàüed study the matter caot be resolved. Thus, consolidación funds are here reported as part of extaordiar revenues.
Latly, deposits and bonds on hand at the star of

the year caot bc considered as income

even if they were not lited as caovers.
The cargos en cesación are als dicult to claif, parcuarly because of the vanations

in reportg practices from year to yea. Al elements described as pagos que quedaron

pendiente en caja have been treated as unpaid bil, whüe al payment obligations imposed

on the admtrtors of revenues collecting intitutions have been treated as income.
Other cesación items were agegated to the equivalent brach of revenues en actualidad.
In some yea however, the cuenta formal made no dierentiation between the varous types of cargos en cesación. and in these cases they have been considered as a whole.

APPENDIXB
DEFINITION OF GROUPED VARIABLES
There are a great varety of ramos de cargo lited in the cuenos ¡ormales and no great

consistency of nomenclature. Desite attempts durig the research to identif caes where
the same type of

income was hidden under diferent naes, we were left with 148 separate

varbles. Such a lare number, and the fact that for a great many braches only a few
yearly entes were reported forced us to aggregate them in grouped varables. Below is a
litig of the grouped varables, an explanation of the nature of each, and an enumeration

of the varables aggregated to compose each one. The grouped varbles are ordered as in
Table 2 and Table B- 1.

Indies
Consisting of al income collected in the coionies, inciudig depiJsitos and sums bor~

rowed by coloni caJas. Taxes on colonial trade collected in the Peninsula are not included but colonial revenues reported as Extraordinaro were segregated from it and aggregated here.
Includes the followig varables: Azogues de Indias, Tabaco de Indias, Naipes de Indias,

Comisos de Indios, Lazas y Medias Anatos de Indias, -4 por ciento de Empleados de Amer. ica, Extraordinario de Indias, Consignadón de Indias para la Fabrlca de Ximena, Subsidio

Eclesiástico de Indios, Pensiones Eclesiásicas de Indias. Cruada de Indias. Expolios y Va. cantes de Indias. Vacantes Menores de Indias. Temporalidades de Indias. Caudal de Indios de los Santos Lugares. Imposición Sobre el Tabaco de Indios. Depósitos de Indias. Servicio Consuar. Balana y Comerdo de Indios. Alo includes cesación income correspondig to the above.

Loans
Consisting of money borrowed in the Peninula and secured by Span or general in-

come, Donativos, and Depósitos and Fianzas. The common element here is that none of it
can be considered as tax revenues. Of

the four subcategones two, Donativos and Depósi1os,

are in no tre sense borrowing. Depósitos are more properly non-income but are included
here because some of the church loans ar termed Depósitos. and it is difcult to diti.

os agenos from those de real hacienda (paricularly as legislation constantly changed). Whe Donativos provide income, they are not loans; nonetheless, the state was expected to be grateful, and between a Donativo and a no-interest loan there is
guh the tre ram

336

Barbier and Klein

only a shade of diference. Fianzas, although retured eventually, were expended as re-

ceived by the Madrid Treas. Includes the following varables: Sobrante del Caudal de Juros, Préstamo Extraordi.
naio, Préstamo de Cabildo, Préstamo de la Campañia de Filipinas, Préstamo Patriótico, Fondo Vitalicio, Imposición and Nueva Imposición sobre el Tabaco. Also included are Depósito de los Santos Lugares (although some of

these sums reported in the cuentasformales

were dcleted as existencias), Fonda de Redención de Cautivos, Economatos, Depóslto de

Mitras Yacantes, Préstamo and Emprestito Eclesåstico. Also included are Fianza, Depósitos, and varous Donativos (Antigua. Nuevo, Yolontario, and de Co"edores). Lastly, vari-

ons cesación catcgories corresponding to pagos que quedaron pendiente en caja, particularly

vales de caja and libramientos formales, are included along with borrowigs listed in extraordinario.

Extraordinary
A group made up of fortuitous revenues money provided by the Gaja de Consolidación

de Yales Reales in actualidad or cesación (or Amortización funds in general), and some miscellaneous categories. Included are: Extraordinario. Amortización and Caja de Descuentos. Correos, and mis.
celleous items in actualidad and cesación. Note that funds lited in the cuentas formales

as extraordinario for 1789-1805 were broken down and those corresponding to Indie or

Loans lied there.
Excise
Includes thce subgroups: Rentas Provinciales and sùnilar taes, the royal pat1imony,

and exactions on municipalities. They are lited together because it was difcult to . distin.

guish between them save on a narrw legal basis.
The varables aggegated were: Provincialest Cuarleles, Utensilos. Dehesa de la Seren,

Reales Piñares. Proprios y Arb/trios. Pósitos. Tercios de Granos. Tercias Reales (in a sense an ecclesiastica income, but one reported so consistently with Provine/ales as to be in.
separble from them), Redención de CensO$ de foblación. Arbitrio para Caminos. Puertas.

Renta de Poblacidn, Alcabala de la Cerveza, Rentas de Madrid, Aposento, Tabernas, and
Reales Descargos.

Monopolies

Made up of three subgroups: monopolies, royal factories. and the lottery. All these involved royal economic enterprise of some sort. The elements included. are: Agurdiente. Azogues, Azufre. Pólvora, Salinas, Tabaco,
Plomo, Naipes. Siete Renlillas, Lacre, and miscellaneous listig oftbe above en actualidad.

Also included ar Loter/a. Panos, Cristales, and Porcelana. For Tabaco in Table 6, cesacfón elements are included for avaiable years, but not in other tables.
Cesación
Included those cargos en cesoeión which could not be placed elswhere. These are:

Todos Cargos en Cesación. Diferentes Rentas en CesaCÎón. Tabaco en Cesación (save as
noted above), and Toda Rentas en Cesación.

Administration

Composed of al administrative fees, fies seizes offce. titles, and so forth. These
are: Papel Sellado, (Antiguo and Moderno), Gracias and Penas de Cámara. Lanzas. Medias Anatas Seculares, Fiades. Real Valimiento. Descuenio de 4 por ciento. Represalias. and Se-

cuestros, FianzQs and Canon de Corredores. and Canon AnuaL

The Madri Treasry, 17841807
Church

337

Made up of income frm the churh and mita orders. This includes: the Subsido
Ec/esico and Excuado, which were often grouped with a varety of other items includ~

ing Pensones Eclesiá.ticas. Medias Anatas Eclesiácas. and Extraordio de Cruad
(al under varous collection arangements); al Cruado, Expo/ios y Vacantes, Mae$/-

razgos, Subsidio Extraordinario, Noveno Decimal. Descunto and Fondo de Encomienda.

Orden de San Jua. Mesa Maesral. and the Fondo Pio Benefcial. and Fondo para e/ Fomena del Reyno.

Customs

Th includes the basic customs duties and silar taes and fees. Included are the followig varables: Rentas Generales. Loas. 1 por dento de Plata, Extracción de Aceyte and

Sed. and Tobias.
Subsidy

Th is the specal Subsidio de 300 Milones on secular income and Conslado revenues
(and some minor imposts on the latter). The constituent elements arc: Subsidio de 300 Mil-

/ones, Fomento y Balanza. and Hidrografta.

Regiona

Made up siply of the transfer of funds from the regional treasuries to the Madrid
Treasury.

TABLE B-1 INCOME OF THE MADRID TREAURY BY GROUPED VARIALES

(in thousands of reales de ve/lon)

. c. c. 00
Customs
Subsidy
41,054 42,142
36,511 5,834

ExtraLOOlU

Year
Mo,riopoly

Indies
Cesocjó"

ordinary
Church

Exdse
Regional
102,781 88,305 117,360 127,847 153,325 16,039 18,558 17,254 18,762

Administralion

Total Income

28,694 44,908
10,057

27,489

-

20,472
10,239

24,104
15,557

1184 1785 1786 1787 1188 1789 1790
31.,030 31,,313 3:~971 2¡r,214 3:t,727 2jr,584
1¡',992
211,567

1791

8,356 22,921 6,494

25,906 2,748 7,813 43,101 7,278 5,134 2,420
26,544 1l,062

36,815 2,569
1,623 16,660

34,ll7
16,277
2~I,227
211,185 3~¡,257 2~¡,958

1792 1793 1794

17,140

22174
54,556
8,474 8,881 8,363

53,411 61,790 32,925 29,047 15,449 5,526 9,880 137,880 606.296
1,870 11,205 14,612

4,944 4,322 5,449 4,901 5,305 5,562 6,089 4,969 5,724 6,289

9,09

~
~ ..
22988

~

1795 1796 1797 1798

2ii.nl
7,490
26,941
311,063

1799 1800

624,122 208,332 287,504 309,536 478,771

6,00
2,799 1,913

23,305 26,352 25,749 26,110 27,951 26,061 27,394 24,440 26,588 27,826 27,414 55,789 39,727 48,952 44,415 25,761

433,44
20,145

10,845 19,146 17,979

ä

~ ~

S'

1801

35,879 55,741 60,834 35,257 160,434 171,074 59,465 150,369

2li,?ll
46,356
31l,834

28,103 17,680 3,548 39,916 26,164 28,778 5,669 42,544 35,804 28,342 69,819 37,229 2,266 23,416 40,676 57,856 21,417 100,425 111,568

3,21
17,061

26,761 10,772 12,653 15,732 94,019 3,098 1,116 23,281 16,357 83,345

6,692

20,04
32,596
2:1,852
311,736

-

3.84
4,311 3,099

16,500 4,435 1,149 316 703

93,633 149,570 197,216 171,488 1 5 4 ,8 3 5 138,415 1 3 9 ,6 2 0 193,563 5 9 ,9 1 4 203,810 38,138 71,411 41,355 369,683 221,959 236,003

44,698
199 186
'1

12,174 12,458 16,230 8.833

1802 1803 1804 1805 1806 1807

34,443 5,461

39,311 17,965 112,947 223,998 326,852 426,152 377,485

62,057

27,086 12,128 43,842 32,591 63,390 22,988 32,755 37,363 34,350 36,023 39,738 38,504 41.367 26,915 30,220

27,052 27,374

33,199 29,358 5,901 25,065 24,693

320 40,473 75,380 32,265 4,168 11,524 37,783 34,989 37,727 34,694 39,561 28,875 26,742 30,181
38,038
(28,233)
6,051

,
27,917 27,417

307,632 299,212 2 9 3 ,6 1 3 3 2 3 ,9 4 4 360,567 257,238 323,144 315,230 3