The rise in royal revenues during the eighteenth century was truly spectacular, evidence perhaps of the effectiveness of the Bourbon reforms, a flourishing mining economy, diversification of productive activity, new taxes, and a rise in the population.
John TePaske and Herbert Klein, 198131
King Carlos III (1759—1788) emerged as the foremost proponent of economic reform during the eighteenth century. New economic ideas in vogue in France strongly influenced him. Carlos promoted commerce and production, and protected national industry from foreign competition. He sought to utilize Spanish American wealth and labor more efficiently. Rather than emphasizing mining, as his predecessors had, he promoted agriculture by relaxing the restrictions on slave imports and by facilitating the purchase of agricultural implements and seeds of selected crops. He also promoted better transportation, realizing that such a measure would increase agricultural exports.32
In 1777, Viceroy Antonio Maria de Bucareli commented on relaxed trade restrictions: “Never have the advantages been so visible as in the last few years.” Due to the increased supply of labor and lower mercury prices, Mexican silver output increased substantially. Between 1699 and 1809,
Figure 4.1 Xalpa aqueduct, about 15 km northwest of Tepotzotlan, built in the 1700s Source: William E. Doolittle
Mine production rose by an average of 1.7 percent a year. In 1790, tax receipts totaled 11,493,748 pesos, 146 percent more than was collected in 1760. The mother country appropriated so much tax revenue that contemporaries spoke of a “river of silver” flowing from Veracruz to Havana and
Thence to Spain.33
During the eighteenth century, silver production increased at an annual rate of 1.8 percent, thus enriching mine owners and their financial backers in the merchant community, expanding employment directly and indirectly, widening the market for food and services, and providing the metallic basis for the local money supply. Long-distance trade increasingly monetized the economy as payment was made in silver. Ironically, even with record silver production, there were never enough silver coins since so many coins were exported.34
Economic growth resulted from eliminating restrictions on trade, the discovery of new silver deposits, an increase in agricultural production to supply mines, and increased demand generated by the creation of a standing army and an expanded government workforce. Increases in lumbering, shipbuilding, and mule transport also contributed to eighteenth-century economic expansion.35
This economic growth decreased the importance of the Indian community. The share of the colonial budget coming from tribute paid by Indians reflects this decline. In the sixteenth century, tribute provided the main source of Crown income, while by the middle of the eighteenth century it provided less than 5 percent. In the latter part of that century, half of Crown income was derived from taxes on mining and tobacco.36
After economic reforms were implemented, the mother country remained the main beneficiary of Spanish economic policy. In 1778, Spanish economist Gaspar de Jovellanos stated, “Colonies are useful in so far as they offer a secure market for the surplus production of the metropolis.” To limit possible competition from colonial production, Spain went so far as to destroy cotton mills in its colonies. In 1801, a directive ordered Spanish colonial officials “to effect their destruction by the most convenient means they can devise, even if it means taking them over by the royal treasury on the pretext of making them productive.”37
World History
