Apogee of Empire • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Stanley J. Stein & Barbara H. Stein Apogee of Empire • • Spain and New Spain in the   Age of Charles III, – The Johns Hopkins University Press • Baltimore and London This book has been brought to publication with the generous assistance ofthe University Committee on Research in the Humanities and Social Sciences, Princeton University. • • 2003 © The Johns Hopkins University Press 2003 All rights reserved. Published Printed in the United States ofAmerica on acid-free paper 9 8 7 6 5 4 3 2 1 The Johns Hopkins University Press 2715 212184363 North Charles Street, Baltimore, Maryland - www.press.jhu.edu Library ofCongress Cataloging-in-Publication Data Stein, Stanley J. 1759 1789 Apogee ofempire:Spain and New Spain in the age ofCharles III, – /Stanley J. Stein and Barbara H. Stein. p. cm. Includes bibliographical references and index. isbn 0-8018-7339-8 (hardcover:alk. paper) 1. 18 2. Spain—Commerce—America—History— th century. Spain—Colonies—America— 18 3. Commerce—History— th century. America—Commerce—Spain—History— 18 4. 18 5. thcentury. Spain—Commercial policy—History— th century. Spain—Economic 18 conditions— th century. I. Stein, Barbara H. II. Title. hf3685 .s737 2003 382′0946′08 21 2002013940 . —dc Acatalog record for this book is available from the British Library. Contents • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Preface vii Acknowledgments xi List of Monetary Equivalents xiii Part One: Stalemate in the Metropole 1 3 .From Naples to Madrid 2 37 .Renovation under Esquilache 3 1765 69 .The First Reglamento del Comercio Libre ( ) 4 .Privilege and Power in Bourbon Spain: The Fall of 1766 81 Esquilache ( ) Part Two: The Colonial Option 5 1757 1778 119 .Flotasto New Spain: The Last Phase, - 6 1778 143 .The Second Reglamento del Comercio Libre ( ) 7 186 .The Aftermath in Spain 8 223 .AColonial Response to Comercio Libre:New Spain 9 1789 267 .Incorporating New Spain into Comercio Libre ( ) 10 .The French Connection: Spanish Trade Policy 305 and France vi • Contents 11 338 .Euphoria and Pessimism 12 351 .By Way of Conclusion 357 Notes 425 Bibliography 443 Index • • Preface • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • In our historiography [i.e., that ofSpain’s American possessions], there is a kind ofinferiority complex, a mélange of vapidity and a certain historical vision...[the idea]that the Indies W were a divine gift to spread the faith rather than a source ofpro t. W Antonio-Miguel Bernal, La nanciación de la carrera de Indias By the middle of the eighteenth century, three established European em- pires were on a collision course in the western Atlantic, with each deter- mined either to preserve its territory or enlarge it at the expense ofits com- petitors. Spain, France, and England each had to renovate old or apply new W scal measures to deal with real, envisioned, or imagined threats. Unrelieved V competition thwarted e orts to achieve an equilibrium of power, an aspi- X ration repeatedly aborted by interimperial con ict after the settlements of 1713 14 – that concluded the War ofthe Spanish Succession, which had pitted France and Spain against England, the Netherlands, and the Holy Roman Empire. That competition would end, at least in the western Atlantic, at the 1814 Congress ofVienna in , with England the clear hegemon in the Atlantic system. After its seventeenth-century crisis, England had succeeded in mustering W the nancial resources to confront its competitors by mobilizing aristocracy and merchant bourgeoisie alike in support ofits imperial aims. Eighteenth- century France, however, was unable to overcome late medieval institutions, Y interests, and mind-sets su ciently to pay for an adequate army and navy. Spain managed to postpone the crisis by using the economic surpluses of its American colonies, especially the most populous of them, silver-mining W Mexico, then called New Spain, to nance both its metropolitan and colo- nial needs. viii • Preface 1759 When Charles III came to Madrid in , after a quarter-century as ruler of the Spanish Bourbon Kingdom of the Two Sicilies (Naples and Sicily), Spain and its colonial empire in America were nonetheless seriously at risk. 1756 63 Madrid hoped to maintain its neutrality in the Seven Years’War ( – ) between England and France for hegemony in the Atlantic. Without a W con rmed ally, Spain had reasons to fear inevitable English operations— conducted by the world’s most powerful navy—against Havana, the hub of its communications with New Spain and South America. Its maritime life- X line across the Caribbean to Veracruz was indispensable: without ows of colonial specie, there was little hope ofrebuilding Spain’s Atlantic defenses. After two hundred years of Hapsburg rule in Spain, followed by a half- century ofBourbon “reform”projects that had gone nowhere, Charles and V his Neapolitan sta , notably his Sicilian close collaborator Leopoldo di Gre- gorio, marqués de Esquilache (Squillace), who became secretary of Spain’s Exchequer, or Treasury Department, the Consejo de Hacienda, had to come to grips with persisting political, social, economic, and intellectual Haps- burg institutions in both the Iberian Peninsula and the colonies. Part One of this book traces the attempt under Esquilache’s direction to renovate those institutions, initially concentrating on the metropole. In essence, “tra- ditionalists”and “reformers”wrestled with a persistent preoccupation: what adjustments were feasible in metropole and colonies to confront Spain’s imperialist challengers without radically altering the Hapsburg inheritance? The Esquilache-directed essay at domestic housecleaning was uncom- monly ambitious and comprehensive for Spain, with many targets attacked simultaneously. Seven years after Charles arrived, however, a combination of privileged interests and factions fostered under the Hapsburgs engi- neered a coup at Madrid that forced Charles to send Esquilache, the archi- tect ofso many government initiatives, back to Italy. In Spain, renewal was stalled. But there remained, however, the possibility ofrevamping the colo- nial administration and the essential economic links between the metropole and its colonies. 1766 Before the March rioting (motín) at Madrid that unseated him, Esquilache had launched what was tantamount to a colonial review. After 1762 recovering Havana, which had been taken in by an English amphibi- Y ous assault, Esquilache dispatched military o cers to survey the situation of 1765 Cuba and Puerto Rico. Subsequently, in , he appointed José de Gálvez, a young career bureaucrat, as high commissioner (visitador general) and au- thorized him to conduct a broad investigation of New Spain, Spain’s most important trading partner. With renovation ostensibly stalled in the metro- V pole, Madrid now emphasized change in colonial a airs. Preface • ix In Part Two ofthe book, we trace how Madrid moved to modify the per- sistent Hapsburg transatlantic trading system linking the metropole to its W American colonies. No doubt Gálvez’s years investigating New Spain’s scal 1779 condition must be factored into Madrid’s insistence after that Mexico City’s Treasury transfer surplus to Madrid andHavana. “Bourbon reform” would prove to be a suction pump of decapitalization in Spain’s richest W W colony. Although a successful scal mechanism, it brought no social bene t, nor was it intended to do so. Part Two concludes with promulgation ofthe last of three reglamentosderegulating what still remained a closed imperial trading system and an assessment of their impact upon Spain and New Spain, as well as of the decline in French exports to the Spanish colonies through the port of Cadiz. Had Madrid’s strategic decision to shift the focus from the metropole to the American colonies and to promote renovation incrementally and nar- rowly been correct? What precisely was “Bourbon reform”in Spain and New Spain? Were there fundamental changes in the imperial system, or was it V merely a case ofmeliorist initiatives with indi erent outcomes, leaving both colonies and metropole ill-prepared for the decades ofdeepening crisis that were soon to follow? In this analysis of how an old colonial empire in the Atlantic survived intact the pressures applied by Europe’s two hegemons, England and France, in the last phase ofcommercial capitalism and the ini- tial decades of what became the Industrial Revolution, we have sought to address these issues, even if they remain ultimately as unresolved as they were on the eve of the French Revolution. This is a study of incremental response by an old imperial order to chal- lenges at home and abroad: of the capacity of tradition to “retard what we cannot repel,”as Samuel Johnson once put it, and to “palliate what we can- not cure.”