Royalists voluntary loans during the War for Independence
Over time, national, state, local and military authorities have demanded loans, either voluntary or compulsory, from the populace and the receipts produced, as for a compulsory loan made in Hidalgo del Parral in January 1877, could be viewed as a form of paper currency. We have, therefore, for the sake of completion, documented these loans whenever we have encountered them.
In the case of the voluntary loans authorised by the Royalist government during the War of Independence, however, the process and the sizeable amounts involved are unlikely to have produced any such “paper currency”.
The loan of 1809
On 5 August 1809, Viceroy-Archbishop Lizana issued a proclamation reproducing the royal order sent on 12 March 12 by the Secretary of State and Finance, Francisco Saavedra, in which he ordered the opening of "a patriotic loan with the security and conditions that reconcile the prompt and greatest possible aid that the nation’s needs and the individual interest of its faithful and beloved vassals". The loan was to be at 5 or 6% and it was left to the viceroy's choice as to which of all the royal revenues would be responsible for the security of the lenders' funds and the punctual payment of interestGazeta de México, Tomo XVI, Núm. 99, 9 August 1809.
The documentation in the Archivo General de la Nación referring to this loan, although voluminous, does not offer us a complete view of the response to it, since it refers fundamentally to what was delivered by the indigenous communities. As indicated by the lists that appeared in the Gazettes of the days immediately after the opening of the loan, the merchants were the most interested in lending their capital at the very attractive interest rate of 6% Among the lenders are the dean and chapter of the Cathedral with $50,000, the convent of Santo Domingo $24,000; the Marquis of Apartado $80,000; the governor of the state, Manuel Santa María, $400,000 pesos. Among the merchants. Antonio Bassoco gave $200,000, Tomás Domingo de Acha, $150,000, Gabriel de Iturbe and Sebastián de Heras, $100,000 each; the Count of La Cortina, Diego Agreda, Vicente Eguía, Gabriel del Yermo, Pedro González Noriega $50,000 each, Lorenzo García Noriega $40,000, etc. and, of course, the Church, among whose loans were those of the not excessively wealthy Bishoprics of Nuevo León and Oaxaca; The first delivered a total of 80,000 pesos, 50,000 without any interest and 30,000 at 5%{ (AGN, Donativos y Préstamos, vol. 3, f. 233): the second gave 90,950 pesos of free loan and 47,045 of loan with interest (AGN, Donativos y Préstamos, vol. 11, exp. 21 ff. 26-40v).
It also seems that some municipalities saw in this loan the possibility of cleaning up their own funds a little, such as that of the town of Sombrerete, which offered to lend the only 4,000 pesos it had, though this was not accepted {footnote }AGN, Donativos y Préstamos, vol. 3, ff. 105-108. The city council of Puebla, for its part, requested that it be allowed to borrow 50,000 pesos, even if it was in partial amounts from individuals, in order to allocate 20,000 pesos from that capital for the patriotic loan, leaving the remaining 30,000 for the needs of the municipality AGN, Donativos y Préstamos, vol. 3, ff. 209-219..
However, the bulk of the documentation refers to the contributions of the indigenous communities, and in most cases the offer was of an interest-free loans, as Lizana had suggested.
The proposed loan of 1810
On 1 January 1810 a royal order ordered the collection of a loan of 20 million pesos.
In order to study the best way to collect the required amount, a board was formed which decided to invite all kinds of suggestions aimed at achieving greater efficiency in the collection of cash: all very rational, but not suitable for a time of urgency, so the board, to avoid further delays, had to ask the residents of New Spain, in the first place, voluntarily to hand over to the consulate of their district their belongings of wrought gold and silver or the amounts of cash that they had, promising them an annual premium of 8% and 6% respectively. But in order to support the capital lent and its revenues, it was necessary to increase the revenues of the royal treasury and, to this end, it was decided to establish a series of extraordinary taxes, with an explicit promise that they would not last longer than necessary for the complete amortization of the 20 million.
The new taxes referred to wax that arrived from Campeche, Havana and other places in America; cocoa from Caracas, Magdalena, Soconusco, Tabasco, Maracaibo and Guayaquil, and Asian effects. In addition, the alcabala fee was increased by a third and the Tobacco Revenue was requested to deliver 500,000 pesos each year for the loan, raising the price of tobacco so that it could do so without serious problems.
The board calculated that these new taxes would produce revenues of 1,700 pesos to the Royal Treasury, which together with the income from the alcabala would add up to a total of 4,200,000 pesos, which was intended to be divided as follows:
1,200,000 pesos for payment of annual interest and "expenses attached to the commission".
1,000,000 pesos for annual redemption of capital.
2,000,000 pesos to form a discount fund for the benefit of the shareholders, so that they could resort to it when they needed to use their funds.
It seems that the junta's willingness to "admit suggestions" responded to serious pressure from the Consulados to keep the administration of the new taxes under their control and, in particular, the right of alcabala. This time the merchants were successful, and it seems Hidalgo's rebellion greatly frustrated the application of this loan.
(based on Josefa Vega, The First Loans of the War of Independence, 1809-1812)