Bauer 1971

The Church and Spanish American Agrarian Structure: 1765-1865
Author(s): Arnold Bauer

Source: The Americas, Vol. 28, No. 1 (Jul., 1971), pp. 78-98
Published by: Cambridge University Press
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THE CHURCH AND SPANISH AMERICAN AGRARIAN
STRUCTURE: 1765-1865
D URING the centurybetween 1765and 1865,the doubleimpact

of the industrialand agriculturalrevolutions brought pro-
found changeto ruralsociety in Europe and North America.
In England, the enclosure movement and the innovationsassociated
with "high farming" culminatedin the destructionof the Englishpeas-
antry and the growth of a productiverural capitalismthat underlay
Victorianindustrialdevelopment. On the continentnew crop rotations
and improved animalsincreasedoutput while political revolution re-
sultedin drasticchangesin Europeanagrarianstructureand in the lives
of lord and peasant.- In North America (and in such regionsas Aus-
tralia and New Zealand) wholly new rural societies were created as
populationgrew and rail and steambeganto put these peripheralzones
within reach of the industrialworld.
During this samecentury momentousevents took place also in Cen-
tral and South America. But where Western Europe and the United
Statesmovedon to developmentandaffluence,SpanishAmericafaltered,
slippedinto chaos, and finally once again into an inferior partnership
in a new colonial arrangement.Where in the eighteenth century
"America" meant SpanishAmerica to most Europeans,by the mid-
nineteenth,it meant the United States. It is during this century of
Independenceand Revolution in the West that the gap opened and
widened between the so-called developed and underdevelopedworld.
The changecan be seen clearlybetweenthe glowing optimismof Hum-
boldt's account of Mexico at the beginning of the century and the
despairof Alamain'sin the 1850's. In the midstof all this change,how-
ever, one importantconstantremainedin SpanishAmericaand at the
end of our periodwas in fact strongerthan before: the archaicsystem
of privatelatifundia.
By latifundio(or haciendaor largeestate) is meantthat kind of rural

propertythat existedthroughoutmost of the uplandregion of Spanish
America. Its main characteristicswere the relianceon local or occa-
sionallynationalmarkets,vast andusuallyunderusedacreage,little capi-
1 Barrington Moore, Jr., Social Origins of Dictatorship and Democracy: Lord and
Peasant in the Making of the Modern World (Beacon Press paperback ed., Boston,
1967), does not deal with Spanish America but contains interesting hypotheses.
78
ARNOLD BAUER 79
tal, abundant and underemployed labour.2 Wherever the conquering

Christiansfound large numbers of sedentary people who somehow were
able to survive the onslaught of European and African diseases, they
formed this kind of landed estate. I say Christian because a fifth im-
portant feature of upland rural society was the presence of the church.
By the beginning of our period, in fact, the private estate and the church
had developed a close symbiotic relationship. The rural estates pro-
vided income for the church in the form of tithes, gifts, and annuities,
while the church cooperated in social control and lent money back to
the haciendas. The economic roles of church and estate moreover over-
lapped. Apart from its function as banker to the rural sector, the church
itself came to own and exploit a great deal of SpanishAmerican territory.
Essentially, the rural estates were set up to provide European food-
mainly wheat and beef-for the white population while the indigenes
were permitted to grow maize and beans on subsistence plots in return
for labor. Alternatives for the lower classes were limited since most
of the land was taken over by a handful of men while the mass of popu-
lation was reduced to poor villages or landlessness. The system pro-
duced striking similaritiesin rural society. The vaquero from Zacatecas
and the huaso from Rancagua; the pedn acasillado from Puebla and the
huasipunguero or inquilino from Ecuador or Chile, all had more in
common than not. This was also true of the second major segment of
rural population. From Aguascalientes in northern Mexico to Talca in
Chile, there was an astonishingly large mass of people on the move.3
This floating population performed seasonal tasks in the countryside,
scrounged for food in the off season and drifted into the towns to
frighten the wits out of such observers as Fanny Calder6n de la Barca
in Mexico in the 1840's.
This legacy from the colonial past, preserved and augmented in the
nineteenth century, underlay the transition from a colonial to neo-colo-
nial regime. A degraded and inefficient mass of rural population pro-
vided cannon fodder for the innumerable civil squabbles;their " sloth"
and "vices" confirmed the creole elite in its opinion that the lower
classes were hopelessly if not dangerously inept. The impoverished
2 Cf. Eric Wolf and "
Sidney Mintz, Haciendas and Plantations in Middle America
and the Antilles," Social and Economic Studies, Vol. 6, No. 1 (March, 1957), pp. 380-
412. These criteria obviously exclude such regions as Cuba and the late 19th century
Argentine Pampa.
? See, for
example, Bancroft Microfilm, A4GN, "Padrones " v. 5 for 1792 description
of the Subdelegation of Aguascalientes. For Chile see: MairioG6ngora, "Vagabundaje
y sociedad fronteriza en Chile (Siglos xvii a xix) " Cuadernos del Centro de Estudios
Socioecondmicos, No. 2 (Santiago, 1966).
80 SPANISH AMERICAN AGRARIAN STRUCTURE
mass offered little encouragement for the elite's entrepreneurship nor

little check on its leadership. Elsewhere in the West growing internal
markets led to industrialization and more conscious populations forced
governments to respond to national needs. In Spanish America both
markets and restraints were absent. The creole elite turned to Europe
for culture and manufactures. Loans were obtained abroad and squan-
dered, control of trade passed to foreigners. Once again, Spanish
America retreated into the countryside.4
Obviously it is no simple matter to explain the evolution of agrarian
structure over a hundred years in such a vast area. But over this cen-
tury between 1765 and 1865, one major trend stands out: the private
estate grew at the expense of the church. At the beginning of our
period the reforming Bourbons made their first major move against the
church by expelling the Jesuits and confiscating their holdings; by the
end-by the 1860's-nearly all the new republics had carried out reforms
designed to dispossess the church of its remaining property. All this is
a familiar story, but a number of recent studies make a reassessment
appropriate and necessary.
Another feature of the economic relations between the church and
the private estate involved the huge amount of encumbrances-chap-
plaincies and pious works among others-that had accumulated on the
land and whose product went to support the church. This subject has
been virtually ignored by modem research but it is nevertheless pos-
sible to discern the main outlines of a process by which estate owners
endeavored to free themselves from these income-sapping debts. That
they were largely successful was due mainly to the assistance of at first
the crown and later the republican governments whose natural sym-
pathies lay with the landowners.
A third feature of church and estate over this century was the change
in the church's role as "banker" to the rural economy, and more
broadly, in the working of the rural credit system. Little research has
been done on this important question and much that is available is
confused. What repercussions did a weakened church have on the
rural economy? What effect did the Independence wars and the change
from formal to informal colony have on the credit system of large
estates?
a. Church lands. Between their arrival in the 1570's until their

(Madrid,
4Tulio Halperin Donghi, Historia contemporinea de America Latina
1969), Ch. 1 and 2.
ARNOLD BAUER 81
expulsion in 1767, the Jesuits acquired several of the best rural estates
in Spanish America. There is nowhere an exhaustive quantitative study
of their holdings but a number of recent monographs have moved in
that direction. Even in these, however, areal figures are not available
since usually not until the 19th and often not until the 20th century
were estates carefully measured and the number of acres recorded. In
eighteenth-century documents only vague boundaries such as ranges of
hills, woods, or creeks are given. The appraised value in pesos is the
common measurementbut this permits little more than orders of magni-
tude. Such data as the percentage of land held by any one group,
or the acreage of a particular hacienda are difficult to determine with
any accuracy. Father Cuevas tells us, for example, that the Society
of Jesus owned 124 rural properties in Mexico including, "ranchos y
haciendas, molinos y trapiches."' Chevalier makes clear the qualitative
importance of Jesuit holdings. They " owned the best-operated, most
thriving estates in the viceroyalty." " Fragmentary accounts of Jesuit
haciendas are common in Chevalier'swork and elsewhere but a compre-
hensive picture is lacking. For the moment it is sufficient to know that
the Society owned many excellent estates in Mexico.
Jesuit holdings were also extensive in South America. A new book

by Germin Colmenares lists some 100 large haciendas in the Kingdom
of New Granada. Several of these were evaluated at over $100,000
pesos which puts them in the category of very large estates and, depend-
ing on the type and soil, means that they contained up to tens of thou-
sands of hectares.' For Peru, recent studies by Pablo Macera show that
the Jesuits owned 97 haciendas at the time of expulsion, a figure the
author believes to be nearly complete.8 For Chile, there is nothing more
recent than the 19th-century work of Barros Arana. He shows that
some 60 of the best haciendas in central Chile were owned by the
Society including the magnificent estates of La Compafiia and Buca-
lemuY. Across the Cordillera the Jesuits also acquired land, especially
5Mariano Cuevas, S. J., Historia de la iglesia en Mexico 5th ed. (5 vols., Mexico,
1946-7) IV, pp. 504-5.
6
Frangois Chevalier, Land and Society in Colonial Mexico: The Great Hacienda.
Edited with foreword by Lesley B. Simpson. Trans. Alvin Eustis (Berkeley and Los
Angeles, 1963), p. 235.
7 Germin Colmenares,Haciendas de los Jesuitas en el Nuevo Reino de
Granada,siglo
XVIII (Bogotai, 1969), p. 97.
8 Pablo Macera, "Instrucciones para el
manejo de las haciendas jesuitas del Perdi
(ss. XVII-XVIII) " Nueva Crdnica Vol. II (Lima, 1966), pp. 5-49.
9 Diego Barros Arana, Historia general de Chile (12 vols. 2 ed., Santiago, 1930-1940),
Vol. VI, pp. 316-26.
in Mendoza and C6rdoba. We have a recent article by Esteban Fontana

that meticulously details the case of Mendoza and there are a few pub-
lished documents about C6rdoba.'?
It is clear that the Society was an important owner of rural estates in
Spanish America. Not only in terms of acreage but in quality of land.
The estates acquired from the Jesuits became in time-with capital and
larger markets-among the most important private estates. The Jesuits
were the first and most successful scientific farmers in America; many
in fact, were agronomists."l The detailed books of " Instrucciones " for
administrators of haciendas is an indication of their zeal and dedica-
tion.12 Negro slaves formed an important part of the labor force on
the Society's estates. They were widely used on the great sugar estates
near Cuernavaca, 1,200 were employed in Chile at a time when Negro
slaves were rare in that country, and 5,224 worked on Jesuit estates in
Peru.'3 The income from all this was managed with rare efficiency by
the Jesuit fathers and went to support the various colegios scattered
throughout America. Everyone agrees on the frugal life led by indi-
vidual Jesuits and the enormous success of their agricultural enterprise.
In 1767, the Jesuits were expelled from Spanish America and their
estates confiscated. Two years later, the bureau of Temporalidadeswas
set up to administerthe property: to sell where possible; to lease where
not; to invest some of the proceeds locally and remit the rest to Spain.'"
Charles III's decree of expulsion has many explanations, none of which
concerns us here [the King himself said simply that it was issued for
" causas y necesarias que reservo en mi real inimo "]. It represents
the first serious move against church property and the beginning of a
process by which valuable ecclesiastical holdings were transferredto the
wealthier inhabitants of Spanish America.
The crown soon discovered that no one in America could pay any-
thing close to the appraisedvalue of the Jesuit estates. This was espe-
10 Esteban
Fontana, "La expulsi6n de los jesuitas de Mendoza y sus repercusiones
econ6micas," Revista Chilena de Historia y Geografla, No. 130 (Santiago, 1962), pp.
47-115. See also: Coleccidn de documentos relativos a la expulsidn de los jesuitas de la
repz2blicaargentina y del Paraguay (Madrid, 1872).
11Chevalier,Land and Society, p. 239.
12 Instrucciones a los hermanos jesuitas administradoresde haciendas. Prologue and
notes by F. Chevalier (Mexico, 1950). See also: Macera, "Instrucciones."

13 Barros Arana, Historia, Vol. 6, p. 318. Macera,
" Instrucciones,"p. 38.
14Fabian de Fonseca and Carlos de Urrutia, Historia general de la real hacienda
(6 vols., Mexico, 1852), Vol. V has an entire section on the various decrees and regu-
lations that dealt with the expulsion and administrationof Jesuit property.
ARNOLD BAUER 83
cially the case in such marginal regions as Mendoza but also true in
wealthy colonies like Mexico. The crown therefore offered progres-
sively better terms. The haciendas could be subdivided (but in fact
never were), the requirement of an initial cash payment was lowered,
and the interest charges on the balance reduced.1 Even so, not until ten
years after the expulsion were sizeable amounts of property sold in
Mexico and then for far less than the appraisedvalue."' In New Granada
buyers were allowed to pay off most of the purchase price over long
periods of time, sometimes as much as twenty-seven years, and only
three percent interest was charged on the unpaid balance. Nevertheless,
many buyers defaulted; estates were then confiscated again and resold
at lower prices.'7 In Peru, the ninety-seven haciendas dealt with by
Macera were appraisedat $5,729,790 pesos but were actually purchased
for around $800,000 pesos in cash and the balance paid in long-term
installments, many of which were never recovered.'8 In Chile, the sixty
great estates were sold from 1771 on. Barros Arana lists the purchaser
and the selling price of about one-third of these.'9
No comprehensive study has been made of the men who purchased the
Jesuit estates. We know only that individuals-Spaniards and Creoles-
bought them at bargain prices. A well-known example is that of Pedro
Romero de Terreros, the " Croesus of New Spain," whose cash offer
of something under half the appraised value was finally accepted by
the Crown in 1776 for a number of great haciendasincluding the famous
"Santa Lucia" estate. These formed the basis for three impressive
mayorazgos (entails).20 Other wealthy miners such as Bibanco also
bought Jesuit estates in Mexico. Alamin mentions the "houses of
Perez Gilvez y Rul and the Marqueses de Vivanco y Jalpa . . . who
established many of the principal families in Mexico." 21 In Chile also,
many ex-Jesuit estates were entailed by their new owners. These were
15 Fonseca and Urrutia, Real hacienda, V, pp. 121-191.
16 Manuel Romero de Terreros, El Conde de Regla: creso de la Nueva
Espaiia
(Mexico, 1943), pp. 131-4.
17 Colmenares, Haciendas,
pp. 133-6.
18 Macera, " Instrucciones,"pp. 8-10. See also Ruben Vargas Ugarte, Historia de la
compaffiiade Jes-is en el Perzi (Burgos, 1965), IV, pp. 205-09. Vargas Ugarte's figures
(taken from Viceroy Amat's Relacidn de gobierno) are slightly higher than Macera's
apparently because they include some urban property.
'1 Barros Arana, Historia, VI, pp. 321-3. See also Fontana, "La expulsi6n," pp. 67-74.
20 Romero de Terreros, El Conde,
pp. 134. See also by the same author, Antiguas
haciendas de Mexico (Mexico, 1956).
21 Lucas
Alamin, Historia de Mejico (5 vols., Mexico, 1849-52) I, p. 101. See also:
D. A. Brading, "La mineria de la plata en el siglo XVIII: el caso Bolafios," Historia
Mexicana, Vol. XVIII, No. 3 (Jan.-March, 1969), pp. 317-333.
often Basque immigrants and other commercial and mining wealthy,

who joined contemporary landholders to form a more extensive landed
society. In New Granada,the most recent work on the Jesuit haciendas
does not deal systematically with the nature of the buyers but notes
that several estates were bought by neighboring hacendados to enlarge
their holdings.22 A great many details cannot be confirmed because of
the lack of quantitative data. For our purposes it is clear that the Jesuit
estates did represent an important block of Spanish America's argri-
cultural land and that this land passed almost always in the huge original
units, into the hands of private owners at a fraction of their value.23
The process begun by the crown was continued by the new republi-
can governments in the early nineteenth century. Confiscation of the
property of the Inquisition, a vulnerable and popular target, followed
on the heels of the Jesuit take-over. These lands, important in some
cases, were also administered by Temporalidades and sold to individ-
uals.24 In the 1820's and '30's almost all of the new countries took
steps to dispossess the remaining regulars. In Guatemala, the rest of
the regular clergy was expelled in 1829. The most important here
was the Dominican order which owned a large number of rural estates.
These were sold to individuals at a fraction of their value between 1831
and 1837.25 In Mexico where even after the Jesuit expulsion the church
had vast holdings, two great haciendas, " San Nicolis Peralta" and
" Santa Catarina" were bought by Gregorio de Mier y Terin from the
Carmelites.26 A great deal of land nevertheless remained in the church's
hands until the mid-century Reform.
Peru provides an excellent example of the entire post-Independence
process. In the 1820's, '30's and '40's almost all of the property owned
by the Inquisition, the brotherhoods, and the regular clergy was taken
over by the state.27 The government permitted buyers to pay for these
22
Colmenares,Haciendas, p. 134.
23 Another effect of the expulsion was that the output of the Jesuit estates soon
dropped as the efficiency obtained under the hand of the zealous fathers decayed.
The expulsion, while it provided an avenue of upward mobility and the chance for
some hacendados to aggrandize their holdings, also dealt a severe blow to the agricul-
tural economy of Spanish America. We are not concerned here with the effect on
education, the missions, etc.
24
Juan Pablo Restrepo, La iglesia y el estado en Colombia (London, 1885), p. 255.
Jan Bazant, Alienation of Church Wealth in Mexico (Cambridge, 1971).
25Mary P. Holleran, Church and State in Guatemala (New York, 1949), pp. 58-9.
26Romero de Terreros, Antiguas haciendas, p. 47.
27
Jorge Basadre, Historia de la reptiblica del Perdu(5th ed., 11 Vols. Lima, 1961-68),
II, p. 606-9.
ARNOLD BAUER 85
properties with "billetes de credito ptiblico" that were issued in the

1820's. We have a revealing comment on the kind of uninhibited land-
grab that went on during these years in the report of treasury officials
who in 1870 were attempting to make some sense out of the tangled
papers of the "Bienes Nacionales." The report is worth quoting at
length:
We have here [among the papersof the Bienes Nacionales] the most
disordered [descuidado] of all the national income. The state took
over all the propertiesthat belonged to the Jesuits,the Caja de Censos
de Indigenas . . . the Inquisition,Cautivas,Escorial,Cacicazgos,and all
those belonging to the supressedconvents plus those lands sequestered
during the war of Independencewhich were not returned. Neverthe-
less at the presenttime few of these still belong to the state. Most of
them were alienatedin the most irregularmannerand through payment
of "documents of credit" at the nominal-not the market-value. ....
Moreover,many of the propertieswere sold to employeesin charge of
their administrationand the recordsof many of these are missing. .. .28
Finally, the mid-century reforms carried out in Mexico and Colombia

nearly completed the transfer of rural property to private individuals.
The case of Mexico is well known and recently has received detailed
treatment by Jan Bazant.29 From 1856 on, almost all of the remaining
lands of the orders and most of the property of the diocesan church
was sold by the church, or later confiscated by the government and
sold. As elsewhere, the property could be paid for with depreciated
credit instruments and government bonds.
Beginning in the 1760's and continuing through the 1860's then, a

massive transfer of land from the church to individuals took place in
Spanish America. In this century-long dispossession of the church,
Spaniards and Creoles, Conservatives and Liberals all participated. It
is quite impossible at this point to give an overall figure for the peso
value let alone the area of church lands distributed. Values of money,
the standards of appraisers, the great range in the type of payment,
varied too much from decade to decade and from country to country
to make anything but hazardous estimates. We do know that hun-
28Memoria de Hacienda 1869-70, "Anexo I: Director de rentas," pp. 14-18. In

1837-8 these "documents of credit" circulated at about 10 per cent of the face value.
See Basadre, Historia, II, pp. 595-6. See also: Jean Piel, "The Place of the Peasantry
in the National Life of Peru in the Nineteenth Century," Past and Present, No. 46
(February, 1970), pp. 108-133.
29
Jan Bazant, "La desamortizaci6n de los bienes corporativos en 1856," Historia
Mexicana, Vol. 16, no. 2 (Oct.-Dec., 1966), pp. 192-211;and in the Alienation of Church
Wealth. See also his volume: Historia de la deuda exterior de Mexico (1823-1946)
(Mexico, 1968).
86 SPANISHAMERICANAGRARIANSTRUCTURE
dreds of rural estates, usually the best ones, were acquired by indi-
viduals. They were moreover acquired at a fraction of their appraised
value and paid for usually with depreciated and nearly worthless paper
instruments. Often these lands were acquired through fraud, favor, or
influence with little monetary outlay. All these methods were espe-
cially possible during the hectic years of the early nineteenth century
as the desperately impoverished new governments struggled to establish
viable political and economic structures.
The acquisition of church lands by miners, merchants and officials
broadened the base of rural society. The newly wealthy in eighteenth
and nineteenth century Spanish America aspired to land ownership
because land conferred prestige. The inefficient latifundio acted as a
kind of sponge that soaked up capital and returned a low yield and
ephemeral status. In Mexico it would appear it was the wealthy
miners-Spanish and Creole-who most generally acquired the ex-Jesuit
estates. In Chile the movement of miners into landed circles is a
commonplace. Contrary to the process elsewhere in the West where
profits from the land were invested in industry, here money gained in
mining or trade was sunk in rural states.30 The haciendas thus tended
to consume capital. At the same time, the older landed society ab-
sorbed-or was rejuvenated by-the new owners and the latter happily
adapted to the seigneurial life style of the "traditional aristocracy."
The nineteenth century saw little conflict between old and new hacen-
dados; rather, the two groups joined to strengthen an already archaic
latifundio system.
b. Clericalobligations-Foundationsof capellaniasand pious works.

During the three centuries of Spanish colonial rule, estates became
heavily burdened with a variety of obligations to the church. During
the period we are dealing with (1765-1865), first the crown and later
the landowner-dominated republican governments provided opportuni-
ties for hacendados to free themselves from these debts. Since there
has been a great deal of confusion over the nature of these obligations,
we must first explain what they were.
The church was involved economically with the private haciendas
in two important ways. First, it received income from the land in the
form of tithes, gifts of cash or land, and-what we are mainly concerned
with here-through income from foundations called variously capellanias
30Bazant, " La desamortizaci6n de los bienes," p. 209 shows that mainly professionals
and merchants acquired land.
ARNOLD BAUER 87
(chantries or chaplaincies), obras pias (pious works), and censos (obli-

gations). These foundations were occasionally established by giving
the church a sum of money in cash. As a rule, however, and especially
since cash was always scarce in the colonies, the landowner placed a
perpetual lien or encumbrance on his property. The capital value of
this lien was calculated in monetary terms and the annuities paid the
church usually represented a five per cent yield on this amount. Thus
a $3,000 peso lien (the normal value of a single capellania) would yield
$150 pesos per year to the church." Secondly, the church often lent a
part of the income it accumulated back to the haciendas. These loans
were most commonly called depo'sitosirregulares,and also censos. We
must keep the two operations-the liens and loans-clearly separate.
From the point of view of the church, there was not too much dif-
ference between liens that guaranteed annuities and the loans it made
to haciendas. Both were equally secure, both yielded five to six per cent
interest. It is true that the principal of a loan could be called in while
that of a capellania could not, but in practice the church rarely recalled
capital. Both loans and liens were actually "investments." From the
point of view of the hacienda, however, the difference was important
and obvious. A loan meant that the estate received cash that could be
used in case of crop failure, for improvements, or for consumption if
the owner so chose. In short, it meant credit, important and necessary
for agriculture everywhere. The foundation of a capellania or pious
work, on the other hand, usually involved no cash. The landowner
merely encumbered his property to guarantee that each year a certain
amount either in cash or in kind would be paid to the church out of
estate earnings.
Thus, haciendas could be heavily in debt without ever having re-
ceived credit and through liens the church skimmed off the top a large
share of rural income. Encumbrances were widespread and over the
years many estates came to be burdened for more than they were worth.
31 Cf. Chevalier, Land and Society, p. 253. See also: Robert J. Knowlton, "Chap-
laincies and the Mexican Reform," Hispanic American Historical Review, Vol. XLVIII,
No. 3 (August, 1968), pp. 421-437, and Asunci6n Lavrin, "The Role of the Nunneries
in the Economy of New Spain in the Eighteenth Century," Hispanic American His-
torical Review, Vol. XLVI, No. 4 (Nov., 1966), pp. 371-93. All of these show that liens
were by far the most common form of endowment. On the other hand Brian R.
Hamnett, "The Appropriation of Mexican Church Wealth by the Spanish Bourbon
Government-The "Consolidaci6n de 'Vales Reales' 1805-1809,"Journal of Latin
American Studies, Vol. 1, Part 2 (Nov., 1969), p. 86, thinks it was done through " donat-
ing in a legacy a sum of cash." Romeo Flores Caballero'srecent La contrarevolucid~
en la independencia (El Colegio de Mexico, 1969), p. 31, also states that it was done by
the "dep6sito de una suma de dinero."
The foundations were cumulative and usually perpetual. They could

be paid off but rarely were and as estates changed hands the obligations
went with the land. If capellanias and pious works made it difficult to
subdivide haciendas on which they had been imposed (not because they
were in mortmain but because of the legal confusion and vexations
involved) they made it easy for the hacienda to change hands as a unit.
If an estate worth $10,000 were encumbered for $6,000, for example,
the buyer merely paid the owner an equity of $4,000 and assumed
payment of the obligations. Many of the estates acquired from the
Jesuits and other branches of the church carried these encumbrances
and they remained in force. The crown ordered in 1769 that the obli-
gations on the Jesuit haciendas, "... pass with them and thus less
money will the buyer have to pay."
32 The crown continually insisted
that the new owners were to continue payment of annuities. In New
Granada most of the Jesuit haciendas carried burdens of capellanias and
pious works. The hacienda of "Latacunga," for example, evaluated
at $143,173 was burdened with a $42,500 censo. Another worth
$66,768, carried a pious work of $26,000 and a capellania of $10,000."Y
Felix Calleja'sreport in 1792 gives an indication of the extent of liens
in Aguascalientes:
"Las fincas de esta jurisdicci6nestin gravadascon Zensos y funda-
ciones en favor de catedrales,conventos, capellaniasy Patronatos,en
mas cantidadque la balen,y por la que pagande reditosmas que rinden;
de modo que sus duefiosno son mas que los Administradoresy la verda-
dera propiedadla tienen los poseedoresde las fundaciones....." 34
This was true of all regions in Spanish America but it was especially
so where the Europeans found large numbers of sedentary population
to erect the great ecclesiastical establishments. Even in Venezuela and
Chile where there were relatively fewer people who could be induced
to support the faith, these encumbrances were ". .. a burden that
affected . . . almost all rural and urban property." 85
In 1804, the crown driven by need for money to back the issue of
"vales reales" in Spain, saw in these encumbrances the possibility of
obtaining cash from the colonies. A royal decree of December 26 of
that year and subsequent regulations required that all property owners
who had either: 1) overdue loans from the church; or 2) encum-
Urrutia, Real hacienda, V, p. 121.
32 Fonseca y
3 Colmenares,Haciendas, p. 68.
34Bancroft Microfilm, AGN "Padrones," Vol. 5.
35Barros Arana, Historia, Vol. 7, p. 312. For Venezuela, see: Mary Watters, A His-
tory of the Church in Venezuela 1810-1930 (Chapel Hill, 1933), pp. 179-80.
ARNOLD BAUER 89
brances or liens on property in favor of the church; must redeem them

by paying the capital value to a special agency of the crown which
would then assume payment of interest or annuities to the church."3
The crown's effort to raise cash in this way did not particularly perturb
the church which would continue to receive its five per cent income.
Besides, the crown was probably at least as reliable as the landholders.
But the 1804 decree did bring forth a series of complaints and statistics
from other quarters and it is these that provide much of the data and
confusion on church wealth as we shall see below.
The crown attempted to ease the decree's shock by allowing the land-
owners to redeem their clerical obligations in installments. The total
lien could be removed by paying between 40 and 50 percent imme-
diately and the balance over several years. This inducement combined
with a call for imperial solidarity (an appeal that could be applied espe-
cially to the Spaniards in America) produced over $12,000,000 pesos
between 1804 and 1809 in Mexico-an excellent comment on the pros-
perity of this colony, the "most brilliant jewel in the royal crown." "
Elsewhere in the empire, landowners were less able to come up with
cash. In the Viceroyalty of New Granada about $500,000 pesos were
produced by the decree and in Chile it yielded only $198,189 pesos;
proof for Barros Arana of the "absoluta falta de capitales" and in
contrast to Mexico, of " the present state of decadence " of this region
at the end of the colonial period.38
The wars of Independence and the subsequent triumph of republican
governments more desperate for cash and less polite in their dealings
with the church, provided landowners with more attractive ways to
free themselves from income-sapping encumbrances. To begin with,
fewer capellanias were founded in the 19th century. The crown in
1796 imposed a fifteen per cent tax on the capital value of capellanias
and several governments did similarly in the 1820's. In other cases
governments proposed legislation to reduce the yield [r6ditos] land-
36 The text of the decree is in: AGN "Reales
cedulas" Vol. 192, No. 141. I con-
sulted this in Bancroft Microfilms, AGN "Reales CUdulas"reel 102.
37Hamnett, "The appropriation of Mexican Church Wealth .. .," p. 110. The
descriptive quotation of Mexico in the 18th cenutry is from Manuel Abad y Queipo,
"Representaci6n a nombre de los labradores y comerciantes de Valladolid . . ." in
in J. M. L. Mora, Obras sueltas (2nd ed., Mexico, 1963), pp. 214-30, one of several writ-
ings that opposed the royal decree. Notice that the decree gave officials power to sell
at auction those estates whose owners were not able to redeem the obligations. Obvi-
ously, this caused protests and in the end few estates were sold.
38 Jos~ Manuel
Groot, Historia eclesidsticay civil de Nueva Granada (2nd ed., 5 Vols.,
Bogota, 1889-93), II, p. 407-8. Barros Arana, Historia, Vol. 7, p. 313.
owners had to pay on capellanias and pious works.39 In many instances

estate owners dragged their heels when it came to paying annuities and
there was little the church could actually do to force payment."4
Much more important and more advantageous for the hacendados,
were the policies carried out by nearly all the governments in the 1850's
and '60's that enabled landowners to get out from under the weight of
clerical obligations. In Colombia in 1851, a law made it possible for
owners to redeem the total encumbrance or lien by paying one-half
of its value to the government in devalued bonds and other instruments
[cupones]. The government, as did the Bourbons in the 1804 decree,
then took over the obligations to the church. In effect, the state said
to the debtor (the landowner): "You, sir, owe ten thousand pesos;
give me only five thousand and I will declare you free of that obliga-
tion." To the creditor (the church) the state said: "I now am your
debtor in replacement of the landowner. In place of money I will
give you some scraps of paper that you may cash in if you can or trade
them with some agiotista [loan shark] . . ""4 Subsequent legislation
made it easier yet for hacendados. By 1863, capellaniasand censos could
be redeemed by paying one-fourth of their value in bonds of the public
debt.42 The advantage this offered landowners may be seen by apply-
ing these laws to an earlier example. The person who bought a Jesuit
estate evaluated at $66,000 pesos by paying $30,000 and assuming the
two obligations (a capellania of $26,000 and a censo of $10,000) could
have, in 1863, paid $9,000 to completely free his estate of debt-a capital
gain of $27,000. A great many hacendados-Liberals and Conservatives
alike-took advantage of this subsidy.43
In Peru laws similar to those in Colombia were passed in 1850 and
1864." No figures are availableand it would be an exceedingly difficult
task to obtain them. Often the obligations simply evaporated in bureau-
cratic confusion; the documents of others were lost or disposed of in " a
most irregular manner." The Treasury report for 1827 estimates that
39Watters, History, 180. "La guerra de independencia y el cr6dito agricola," in:

Documentos para la historia del credito agricola (Banco nacional de cr6dito agricola y
ganadero, Mexico, 1953), Vol. I.
40 Michael Costeloe, Church Wealth in Mexico: A Study of the ' Juzgado de Capel-
lanias' in the Archbishopric of Mexico 1800-1856 (Cambridge, 1967), p. 73, 78.
41This imagined monologue is in Restrepo, La iglesia y el estado, p. 328.
42Restrepo, La iglesia, p. 487.
43Restrepo, La iglesia, pp. 328-32. Note moreover that the $9,000 could be paid in
devalued bonds.
44Memoria de Hacienda, 1869-70, "Anexo I." See also Basadre, Historia, II, 584.
ARNOLD BAUER 91
there were between 3 /2 and 6 million pesos in censos. In 1868 there is

an entry under Internal Debt for $1,193,547 pesos for " Censos y Capel-
lanias " but exactly what this means is not possible to tell.45
In Chile better data are available and at least here orders of magni-
tude can be presented to show their importance. Legislation of the
kind we have seen was not passed in Chile until 1865, probably because
of the greater financial stability in the country and less pressing need
for cash. The brief war with Spain in that year, however, produced a
minor crisis and a law was passed permitting landowners to redeem
censos and capellanias by paying 40 to 50 per cent of their total value.
This was not as attractive a subsidy as those offered elsewhere and we
do not know what percentage of owners took advantage of it. But
we do know how much was redeemed. Between 1865 and 1900, the
Treasury received about $8,500,000 pesos in redemptions. This would
represent something over $17,000,000 in encumbrances that were paid
off during the last third of the century. Total Chilean agricultural
income in 1854 has been estimated at $7,200,000 pesos. Had all the
censos and capellanias that were later redeemed been in effect in that
year (and figuring that they yielded the normal 5 per cent) it means
that they would have taken about 12 per cent of agricultural income-
a not inconsequential amount in a country where the church was rela-
tively poor." Finally Mexico. Although the Reform laws of 1859
did not deal explicitly with capellanias and pious works, subsequent
legislation made it possible to redeem these encumbrances here as else-
where by paying only a fraction of their value-often as little as fifteen
per cent."'
c. Credit. The takeover of church property and the reduction of

its income had repercussions in the rural credit system where the church
traditionally played an important role. As income from rented prop-
ties decreased, tithes declined, and pious foundations and capellanias
dried up, so did the church's lendable capital.48 The advantages hacen-
dados gained through acquisition of church lands and the reduction of
45See: Memoria de Hacienda for years 1827 and 1868.
46Data on censos and capellanias redeemed is in Reszimen de la hacienda pziblica
(London, 1917?) Pesos are of constant value of 44 pence. Note that for simplicity I
assume that all obligations were on rural property. In fact, most but not all were.
Furthermore, not all-but most-recipients of censos and capellania annuities were
ecclesiastical.
47Bazant, Alienation of Church Wealth.
48No study of the effect this had on charity, education, health (hospitals), the con-
dition of the lower classes, nor on the number of clergy is available.
their obligations were therefore in part offset by the loss of an im-

portant credit source. The effect of this is easily exaggerated, however,
because the church's role as " banker " has been overstated. The church
was by no means the sole source of credit to the rural sector as some
have alleged, and the arrival of British and United States merchants in
the post-Independence years added an important source. Let us look
first at the standardpicture of the church's role in the rural economy.
The common image we have of an opulent church dominating the
credit structure of rural America dates mainly from the early years of
the nineteenth century when Spanish officials and Liberal critics endeav-
ored to quantify the extent of church wealth. The first thorough ex-
amination of this type came in 1804 when the crown moved against
church property in the event described above. Abad y Queipo's Repre-
sentacidn and later Escrito to Sixto Espinoza were in reaction to this
decree and they form the basis for most of the information and con-
fusion on the church's credit role.49 Alexander Von Humboldt, in
Mexico at this time, gave wide publicity to these data and they were
further elaborated by Mora and Alamainin the 1830's and '40's.5o Later
writers-Phipps, Mecham, Gruening, Cuevas, and Callcott merely re-
peated the older allegations.5' Only two modern studies deal seriously
with credit in the prebanking age in Spanish America.5"
The main problem arisesfrom Abad y Queipo's figure of $44.5 million
for " capitales de capellanias y obras pias de la jurisdicci6n ordinaria"
in his Escrito to Sixto Espinoza.53 Nearly all recent writers have taken
this to mean (or have implied) that the 44.5 million was " liquid assets"
or " capital invested . . . in the economy of New Spain . . . in lieu
of the existence of proper banking institutions," or " invested capital in
49Manuel Abad y Queipo, Representacidn ... and Escrito presentado a don Manuel
Sixto Espinoza, del consejo de estado .... Both in: J. M. L. Mora, Obras sueltas
(2nd ed., Mexico, 1963).
50Alexander Von Humboldt, Political Essay on the Kingdom of New Spain (4 vols.,
2nd ed., London, 1814), III, pp. 99; J. M. L. Mora, "Disertaci6n sobre los bienes del
clero," Obras sueltas; Mejico y sus revoluciones (3 vols., Paris, 1837); Lucas Alaman,
Historia.
51Helen Phipps, Some Aspects of the Agrarian Question in Mexico (Austin, 1925),
pp. 49-59; J. Lloyd Mecham, Church and State in Latin America (Chapel Hill, 1934),
pp. 46-48; Ernest Gruening, Mexico and its Heritage (New York, 1928), pp. 171-83;
Wilfred H. Callcott, Church and State in Mexico; 1822-1857 (Durham, N. C., 1926).
52Costeloe, Church Wealth; Maria Eugenia Horvitz Visquez, "Ensayo sobre cr6dito
en Chile colonial." (Unpublished memoria in the Instituto Pedag6gico of the Univer-
sity of Chile, 1966.)
53Abad y Queipo, Escrito in: Obras sueltas, p. 231.
ARNOLD BAUER 93
circulation," " etc. Yet it seems clear from a close reading of the 1804
decree and Abad y Queipo's writings, that the $44.5 million included
both loans and the capital value of capellanias and pious foundations.
The 1804 decree required that landowners redeem both " capitales de
capellanias y obras pias en calidad de censo " (i. e., encumbrances or
liens), and " en calidad de depo'sitoirregular de plazo cumplido " (i. e.,
overdue loans from the church)."" We do not know the amount of
each of these categories because Abad y Queipo never separated them.
His concern was with the harm that forced redemption would cause
in Mexico. Since the decree required that both be paid, the difficulty
from the point of view of the hacendados was the same. Since most
capellanias were established by imposing liens on property and not
through donations of cash to the church, it is reasonable to assume that
a large part of the $44.5 millions of " capitales" actually consisted of
capellanias and pious works and not loans from the church as is usually
implied."'
From the church's point of view both capellanias and loans may be
considered "investments" and the term " censo " is at various times
used to describe both kinds of transactions. This has led to confusion.
Also, the verb reconocer may be used to acknowledge either kind of
debt. Thus, for example, a recent article asserts that Gabriel de Yermo
" borrowed " a " full total of $400,000
pesos from the pious funds and
chantries." '7 But the author's two sources merely say in one case that
Yermo's estates "recono [cian] . . . mais de $400,000 pesos," and the
other, that the "property was mortgaged in the sum of $400,000
-8
pesos." Obviously from a landowner's point of view there was a
great functional difference between having received $400,000 in a cash
loan and owning estates with that amount of encumbrance. It is not
clear in this example nor in the various recent studies which were liens
and which were loans, but it is likely that careful archival investigation
would sharply reduce the volume of church lending in the colonial
period. Costeloe's work on the Juzgado de capellanias in first half of
the nineteenth century reveals a fairly modest credit operation. He
offers a figure of a little over $4 million for total Juzgado loans in the
54 Flores, La contrarevolucidn, pp. 29-30; Hamnett, "Appropriation," p. 87; Costeloe,

Church Wealth, pp. 111-2. Farriss, Crown and Clergy in Colonial Mexico (London,
1968), pp. 163-4.
"
55 Abad y Queipo, Representaci6n a nombre . . ." in Obras sueltas, p. 219. See also
article 15 of the 1804 decree. (Italics added.)
56 Chevalier, Land and "
Society, p. 253; Knowlton, Chaplaincies,"pp. 421-37.
57 Hamnett, "Appropriation," p. 113.
58 Alamain,Historia, I, pp. 240-1; H. H. Bancroft, History of Mexico (San Francisco,
1886), IV, p. 53.
Archbishopricof Mexico at the end of the colonialperiod.59In Chile,

Horvitz shows that church lending was insignificant in comparison to
the credit operationheadedby merchants.60
Even if the volume of church lending is reduced however, it still
was importantand relatively abundantcredit was one of the keys to
the prosperityof the late eighteenthcentury, especiallyin the central
and northernparts of the empire. Besidesthe diocesanchurch, other
ecclesiasticalinstitutionssuch as the nunneries,the Inquisition,andabove
all, the regularclergy, lent money at interest. The Jesuitsran a sizeable
credit operationby lendingamongtheir own colegios,borrowingfrom
varioussources,and lendingto propertyowners.6"The office of Tem-
poralidadescontinued this practice on a diminishingscale during the
yearsit administered the Jesuits'property.62 Lavrin'sstudy of the Mexi-
can nunneriesshows the importanceof this operationand she believes
that they were "circulatinga sum close to three millionpesosin censos
and loans" at the end of the colonialperiod.63
Becauseit was exceedingly difficult to force defaultingdebtors to
pay interest,the church had to pick and choose in selectingits clients.
Only the most solvent,the most responsiblelandownersreceivedchurch
credit. It appearsthat the churchdid adhereto usury laws, but in the
eighteenthcentury the six per cent maximummust have been close to
the free marketrate for well-securedloans. The churchby no means
had a "monopoly on credit" and was probablynot even the most im-
portant source.64Merchants-above all Spanish merchants-probably
formed the major supply of credit to colonial commerceand mining,
and merchantsand minersin turn lent to the rural sector.65 Here it
seemsthe interestrate did rise abovesix per cent. Probablythe higher/
yield, high/riskcreditwas largelysuppliedby merchants. Landowners
who could not qualify for a loan from the church, or desperatemar-
ginal producerswho sought advanceson crops, obtainedcredit from
59Costeloe, Church Wealth, pp. 87-8.
60 Horvitz,
"Ensayo sobre credito," Ch. 3.
61Macera, "Instrucciones," pp. 7-8. See also Documentos sobre la expulsidn de los
jesuitas y ocupacidn de sus Temporalidades en Nueva Espania (1772-1783) (Mexico,
1949), pp. 27-53, which gives lists of outstanding debts and obligations.
62
Fonseca y Urrutia, Real hacienda, V, pp. 192-3.
63 Lavrin, " Nunneries " p. 392. This figure however may include some encumbrances
(liens) as well as loans.
64
Cf. Costeloe, Church Wealth, p. 29, 103.
65 David A.
Brading, Miners and Merchants in Bourbon Mexico: 1763-1810 (Cam-
bridge Univ. Press, to appear 1971), demonstratesthe importance of merchant credit in
the economy generally, and shows that the church deposited money with merchants at
5 per cent. The merchants then lent money-taking a higher risk-at nine per cent.
ARNOLD BAUER 95
merchants at considerably higher interest rates."8 Our sources here refer

to Mexico, but allowing for local variations the same conditions would
probably be true for other regions of upland Spanish America as well."6
Recent research in the notarial archives of the subdelegation of Le6n
for the decade 1780-1790, provides an indication of the rural credit
structure of colonial Mexico. Here the thirty-three largest estates
obtained $175,000 in loans during these years. Sixty-eight per cent
($106,000) came from miners and merchants and the rest from the
church, mainly from convents. In addition to the $106,000, merchants
advanced money on future crops but the quantity cannot be determined
since that kind of transaction is not contained in the mortgage records
examined. Besides the mortgages guaranteeing loans, the thirty-three
Le6n estates were encumbered for $100,216 in capellanias,censos, etc.68
Le6n may be somewhat unusual since it lies in the Bajfo, a district then
thriving because of the nearby Guanajuato mining complex; but it seems
likely that research in other regions with access to commercial or mining
capital would reveal a similarpattern of rural credit in the late eighteenth
century.
d. During the Independence wars, the sources for rural credit in

Spanish America underwent profound change. For over a decade
[1810-1820's], nearly all the region suffered the devastations of a pro-
tracted and bitter struggle. As it became apparent that the wars were
going against Spain, Europeans began to flee Spanish America. As early
as 1814, for example, two "convoys of soldiers, churchmen, judges,
merchants, and property owners " sailed from Mexico carrying some
12 million pesos with them.69 During the next few years Spaniards
and Creoles everywhere were dispossessed or forced for loans during
the frequent "liberations " and "reconquests."
All this obviously weakened the traditional credit sources. The
church found its income and lendable funds diminished by the assault
on its pious foundations and by the growing disinclination of the faith-
ful to support an institution so severely under attack.70 Legislation
abolishing the tithe or making its payment voluntary-in Mexico in
1833; in Chile in 1853; for example-further reduced church income.
66Bazant, Alienation of Church Wealth.
67 Horvitz, "Ensayo sobre cr6dito," Ch. 3, stresses the importance of merchant credit
in Chile.
68Robson Tyrer, "Notes on the Late Eighteenth Century Agrarian
History of Le6n"
(Unpublished manuscript on xerox, Berkeley, 1968), pp. 10-14.
69 Flores, La
contrarevolucidn,p. 78.
70
Costeloe, Church Wealth, p. 27.
The other main centers of eighteenth-century wealth and power also

suffered during the years of the Independence wars. Mines flooded
from neglect and displaced labor; the commercial system, especially
that part involved in the profitable overseas trade, was shattered.
Spanish merchants were often harassed or expelled, favored monopolies
dried up; the lucrative positions in colonial administration were done
away with. In short, the groups favored by the Bourbons-essentially
the "urban" sectors-all either deteriorated or disappeared completely
with the breakup of the Spanish colonial empire.
After Independence, the new republican leaders found that they had
unexpectedly expensive countries on their hands and their financial
troubles were compounded by the large and restless armies, grown
powerful during the wars, that demanded payment. At this juncture-
in the 1820's-loans, and with them increasing dependence, were sought
abroad. At home the agiotistas, the shrewd few who had survived
Independence with their fortunes intact, now found a market for their
cash that if adventurous nevertheless paid handsomely for the risks.
Interest rates rose in some countries to 36% per month as the financial
needs of the new republics and above all the army, absorbed whatever
money was left."
Into the vacuum created by Independence moved not the Creoles but
primarily the British and North Americans. They spoke the language-
literally as well as figuratively-of London and New York. They had
the necessary connections in commercial and financial circles and the
resources of powerful merchant fleets. In this pre-banking age, credit
was still a highly personal business but the growing number of foreign
merchants were soon able to establish direct contact with Creole hacen-
dados or work through local merchants. A score of travelers' accounts
testify to the energy and success of the British and North American
officers and agents who were active in Spanish America in the early
nineteenth century. A Peruvian, one Santiago Tivara, wrote that,
"Foreign commerce in spite of political instability has developed and
continues to develop with astonishing rapidity. They [the merchants]
have lent to hacendados . . . capital . . . for mills and new and cheap
equipment."72 In Chile, British and North American merchants acted
as marketing agents for Chilean hacendados,lent them cash, and financed
in the 1840's and '50's, a flourishing flour-milling industry.73
71 Bazant, Alienation of Church Wealth. See also: Jan Bazant, Historia de la deuda
exterior de Mexico: 1823-1946 (Mexico, 1968), Ch. 2 and 3.
72
Basadre, Historia, II, 56.
73Arnold J. Bauer, " Chilean Rural Society in the Nineteenth Century" (Unpublished
ARNOLDBAUER 97
As trade and finance came under the control of the British and North
Americans, political power fell to the rural sector-to the landowners.
The large haciendas were less vulnerable to military destruction than
mines or warehouses and they survived the Independence period rela-
tively unscathed. Not only did they gain relative to the urban sector-
perhaps one should say they suffered less-the private estate system was
also strengthened absolutely. Cheaply acquired church lands expanded
the private sector. The foundations of capellanias and pious works
that had drained off estate income were redeemed for a pittance through
the offices of a friendly state or they merely disappearedsince the new
republican governments looked indulgently upon evasions by Creole
hacendados. Landowners also defaulted on a great many church loans
during the early decades of the nineteenth century and there was little
the church could or the state would do about it. Moreover, the social
system surrounding the haciendas remained intact. Rural labor-espe-
cially resident labor-was left relatively undisturbed and remained loyal
to local haciendas. The few glimpses we have of early nineteenth-
century society shows clearly enough the constancy of rural life.74
The deterioration of the old colonial urban sectors-mining, trade,
bureaucracy-caused a shift of political power to the group that had
least interest or capacity for creating a strong national state. The land-
owners' status ambitions could now be satisfied by the exercise of public
office, and their economic needs-for credit, for markets, for luxury
imports-led them unhesitatingly into a new relationship with the indus-
trial nations of the North Atlantic. The landowners' class interests did
not compel them to develop national interests. Rather, they presided
over a passive state, gave themselves large chunks of the public domain,
and sought a symbiotic dependence with Britain and the United States.
The new compact was soon forged. Where before Creole landowners
acquired Spanish partners for their children, the Chileans, Argentines
Peruvians and Mexicans now married their sons and daughters to the
prospering class of English-speaking merchants. English surnames (the
Lynch's, the Cox's, the Edward's) appeared on the rolls of the best
Ph. D. thesis in History, Berkeley, 1969), Ch. 4. I do not mean to imply that foreign
capital flooded America at this time because large investments did not come until the
late nineteenth century. But if merchant capital was only available in modest quantity,
one must remember that huge credit resources were never available or for that matter
needed by estates in the eighteenth and early nineteenth centuries.
74Atropos, "El inquilino en Chile," Revista del Pacifico, No. 5 (1861), shows that
estate workers in central Chile hardly knew that Independence had come. Luis Gon-
zailez'"micro-history" of a small village in Michoacin gives the same picture: Pueblo
en vilo (Mexico, 1968), pp. 64-83.
clubs and homes. "Toledo " steel was now made in Birmingham;Liver-
pool replaced Cidiz as the main artery of trade.75
By the end of our period, formal banking institutions were every-
where appearing in Spanish America. In Peru, the Banco del Periuand
the Bank of London and South America were founded in 1863. More
importantly, two mortgage banks, the Banco Hipotecario and the Banco
Territorial Hipotecario, designed to lend money to the larger haciendas,
were establishedin 1869-70.76 In Chile, the Caja de Cr6dito Hipotecario,
"d6cil instrumento en manos de los terratenientes" was established in
1856 and it supplied long-term and low-interest (5-8 per cent) credit
to favored estates. In Argentina a similar organization was founded in
1872.77 The great private estate owners who had enlarged their hold-
ings through the acquisition of church lands and reduced their debts
and clerical obligations during the previous decades, now drew on the
resources of a formal credit system.
If we look broadly over the Western world during the century be-
tween 1765 and 1865, a major difference is apparentin the rural develop-
ment of Spanish America. Where profound change occurred in some
rural societies and wholly new agrarianstructures created elsewhere, in
Spanish America the existing system was strengthened. A hundred
years after 1765 the large private estates were still intact, still enormously
inefficient. This is not to say that ownership did not change because
the new republics provided many opportunities for wealth. Different
families may have bought land-including many who prospered through
the plunder of army and office-but the agrariansystem was little altered.
Land was still held in vast units, inefficient labor was still controlled
through loyalty and coercion, seigneurial values were still predominant.
By 1865, as Spanish America entered more fully into its new colonial
compact with industrial Europe and the United States, it did so with a
still quasi-feudal countryside where a fortified latifundio system under-
pinned the ruling elite.
ARNOLD BAUER
University of California
Davis, California
75An excellent recent summary of this process is in Tulio Halperin Donghi, Historia
contemporainea,Ch. 2-3.
76 Basadre, Historia, III,
p. 1805.
77 For Chile, see: Jean Borde and MairioG6ngora, Evolucidn de la propriedad rural
en el valle de Puangue (Santiago, 1956), I, p. 126; Bauer, "Chilean Rural Society," Ch. 3.
For Argentina: H. S. Ferns, Britain and Argentina in the Nineteenth Century (Oxford,
1960), pp. 370-1.

Bauer 1971

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The Church and Spanish American Agrarian Structure: 1765-1865

Author(s): Arnold Bauer

D URING the centurybetween 1765and 1865,the doubleimpact

By latifundio(or haciendaor largeestate) is meantthat kind of rural

tal, abundant and underemployed labour.2 Wherever the conquering

mass offered little encouragement for the elite's entrepreneurship nor

a. Church lands. Between their arrival in the 1570's until their

Jesuit holdings were also extensive in South America. A new book

in Mendoza and C6rdoba. We have a recent article by Esteban Fontana

notes by F. Chevalier (Mexico, 1950). See also: Macera, "Instrucciones."

often Basque immigrants and other commercial and mining wealthy,

properties with "billetes de credito ptiblico" that were issued in the

Finally, the mid-century reforms carried out in Mexico and Colombia

Beginning in the 1760's and continuing through the 1860's then, a

28Memoria de Hacienda 1869-70, "Anexo I: Director de rentas," pp. 14-18. In

b. Clericalobligations-Foundationsof capellaniasand pious works.

(chantries or chaplaincies), obras pias (pious works), and censos (obli-

The foundations were cumulative and usually perpetual. They could

brances or liens on property in favor of the church; must redeem them

owners had to pay on capellanias and pious works.39 In many instances

39Watters, History, 180. "La guerra de independencia y el cr6dito agricola," in:

there were between 3 /2 and 6 million pesos in censos. In 1868 there is

c. Credit. The takeover of church property and the reduction of

their obligations were therefore in part offset by the loss of an im-

54 Flores, La contrarevolucidn, pp. 29-30; Hamnett, "Appropriation," p. 87; Costeloe,

1886), IV, p. 53.

Archbishopricof Mexico at the end of the colonialperiod.59In Chile,

merchants at considerably higher interest rates."8 Our sources here refer

d. During the Independence wars, the sources for rural credit in

The other main centers of eighteenth-century wealth and power also

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