Espinosa, Margarita Maria Suárez; (1998) Merchants, bankers, and the state in seventeenth-century Peru. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

The present dissertation explains the functioning of the colonial system in seventeenth-century Peru, through the study of the economic and political mechanisms the merchants in Lima used to attain a dominant position in the viceroyalty. The seventeenth century proved to be most interesting due to the development of a specific relationship between Spain and its American possessions. Absorbed as it was by external and internal problems, Spain could not retain control over its colonies: maritime trade fell into foreign hands, the silver produced in America stayed there, the bureaucracy was inadequate, corrupt and was connected to local elites; finally, the defence of the colonial State fell to militias and private support, rather than to a regular army. Why, then, did the colonial link survive. A possible answer would be that Spain delegated functions to, and shared its power with, local elites. The specific objective of this dissertation is to show how the local elites -and the merchants in particular- became stronger, and the terms in which it related with the colonial State. Two points are developed. First, the development of complex and sophisticated credit devices -such as public banks- that enabled merchants to take control of the home market and the Atlantic trade. Second, the conditions in which the State allowed an important part of its administration to fall into the hands of merchants, and moreover, allowed the royal treasury to depend financially on the loans of Lima's bankers and great merchants. There are few studies on this topic, and most mistakenly assume that the merchants of Lima were no more than agents of Peninsular companies, and therefore represented and defended the Spanish commercial monopoly. On the contrary, I argue that the merchants in Lima were among the most active elements that broke up the commercial monopoly and destroyed the fleet-system. I likewise discuss the belief that the Church was the only, or the most important, credit agent in seventeenth-century Peru. The study of the public banks shows how far both mercantile and bank credit were a dynamic element, whose functions were quite different from those of the credit given by ecclesiastical institutions. Finally, I suggest that the political conduct of this group is a good example of the way in which a local American elite resisted metropolitan pressures. In brief, the colonial link survived because of the Crown's weakness, which allowed the local elite to retain the biggest share of America's wealth and power. The Crown in turn provided defence against the expansion of other European powers in Spanish America.

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