The real hacienda (royal treasury) encompassed all state fiscal activities in the Spanish Indies: collection of taxes, disbursement of funds to meet colonial needs, remission of surplus revenues to Castile, accounting and auditing (Contaduría), and all other functions involved in the oversight, protection, and promotion of royal fiscal interests. From the time of discovery late in the fifteenth century, state treasury officials were on the spot to ensure the Catholic monarchs their proper share of the fruits of conquest. As Spain extended its domination over the Indies, the Hapsburgs sent more fiscal officials and established formal royal treasury districts (cajas) to implant the fiscal authority of the state in bustling port cities, mining centers, administrative market centers, key military outposts, and areas with large indigenous populations. These cajas and the officials serving in them—accountants (contadores), treasurers (tesoreros), factors or business managers (factores), quartermasters (proveedores), and paymasters (pagadores)—constituted an integral part of Spanish colonial administration.
The royal treasury system in Spanish America was far more rational and efficient than its metropolitan counterpart. In Spain treasury jurisdictions overlapped and semiautonomous institutions collected taxes, a function which in a modern state properly belonged to the crown. Moreover, medieval privileges (fueros) giving the church, various kingdoms, institutions, and individuals exemptions from taxes, prevented establishment of a uniform tax and fiscal system for early modern Spain. In the Indies, however, the crown, perhaps because of the fragmented, unequal system at home, established a far more unified, rational, and efficient system than the complex, labyrinthine framework which had developed in late medieval and early modern Spain.
Spain set up treasury districts in virtually every area of the Indies. In the Caribbean formal cajas replaced supervisory treasury officials at the beginning of the sixteenth century in Española, Puerto Rico, Cuba, and Jamaica. Mexican accountants began keeping their first ledgers in 1521, the year of the final conquest of Tenochtitlán. In Peru both Lima and Cuzco had royal treasuries by the mid-1530s, and in New Granada, Santa Fe de Bogotá had a caja by 1538. In Upper Peru the mining center of Potosí became a royal treasury district in 1549, four years after the discovery of the silver-rich Cerro de Potosí. As the Spanish presence in the Indies grew, new treasuries emerged in the sixteenth and seventeenth centuries to create a fiscal network of cajas linked closely to the matrix treasuries in the viceregal capitals of Lima and Mexico City.
Royal cajas functioned in very much the same manner in most areas of the Indies. In larger, heavily populated districts an accountant or comptroller (Contador) kept the books, entered all collections and disbursements of tax revenues, certified all treasury transactions, and held one of the three keys to the royal strongbox (caja), hence the term caja. A treasurer personally collected taxes, physically deposited the specie in the caja, disbursed it as needed, and also held one of the three keys. A factor served as business manager for the treasury, negotiated with factors in other districts, and safeguarded the supplies, arms, and munitions in royal warehouses. A fourth official, initially the veedor, supervised the weighing and smelting of gold and silver and all activities relating to mining and minting, but in the seventeenth century the veedor gave way to an assayer (ensayador) and a bullion-smelting expert (fundador). In major treasuries myriad accountants, bookkeepers, and minor functionaries assisted the chief accountant and treasurer or royal officials (oficiales reales), as they were called. In minor cajas no coterie of bureaucrats was necessary, and oftentimes one official took on all treasury duties.
The crown rigidly prescribed the conduct of royal treasury officials. They could not deposit or disburse funds from the caja unless all three keyholders were present, usually the accountant, treasurer, and factor. They had to keep both a daily record of receipts and disbursements (libro manual) and a ledger (libro mayor) listing tax collections and disbursements by tax category (ramo), both subject to a sudden audit by royal inspectors and, after 1605, by one of the three auditing bureaus (Tribunales De Cuentas) in Mexico City, Lima, and Bogotá. These tribunals were set up specifically to audit and close all the caja district accounts and special ledgers before sending them off to Spain for still another audit by the Central Accounting Bureau of the Council of the Indies.
Officials of the real hacienda collected all sorts of revenues including sales taxes (Alcabalas), import-export imposts (Almojarifazgos), the royal fifth (quintos real) or tenth (Diezmo) levied on silver and gold production, tithes allocated exclusively to the crown (novenos), and the sale of certain colonial offices (oficios vendibles). They also took in salary taxes imposed on both secular officials (Medias Anatas) and clergy taking posts in the Indies (Mesadas Eclesiásticas or medias anatas eclesiásticas). Collecting revenues from royal monopolies such as snow (for drinks and iced foods), playing cards, stamped legal paper, lotteries, tobacco, and mercury, usually paid by a private contract holder, was also their responsibility. Store or bar license fees (pulperías), payments for legalization of land titles or validation of residence (Composiciones), and, late in the eighteenth century, pension-fund collections from various public and military officials (Montepíos) all fell under the purview of treasury officials. Moreover, they took in tribute, the major contribution of the indigenous population exempt from most other taxes, as well as contributions for the Indians' legal protectors and hospitals.
Royal officials disbursed funds for a variety of purposes: administrative salaries and expenses, military and naval stipends, war supplies, fortifications, militias, and military subsidies (situados) sent to remote areas of the empire such as Florida or Concepción in Chile, where military garrisons defended Spanish interests. At the same time, the treasury expended tax revenue for parish and mission work, hospitals, poorhouses, orphanages, seminaries, colleges, and universities and for other charitable, educational, and philanthropic endeavors.
Record keeping was a simple task, with accountants keeping ledgers of revenues (cargo) and expenditures (data) as they were deposited or expended. In 1787, however, Charles III ordered a change to a double-entry system to obtain a clearer picture of the fiscal realities in imperial treasury districts. He also dictated the establishment of separate categories within the royal treasury: one allocated for the general operating funds of the district (ramos de real hacienda), another reserved especially for the crown (ramos particulares), and still another to be set aside for specific crown or institutional purposes (ramos agenos). The move to the double-entry system never worked out, however, and by 1790 accountants were again keeping their ledgers in the old manner, except for Lima, where bookkeepers learned the new methods prescribed by the crown.
The large number of cajas in Spanish America by the end of the eighteenth century testifies to the growth and strength of the Real Hacienda in the Indies. New Spain (Mexico) had twenty-three treasuries: Acapulco, Arispe, Bolaños, Campeche, Chihuahua, Durango, Guadalajara, Guanajuato, Mérida, Michoacán, Mexico, Oaxaca, Pachuca, Presidio del Carmen, Puebla de los Ángeles, Rosario, Saltillo, San Luis Potosí, Sombrerete, Tabasco, Veracruz, Zacatecas, and Zimapán along with some lesser subtreasuries. Lower Peru had seven: Arequipa, Cuzco, Huamanga, Lima, Puno, Trujillo, and Vico y Pasco. Upper Peru (present-day Bolivia) had nine, including Arica, Carangas, Charcas, Chucuito, Cochabamba, La Paz, Oruro, Potosí, and Santa Cruz de la Sierra.
A whole host of new treasuries were set up in the last half of the eighteenth century in the Río de la Plata, which had thirteen in all at the close of the colonial epoch: Buenos Aires, Catamarca, Córdoba de Tucumán, Corrientes, La Rioja, Maldonado, Montevideo, Paraguay, Salta, San Juan, Santa Fe de Veracruz, Santiago del Estero, and Tucumán. In 1800 five treasuries were functioning in Chile at Chiloé, Concepción, Mendoza, Santiago, and Valdivia, while farther north in Ecuador treasury officials in the three cajas of Cuenca, Guayaquil, and Quito watched over royal fiscal interests. At least ten treasuries fell within the orbit of the treasury of Santa Fe de Bogotá in New Granada, including Antioquia, Cartagena, Cartago, Honda, Medellín, Novitas, Pamplona, Panamá, Popayán, and Río Negro. By 1800 eight cajas functioned in Venezuela, in Caracas, Coro, Barinas, La Guaira, Puerto Cabello, Cumaná, Guayana, and Maracaibo. At least eight had cropped up in Central America, including Portobelo, Chiapas, Guatemala, León de Nicaragua, Trujillo, Sosanante, San Salvador, and Trujillo. In the Caribbean, Española, Puerto Rico, and Trinidad all had cajas, while more than thirty were functioning in Cuba at the beginning of the nineteenth century. The distant Philippines also had its caja.
These treasuries of the real hacienda thus bound the Spanish Indies together into regional groupings, gave the state a significant degree of fiscal control over the Indies, and ensured the crown at least a share of the tax revenues being generated in the empire. The breakup of this system during the Wars of Independence severely affected state-building in many areas of Spanish America in the nineteenth century.
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John Jay TePaske