7 - Mexican Silver for the Cortes of Cádiz and the War against Napoleon, 1808–1811

Summary

Loans are only useful in two circumstances, that is: when governments are solidly established and in consequence have credit and good faith, or when the investors run similar risks as the government and can see no other way to save their life and fortune than by helping it with money… .

Manuel Abad y Queipo, Bishop of Valladolid de Michoacán, May 30, 1810

The French army's occupation of the Iberian Peninsula in 1808 was – to use a modern phrase – a huge external shock, which brought down the monarchy in the metropolis and threatened the Spanish administration in the colonies. Paradoxically, in the viceroyalty of New Spain as well as in other Spanish American territories, loyalty to the Crown and mother country was reinforced as news spread of the Napoleonic invasion. Colonial elites in Mexico and Peru, in particular, feared the possible disturbance of the status quo and of their traditional privileges, which might be disrupted by political crisis and social upheaval. Despite collapse at the center of empire, therefore, the most important and richest colonies did not interrupt silver shipments to the metropolis. On the contrary, royal officials and the higher clergy mobilized new and vigorous financial campaigns to collect donations and loans to send to the patriot forces combating in Spain, the greatest sums being gathered in Mexico.