6 - Between Spain and America: The Royal Treasury and the Gordon & Murphy Consortium, 1806–1808

Summary

We have seen with great pain and indignation the Royal licences granted through the Consolidation Fund (Caxa de Consolidación de Vales Reales) to various foreign trading houses from Europe and the United States … to send to this port as many vessels as they wish and to return with gold, silver and the products of this country … directly to Spain or to neutral ports.

Merchant Guild of Veracruz (Consulado de Veracruz) (1809)

For the administration of Charles IV, the transfers of American silver to Europe were fundamental not only to pay for wartime obligations such as the Subsidy Treaty signed with Napoleon but also to sustain the overall finances of the monarchy. To ensure a regular flow of bullion from the colonies, it was essential that the fiscal system in the Americas continue to produce and remit tax surpluses, despite the obstacles and interruptions caused by naval wars. This depended on both the ability of royal officials to collect resources in the colonies and the smooth functioning of the most important state monopolies, which required regular dispatches of vital materials from Spain to the colonies as well as return shipments of key commodities and silver from the Americas. In sum, an indispensable condition for the continuity of the empire lay in the sustained functioning of what was a complex, transatlantic fiscal machine.

There were two strategic monopoly branches in this vast fiscal system that maintained major commercial and financial activities across the Atlantic.